Spreading the next few months could be challenging. Approach with caution. Jay powell warning over economic challenges, despite the prospect of coronavirus vaccine. Treasury yields fall amid growing concerns around the pandemic. California joins texas reaching one million infections. U. S. Election Officials Say the vote was the most secure in u. S. History. Bandss President Trump investment in firms controlled by chinas military. What a week. Clarity in the u. S. Election. A hope old date on a vaccine. We are ending the week with a surge in covid cases. A push poll between the euphoria of a vaccine versus the pandemic. We wake up to french hospitalizations breaking a record. California joining texas surpassing one million infections. Chicago, the latest u. S. To issue a stayathome advisory. The mayor saying, this is literally a matter of life or death. Lets take a look at how this is playing out into markets. A stunning week. We have covid weighing on equities. Into session feeding feeding into a lower session in asia. S p futures flat. The ftse down more than 1 . We do have money moving into havens like the yen. 86 basis points in the 10 year yield. At 40 a barrel again. Said a vaccine will not rescue demand. That coin, we passed 16,000. The question is whether we are going to go past 20,000. It is a shout out to manus cranny. He calls it the gold for millennials. Investors moving to those havens. Three of the top central bankers are warning the possibility of a covid 19 vaccine is not enough to end the economic challenges created by the pandemic. That is good and welcome news for the mediumterm although uncertainties remain about timing, and the efficacy for different groups. From our standpoint, it is too soon to assess the implications of the economy. As we get more news on the vaccine situation, i hope not only will it give encouragement and hope, it will reduce that level of uncertainty over the outlook. We are not really there yet. Important for Monetary Policy. We are having to make Monetary Policy in conditions of extreme uncertainty. I dont want to be exuberant about this vaccination. There are still uncertainties about the rolling outcome of the fabrication. The number of people that will be vaccinated in the course of 21 so we can reach herd immunity which will give us more certainty from the health point of view. A Christine Lagarde at Virtual Conference, taking a cautious stance. Joining us to break it down this morning, whaley. Wei lei. It was an emotional roller coaster. We saw euphoria about a vaccine. Now we have the resurgence of cases playing front and center. What narrative is going to win . The timearound horizon. Jay powell put it well. In the mediumterm, the vaccine springs forward the prospects of a restart looking more real. Light at the end of the tunnel. Thehe number near term, tunnel is still quite dark. We are heading into rising case unts. Fertilitys as well. Everything considered certainly in the near term, i can understand why markets are consolidating from the euphoria earlier this week. It is very important to put things into perspective. Course of the last week , two of the biggest uncertainties for investors, the u. S. Elections and a vaccine development, you have seen notable progress. I think its very important to put the near term risk reversal in the context of an environment where some of the uncertainties have been improving. To haves we have spoken been putting cash work into motion. There is an easing of the tension uncertainty given the vaccine front. This, do you think rotation we have seen is here to stay . What we have seen is a swift changing of leadership. Immediately after the u. S. Election clarity, we saw a rotation back into the old winners. Technology, health care. Breakthrough, we see a rotation into a bit of value, the cyclical names with technology giving back a little bit. Bit in the a little last couple days as well. In our view, and this environment, low growth and interest rate, and by investors will continue to pay more for high quality. Assets. Ielding that focus on quality is not going to go away. Having said that, given the potential for cyclical uplift, we dont want to be underweight cyclical assets either. Ouro regular polling for clients. A lot of clients are underweight owning cyclical exposures like value. This,environment like closes some of that is what we can say. It can be costly caught in an isironment where leadership swiftly changed to cyclical exposures again. You have to make sure your finger is on the pulse at all times. You talked about flows in europe are slower to buy into the rotation. Is this because europe is living and locked down 2. 0 . A daily reminder we are not there yet . I think you are absolutely right. If you look at flows in the last few days, and response the u. S. Elections, vaccine breakthroughs, there is a much trend embracing inflows. A lot of inflows into small cap, value. Embracing the leadership change. The same cannot be said about european flows. Exposures like credit exposures, quality. All gaining traction. Very much speaking to the fact there are conflicting motivations behind european investors allocation decisions. Economies are further in the lockdown and the prospect of this pandemic containment is dampening the sentiment. They are coming through in the flows. Say, very important to cash is moving. Ishares india had the strongest inflow on record. Even though investors have yet to decide which narrative they are going to go with, they want to put cash to work and they want to be part of this train. Stay with us. I want to get an update on first word news with laura wright. The u. S. Is banning investments in firms it says are owned or controlled by the Chinese Military. Latestresident trumps bid to put pressure on beijing. Relations between the u. S. And china have deteriorated with the president vowing to punish beijing over the coronavirus pandemic. Poland is joining hungary threatening to veto the eu veto fun fund. If they managed to block the budget, poland would lose about 23 billion euros. Hungary would lose about 6 billion. Top aide isns quitting. He is the second key advisor to leave over tensions over how the inner circle operates. He has long been a controversial figure in reddish politics. Day onnews, 24 hours a air and bloomberg quicktake. Powered by more than 27 hundred journalists and analysts. This is bloomberg. Laura wright in london. A few republicans move past acknowledgesal to the election results. A state of play and d. C. This is bloomberg. Trade and china, those things are related for sure. I would expect a Biden Administration would be substantially less illiterate. I also expect some of the things the Trump Administration did in canada presents a National Security risk, would not be sustained. Years, welk in four will probably identify those two areas as one where you could see more continuity rather than less. From joee can expect biden when it comes to buying. Republicans are slowly moving past his refusal to knowledge the outcome of the election. Some are even backing taking steps in the transition process. Was among those saying joe biden should get classified briefings. Lets start with the state of play in d. C. How significant are these comments . I think the world is watching to see how this transition goes. It has been a week, over a week since the election. We have those comments from the texas senator saying he should get classified briefings. Others have yet to recognize is win. Den mr. Bidens President Trump continues to make claims about voter fraud. This is happening well glover leaders are recognizing vice win. Dent eitan bidens we had telephone calls with the president elect. While these gop lawmakers are slow to come aboard, the rest of the world is watching to see how the transition goes. Is as smooth as previous transitions. What does beijing make of this transition . They are somewhat lying low. They have not made any comments on the u. S. Election. Is Current Administration not finished. We saw a new executive order prohibiting investment firms from investing and 20 Chinese Companies designated as having Chinese Military ties. That speaks to the idea President Trump and his hawkish strategy is not over yet. He is still in office until january 20. Untilis going to lie low biden takes office. He certainly will not want to stoke those tensions. The coming weeks and months before the transition will be a jittery time. Equities, down more than 1. 5 . Jinping, beijing probably trying to take a bit of a lower profile. What more can the u. S. Do . China will not want to stoke tensions. They will want to ride out President Trumps final few months in office. They will not want to start another whirlwind of trade tariffs. There are plenty of things the u. S. Can do in terms of sanctions against individual officials, Chinese Companies and banks. Itsu. S. Is pushing through vow to punish beijing over the so thereus pandemic, is plenty in President Trumps late. It could some ways respond, with negative treatment of u. S. Firms. The broad feeling in this part of the world is china will want to ride out the next few months and see what kind of a reset there will be. Party consensus. At the very least, china might somelping hoping for time to start fresh. Walking on eggshells is what it sounds like. Thank you so much for your time. Something that took me by officials have said it was the most secure u. S. Election november 3 we have ever seen an american history. Do you think for investors, the risk of potentially those losses, has that now phased and eased . We certainly see uncertainty from u. S. Elections towards china, focused like what we just talked about. As it relates to implementation for u. S. Election outcome, things are shaping up to be quite clear. A greater focus on income and quality. An environment that could be very positive. Emergingmarket assets and equities. China within that as well. Rivalry between china and the u. S. , that is not going to go away. From the trump residency to the biden presidency. In terms of the protected rules of engagement, going back to normalized ways of engagement and that directional travel. Because of that and greater of income, we have seen better inflows. China bonds, china equities. This is just getting started. This trend is very much accelerating. Directional travel, a bipolar world order of restoring supplies and everything that goes with it. We have to own u. S. And china. Balancing them in a diversified and balanced portfolio. The chinese yield this morning, at a one year high. In a little bit more in d. C. , the white house has said they are pretty much done with stimulus negotiations and they will leave it up to Mitch Mcconnell to negotiate with pull oc. Does this mean any possibility of a stimulus is pretty much off the table . It is becoming less likely. Size we were previously hoping for. Significantly less than starting with two. The chance of a lameduck stimulus package is looking less and likely less and less likely. Markets are waking up to that. That is not to say we are writing off stimulus expectation altogether. The central bank being the only game is town is not going to be as effective. We do need coordination between fiscal policy and Monetary Policy. We need to continue a of that. The hope is it will come through swiftly. The scarring of the economy toward somewhere. Now that we have a vaccine. The economy definitely needs it. What is your outlook on stimulus, even the fact that many are saying the senate will stay in republican control . Are, we do have races in georgia on the fifth of january. Democrats,e, for the 5050. Even if they win both of those. We are talking about the vp as the tiebreaker and some of the more conservative senators, some of the more progressive legislation will have to be adjusted in terms of expectations. Compared torder previous expectations of a blue wave in terms of fiscal stimulus. Expectationsjust for the size and difficulty. That is why some of the more stimulus based trends going into the u. S. Election, we see some unwinding of that. Size and scope having to change. Thank you for joining us. Ehe is also a twotime mathlet gold medalist. The virus rages on in the u. S. Stay with us. This is bloomberg. Good morning. City of london. Lets have a quick check on equity markets. The euphoria at the start of the week starting to fade. A lower start in europe. Is quitee house bullish. Juliette saly, what is going on . A jp morgan strategist saying essentially the news we hear this week from pfizer and beyond in their vaccine is a game changer and they are more positive in Global Equities versus bonds. Are saying even though there is concern about rising coronavirus cases, the fact that there is a vaccine news breakthrough is positive in terms of the broader reopening of the economy. They boosted their equity overweight to 10 . Reducing their overweight positions in corporate bonds. That news propelled markets higher earlier in the week. We have seen the msci world index up about 9 in november. Bloombergrsus the barclays global aggregate treasure. Jp morgan saying Global Market stocks should enjoy outperforming. They prefer nonus shares over american counterparts. Everyone i talked to is quite bullish on the u. S. The question is whether or not this rotation is here to stay. Happy friday. A happier place, disney shares gained after streaming subscribers jumped. This is bloomberg. 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Com. Bloomberg european headquarters. Im annmarie hordern, this is bloomberg daybreak europe. Economy see the continuing on a solid path of recovery, but the main risk we see is clearly the spread of disease in the United States. The virus is spreading and the next few months could be challenging. Annmarie approach with caution, jay powell joined by Christine Lagarde and Andrew Bailey warning over economic challenges despite the prospect of a vaccine. Fall amidields growing concern around the pandemic. California joins texas in reaching one million infections. Making a statement, u. S. Election Officials Say the vote was the most secure in american history. Good morning to you. It is friday morning, friday the 13th, and what a week it was. We had some clarity on the u. S. Election, hopeful data on a vaccine, but we are ending the week with a surge of coronavirus cases. French hospitalizations rocha record. California broke a record. California passes one million infections. Chicago is the latest big city to issue a stay at home advisory. Mayor lightfoot blunt and frank, saying, this is literally a matter of life and death. This is weighing on the markets. Wall street close lower. Msci asiapacific also lower, down 0. 3 pip . Ftse 100 futures are lower alongside the rest of europe. Across assets we see money moving into havens like the yen. We have a yield lower on the 10 year. Aboven is a blowout, 16,000. The mliv question of the day, will it go above 20 k . Manus calls at the gold for millennials. Surrounding the 40 handle. Will it go that low again . That would be a major line in the stand. The iaea says a vaccine will not secure demand yet. The vaccine news is what gave oil the tailwind. Disney is jumping in late trading, reporting smaller than expected fourthquarter losses. The star was disney . The disney ceo shook up the Management Structure to emphasize streaming. Despite the many challenges and hardships, im proud to say we have been steadfast managing our businesses under enormously difficult circumstances. Persevered just during these tough times, we have also taken a number of deliberate steps and smart risks and positioned our company for greater longterm growth. Annmarie alex webb, our Bloomberg Opinion columnist joins us now. Disney , can they take away netflixs dominance . Thelook at the numbers, amusement parks which bring in so much money are suffering so much due to the pandemic. They are not necessarily taking audience away from netflix, there is enough space for both of them. The conversation increasingly is the services for people, and the ,onversation around disney, they are trying to make changes to look at the growth stock and value stock. There has been reception to those ideas. ,f you value the growth stock it would be similar to netflix, and you can enjoy more generous multiples that generate steady returns and predictable. Annmarie do you think dan loeb is correct . Alex i do. When it comes to valuation, trade is 60 times earnings, if you look at normal film studios, they trade at 12 times earnings. The question is if it can sustain that valuation and the growth of disney . In the most recent quarter, they exceeded expectations. The challenge it has is disney , the content is not that great. They have the mandalorian and nothing else that has been successful. They need to up the pace in investment and new content. Annmarie full disclosure, i have never seen star wars or mulan. How did the film fare . Incomet attracted more than people expected. They asked people to pay an additional fee you already pay for the subscription, and then an additional 20, which is a big ask and left people not very happy. That is not a trend they will repeat when you look at the releases of upcoming films such soul. Animatio