Businessweek is really taking everyone by storm. Tom they mentioned all the right schools as well. I think it is true probably in every urban area, but after real estate it is the focus of new york city, what to do with the cherubs in not only the private schools, but i would also mention the stateoftheart anything,ools are, if even more competitive. The schools with a heritage up in boston, boston latin. They are just as hard to get into as the other fancy schools. Do spend a lot of time thinking about education for our kids, and these fouryearolds actually have to do tutoring, but also applications and interviews to get into these kindergartens. I find that fascinating. We will talk about Central Banks much more. Thats get to bloomberg first word news with ritika gupta. Ritika President Trump has fired a Homeland Security official who contradicted his unfounded claims about election fraud. Christopher krebs is a former Microsoft Official who the president named to a top security job. In a tweet last night, the president said that his comments were highlysecurity inaccurate. In michigan, a county that included detroit averted its decision earlier, wayne countys election board because a national uproar when republican members blocked certification. They had been asked to conduct. N order an audit michigan was crucial to joe bidens victory. The senate could still try to consider the reading almond the nomination of judy shelton to the Federal Reserve board, but it is unclear if the result would be any different. Stunning setback by blocking sheltons nomination. Two republican senators were quarantined. Two others voted with democrats. Boris johnson is going green. The british prime minster announced a 15. 9 billion plan to boost industries and tackle Climate Change. New gas and diesel cars will be banned from 2030. Create orys it will support 250,000 jobs. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im ritikauntries, gupta. This is bloomberg. Tom thanks so much. Equities, bonds, currencies, commodities. The great john tucker asked me today, what is the single thing out there i see, and the single thing out there i see is a raging battle between the bulls and the bears. It is that simple, dashing to december. Down,s up 5, dow level 27. 91. Can you imagine a 19 vix . We are not there yet. Oil with a little bit of an elevation. Brent crude 24. 24. Renminbi continues to show strong pacific rim. Francine . Francine with list markets trading a little bit skewed today, the moves in cryptocurrencies caught my attention. Are backing ns i have to say it could have gotten a bit out of hand. Additional currency more than doubled this year. Bitcoin surging past 18,000 for the First Time Since december 2017. Otherwise, im looking at dollar weakening, and im looking at pound because Rupert Harrison is on and we will talk brexit. Always a good thing to look at sterling. 1. 3289. More stimulus is being called for as the pandemic threatens hopes for global recovery. They spoke at the Bloomberg Economy forum. The original stimulus post covid was not sufficient. And really did not reach those people, either the employees or the Small Businesses that were in the greatest need. We need the fiscal stimulus. We need it relatively quickly. You can see Consumer Spending beginning to get impacted again. Francine joining us now is blackrock macro strategist portfolio manager. Focusing on the vaccine, everything is well, we go back to the growth we had in 2019. Our focus on infections in the mediumterm concerns. How do you see the markets as a whole . Rupert i think that is a good characterization. Broadly constructed if you look sixmonth ahead, this news is game changing. It gives us a bridge to policy. It looks it means we can look ahead to normalization and we will get a rapid bounce back next year. But we have an air pocket in the u. S. Particularly. In europe we have virus news improving. Restrictions are working. We have fiscal support continuing in europe. In the u. S. , we have both of those things as a negative. We have escalating virus news. Policymakers are going to have to react but they have not yet done enough to get on top of it. We also have big uncertainty around the air pocket in fiscal support. Yesterdaysin retail sales disappointment, the first month where we have seen incomes falling because policymakers have not done enough to support incomes. The struggle between a positive six month view and shortterm risks, particularly in the u. S. , is what is leading to this direction in markets. Francine we dont have a number of World Leaders and Businessmen Forum and economy businesswomen saying we need more stimulus, to your point. Is there a danger we are not going to get stimulus because governments say there is a vexing down the road come it could be three or four months away, why create debt if the economy can pick up quickly after that . Danger, but is the that is the exactly wrong conclusion. The correct policy conclusion from vaccine news is that we know policy is a bridge to somewhere, not a bridge to nowhere. These companies are likely to be viable, and therefore the returns to investment now to prevent scarring through bankruptcies and redundancies are that much higher, and any theory that says we are going to have to learn to live with the virus, we have to let these Companies Fail is much harder to sustain. Policies are higher. The political situation in the u. S. , the concern is that it will not deliver that policy in time. On balance, the strong story that we are going to see next year is going to continue dominating market thinking. The struggle for investors right now is that we saw vaccine news reflected in incredible rotation in markets in terms of factor moves, industry moves, individual names, and i think it is clear that a lot of that vaccine news is priced. We have seen momentum selloff. Getting that further impact of those, we are going to need new news. That could be things like the astrazeneca vaccine, which is important for the u. S. And the u. K. For europe and the u. K. Or it is going to be news around policy support. Tom good morning to you. I love what blackrock says, that ae Business Analysis in disaster like we are experiencing doesnt work. A normalhis is not business cycle. We have already seen a much more rapid bounce back than expected, and we will continue to do that in 2021. The political cycle is the key question. I think in europe that is less important because we have on the physical side, we have had this bump in the road for the european package with the hungarians and the polish veto. I think that will get dealt with. But largely the big fiscal support through furlough schemes, work schemes, that is intact and that will last through when it is needed. The focus is on the u. S. , whether we see anything out of this lameduck session of congress. We have the georgia runoffs on january 5. There is an outside chance that the democrats will end up with a 50 50 senate. The scope for disappointment on the fiscal side in the u. S. Is very significant, putting the ball back in the court. Steve englander at Standard Chartered publishing they may take action before the december 16 meeting to do what others. Ont do what happens, rupert, if we dont get fiscal stimulus and the fed feels they need to be patient . What is the Market Reaction to no one showing up for this presumed assistance . Is i think the market i think the market expects the fed to do what it can. I think the fed will agree on that. If you look at the fed, the chair of the vice chair, they are clear that they will do what it takes. I think we have had a stark message from the fed that they are only looking at inflation. They are not interested in the labor market, and growth. If we get a strong labor market, they are not going to take that as an excuse to tighten. They will not do anything that will tighten policy. It is a very different regime. But there are limitations to what the fed can do. They can expand purchases, provide guidance. Battle now theres a on spending power between now and q2 next year. If we say the economy is roaring back in q2, which is the correct expectation, we know that households have pretty good cash positions. Most households has been most households have been saving during this period. Looking ahead to q2 might be enough to sustain the cyclical rally. Tom this is so important. Maybe it is the mcconnell put because senator mcconnell knows the fed will show up. We will have to see. Yes, absolutely, tom, although we keep hearing from i think the speech that Christine Lagarde did last week was probably the envy of a lot of Central Banks because she talked about coordination, really like no one else in terms of major Central Banks have done, almost with a hint of a threat you guys need to show up, politicians need to show up if Central Banks do their job. Coming up, we have plenty more from the Bloomberg New economy forum. Imfill be talking with the chief economist, the guggenheim chief investment officer. You can watch it live on bloomberg. Com, and all of our social channels. This is bloomberg. In my opinion, dont own bonds and dont own cash because they are producing a lot of debt and producing a lot of money to fund it, so that is changing the nature of capital flows. Its also changing how those flows go to china in terms of the comparison to that market, u i think its behaving sensibly, but dont use old multiples as reflections of the limitations of what is expensive. Tom that banner will be interesting. Mr. Dalio dont own bonds, dont own cash. Then what do you own . That is the conundrum right now, all of us living at the zero bound. We are going to talk about green in the next halfhour with Rupert Harrison of blackrock. Right now, rupert, as multiasset strategy portfolio manager, lets go back to square one. What is your Asset Allocation right now if dalio says no bonds, no cash . Rupert i think he is right that bonds are not going to provide the kind of protection and correlations that you are used to in a we still want to own some bonds. I think theyre still a case for that. There is room for diversifying bond allocation. China is an increasingly interesting market for diversification. You want to continue looking into otherprecious metals and te infinity world are useful source, even in the shortterm they are trading with a positive beat. Ad i think you have to build risk portfolio that reflects the opportunities. We still see those as enormous. Albeit some of the problems we have been talking about in the next few months might make for a choppy few months, but when you look six to 12 months out, we see a strong recovery in the world and enormous opportunities with the growth businesses that have driven opportunities over the last decade or so. I think there is going to be a continued cyclical recovery in some of the assets that have underperformed. There is plenty of opportunities out there. Tom the question is, do you get an absolute or a relative performance away from technology . Do we go to cyclical and technology drifts to the wayside, or does it come up rupert to get that cyclical rotation with a market standing still, i think you need to see steeper yield curves and you need to see the discount rates sort of way on longduration assets. I think it is going to be very difficult for yields to steepen significantly. In the u. S. , you have a fed saying they are happy to let breakevens and Inflation Expectations move up. I dont think they will let you real yields drift up significantly. They want to keep the foot to the floor here on Monetary Policy, so i think the extent of that damage that could be done to those longduration assets is going to be limited. Do youe rupert, where find protections against inflation . Do you buy gold, do you buy bitcoin . Is there anything else out there . Rupert i think we want to belong inflation, a tactical view and a longterm view now. There is more uncertainty on the upside to inflation over a fiveyear horizon than there has been for a very long time because we are in this new Monetary Policy regime. We want new inflation exposures. Post gold is empirically not a very good hedge against inflation, but in an environment where investors are looking for a broader range of diversification, or people are extrapolating qe forever, they are looking at that whole narrative around expansion of government debt, expansion of Central Bank Balance sheets, it is useful to have that in portfolios. I think you have to look at more tactical dynamic opportunities when it comes to hedging. That puts pressure on active managers to find good sources of dynamic Asset Allocation and good sources of tactical hedging. Francine rupert, thank you so much. Rupert harrison, blackrock multiassetl strategies. We will talk about the greendale and brexit. Fromg up, french hill arkansas, we will ask him about President Trump conceding or not. That is at 6 30 a. M. In new york, 11 30 a. M. In london, and this is bloomberg. Ritika this is bloomberg surveillance. Im ritika gupta with your Bloomberg Business flash. A key safety milestone and its study of its experimental Coronavirus Vaccine. The ceo says the drugmaker is emergency usek a authorization from regulators. Was 94 aid the vaccine against the virus. The Cryptocurrency Bitcoin is approaching a record highs. That spurred a mania among buyers almost three years ago. That mania ended in a violent crash. The cryptocurrency jumped to well over 80,000 today for falling back some. Bitcoin has more than doubled this year. In europe, a recovery in demand for new cars did not last long. Car sales fell in october by 7. 1 . After countries started reimposing restrictions to contain the spread of the coronavirus. Other than a small gain in september, european car sales have been a decline all year. Down 27 since the first of the month. Tom Rupert Harrison was talking about optimism off the pandemic. George saravelos of Deutsche Bank publishes a blistering paragraph saying simply, europe will boom. Wet gives you attention as bound to december. Continued487 currency strength. Francine . Arecine european stocks pretty steady, tom, kind of range bound, not moving much. They are looking at the rise of virus cases against optimism over a vaccine. It is kind of a binary outcome right now. Since that for the First Time Since 2017. Cryptocurrency is making a comeback. I think we have to figure out the underlying underlying, tom underlying reasons for this. Is that diplomatic enough . The pound is climbing as the u. K. Makes progress on a brexit deal. We will speak about that with Rupert Harrison. I dont want to go to my thoughts. If it prints 25,000, Matthew Miller in berlin retires. It is a surge. There is a link with real yields. We will see if that holds true. Bitcoin up, up, up, confounding goes on the negative currency. I look at the data today, and i really have to go to the persistency of em strength in currencies across the pacific rim doing better. Francine we also have to look at peru and a change in leadership there. Withberg continues today the hsbc chief executive. You can watch on all of our platforms. This is bloomberg. We are quite confident in travel recovery for asia. I think asia will be in the forefront because a lot of the markets in asia are already in the green zone. Thailand already opening back to chinese passengers. Kong also establishing travel bubble. We are back in two volume almost to 2019 levels. Chinasook at , florida, business is better there than it was in 2019. That is because people feel it is safe to get back on the road. Leisure travel is stronger than Business Travel but Business Travelers coming back too. We have robust demand. ,f you look at our bookings they are in the range that they would be precoded. We are not having discount prices or anything. Jobs we impact millions of and while there is almost half a billion people a year that take holidays, only about 30 million go on cruise ships. Unlike my colleagues on the panel, we sale full. We do not have vacancies. Francine those were some of the leaders of the travel industry maintaining a positive out look for the future of travel. The u. K. And talk the green new plan they have put together. We speak with the u. K. Business minister, Nadhim Zahawi. Lets talk about the green deal and the brexit deal. Rupert, when we look at the u. K. s push into Green Financing , how much of this is a plan for a country postbrexit, and how much is the u. K. Just trying to do their part . Rupert it is a bit of both. Politically, this is important for Boris Johnson. It is also building on quite a lot of strength. U. K. , areasat the like offshore wind has been an enormous success story. Green finance, the government making progress with very current very encouraging announcements. If you look at this plan, there is substance. Obviously there are things that are reannouncements, but there is substance because the u. K. Has reallocated a chunk of Capital Spending to this agenda. If you look at the eight ambitions on the hydrogen economy, which is an area of strength, green finance and the natural area of competitive advantage, those are substantive. They have got to deliver, but the plan remains substantive. Francine what about the Carbon Market . This is the linchpin of any kind of strategy. Find out we actually what the u. K. Plans to do postbrexit . Rupert i understand there is still big debate in government over whether we are going to go towards carbon taxation. I think that is unresolved. The important thing is that you are still going to have a government committed to putting a price on carbon, sending a signal. As part ofou hear the brexit discussion, fears the u. K. Is going to enter the race to the bottom in environmental regulation. I would expect the reverse. I think the u. K. Is going to try to stand out globally as a leader. That is important to their marketing pitch postbrexit. Tom what gets my attention is well mending wellmeaning Business People trotting out the word paradigm. The basic ideas of paradynamic shift in Climate Change, someone has got to pay for it. Who . Going tohose costs are be borne by a combination of consumers and taxpayers, but those costs are dynamic. Offshore wind is a good case in point. When i was in the u. K. Treasury, we are recruiting we were putting in a subsidy that some said was outrageously expensive. You look at the cost curve in that technology, we are now signing offshore wind contracts at prices that are unbelievably low relative to what was expected a decade ago. Technologies are now able to compete with carbon sources of energy on a no subsidy basis. The cost situation is a dynamic target. Well, people increasingly see opportunity. Tom the technological progress, the engineering, almost in a 19th century sense is going to outdistance traditional technologies. Does that mean the carbon tax debate evaporates . Rupert there are Important Roles for carbon tax to play. You have to look across the economy and see if there are gaps in pricing. Emissionfuel, High Industries are perhaps not facing the true social cost of what they are producing. There is an Important Role for the government to say, are we providing the right incentives, or are there gaps where we are providing the wrong incentives . It does not have to be a single carbon price. There are different frameworks possible. There is still a role for that pricing. Busy two it has been a weeks for the Prime Minister. Selfisolating after coming into contact with an mp who tested positive. Everything changed at downing street last week with the departure of dominic cummings. We hear chatter that we are closer to a deal with brexit. Is this a different, or new Prime Minister . Rupert it is the same for Prime Minister. You will see a change in approach from downing street over the coming months because i think that particular style of Government People had come to associate with that mentality and the people from that team is going to change. A lot of the substance is going to remain the same. I think we are still heading for a deal. There is possibility that recent events make it harder for Boris Johnson to justify concessions that will be necessary for the final bargain to come into place, but that is still doable. Get pushed toill the last minute. Maybe not even next week. Francine thank you so much has always. Rupert harrison, blackrock portfolio manager. Lets get straight to the first world news with ritika gupta. Ritika Homeland Security publicly contradicting press tub President Trump claims on election fraud. Those remarks cost him his job. The president tweeted he had fired him for what he called highly inaccurate comments. President trump may complicate joe bidens plan to impose tougher regulations on wall street. He plans to nominate the acting comptroller brian brooks to a fiveyear term. If the senate confirms, biden might try to rely on a never used Legal Authority to remove him. Missed thatsley crucial vote on fed nominate judy shelton after testing positive for coronavirus. He began quarantine yesterday. It was the first time grassley had missed the senate vote. Grassley is 87. President pro tem of the senate, he is in the line of succession to the presidency after the Vice President and the speaker of the house. The firstas okayed coronavirus cell testing kit. One more tool in a time when nationwide Testing Facilities are being overwhelmed. The testing kit is currently authorized for prescription use only. 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. I am ritika gupta. This is bloomberg. Tom futures up nine. Coming up, the u. K. Business minister and chemical engineer is more than qualified to speak of the processes and for review on Climate Change. Nadhim zahawi will join us. This is bloomberg. Francine this is bloomberg surveillance. Vaccine does not change ecb plans to enact monetary stimulus according to Christine Lagarde, speaking to us at the new economy forum. She tells us the central bank had already planned to stop the economic crisis from getting work getting worse. The assumptions in her forecast were that we would have a vaccine in six months. Im not sure thats going to be a major game changer simply because what we had anticipated in our baseline was that at some stage in the first half of 2021, there would be a vaccine and it would be rolled out in the course of 2021. It might be a little accelerated given the news we are receiving , but i dous horizons not think that is going to be a game changer, so to speak. Being revisited as we speak and we will be releasing on the 10th of december, so i do not want to anticipate what the outcome will be. We had this great news we had somees, pretty negative news concerning the second wave that came about, certainly earlier than anything we had anticipated, and together with that second wave we have also a list of containment measures and lockdown measures that have affected one country after the other. Combination of those developments that affected situation and that also has an impact on the outlook. What kind of economy do you see for europe in the world . Because of the restrictions, is that a double dip . Is it something that is so uncertain at the moment even if we get a vaccine, we do not know what shape it will take or how consumers will behave. I do not want to downplay the very good news that the vaccines were. As a central bank, we need to be shorttermnot just a , we have to be mindful of the overall situation. In that vein, the second wave we saw presents risk. Tom Christine Lagarde with Francine Lacqua at the new economy forum. Much more to see here throughout the week. Briefing froma the french minister of finance and economy, bruno le maire. This is bloomberg. Ceo of says 14 billion doses of the Coronavirus Vaccine could be needed. That is why she decided to partner with three other companies to develop one. Spoke on the new episode of the david rubin show. Three vaccines partnered with others, including sanusi because that technology is proven in pandemics to work a all of the people it is more effective way to get to scale manufacturing, the other real challenge. We need to probably provide up to protecton doses the world. As well as getting to a safe and effective vaccine, we need to get to scale. Our route to that was partnership. Ritika you can watch all of that interview with the gsk ceo Emma Walmsley on the David Rubenstein show tonight at 9 00 p. M. In new york. That is her latest Bloomberg Business flash that is your latest Bloomberg Business flash. Francine Prime Minister boris a plan tos announced boost Green Industries and tackle Climate Change. He says the 10 point plan which includes banning the sale of new gas cars in 2030 will create jobs. ,oining us is Nadhim Zahawi u. K. Business minister and conservative mp. When you look at some of the plans laid out by the present by the Prime Minister, how many jobs will be lost in transition . Do you worry you do not have the skills or need retraining before you support those jobs . Nadhim you are right to focus on retraining. Guarantee thatls boris announced got few headlines because the whole world is focused on coronavirus. Guaranteeme skills allows people of any age to reskill and the government will pay for that. That includes about four years of reskilling or upscaling using current education infrastructure. This announcement today is an additional 250,000 jobs on top of what we currently have in the green sector. Between now and 2030. This is the first of getting that additional 2 million jobs in total as we transition to net zero by 2050. Big announcement. You highlighted the banning of petrol cars, but there is a lot more in there. Storage, the West Midlands in scotland. The one thing people keep asking is when will a government make a decision on the future of the Carbon Market postbrexit . Towardsactually be carbon tax . Trading is mission something emission trading is something that is attractive to us. That is something we are considering, but we are looking at all of our options. The Energy Minister is currently considering what is the right thing to do. We have got a great track record in many ways. If you look at what we have done wind,rogen offshore cfds where we are now certain 36 of the whole planets offshore wind generation. There is an opportunity for the u. K. To take real leadership. The city of london too. In new york, you know in engineering there is that dreaded course called systems analysis, game theory for science. Tell me about the adjacency factor. This is a wonderful program, but how badly do you need the people across the north sea and the English Channel to be with you on this to make it work . That weit is important have partnerships, interconnectors, youre right to talk about people across the , which and the north sea we are confident in being able to achieve. Also, a transition plan. If you look at assets in the north sea in oil and gas, there are real opportunities for Carbon Capture use and storage. You the announcement today, will see a transition plan for north sea oil and gas toward this renewable world that boris wants to champion and lead the world in. Tom tell me about the linkage of federal action, what we call in the u. S. A federal approach, the paris accord idea of states and localities. How do you meld the Boris Johnson plan together with the localism of the paris accord . Nadhim it is important that we the if you look at what we are doing in teesside, ben haoching is going in four hubsountry for Carbon Capture use and storage at an additional 200 million pounds. Haoching is a brilliant metro mayor that he sees this as investment in ofnsforming the economy teesside. That is important. Centernda driven by the but creating the environment to attract further investment, the 12 billion that boris announced we believe, as we have done before, will be matched three times. So, 36 billion private Sector Investment into this green industrial revolution. I just want to come back to the difference between emissions trading and carbon tax, which is the most important point. Why is there a split between the Business Ministry and treasury . Nadhim it is important that we work together. Beeninister for energy has working with treasury ministers on this, and we will obviously make an announcement appropriately. I was making a point that i think emissions trading is a track system and weve got to get this right. Francine talk to me briefly about nuclear. We keep hearing from ministers that you are committed to largescale plants. Nadhim we are omitted to largescale nuclear, the Prime Minister announced a new 500 million and investment into kindoping the first of its small module reactor. Weve got a consortium of the u. K. That is leading on that. Ultimately, advanced modular reactors, which will come further down the road. S is a very important ultimately, weve got fantastic innovation around fusion. Which we have already announced previously. Tom thank you for joining us on this important day of Climate Change announcement. Nadhim zahawi, u. K. Businessman and conservative mp. Lacqua, putting no wind tower at her house putting a wind tower at her house. Francine we are going green. [laughter] everyone is doing diy. Tom home depot yesterday with banged up sales increases. Shepherdson of pantheon and macroeconomics, 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. Of this morning, evidence fear this recovery in stockton is not to be believed. The bulls and bears are divided. Continued pacific rim strength this morning against the dollar. There is evidence of a pandemic in bulgaria. Deaths double in 14 days. Adelaide, australia locks down. Senator grassley of iowa tests positive. Michigan gop reverses the refusal. The Pennsylvania Supreme Court crushes trump hopes. Court, attorney Rudy Giuliani says those ballots could have been from mickey mouse. Good morning everyone. Tom keene with Francine Lacqua in london. Extraordinary news flow this morning. We have been talking Technology Today and we see an apple capitulation. Breaking news from apple
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