and that was the deal that i made. i don't love the deal. but when i came into this business many, many years ago, my goal was to see it not only survive, but to thrive. and i feel like it's mission accomplished. welcome to to "street signs. european travel equities march into the new year despite pandemic restrictions across the country. britain delivers the first astrazeneca vaccines as a new

kick juf roloff rolls out. the uk kicks off the new year and its first full week post-brexit. standard life aberdeen chairman douglas flint tells cnbc that london's history will ease and president trump tells georgia's election official to recount votes. >> we had vast -- the state is in turmoil well, good morning welcome to the first "street signs" of the year kicking things off here, i want

to bring you some flashes we're getting from eurozone data this is from the month of december, so it could be construed as out of date given how things have taken a turn for the worse with pandemic restrictions over the past couple of weeks. we have the final manufacturing pmi numbers for eurozone at 55.2 a tad below the flash of 55.5. so, a slightly weaker than number than the flash estimate still very strong and posting a strong rebound from the prior month. worth taking these with a pinch of salt, things have definitely got worse in the last couple of weeks with all of the economic restrictions on the continent. on that front, let's dive into the detail in terms of those latest and tougher restrictions germany is expected to extend its virus restrictions for at least another two weeks with officials warning that the numbers are still too high

chancellor angela merkel and regional leaders are set to rubber stamp the move at a meeting on tuesday cases continue to rise across the continent with france extending curfew times in some regions. here in the united kingdom boris johnson has warned that further virus restrictions are under way as the country recorded 50,000 cases for the sixth straight day. johnson said there were a range of tougher restrictions being considered but did not go into details. >> it may be that we need to do things in the next few weeks that will be tougher in many parts of the country i don't -- i'm fully, fully reconciled with that i bet the people of this country are reconciled to that until that -- >> what might tougher be >> until a vaccine comes on stream in a massive way, we're

fighting this virus with the same set of tools. >> and welcome again, everyone it's the first "street signs" of 2021 let's look at how markets are opening for the first couple of hours for trading for the day and for the year you can see there's a lot of green on the board certainly a lot of buying has emerged in the first few hours of trading for the year. it was not a good 2020 for european equities as a whole let me run you through some of the numbers. ftse, the uk index ended 2020 down almost 14%. the cac 40 in france down 8% the only index that ended the year positive was the german index up 4%. despite the strong quarter we had, for the year as a whole it was weak for europe asian equities and u.s. equities were stellar for wall street particularly for the tech sector with the nasdaq ending the year

up more than 40% this is what europe looks like in the early minutes of trading here the stock sto quite a big bounce early in trading. let's switch to european markets and see what the picture is like the ftse 100, very strong performance, up 2.2% this is the first day that markets are open for trade since the uk now has formally left the eu and has become a third country, vis-a-vis the eu. strong performance in the ftse 100 for the first day of trade this is in reaction to the deal being passed finally in the last week of the year in 2020 there was a lot of hesitation and a lot of going back and forth, and finally we got some resolution that's giving clarity for some investors looking to put money into the uk market cac 40 up 1.25%. the dax up about 0.6%. we're seeing a strong rebound

today in the pandemic hit sectors. things like travel, leisure, airlines, all the cyclicals are coming back in force in the first couple hours of trading. good start to the year so far. >> thanks very much. on the vaccine front, today marks another milestone day for the united kingdom the country has become the first in the world to deliver the oxford astrazeneca covid-19 vaccine today expecting to supply the uk with 2 million doses a week starting this month. the nhs denies a report that they had not committed to this level of supply as long as production targets are met let's bring in our first guest of the morning, an affiliate professor of technology and operations management and enciad to weigh in on the supply chain and the process of getting these vaccines from the lab into peoples arms

professor, great to have you on the program again. before the rollout of these vaccines began, a lot of the focus was on supply, whether there would be enough of these vaccines to go around, which countries would get access first. now that the rollouts are under way, a lot of the focus is turning to the actual administration of the vaccines and a lot of complexity and problems have cropped up one statistic to put out there, or two numbers, in the u.s., over 11 million doses of covid-19 vaccines have been distributed. but only 2.1 million have been administered help us understand the huge gap that exists between doses that have been distributed versus administered >> first of all, i think we still have to keep working hard on resolving supply problems it's not that we don't have enough supply to go around in the uk or america or other parts of the world, we need to keep

our eye on supply. as you pointed out, currently what we're seeing is mismatch between demand and supply. i think what we highlighted in the past is hard infrastructure constraints such as having more trucks or having freezers are the problem which is more on the supply side. we have to ensure that the soft infrastructure and soft infrastructure inplies the people who vaccinate, the vaccinators, the operational logistics, the information systems, that's more of the soft infrastructure i think matching demand and supply requires a lot more investment in soft infrastructure, better planning. and that's what we are seeing in the u.s. in many other parts of the world where we have seen there's sufficient supply but the update is not as high. this is like the soft launch of any given product. it's not a hard launch

a hard launch will be when we get to phase two, when we would have large numbers of retail pharmacies, mass vaccination clinics. we should not extrapolate too quickly from what we are seeing in the first four, five weeks. there is more to be done there is also the issue of accountability, because there's multiple levels of government agencies involved. we see comparisons being drawn out between health systems which are intrinsically different, such as israel versus the united states versus the uk and france. those intrinsic differences in the health systems will show up as differences in the rates of demand side. we can't resolve them overnight. these will be things that take time >> it's reassuring those -- your thoughts in terms of this being more of a soft launch, especially in places like the united states, a major big country. you highlight israel as an example of a country that's done

well in the very early stages of rolling out the vaccine. 12% of the israeli population has been given the first jab what specifically about that health care system or about that infrastructure has enabled them to be so efficient at getting the vaccine out to its people? >> multiple facts. the health system has dealt with emergencies in the past. they have greater trust in universal health coverage. people trust their health funds. the logistics has been managed better in some respects. i think many things led to it, not a single contributing factor we have to keep in mind that we are seeing that whether we use second doses, should we reserve them for people who received the first doses, those are issues which are about how society evaluates the risk/reward tradeoffs in covid-19

vaccination. those decisions will help society. some will be willing to take high risk in exchange for higher return, higher return i mean more people vaccinated quickly others may have to worry more about the risks involved, and by the risks i mean do we have sufficient evidence of second dose we have to keep these things in mind as we do comparisons across country. >> i want to ask you about the wedge between the production and the distribution, which is what julianna was referring to. could it be the case one of the reasons we're seeing so many logistics challenges now is simply because this particular vaccine, the vaccine given approval, the pfizer/biontech one requires an extremely cold temperature for storage, whereas say now we -- today is the first day in the uk that the astrazeneca jab is being administered from a logistical perspective it may be easier to get out because

it can be stored at fridge temperature. will that help with the distribution, do you think >> to some extent yes, but we have to keep in mind that the actual vaccines versus those sitting in a fringe at a clinic, at the point of vaccination, so that means the ultra cold chain infrastructure problems has been resol resolved something else is at play. but having a vaccine which has a different primary packaging, not necessarily 956 doses in a container which you have to put in bulk and break open those are things with the astrazeneca product which may help match the demand and supply quicker without having to undertake larger investments >> how important is it in your view that governments partner up with private companies in the case of germany, for example, the state of lower

saxony is one of the first german federal states to say they'll work with dhl to help deliver and administer almost 2.2 million doses of the vaccine. do you think that's a good template for other governments to follow as well and there's room for them to partner up with the private sector >> yes two kinds of private sectors one is the distribution and logistics companies. the second is the private sector which can help administer the vaccine, whether it's private clinics, retail pharmacies, retail chain pharmacies. i think the key thing to keep in mind is that the government should always be in the role of safeguarding and being the guardian of the vaccine supply chain, which means having all information about where product is going, how it is getting administered, while letting private entities do what they're good at, running planes, trucks, warehouses with i.t. systems all of which are coming together

seriously. that's the partnership model we want to see more i think it's starting to happen in some countries. just a reinforcement of those partnership structures will help >> most definitely something to take on board as we get to a crucial couple of months thank you so much for joining us >> thank you stay with us also coming up on the show, the uk prime minister boris johnson says it is time for britain to think big as the post brexit era begins we'll be back in just a few minutes.

welcome back to "street signs. the uk has finally completed its exit from the eu after 48 years as a member of the bloc and 4 1/2 years of brexit negotiations britain formerly withdrew at 11:00 a.m. on december 31st, albeit with little fanfare due

to coronavirus restrictions. the uk and eu will begin trading under a new treaty agreed to on christmas eve. boris johnson told the bbc that brexit will offer many in opportunities for british businesses looking to export >> of course there will be changes, we made that clear. and actually i think that there's a great opportunity for british smes and for exporters of all kinds, because now -- pick that up and wave it again >> 159 pages of red tape >> that's all that you have to do to sell around the world. and -- >> and to the eu >> so what we've seen is many companies in this country not exporting in the way that they could. the tragic reality of business life is there's some bureaucracy. we're trying to remove it. we have a massive opportunity to expand our horizons and to think

globally and to think big. >> there we have it. after 4 1/2 years, the uk has formally exited the eu and with a trade deal there were two founding principles i would say that guided all of these brexit discussions. the first is that the uk wanted to maintain zero quota access to the continent. so even though, yes, the uk has formally left the single market and has left the customs union, they still have managed to achieve that point, even though it's not necessarily frictionless trade the second is the retention of sovereignty and the right to resort back to its own laws. i think this was a particularly pressing point when it came to those discussions early on in the year, which is the role that was going to be the role of the european courts of justice on that particular point the uk has managed to come up with this compromise of a separate third party adjudication committee

that would be independent of the european court of justice in case they were to diverge on regulations. on those two points, the uk did manage to deliver on the founding principles of what they wanted to achieve on brexit. >> looking ahead, one of the big questions is around the financial sector given that the city is such a huge center for finance, for the region. based on what you're reading, how likely is it that we will get a substantial deal on finances down the line now that we do have a deal on trade >> i think that's one of the big questions for the financial services industry. actually last week the banks and the banking sector were remarkably underperforming i think because there wasn't a lot of clarity on what would happen with financial services it has emerged over the weekend that in about 12 weeks time or within the 12 weeks timeframe we should get some more color on the regulatory situation and the

equivalence and whether or not it's going to be a case by case basis. so whether each individual country in the eu will be designating equivalence rules with the uk or whether it will come from the eu as a whole. we should get more clarity hopefully on that front within the next couple of months or so. certainly a big one to watch for investors out there. let's get out to henry dixon thanks so much for joining us. just to take it back to uk and the investment opportunity there, i think most people do agree that there is a valuation, a deep valuation discount for uk markets. but how quickly do you expect that gap to close vis-a-vis the rest of the world if at all given the incredible amount of uncertainty still when it comes to the granular detail of this brexit deal and how things will transpire in the next few months >> yeah. i think there's still an easy

moment in time to be emotional about this i think probably you saw two sides of the debate unfolding. what i do like when we return it to fundamentals and valuation, we can quickly get a view of where the uk resides today that's basically where it was in 1974 and 1989. 1974 was a special situation, the market itself was cheap on five times earnings, the uk market would go up 130% in the next 12 months i think 1989 perhaps feels representative you sat down on january 1st of that year paying 13 times uk equities the equity market would be up 30%. clearly we hope history can repeat itself. you alluded to the last 4 1/2 years which have been a rumbling and rolling agony. in that 4 1/2 year period you've seen the uk equities being the most redeemed asset class of asset classes in that period we hope that does pause and

hopefully reverses and that money can make its way back into the uk >> what about the macro economic outlook here everything i read from the analyst commentary out there suggests that the uk will be one of the slowest to recover economies in the world if you look at the u.s., we're probably getting back to trend growth by the end of 2021. similar case for germany people are saying we'll be lucky if the uk gets back to pre-trend growth by mid 2022 what does that do for your investment thesis here >> two things. i think -- i don't want to go down this sort of cul de sac that is atistatistics the way remeasure gdp is different than other countries we are an output measurement of gdp. so our education sector recorded a massive recession in 2020. it was the only education recess anywhere on the planet because of the way we measure these things i think perhaps we do tend to

find with economists, they do try to perpetuate what they see in the now and clearly the uk will go down in the history books as one of the poorer economies of 2020 i always think mean reversion is one of the most powerful things you tend to see in economics so therefore i think the fact that the uk was not just the worst performing economy allegedly in 2020 but forecast to be in '21 and '22 is two pessimistic. you can look up the pent up perspective in this country is greater than in other areas because biz chance been held back by brexit uncertainty i think you can see a correction to the upside ahead of expectations as you look at the consumer area again, similar to other geographies, the pent-up consumer looks considerable. us as consumers have a wonderful thing we like to do, it's spend our money when we have it to spend. the amount of money in bank deposits would encourage that

there is pent-up potential not just in the corporate sector but also in consumers. >> really interesting point there that we could see higher savings rates turn into a spending boom in the months ahead for the uk i want to come back to the ftse 100 under-performance. to what extent do you think that's down to uncertainty around brexit, the restrictions and the handling of the virus situation in the uk versus the overweight nature of the index towards cyclical sectors like energy and banks if we are looking at a situation where the world enters this boom phase, the roaring '20s as some have called it, does that bode particularly well for the ftse 100 given its overexposure to cyclicals? >> the roaring '20s. wow. that would be quite something. look, clearly if the picture that i think looks credible to paint with regards to pent-up

potential plays out, then probably in truth it is where you want to be is cyclicly exposed. one thing we can agree on is that stimulus, for example, is not going to be such a feature of financial markets as it has been in the last two years therefore if stimulus is to unwind you'll see a normalization in discount rates. historically what happens when you see that, bond yields rise, you tend to get a normalization in valuation that's the big extreme let's say the big tech to the upside, energy and oil on the down side. they tend to converge. clearly it's been a decade where we have not had much evidence of that you would have to go back to 2013 to see a period where bond yields rose. that's exactly what happened you saw the consumer staples and very, very growth areas of the markets coming under pressure. it was the more cyclical areas of the market that benefited there was plenty of potential in the uk, not just from a value argument here. i don't like to think of the uk in terms of value.

there's plenty of great companies in the uk market that can defend themselves on growth credentials if we're going to see a slightly more constructive environment for growth, i pray for the roaring '20s, not necessarily plan for it. in that environment the uk market looks well set up because it has those value credentials that will mean revert quite strongly in a more buoyant economic environment >> we'll leave it there then on the outlook for a possible roaring '20s for the uk. henry dixon, thank you stay with us, we'll continue discussing the brexit effect with the natwest cirhaman, howard davies. that's after the break

welcome back to "street signs. i'm joumanna bercetche with julianna tatelbaum these are your headlines european equities rally into the new year with travel and mining stocks up front despite threats of expanding pandemic restrictions across the continent. britain delivers the first

oxford-astrazeneca jabs as a rollout kicks off but prime minister johnson warns tougher pandemic measures could be around the corner. the uk kicks off the new year and its first full week post-brexit. standard life aberdeen says britain as a financial center will ease with history >> the muscle memory has coalesced around london for the great city that london is and that's a significant challenge to anyone else to replace. >> and u.s. president donald trump appears to try to convince georgia's top election official to overturn the election result as control of the senate hangs in the balance >> the bottom line is many, many times the 11,779 margin that they said we lost by, we had

vast -- you have -- the state is in turmoil welcome back we are just getting the uk december financial manufacturing pmi numbers. they came in at 57.5 versus 57.3 for the flash. so slightly higher than the flash estimate from a couple weeks ago. this is indeed the highest print in three years we've seen for the month of december. so quite a strong rebound for the uk manufacturing sector. as i mentioned with the eurozone pmi numbers, take this with a pinch of salt it only took into consideration the first 10 to 14 days of the december month, then, of course, we do know since then economic restrictions have gotten harsher around the continent and in the uk. so a little bit backward looking at this point. italy's banking authority says it is granting british financial firms a brexit grace period while they await

authorization to do business in the country as a non-eu entity this after the uk and the eu's post brexit deal failed to include provisions for financial services italy's watchdog says it will allow uk institutions to carry out existing contracts until the end of june but they cannot sign new ones until a deal for financial services is agreed i'm happy to say we have howard davies the chairman of natwest joining us on the line thank you very much for taking the time to speak with us. the banks, the british banks and banks everywhere have had plenty of time to prepare for this day. the day has finally come, but do you think banks are sufficiently prepared >> they're prepared for a bad deal, if you see what i mean, a hard brexit. we for example have set up a subsidiary in amsterdam, a

branch in frankfurt, we have a capitalized entity which can deal with european union clients. so we've prepared as far as we can. what we can't prepare for is uncertainty which persists at the moment we do not know yet what the future arrangements or the regulation of cross-border entities in europe will be that's part of future discussion on regulatory cooperation, which is mentioned in the agreement but not described. and also there's a big issue of in the jargon equivalences to the extent of which uk markets will be regarded as equivalent in their structure and their regulation to european union markets. that's not been decided either so there's a limit to what individual financial institutions can do when there are still significant moving parts here >> but indeed the document does mention the move towards a memo of understanding that should come out within the next 12 weeks.

hopefully shedding a little bit more light on some of those issues what would you like to see in that document? >> well, that's probably more significant, actually, for the eu-based entities that have large operations in london what the most important thing is can the european central bank rely on the european -- on the uk regulators to look after, whether it's bnp or deutsche bank in london on whether they have information exchange to continue that's the most important thing. it won't be so significant for us, though it will have some significance that's the crucial bit can the ecb through its relationship with the bank of england still know enough about what's going on in those entities in london that it's happy to allow a lot of that to continue >> sir, i want to shift focus a little bit to the bank of england policy around dividends

for the uk banks we know the bank of england slapped restrictions on the uk banking sector with regards to paying out dividends about nine months ago to conserve capital, to cover losses from covid-19. then in early december we saw the bank of england ease restrictions on some banks, enabling them to pay out dividends, but now we're in a situation where the virus has become more easily spread and we're facing tighter restrictions yet again what does that mean for the outlook for dividends, for the uk banking sector as we look to 2021 and perhaps even 2022 >> well, where we rest is the statement in early december, which i thought was a good statement in that it put the responsibility for making dividend payments back where it belongs, which is the boards of the banks concerned. it describes some guide rails f you'd like, about the kinds of amounts of dividend that the

bank of england would be prepared to envision, but it left the responsibility of proposing that with the board. that's quite right so what's going to have to happen in the next month or so is that each board of the big banks will have to look at the prospect, will have to rework in the light of what's changed in the economy and changed in the lockdowns and decide what is sensibly affordable in those circumstances. that discussion will now have to go on. but the basic framework, i think, was set out by the bank of england in december as i say, i think it's a decent compromise between where they were from last march, which was a solid dividend ban, which is not tenable for the long run and some heavy sort of traditional governors eyebrows saying, you know, of course you can pay a dividend but be careful about what you pay that seems to be a reasonable place to be at the moment >> ultimately those discussions

i would imagine come down to the loan loss outlook and how much capital you need to conserve have your expectations for loan losses over the coming months changed as a result of the new restrictions and the tougher outlook we're facing between now and the summer when the vaccines really get under way >> well, let's be completely honest here. i and my chief executive have not asked our teams to rework all our models in the period between the 18th of december and today in the light of the previous -- of the new lockdown arrangement. we have not done that work let's be honest about it it would not have been reasonable to do it. also, of course, you need to see a little bit more data about what impact this new lockdown is having it's quite clear that lockdowns now have a bit of a different impact on the economy than they had right at the beginning people have learned ways of

working around them. you saw manufacture earning data from early december is quite good so we will do that exercise. we will see if it's necessary to relook but we and other uk banks took large provisions in the second quarter of last year and up to the end of the year we had not seen all the losses, bankruptcies feeding through, real-live losses that were envisioned in that scenario. up to the end of the year we were comfortable with where we we were we will have to look at it in the light of as much data as we can assemble during the month of january. that's not an easy exercise but we have to do that >> just to round off the discussion here, what do you think brexit means for the future of london as a global finance hub? do you think this lighter touch regulation drive is actually going to be beneficial for the uk economy medium-term >> i completely am baffled by

what people mean by lighter touch regulation there is no sense that the bank of england is going to adopt standards on capital that are not agreed in basel. most of the european regulation that really matters on bank capital and insurance capital come from global agreements. the european rules on capital come from basel where the americans are, the japanese. so the idea of coming out of the european union leads to light-touch regulation is just illogical. we're not following that we're following a global rule that comes down through a european directive into the uk and the european bit is gone but the global bit will remain so i don't think there will be anything quite light touch about

the new regime, certainly not for banks. there's possibilities in the insurance area where the european sovereignty ii rules could be amended i don't think we'll have light touch. as for the future of london, it will remain the largest financial center in europe for the foreseeable future but the extent to which it can retrain intra-eu business will depend on these new arrangements, on regulatory cooperation and equivalence. so i think the prudent man says look at that first and see how much of the eu business we can retain it won't effect, of course, london's business with the rest of the worldrobust >> fair enough we have to leave it there. thank you very much for taking the time to chat with us today howard davies, the chairman of natwest. we're getting some flashes come through from the auto industry and here we have confirmation that shareholders with double

voting rights have formally approved the psa group merger with fiat. so this has formally been approved now and we are just getting confirmation and this is the relative price action for both of those stocks. both of them are up decent in the last couple of months. we did see quite a big bounce for the auto sector in the last trading days of the year and this does create, i believe, the fourth largest automaker in the world now with this tie-up big news in the auto space let's take a quick look at how european markets are shaping up a huge bounce for the ftse today, up more than 3% this is the first proper day of trading since the uk formally exited the eu. ftse 100 up 3% there's a lot of value there we've been talking about it and perhaps investors are seeing that value and are deciding to dip in in the first day of trading for the year

dax up about 1.3 cac 40 up about 1.8% the ftse mib up 1.4% all of them are off to a solid start despite news of further possible pandemic restrictions on the continent and in the uk as well. we're expected to hear from boris johnson in the coming days as to what the measures in the uk might look like, some people are saying we may be headed for yet another national lockdown. so that's something to be aware of as well switching to foreign exchange markets, the theme for the better part of the second half of last year was the weakness in the u.s. dollar. today what we are getting is some weakness in the dollar transpire as well. euro trading firm versus the dollar, 1.3% almost the 1.23. the euro goes from strength to strength here. the pound, we've been watching that closely ever since that brexit deal was inked, almost at 1.37 right now so very strong performance out

of euro and the pound versus the u.s. dollar here the dollar continues to trade weaker as for u.s. futures, the picture for wall street is pretty positive as well. we have s&p, dow and nasdaq seen opening up in positive territory and this is propelled by the fact that the fiscal stimulus is, indeed, going to pass. we got that news towards the end of the year last week. and all eyes will be on that georgia senate runoff election which are taking place tomorrow. that will be very key for where u.s. markets are headed from here, and key for the outlook for the u.s. and any further physical stimulus that could come to pass turning to energy markets, opec's secretary-general warned a potential downside risk to demand in 2021, despite projecting crude demand to rise by 5.9 million barrels a day but oil prices are edging higher

ahead of a meeting of opec and its allies today amid expectations that the group will cap the output at current levels a bit of deal news for you mgm resorts launched an $11 billion takeover bid for ladbrokes owner entain coming up on the show, president trump continues to try and overturn the results of the presidential election urging one state official to find the votes. more on that in just a few moments. direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized that we needed a way to supplement our income. our friends sold their policy to help pay for their medical bills and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some

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welcome back to the show chinese factory activity continued to grow in december but at a slower pace than in the previous month the manufacturing pmi dropped to 53 points. analysts were expecting a much more moderate decline to 54.8. official figures from last week showed a continued recovery from the pandemic but at a much more

sluggish pace. and beijing has vowed to take necessary measures to the nyse's delisting of the three biggest chinese telcos donald trump's executive order bars americans from investing in companies linked to the chinese military shares are trading lower in hong ko kong, but according to the nyse the delisting could be completed by thursday this week. the chinese minuistry of commerc accused the u.s. of overusing its power. president trump pressured georgia's republican secretary of state to "find votes and overturn president-elect biden's victory in the state." that's according to audio obtained by nbc news and first reported by the "washington post." the u.s. leader repeated a slew of false claims regarding voter fraud and berated state officials while reiterating that he won the state in november's

election more than 3 million people in georgia have already voted in the state's runoff elections, races that will decide whether republicans or democrats control the senate the 3 million votes count for 38.8% of all registered voters in the state according to the universityallocations this year.

where exactly do you see valuations looking stretched is that a fair comment across the whole of the u.s. market or are there particular sectors that you're staying away from? >> it's not so much sectors as size, actually if you look at the top ten stocks in the u.s. equity market in terms of market cap, they're much more highly priced than the rest of the market even relative to history so the mega cap u.s. stocks look somewhat stretched here. it's not to say they'll fall, it's saying that we sort of priced in a very best case scenario into the u.s. equity market whereas if you look at stock markets around the world in europe, in japan and emerging markets, they look much more reasonable and i think that's very important as we go into 2021 >> this is a big week for both the political front and for

market perspective in the united states with the georgia runoff elections and a lot of investors looking at this event as potentially market moving given the implications for joe biden's policy agenda, the economic recovery and even the path of interest rates what do you think the market is pricing in at this point and how do markets react in the event that democrats take both seats and take control of the senate >> i think the markets can price in one result or the other because this is too close to call it's very, very close. but it is important, if the democrats take control of the senate because even in a 50/50 senate the vice president has the tie breaking vote, that would allow, i think, particularly more stimulus pandemic relief, money for state and local governments. you will get more of a fiscal push in that environment maybe get a faster recovery but also higher interest rates if the republicans retain control, as you said, i think they will tend to block a lot of

that fiscal expansion. i think the senate majority leader can stop that even coming to the floor that means a slower recovery but also means lower interest rates and that the federal reserve will have to do more to help the economy out. i think it does have big consequences for markets >> just to pick up on that, david, it seems clear that the result is going to be very important for the trajectory of interest rates, but what about the u.s. dollar, because the greenback has been trading on the back foot for the better part of the last couple of months now is it your view that irrespective of what happens tomorrow the dollar can continue its downtrend? >> i think the dollar should come down in the long run any way, but i think a republican win tomorrow means lower interest rates but also less economic growth in the short run, both of those things are dollar negative. i would expect the dollar to do worse under a republican victory tomorrow than under a democratic victory. >> just switching back to equities again, to pick up on

what you were saying about the leadership and the fact that the mega caps are looking quite stretched here going into 2021, how do you think that leadership will differ from what transpired in 2020 if it is the case that mega caps are looking stretched relative to some of the other tech stocks out there, other stocks out there, rather, even the bigger portion of them in tech, where do you see the leadership coming from >> okay. i think the big difference this year over the last year is that there will be less uncertainty once we get through this last political uncertainty, getting through the georgia elections and inauguration day, after that things will calm down. it will be seen that the pandemic is winding down, too. with less uncertainty there will be more focus on fundamentals rather than momentum i think it's momentum that's driven the mega cap tech stocks up and left other stocks languishing. is if you have a rotation, things like financials, perhaps

some consumer stocks, as i said a lot of non-u.s. stocks ought to do better just based on valuations in what will be a much more normal slow-growing u.s. and global economy. >> david, we'll have to leave it there. thank you very much for joining us, david kelly chief global market strategist at jpmorgan asset management. fresh comments out of the german health ministry according to a document seen by reuters, this is with regards to the vaccine, the german health ministry examines whether to delay administering the covid-19 vaccine shot to stretch supplies according to a document seen by reuters recommends drawing six doses from vials from the pfizer/biontech vaccine will increase shots by 20%. currently the guidance is to use five doses per vial. the eu regulators are managing

astrazeneca and looking for a way forward for the astrazeneca vaccine and approval those are fresh comments out the german health ministry >> today in the uk we started administering the first jabs of the astrazeneca vaccine. that started in the early hours of the morning a quick look at u.s. futures to see how the first trading session is shaping up. all of the majors in wall street are pointed to open up in positive territory s&p seen up 23 points. dow up 170 nasdaq up 66 it's a big week for u.s. markets, not only from an economic standpoint with data but also the political anoi aweith the georgia runoffs tomorrow that's it for the show i'm joumanna bercetche alongside julianna tatelbaum "worldwide exchange" is coming up next.

it is 5:00 a.m it's cnbc. here's your top five at 5:00 trading in 2021 coming in, well, like last year went out. on the move higher futures up big stocks continue to catch a bid, but nothing can top bitcoin's bid surging again breaking through 34,000 before pulling back in a big way. it's down a couple thousand right now. trump urging georgia's top election official to overturn the state's presidential

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