Bloomberg surveillance. This is what the markets are looking at. The focus is firmly on the vaccine trial data out of moderna yesterday. The focus is of course on the fact that we could have a vaccine quicker than expected simply because it is the second trial data that is better than what analysts and watchers were thinking. This global stock rally powered by hopes that the vaccines will bolster Economic Growth was paused, partly because investors are weighing the spread of the virus. I think investors are also looking at valuations. And also, there is a bit of profit taking getting underway. Inla jumped more than 10 after hours trading after the announcement that it will join the s p 500 index on december 12. In other asset classes, treasuries drifting with the dollar. Lets get straight to the bloomberg first word news. Heres leighann gerrans. Good morning. The Trump Campaign is withdrawing a key part of its lawsuit against the Election Results in pennsylvania. It is abandoning demands that almost 700,000 mailin ballots be thrown out because observers were kept too far away from the count. The challenge is now against a far smaller number of ballots. Almost certainly just a fraction of bidens lead in the state. In germany, chancellor Angela Merkel has failed to push through restrictions to tackle the pandemic. She is postponing major decisions until next week after being unable to reach a deal with the regional leaders. Instead, she is urging people to limit public and private gatherings. The strongest storm of Hurricane Season has hit central america. It made landfall late on monday in nicaragua, bringing catastrophic winds and torrential rains. At 155 miles per hour, its winds are powerful enough to crush homes, snapped trees, and make areas uninhabitable for months. And finally, four astronauts have arrived on the International Space station after a 27 hour voyage on the Spacex Dragon capsule. They will now begin their six month Scientific Mission aboard the orbiting lab. It is the first time in nasas history that a full crew has been ferried to the space station on a commercial vessel. Global news 24 hours a day, onair and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am leighann gerrans. This is bloomberg. Francine . Much. Ne thank you so i promised you the share price for tesla after hours, so promise delivered. Here it is. Gains of 12 after the announcement yesterday that elon musks carmaker will join the s p 500 index after december 21. You can see premarket at the moment gaining some 12. 3 . Lets get back to our top story, vaccine optimism. Modernas vaccine was shown to be 94. 5 effective during its large late stage there trial. The ceo tells us what sets his vaccine apart. Afford for 30 days to have a vaccine stored in a regular fridge, like with insulin. As you know, every pharmacy, doctors office, hospital has that capability. We dig it is a very important game changer. The other piece to keep in mind is our vaccine does not require dilution. Francine for more on the vaccine, joining us is sam for li. Sam faze a lot of optimism. This was widely expected because of the nature of vaccine, which is quite similar to the pfizer to what the Pfizer Vaccine trial actually gave us and that was last week. What information do you have to give to make sure that this is a vaccine that will work and will be rolled out quickly . Moderna gave us a bit more than pfizer did. They prevented so far the ,evelopment of severe disease so nobody in the Vaccine Group had any severe covid. Looks like it also works in the elderly, which is a crucial element. I do not expect it to be necessarily different, but time will tell. The key thing that remains for all of them is obviously more details, in terms of more patients, and we could always ask for more as well, but clearly, the durability of the vaccines. That is something that would just be nice to see that data as it comes out and we get to analyze it. Me a senseam, give of exactly what these vaccines are. There is a lot of misunderstanding about what these two two types of two types of vaccines are, which are rna. Is it going to be hard convincing people to take this vaccine . Sam i mean, people should not really it shouldnt make any difference to anyone. All thats changed is rather than using proteins are pieces of the virus that you inject into people first in a lab, you are just giving them the genetic material that allows their own bodies to manufacture it. We have extremely delicate and complex systems that control this. Ga does not get into your enes, it doesnt do any of that. It allows yourselves to produce the vaccine your cells to produce the vaccine inside your body. From that perspective, i wouldnt worry about it at all. Sam, if somebody takes the vaccine, so it means you are less likely to get sick or almost unlikely to get sick, can you still be a vector of transmission . Can you still give it to someone else . Sam francine, thats the question that nobody can answer today, including the ceos of pfizer and moderna. Unfortunately, the trials were not conducted in a way that would allow this to be properly analyzed. It has to be something that people look at further down the road. We dont know if people who are vaccinated who do not get the disease are still infectious are not. Or not. Anna thank you so much for all the insight. Of bloombergere intelligence. Patrick armstrongs chief of ive markets are wobbling a little bit. Are they worried about valuations . Is there just too much good news priced in . Patrick well, markets have gone very far very quickly. The pullback we are seeing today at a fraction of a percent is inconsequential versus how things have rallied. I do think valuation will matter at some point. It is not something that matters right now. It is liquidity, central banks, reopening of the economy and the vaccine pushing risk assets, in particular, cyclical assets, the reopening of the economy. The pullback today makes sense, given how far things have come. I still think there is headwinds for some of the cyclical sectors in the near term. Francine where do you see value . If you were to pick a part of the market that can still arise, you know, given where we are, where is that . Patrick well, our most recent additions have been in some of the hardhit value stocks recently. It comes from that i believe that there will be the growth, reopening of the economy. I had a very big position in quality vol into this week. Weve limited some of that. Peugeot, some of the travel companies. Airbnb filed for ipo yesterday. Those kind of companies, solid profitability estimated. With the path back to profitability for these companies, i do think there is some value in some of those beaten down stocks at this point. Francine the big news yesterday, and i know a lot of people were tweeting about it, looking at exactly what it from, tesla on the s p december 21. How did you react to that . Patrick its not a surprise. The timing, you never know when its going to come. The math is staggering on tesla. If there is 11 trillion dollars tracking the s p 500 and teslas market cap of about 80 will make tesla the seventh Biggest Holding in the s p 500. That will put at about a 1. 2 weight. That will mean 130 billion of passive money. You also have active money that is benchmarked against the s p. From december 21, you will have a risk for not owning tesla. Put that on top of the big short position on tesla, you can see really Strong Demand that is just structural now for the next three or four weeks. Its not a surprise that its entering the index. The timing yesterday, nobody indicated it would be announced yesterday. They may not do the full allocation on december 21. S p asking for some guidance. They may do it in two stages as well. Anna Patrick Armstrong there. He stays with us and we will talk a lot more about tesla shortly. Coming up, we will not only talk about tesla, but of course valuation sector as a whole. Adam was 390 billion in value, tesla set to become the Biggest Company ever added to the s p 500. We discuss more about the s p 500 shortly. This is bloomberg. Economics, finance, politics, this is bloomberg surveillance. Late trade on news that the stock is joining the s p 500. The carmaker will join the index on december 21 after months of speculation and a temporary setback failed to make the grade in december september. The stock this year making tesla the most come valuable company ever to be added to the gauge. Ipo,b filed for its outlining widening losses and plunging revenue due to the projectedbut it has optimism for a rebound in demand when the economy recovers. Sources tell bloomberg the Company Plans to raise as much as 3 billion. Lets get back to Patrick Armstrong. We touched on tesla. I want to go back to actually what will be in the s p 500 for now. We saw also this huge rotation in markets. How long can that continue for . Patrick it can continue for value stocks to have a sustainable recovery, you need to have either a steeper yield curve or higher Interest Rates. If thats driven by Economic Growth, where full employment, i think you will have a sustainable value. When future earnings are discounted at next to nothing, you should pay a lot more for growth companies. If there is a steeper yield curve, which a strengthening economy will lead to, all other things equal, used to have yield curve control at some point, i think thats the real catalyst for value. If people believe in Economic Growth, there is a higher discount rate for growth multiples. The Cyclical Companies generate their growth, the heavy lifting for them is done based on Economic Growth. Other growth pins to what products are, barriers to entry are. Cyclical companies basically have that tailwind of the improving economy, should we get that. Francine the question we are asking today, patrick, on the , when will the s p hit 4000 . What will be the catalyst for that . Patrick you will have to see earnings growth. It cannot just be multiple expansion at this point. Not, 2019 earnings are dissimilar to what they were in 2018, but the s p was up massively. 10 this year. You do have to see earnings start to be proponents of that expansion. With Economic Growth, we probably think the u. S. Is poised to grow at close to 5 next year. Thats still not going to put anything close to full capacity, full employment. You will have Economic Growth. 23, januaryo say 20 2023 for 4000. Anna when you look at francine when you look at some of the other things, are we going to see a resurgence of ipos, including airbnb . Once we have the vaccine, does it become back to what it was like an 2019 . Patrick you should have a surge arepos, because there these unicorns that have billions and billions in market cap and basically not traded in equity issuance to private investors. With these kinds of multiples you are getting in the public markets, it makes a lot of sense. There is tons of liquidity. That liquidity is increasing what centralith banks are doing, keeping Interest Rates pegged at zero. I do think with these multiples, its just a nobrainer for companies to take the multiples they can get. There is obviously demand. Usually, the oversubscription of all these highprofile ipos, so i do think there will be a wave of ipos in the coming year. Francine what does a Biden Administration mean for stockmarkets . Patrick it depends on the senate at this point still. That got two senate races are going to be finalized in january. Its looking like the republicans will win those, but with elections, theres never certainty. If we see the democrats take control of the senate, then its a massive fiscal stimulus from biden, so environmental spending on infrastructure, raising minimum wage to 15, u. S. Manufacturing really pushing contracts. All of those things really progrowth. The consequence of all of those things would be higher taxes. You have a republican senate, it doesnt allow any of those things. Biden will reenter the paris accord. The senate will not approve minimum wage being doubled to 1 5 an hour. It is still iffy, depending on how the senate races go. With gridlock, i think you are going to have less ambitious policies from biden, just because they will not be able to get them through. Francine what happens with china . Does the u. S. China relationship get better from here or could it actually get worse . Patrick i dont think it gets worse. I think bidens playbook will be ending the tariffs over time and basically synchronizing tariffs the u. S. Do with europe and other major allies. It will be going from America First to part of the old global order and the globalization, were basically where basically pushing values and being benefits of globalization, i think that will be going back to how the previous regimes were in america. You probably wont get there fully. Its probably good news for global trade, good news for china. If the u. S. Does coordinate with europe any tariffs and pressure they have will probably have a much higher efficacy against china as well. Francine patrick, thank you so much. Patrick armstrong there. Coming up a little bit later wo ofof course its day t the Bloomberg New economy form. Dont miss our discussion with Christine Lagarde at 4 00 p. M. London time. This is uber. Bloomberg. A competitive approach to china was inevitable, but keeping it healthy and not pernicious is vitally important, and that will not be easy. Some some places, with cooperative action to a catastrophe. What i do believe both sides are capable of through the highest level diplomacy at an early stage of the Biden Administration is to define the parameters. We should build an open World Economy that works world works for all. We must safeguard the system under the wto and unequivocally reject unilateralism and protectionism. When your economy becomes so big and your interests are all you have told, protect your own interests. The American Administration is about to change, but the clock will not simply be rewound. I hope that he would be able to focus his mind on developing a framework for an overall constructive relationship with china, because the last four years have been quite a tumultuous ride. They have trumpeted the decoupling and to have fully walked away from these international commitments, posing challenges to multilateralism. I dont think that going into a world of deep protectionism going forward. I see more regionalism. Those were some of the guests from the Bloomberg NewEconomy Forum giving their take on their u. S. China relations. I was just looking at the markets. The markets really not worried about what is coming up ahead in terms of u. S. China. The focus is on the vaccine. Coming up, a discussion with ecb president Christine Lagarde. Dont miss at 4 00 p. M. London time and 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. It will be available at first at the level of tens of millions of doses. I would suspect before the end of this year, some 20 million to 40 million doses will be made available. The first into quarter, that number should ramp up to as much as 15 million to 100 million doses. Tot will ramp up for 2021 500 to one billion doses. Ofncine that was the chair moderna speaking to us yesterday. The vaccine was expected was found to be 94 effective in the latest trial. That scheduled leighann gerrans. Leighann president elect joe biden says containing the coronavirus is vital to economic recovery. He urges congress to pass a stimulus bill this year to deliver immediate relief to americans. Biden says it should be likely to point true the 2. 2 trillion heroes act passed by the house. Recruiting women into senior roles, according to a new study by zurich insurance. Women applying for management jobs jumped 20 after the insurer advertised roles with parttime and a job share option. As a result, the number of women hired for senior positions jumped by a third. Four astronauts have arrived on the International Space station after a 27hour voyage on the Spacex Dragon capsule. Sixmonthnow begin a Scientific Mission aboard the orbiting lab. It is the first time in nasa history that a full crew has been ferried to the space station on a conversion on a commercial vessel. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Francine . Francine leighann, thank you so much. Bill clinton says xi jinpings longterm rain has upended u. S. China relations. He made the comments in a conversation with former u. K. Prime minister tony blair. Does a new administration in the u. S. I think the big challenge with china is to get what i would call a strategic framework for dealing with china , rather than a series of reactions to whatever the chinese may be doing. I dont know what you think about this, but it is distinctively two things one is that china power today is a fact and it is a perfectly justifiable fact in the sense that it is a large population, huge economy. China is and should be one of the great powers of the world for the 21st century. The problem is the system is a different system, whereas i think when you and i were in anice, there was not expectation exactly, but a hope that as china opened up and d