We have the travel and leisure stocks popping sharply higher. On the other hand, the stayathome trade, the zooms and the pelotons are down. Interesting to see how much of our behavior trickles forward into the future. Right now those stocks are being sold off. The one piece not quite fitting into the puzzle, bonds just about flat. Bonds not selling off. That may stick to the more difficult months ahead as the vaccine is raging here in the u. S. The virus is raging here in the u. S. Ahead of the vaccine getting out there. Bonds more nearterm looking at the reality. Stocks more optimistic, doing with the s p 500 does. Later alix david would be speaking with dr. Celine gounder. Paulsontime ago, henry appeared at the Bloomberg New economy for them and set a comprehensive new approach to u. S. Relations with china. We welcome him back to balance of power. Lets spend just a minute on the new Economy Forum. We are about to Revenue Administration in the white house. We will hear from the president elect in about an hour and 45 minutes about the economy. What is the best advice for this administration coming in to try to get the economy in the United States and globally going again in the face of a pandemic . Mr. Paulson first of all, the new Economy Forum is an amazing group. Leaders, business government leaders, acquisitions from east to west, u. S. , asia, middle east, africa, they are looking to the new joe Biden Administration. There is a profound sense of isief because this predictability. On crushing focused the virus because it is ravaging the world. Focus, and ia big biden,or president elect his huge focus initially has to be domestically. Anddepression the virus to crush the virus. We will need more stimulus in the interim and im focused on the recovery package because a lot of what i talked about was competing with china. The road to success begins at home and begins with the kinds of things we need to do to fix our economy and make it strong. Do with everything from investing in education and reforming immigration policy so we attract talent and upgrading our social safety net for the most vulnerable. Has to a big part of it a Infrastructure Program that is going to emphasize not just that aret technologies going to be the key to our real longterm competitiveness. David you spent time in washington, not just at wall street. Can we get that done . Can we get a big Infrastructure Project done you say we need to have . Mr. Paulson that is the 64,000 dollar question. I sure hope we can. One thing we have got for sure with the incoming president is he has shown an ability to work with congress and cross the aisle. I think he is going to need to put together a package that speaks to all of america and speaks of the kind of reform. I think there is general agreement we need infrastructure. The question is how will we pay for it. There interesting ideas to pay for it, and again i want to see a package focused on longterm economic competitiveness. David lets turn to the subject of your talk at the new Economy Forum, u. S. China relations. Theres a lot of perception that President Trump did get the economy going again through tax breaks and perhaps his policy and china stood in the way of growth. We tend to talk about this as free trade on the one side and protectionism on the other. You have a sort of third way is the way i interpreted. Mr. Paulson i am not for protectionism, i am not for isolation. President elect biden understands china, the team around him understands china. He is inheriting a relationship with china that will be fraught for the foreseeable future because this is a strategic competitor. This is structural. It is largely structural. When you have an established power and a rising power and the rising power has a very different economic system, local , competition is baited through the relationship. It will be a quarter storm for the relationship. They key is how you have competition and keep healthy without it becoming destructive . Of the points i make is the goal should be competition without unnecessary confrontation, because what we have seen is confrontation without effective competition and is not working for the American People and making the world a sabr place. As i think about the a safer place. As i think about is largely economic. We are concerned about military cooperation, but at the core is economics. Our military strength is rooted in our economic strength and so it comes down to how do we have smart competition . Competition that does not hurt the United States while we are trying to contain or hurt china. This is where i talk about targeted reciprocity. The key to trump has been the idea of reciprocity. Deal with china as they deal with us. Open markets in the u. S. Only of china opens them for u. S. Companies. That does not make sense. Feet,nds good at 100,000 but it is flawed to the extent that if we make ourselves look much like china, we will not ultimately be as successful as we need to be. I am looking at that. I did not favor the trump tariffs. They were a tax on americans but they also make it hard for our businesses to be successful, to be treated as reliable suppliers , it does not make the u. S. And attractive destination for foreign investment. As long as we have those in place, most of the damage is done. I think there is great opportunity for the incoming have negotiations and open up the markets where we are most competitive. I understand what you are saving what youre saying. You did not favor the terms but you do not think President Biden should take them all off. You think there should be negotiations to create the structure of the table you think about. You do not compete out of all fronts. When does the United States say we are going to compete in there. Mr. Paulson i am going to pick one area, in the environment. One area we know there will be a change is Climate Change. This is a key part of the joe biden agenda. There are a lot of ways we can work with china cooperatively. If were going to make any real progress. I believe we need to continue to treat Climate Change like any other economic issue, so i do not like the fact there is all kinds of tariffs on employment. F goods and Services China has tariffs on environmental goods and services. There is a huge market in china, a 3 trillion market in china continuing to see investment to clean up dirty air, turning china. Inhave great technologies the United States, so we should look to open up that market. That they made the Carbon Neutral pledge. Im sure President Biden will redo paris. One of the things we have importance of u. N. Voluntary agreements, they will not solve the problem themselves. They will not come close to solving the problems. We are going to need to put new structures in place involving the major economies, structures avoid the that billing of countries around the my point is we need to treat Climate Change like any other economic issue. We will cooperate, but we will also negotiate tough. David competition is in our dna. We love competition in the United States. How can you compete when the competitor on the others is the governor. Is it possible to structure this in such a way we can effectively compete with the government . Mr. Paulson i believe we have a system that is better over the long term and will prove itself over the long term. Capital itate think our system will prove to be better over the long term. In terms of opening the chinese , i think there many things all be difficult to change but there plenty of things we can change. You are focusing on the right topic because the Trump Administration has been looking to open up, looking to negotiate oldstyle purchase agreements. I think the key is to look to the future, to love synergies and make structural changes. The protectionist tool of choice. Oday is not tariffs it has barriers, subsidies need to work to break those down. I think what the Incoming Administration should do is open negotiationng trade , investment negotiation with china. Looking at structural issues. I think they should focus on some of the things. Itll be easier to get done use unconventional tools to force compliance. A big part of this is going to be working with our allies and a huge opportunity and challenge that President Biden has is to restore global cooperation. A key part of that is going to be figuring out our work with our allies to exert National Pressure on china. Comes david that comes right on the heels of a major agreement china participates in. Does that make President Bidens job harder . Mr. Paulson it does. As we have been absent for four years in terms of trade agreements in asia, it was just a travesty we were not there for the tpp. The Chinese Market being open for all sorts of other economies, and we are sitting on the sidelines. They circled to success in our petition with china leading domestically, strengthening our economy at home, and making sure it is a model, or being a waiter overseas. I do not know how we will go overseas and this we get trade deals done now be a challenge because i will tell you howcans and democrats does that make sense in a world where 96 of the people are out of the cash out of the United States and a large part of the Economic Growth will be out of the United States. So many people want to reject the idea out of hand, which is absurd, that we do not benefit from participating in the Chinese Market. Even today, as unbalanced as it is, we benefit significantly and there is an opportunity to benefit much more. Benefit we have so many outstanding who believes in United States. How are they going to be successful as we want them to be . Unless we resolve some of these issues. The income president will need to work with china to determine where we are going to compete, where we are cooperate, and where will be adversaries. Until we do that, it will be hard to be as successful as they need to be pure david as i will call it, targeted reciprocity. Hank paulson, always a delight to talk to you. The former u. S. Treasury secretary. Coming up we will talk with Energy Expert elizabeth sherwoodrandall about what a Biden Administration Energy Policy will apply. Ons is balance of power Bloomberg Television and radio. David this is balance of power. We turn to Mark Crumpton for bloomberg first word news. Mark former secretary of state Henry Kissinger says the incoming Biden Administration should move faster restore lines of communication with china that prayed during the trump years. Speaking of the Bloomberg New Economy Forum, dr. Kissinger said if not the u. S. Could be risking a military conflict. Kissinger unless there is some cooperative action, the world will slide into a catastrophe comparable to world that with the technology is even more difficult to control than the technology of the period. Kissinger, who paved the way for Richard Nixons trip to china, said he hoped that shared threat of the covid19 pandemic would provide an opening for political discussions between the countries when joe biden takes office. Fastpacedgn the hunt by drugmakers and scientist is paying off in the fight against the coronavirus mode says its Moderna Vaccine is 94. 5 effective in a late state critical clinical trial. The news comes a week after a shot by pfizer was found to be more the 90 effective. New York City Schools will be open tomorrow as a positive test rate for covid19 remains below 3 . A rising infection rate let mayor bill de blasio toward parents schools may be close today, but the rate dipped over the weekend. Mayor de blasio said we have a fight ahead to keep them open. New york city sevenday average of new cases jumped more than 1000, something bill de blasio called very worrisome. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Mark Crumpton. Bloomberg. David this is balance of power on Bloomberg Television and radio. We want to check on the markets. Joining us is kailey leinz. The second monday of equities going up because we have another vaccine candidate. Kailey we had pfizer last monday, moderna today. The company, the stock itself 8 higher, trading at a record high after rallying the most since july on releasing its preliminary analysis of a late stage, largescale study of its vaccine candidate. That includes highly effective efficacy rates of 94. 5 . Virtually all of the 30,000 patients involved in the study did not show any covid19 symptoms and did not contract the virus after receiving the vaccine. Another notable point was the data from moderna. The vaccine stable at refrigerator temperature for about 30 days. A longer than expected shelflife which could mean a distribution challenge. We expect final results toward the end of this month. The company says it could be a game changer, and dr. Anthony fauci call it remarkable. We got something similar from pfizer. That vaccine candidate uses similar technology. Both of these companies are expected to seek accelerated use authority from the fda if they do proceed. David in the past we have seen a rotation out of the stayathome stocks into the last into the lets go out stocks. Initially the nasdaq was down coming out as backup in the green. Is it taking everything with it . Kailey do a certain extent. Youre still seeing a lot of the stayathome players, the likes underm and peloton pressure. It is not that tech is down, and is Everything Else is higher, energy, materials come industrials come it is those names leading in the s p 500. What is noteworthy is the russell 2000 hitting a record high. Reopening, the economy will do better in theory trade we are seeing need play out so we are not seeing big tech under as much pressure as we thought last monday but there are still lagging in a broader sense. David it is clear equities are liking what they are seeing, but do they believe it . If you look at the bond market, is not entirely restaurant. A little bit of trimming on the bond market. I heard volumes were not going up which is indication they do not quite believe it . Or they were already expecting it. There is a question how much this was already priced in given that pfizer had the 90 efficacy rate in the data it released last week. Everyone was expecting something similar from but are not from moderna but it may be the bond market is not reacting to such an extent. We may be getting a vaccine, but you have to scale it and distribute it. All of that could take time. The equity market maybe willing to price in. David i do not want to look a gift horse in the mouth. Thank you to kailey leinz for that great report on the market. Former obamat, administration Energy Official elizabeth sherwoodrandall on the transition from energy under President Trump energy under President Biden. Power onalance of Bloomberg Television and radio. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Any idea how much it will cost . You have a choice. Insurance or goodrx. I have insurance. Insurance is not what it used to be. People struggle to get their prescription covered and prices keep rising. I recommend goodrx. You get free coupons to save on your prescriptions. [narrator] compare prices to get the best discounts. Goodrx, smart. [narrator] stop paying too much for your prescriptions. Download the free app today. David this is balance of power on Bloomberg Television and radio. Im david westin. News wemberg first word go to Mark Crumpton. Mark a member of the Trump Administration may be acknowledging that President Trump lost the election. Speaking at a Global Security summit, a National Security advisor Robert Obrien is pledging a professional transition. He indicated that joe biden appears to have won the election, something other top officials have been reticent to say. Over the weekend, the president conceded, i conceded n nothing. The conversation comes amidst speculation that President Trump might order a rapid withdrawal of American Forces in the country. Firedeek, the president defense secretary mark esper, who had tried to talk the president out of complete troop withdrawals out of afghanistan and syria. Steve schwarzman has a way to make teachers stand out in the workforce. The cofounder of the Blackstone Group says they should be the only group of workers in the u. S. Exempt from paying income tax. He spoke at the bloomberg Economy Forum. It would mark them apart from all other types of employment as a valued class. Will also increase over 120 countries. Im Mark Crumpton. This is bloomberg. David thank you. President elect biden will come to office having laid out a vigorous policy for clean energy during the campaign. Georgia tech distinguished professor elizabeth thewoodrandall served as former deputy secretary in the u. S. Department of energy. Welcome to bloomberg, great to have you. Lets start with that plan for green energy that president elect biden was very assertive on. Much of that can he get done without a majority in the senate . As you know, that is up for grabs in georgia. Elizabeth a lot can be done. This is a strategy that will climate, andrgy, security agendas. All americans have a stake in a recovering economy after this pandemic is under control. I would describe four main lines of effort that will be pursued that will be doable and achievable with cooperation across party lines. First of all, to achieve greater efficiency in how we use energy today. That is a relatively easy win. Bulbs, drivert mileage, and pushing for a cleaner economy at home also means that our businesses will push for d carbonized goods. Second, we need to strengthen our ego innovation system. That will be a winwin for the American People, accelerating job creation. Again of interest across party lines. Also, this will have to be on a grand scale, investment, lots of crosscutting platforms that will support other sectors. We also have to invest in Clean Energy Infrastructure to support infrastructured of the future. Hardening our power grid so that it will be the backbone of the new economy. Fourth, we need to rebuild partnerships. Biden has made his career on reaching out across party lines, it is something i have seen him do since working from him 35 years ago. He will build bridges and coalition in congress so that american can lead on this important agenda. David that was very helpful in laying out how we may spur on the development of clean energy, but what about reining in on fossil fuels . He has also talked about cutting subsidies to fossil fuels, cutting back on fracking on government lands. Can he do that without support from congress and the senate . Elizabeth the government needs to focus on doing all the things it can do to meet our net zero goals by midcentury, the goals that president elect biden has put forth in his plan. The government will work on generating optionality. The needs of different states and cities and countries will be varied. We need to meet the needs of the workforce in those places. Investing in Technology Like Carbon Capture storage will be gas country. Il and similarly, they will want to invest in new technologies that have not been invented yet. I have confidence that we can bring American People along with us in this bold endeavor because it will mean a Better Future for all of this. Is thehow much of this government to spur it on, and how much is the market going that direction anyway . We heard the president elect say there will be a transfer away from fossil fuels. That has already been going on. Elizabeth it has been. The markets have moved ahead of us. In the last four years, we have fallen behind. Other countries have taken the lead in developing their businesses, their Technology Solutions they are bringing to market. That is why i said there is an honest opportunity for us, the greatest ecosystem in the world, combining investment to grow new Technology Solutions like the advanced Research Project energy , modeled on the defense department, which can Bring Technology forward, bring them to broad deployment. I see this as being an innovation chamber. Government invests where you need early investment, and the private sector picks up when you need to move out to market. David talk about one area that you were in charge of, nuclear arms control. Do we have a sense of where President Biden will take that . We know President Trump was trying to get talks started again with russia. Of course, im speaking as a private citizen, but i have worked with joe biden on arms control since the mid80s, and he is insured to committed to ensuring our safety and reducing our reliance on Nuclear Weapons and building collaborations with other countries. When we achieve the transition that we just heard on your clip, the National Security advisor has said it will be a professional transition i look forward to that happening. Then we will have steps after Inauguration Day to extend the new start treaty between the United States and russia, deliver on efforts to build on new achievements in reducing the threat of nuclear war around the world. Policy,s a matter of would you advise that we go back into that intermediate missile treaty that we pulled out of with russia . Elizabeth we need to look at the full array of issues. New weaponseveloped and new Delivery Systems over the past years. We need to consider all of the elements as we develop a new approach to reestablishing strategic stability, which is at significant risk today. David talk about that transition he referred to. What are the risks of holding further . At transition there are changes being made in some of the areas that you were responsible for in the department of energy, including the head of the National Security administration. Is there a cost in this delay . Elizabeth when i had oversight responsibilities for the from then in 2016 obama to the Trump Administration, we were extremely vigilant. Wouldged that adversaries receive the transition as a potential moment of weakness. You want to be even more focused on security threats, insuring the handoff is absolutely study without any balls dropped. In this case, because of the delay, you could see risks. But i also have confidence in the career people in place to look after our interests around the world. I also know the people working with the president elect are extremely capable and confident and experienced, and they will be ready to lead on day one, regardless of what happens during this transition period. David this is an important point that Many Americans may miss about the transition, applying to energy and more broadly. We see a lot of political appointees being moved out, but there is a Civil Service there, a lot of intellectual capital, that the president cannot really change. Fought in he has many cases to marginalize and penalize those who would speak truth to power among the career civil servants. Whok about the diplomats were moved out of their jobs because they challenged the president s approaches. We have seen this happen in a number of different agencies on climate policy. I also know that we have people willing to sacrifice their careers because they know they need to do the right thing. In this particular instance, we are relying on the career military, when you are talking about our security. We have a joint chiefs of staff that do not change, that remain in place, that are responsible for our safety around the world. David it was really helpful having you today. That is elizabeth sherwoodrandall of georgia tech. Memberup, we talk with a of the Biden Coronavirus Task force, dr. Celine grounder gounder. This is balance of power on Bloomberg Television and radio. David this is balance of power on Bloomberg Television and radio. Im david westin. Markets greeted news of another potential vaccine Success Story today with enthusiasm. How does the moderna candidate compare with the pfizer faxing me got a week ago . And what is the difference between successful tests and distribution on the other . We welcome down dr. Celine langone schools of medicine. Give us your read right now on this moderna candidate, as opposed to the pfizer candidate. Dr. Gounder there are some key differences. Both the pfizer and Moderna Vaccines rely on mrna technology, a previously unused this is somewhat uncharted territory. These are the first vaccines based on this technology. Both of them appeared to be highly effective, at least based on the data shared with us so far. One key difference between the pfizer and Moderna Vaccines are the temperatures in which the Moderna Vaccine needs to be stored. The Pfizer Vaccine needs to be deepfreeze, 70 celsius. That is not really something the average Doctors Office can accommodate. The Moderna Vaccine in contrast can be frozen or refrigerated at a more normal range of temperatures for up to 30 days. That means its a lot easier to distribute than the Pfizer Vaccine. David as a scientist, a lot more data that you want to look at to understand either one of these better, specifically who got covid, who did not, comorbidities, terms like that. At the same time, im told they may apply for a youth authorization as soon the end of the month. What do they need to ask for that authority from the fda . Dr. Gounder some guidelines have been issued in terms of the minimum number of patients enrolled, the number of events. Numbers of people in the placebo arm who did not get the vaccine, versus the vaccine arm who got coronavirus. That is the only way to say was protective . One thing that is accelerating that collection of data is the fact that coronavirus is surging across the country, so we are getting that signal more quickly. Also data on the side effects. So far, both of the vaccines seem pretty safe and effective. David are there other candidates in the pipeline that could be coming up like next monday . Seems like every monday we get another announcement. Dr. Gounder two others are very shortly after in the pipeline, the johnson and johnson, the oxford vaccine. Those are also far along. There are a host of others in the pipeline after that. Its important to understand they will be a number of vaccines that will probably get emergency use authorization, that will start to scale up in the coming months. Part of the decision will be which vaccines to use for which populations come in what areas, and that will be an evolving thing. David i understand its a big assumption until we get answers to the tests before we can distribute the vaccine. What would it take to distribute millions of vaccines . Both of these candidates, i understand, you need to do it twice. Dr. Gounder both the moderna and Pfizer Vaccine require two doses about a month apart. That in another itself is a logistical challenge. You need to make sure everyone at caps the first dose gets the second dose. We are all busy, we have things that we are doing in our lives, and we may forget to come back. We need to make sure that happens. I think people underestimate the complexity of the supply chain and Delivery Systems. Think about personal protective equipment. Technology,mple masks, face shields, gloves. But look at how difficult its been to make sure we have adequate supply of those in the pandemic. Now multiply that in difficulty with new technology that requires being kept at cold or ultracold temperatures. This will not be a simple distribution logistical challenge. David and everybody will want it at once, i presume. Who will you decide gets it first . Are there plans inplace right now to say this is the priority that we are going to give to people . Dr. Gounder some of those plans are occurring at the state level, some of it will also be happening in the Biden Harris Transition Team the national level. We have some sense of the targeted populations will be frontline workers, highrisk populations, People Living in nursing homes, assisted living facilities and the like. After that, youll see an emphasis on people with underlying medical conditions that put them at high risk for severe disease. David you are one of a group of distinguished scientists as part of this task force for president elect biden. There is concern about the transition not happening the way it would normally happen. From your experience, is that a big problem . Do you have the data that you need at this moment to start working on what you need to starting january 20 . Dr. Gounder we have the data that is available to the rest of the public. Essentially, we are at war with this virus. If we were in the middle of a war with a foreign power and we did not know precisely where our aircraft carriers and tanks and troops were, it would be problematic to continue waging that war during a transition of power. On them on hand, we are gathering all the data that is available to us, but we really need to see the gsa move forward on ascertainment, so we can move forward on getting insider information, to move forward with our own plans. David what are your priorities among the task force . What are you trying to take on, first, second, third . Dr. Gounder you will see early on the president through an executive order will scale up production of personal protective equipment. Gownss the masks, gloves, that have been in short supply throughout the entire pandemic that are in even more scarce supply now that cases are surging across the country. The will happen quickly in new administration, something that we have been pleading the Current Administration to do for months. The other key priorities are testing. The Current Administration has really discouraged testing, but it is difficult to contain a virus if you dont know precisely at any moment in time who is infected, what places, and why its happening. That is dr. Celine gounder, a member of president elect bidens covid task force. We will have more with her on Bloomberg Radio coming up at 1 00. Coming up, we hear from Henry Kissinger about covid19 and its effect on u. S. China relations. This is bloomberg. David Henry Kissinger was the architect of u. S. China relations in the modern era. He spoke earlier today at the Bloomberg New Economy Forum about what covid means for International Relations and if there is a global solution. Henry the longterm solution has to be on some global basis. , then that framework performance of countries that solve the problem and also their , and themedical needs global, regional method of serving it may affect the position of those countries. But i dont think covid should be dealt with from that point of view. In theld be dealt with need of certain issues that can only be dealt with on a large basis, hopefully even a global basis. Is that what you referred to at the beginning in terms of a framework of issues that china and america could come around together on . You could do clomid climate, covid. We need to live in a country of harmony. That there will always be stresses. Is is there aon direction in which we can cooperate . There will be other issues that we can differ. There are some places for some cooperative action. Technology that is even more difficult to control than the technology of the period. David that was Henry Kissinger. Watch more on live go through your terminal on bloomberg. Com and on the new economy social channels. This is bloomberg. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Mark im Mark Crumpton with bloomberg first word news. Political experts say House Speaker nancy pelosi has her work cut out for her with the narrowest majority in decades, the speakers ability to build consensus and keep democrats moving in the same direction will be severely tested. Her first test comes later this week. House democrats will hold leadership elections that will offer a reprieve from the existing team at the top led by nancy pelosi, steny hoyer, and james clyburn. There is work today of another promising vaccine in the fight against the coronavirus. Moderna says its vaccine has been found to be highly effective in preventing the disease. 94. 5 efficacy in an analysis of late stage trials. Blockccine may also severe cases. Shopk ago, a similar developed by pfizer and biontech was found to be more than 90 effective. The u. K. Is signaling it will not back down as present talks with the European Union enter another crucial week
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