Good morning on Bloomberg Radio, good morning on bloomberg television. Too much to talk about. You hear it within those voices, that maybe it is the morning after, and the vaccine is really not out there. Now we get into a churn of the immediate news. Jonathan it is a tugofwar between the forward outlook looking better and the nearterm outlook looking worse. A real divergence between the two. How policymakers navigate the former will allow markets to keep the help about the latter. That is the hope for the market. First half of the week about cyclical appetite. 500 downhalf, the s p 0. 6 and nasdaq futures just about positive on the day. Tom we are going to roll the data check here through because it is a mess this morning. I just saw a 93 print on dollar. That speaks to the resiliency of dollar. Weve had a weaker dollar, but we just seem to come back when the uncertainty reigns. Lisa that seems to be the theme with all of the uncertainty on the dollar. When there is a risk off feel, people go to the dollar. Today i am watching treasury yields, and part because of record options this week. I think what Chris Verrone said about how they want to bleed higher to that 1. 30 , 1. 40 place, there is a question of what does that do. How does that rearrange equity valuations . How much does that rearrange peoples longterm growth expectations . Tom i know you are in preproduction for the real yield tomorrow, but massive negative real yield, disinflation expectations and inflation data in this hour, and then you come down to the real yield. We had a lesser negative real yield. Now what . Jonathan the real yield is at the epicenter of a lot of these moves. It has been the underpinning of why we had this positive correlation with gold and equities because tech growth has been tethered to that story as well, and in many ways, the u. S. Dollar. The dx why bottomed at the back end of august, august 31. He tech big tech topped stocksre broadly, growth , i think it is interesting to see how that develops in the coming months. Tom it will be interesting to see. And of course, look for that afterow out of jon, midmorning matters with john ferro. And i write that in the last number of days, full facing credit is really separated from highyield and investmentgrade . Is that a correct statement . Lisa basically, it has gotten more extensive for the u. S. Government until today to borrow money, and less expensive for riskier companies to borrow money commode is typically what you would see in a risk on environment. Basically, that spread, that extra yield investors demand is evaporating because they see the perceived risk as dissipating. Lets gogo to ft, and hes betting against it. Do you see a bet that spreads will widen in credit . Jonathan i see a lot of people who are uncomfortable with the idea of where spreads are right now, but not operable enough to push the other way. Why . The central bank is in the game fixing the price. We have a pricesensitive buyer in credit. Youve got to believe that somehow this market can give way to a central bank that is sitting there on the bed whenever anything goes on the bid whenever anything goes wrong. Beata joins us kirrr right now, beata joins us of alliancebernstein. How do you see this through 2021 . Beata we see the same things the market has been focusing on for the past year. The offsetting force is the fiscal support and monetary support that is providing tremendous mental and liquidity to the market. I think what you have seen over the course of the last few weeks is really a recognition that so many people were waiting for event risk around the election and have reengaged with the market as there is more clarity around that. So i think we have to wrestle with those two forces. Jonathan jonathan i think a lot of people are also thinking about whether we would have regime change away from the Monetary Policy regime to the fiscal policy regime. I do wonder, for you, where you are sitting right now. What regime are we in . That we are in a regime has been coordinated. What we saw in the First Quarter was an incredible response both in times ofs both in terms of speed and magnitude. Then over the summer, it has been frustrating to not see that second round of fiscal stimulus be passed. We really think the economy and limit leading markets will be looking for direction around fiscal stimulus. A much smaller stimulus package them what wouldve occurred under the consensus views going into the election of a blue wave , but nonetheless, we do think you will see in the numbers today that there is still a tremendous number of people looking for work, out of work that need help, and especially as covid19 ramps up pretty relentlessly. We think that fiscal stimulus is going to be critical. Jonathan the numbers are ugly in the United States. Morerospect of d. C. Doing has diminished over the past couple of months, as you have described. What are the consequent as of that for you as you look into yearend . Beata i am coming to you from chicago, where we are the one state in the union right now that doesnt even allow indoor dining, to give you a sense of the escalation and the potential for ongoing shutdowns and lockdowns. We do see the vulnerability of the economy to ongoing stress from lockdowns. That being said, we are longterm bullish, and in fact, we went into september and the election slightly overweight equities. That has been the call. We have turned that back a little bit, but ultimately maintaining that position because we see vaccine optimism and earnings recovery that are substantial in 2021. Lisa lets build on that. Is there an idea that the virus count and all of the highfrequency data people were pouring over this year, none of that matters right now if youve got a longer term view . Beata we dont think none of that matters. If you think about what happened in the spring, the market was really focused on a National Health care access. The inability of the system to manage the virus. What we have learned today, and youve had prior guests this morning actually addressing this, is better treatment, ultimately lower fatality rates, and more targeted Economic Impact for more localized shutdowns. That is what the market is effectively expecting. But we do come back to the fact that fiscal stimulus is necessary in some form. The sooner the better, but the odds of that happening this year are being reduced as we speak. Tom you always fold a lot of math into this. I love the mathiness of the phrase the idiosyncratic drivers. Discuss that. What is the new idiosyncratic driver . Beata in our opinion at bernstein, what it means is that being an index investor is not enough. There are a lot of Underlying Company fundamentals that you have to look at very specifically. We know we are in a year where growth has led in and assured mary way, but with in the style in an extraordinary way, but within the style of growth. You have to look at the company, its balance sheet, its management team. Ultimately we are focused on buying enduring businesses, and in the end, we think that focus on Stock Selection will prevail. Jonathan lets talk about that. Just give us some idea of how you do that. Oflier this news, the likes amc bids up aggressively. I want to understand between plays thehat catchup trade on a bit of hopefulness, and the more durable recovery you anticipate. Beata i would leave that to our Portfolio Managers who are ultimately refundable for kicking the tires of the management team, but what we have been doing over the last couple of weeks is picking up a little bit more in the cyclical space. To give you an example, even within technology, focus on semiconductors. An area we think will continue to benefit from the stayathome economy, but ultimately support that reversal of going back to normal. King up a little bit more in the transportation sector as well, and some of the most beatendown names in Consumer Discretionary in travel and leisure. That is how we are singing about positioning today. Jonathan thank you. Always great to catch up. Thank you very much, of alliancebernstein. Tom mentioned to me that actually, play at the masters has been suspended due to intimate whether that took place at 7 35 eastern. Tom theyve got to be sensitive down in augusta. It is not like the british open, where they just play, play. I love the british open because the rough is like this stick, the putting green is like an inch. That is like real golf. Jonathan augusta is beautiful. Tom it is. Jonathan title scheduled tiger scheduled at 8 05, sam need after 12 noon. Jonathan it is really important that the weather fades quickly. Some say this tournament could move from spring when this tournament moves from spring to november, they need to get this done quickly before it gets dark. You have a series of players teeing off from the first hole in the tent simultaneously. Try to get these rounds completed. Tom can you see me playing golf . Lisa no. [laughter] jonathan no. Maybe in the car with a beer or some thing like that. Something stronger probably. Alongside tom keene and lisa abramowicz, im jonathan ferro. This is bloomberg. Ritika with the first word news, im ritika gupta. The state of georgia will conduct a hand recount of ballots for the president ial race. Joe biden leads President Trump by a slim margin of about 14,000 votes, roughly 5 million that were cast. The Trump Campaign has alleged there were ride spread there were widespread voting irregularities come but has offered no proof. Study hasys its accumulated more than 53 infections. That will allow a preliminary analysis of its effectiveness to begin. Internet did not predict how long moderna did not predict how long it would take an independent committee to analyze the data. Oak hill and visors oak Hill Advisors founder spokes with bloombergs eric schatzker. A biden presidency supported by a fed that continues to be accommodating, i believe that as a goldilocks scenario for the markets. You can see more of that ritika you can see more of that interview starting at 10 00 a. M. New york time here on bloomberg tv. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Frankly, they Trump Administration has basically given up. We are just sitting there waiting for the vaccine, and the virus is not waiting. The virus is all around us. Stinthan lawrence go professor. Getown heres the price action this morning. Alongside tom keene and lisa abramowicz, im jonathan ferro. Tve on Bloomberg Radio and come of the story as follows for you. 19, 0. 5 . Res down 93 basis points on the 10 year. I find the euro move fascinating over the past week. I keep bringing it up. Positive as Risk Appetite declines. Euro negative and the dollar comes back. Youve got to get your head around that. It is important. Tom on the blended index, theres two of them. There is the bloomberg dollar index, which is really good math , and in the traditional dxy index. The dollar doesnt give way here, does it . Jonathan people thought it would when Risk Appetite and cyclical impulse came back into this market. We also it we all saw it. What happened to the dollar . Not what people expected to do. Tom lets rip up the script here. Ed mills is with us of raymond james, with years of congressional effort in washington. With headlinest that have to do with the strains , monoclonal antibodies, and my eyes are glazing over. Is washington as missing in action as it looks on this pandemic . How alone is dr. Fauci and the rest of the Science Community . Ed i think under the Trump Administration, they are leading with the strategy of trying to get the vaccine, not necessarily leading with the National Strategy at this time for containment. That is where i think the market is looking toward the pfizer news of this week, other positive headlines related to any vaccine or therapeutic development. There is a hope that there could be some fiscal stimulus out of d. C. That is probably the one area where we connect. Getting it done before the end of the year has a lot of hurdles, but the market has largely been looking at that as not a question of if, just a question of when and how much. As long as it stays on when and how much, that is a decent use for the market coming out of d. C. Lisa from your vantage point, how much cohesion is there right now in washington, d. C. . As jon mentioned, we basically have a contested election. The Transition Team for president elect joe biden has not been allowed in to get National Security briefings. How important is this when it comes to crafting policy in the u. S. And passing some sort of Fiscal Relief . Ed what we have said is that if we were in a contested election, the ability to get Fiscal Relief done was basically off the table because if you are arguing over an election, getting bipartisan agreement on a 1 trillion or 2 trillion package is very difficult. D. C. Think the sentiment in is that a lot of what is going on has to do with the runoffs in georgia, ensuring that the Republican Base of Trump Supporters rains elevated in their support for those two candidates. I will tell you from a market perspective, and dusters i talked to think this election is largely over. They have even somewhat called the georgia races. People are positioning for split government, with biden as the president elect and republicans in the majority in the senate. It might take a few weeks or a couple of months before that becomes official. I think if there is any doubt, it is the seats in georgia i would be watching. Jonathan i just want to touch on the price action and returned to georgia quickly. On the s p, we are 0. 6 . In europe, down 1 on the stock 600. Bottom of the pile, the banks. They were top of the pile over the last two days. Thanks down by 2. 9 , just something to keep an eye on as we go into the opening bell in new york. You mentioned georgia and the relevance of a contested election for how the Senate Runoff races may be. Can you help me understand the fiscal conversation, whether that has anything to do with the politics as well . Ed there are more questions right now than answers in the fiscal debate. Does mcconnell want this to be settled before the runoff elections, or does he want to potentially strengthen his hand if it is clear that he will have the majority for the next two years . Do democrats want to settle . Is there going to be a big fight around the december 11 government funding deadline . What do we do about the to summer 31st expiration of millions of americans who are getting testy december 31 expiration of millions of americans who are getting federal unemployment the december 31 expiration of millions of americans who are getting Unemployment Insurance . You need the political will. But what does biden do . What does trump do . Is he willing to support Fiscal Relief . I think everything is up in the air, and that is why the market is not focused on the f. It is focused on the when. There is a belief that we get it done. It is my belief as well, but i think we have more uncertain than i would like now. Jonathan i can tell you what people in markets think of washington. Can you tell me what the people you think in it you speak to them washington think of markets right now . Ed i think there is a humorous view of each other. I think both at times think the other is disconnected from reality. A lot of people are wondering how we couldve seen this move after an election. Almost in the outcome, people with assets come up with a reason why that is good for their assets. Tainly as i look i had look ahead, if it is a divided government, if we get Fiscal Relief and we do not have to deal with the uncertainty of a oneparty government, that is positive, but it is always interesting to me that without a doubt, we always find a way if you have money that this is an ok outcome for you. Jonathan always finding a way to be bullish. Then queue. Isnt that the story . Always finding a way to tell a comforting story about why everything is going to be ok and to stay long. Tom i think it is called gridlock. I wonder, with the news flow we are seeing, and the market flow as well, as we spoke to rob kaplan the other day of dallas, do we have time for gridlock right now . I dont have an answer. But is gridlock good going into march . Jonathan gridlock apparently is good going into march and beyond. Why . Because of the central bankers you just mentioned. Weve got a market that is so heavily insulated to risk. How much divergence have we seen on high yield spreads in the last couple of days . Clearly the backend is going to be tough. Jonathan this is the reason lisa this is the reason why people are not excited about getting defaults on risk. Are people going to be forced there george going to be forced to shut their doors in the coming weeks and months . Jonathan the Economic Data is five minutes away. That means Michael Mckee drops then Louis Alexander nomura, chief u. S. Economist. This is bloomberg surveillance. You can go your own way its time you make the rules. So join the 2 Million People who have switched to xfinity mobile. You can choose from the latest phones or bring your own device and choose the amount of data thats right for you to save even more. And youll get 5g at no extra cost. All on the most reliable network. So choose a data option thats right for you. Get 5g included and save up to 400 dollars a year on the network rated 1 in customer satisfaction. Its your wireless. 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