Transcripts For BLOOMBERG Bloomberg Surveillance 20240711 :

BLOOMBERG Bloomberg Surveillance July 11, 2024

Were up, and then lifted nicely at the pfizer announcement, 1. 11, up 12. We are near dow 30,000. To me, the clarion idea is that the vix is peeling away the fear , the volatility that is out there come up with a vix at 22. 01. Jonathan wejonathan have been doing that since the election, and the move got a big boost of the pfizer news from last week. The final efficacy rating, and the number is decent. Lisa 95 , better than the initial read last week of 90 . S is the mark on brands this is the more comprehensive data. Of over 65, so preventing illness. An incredibly good display here. The interesting thing to me is that we are not seeing more of a reaction in markets. It is already baked in, and in fact, you are seeing bond yields a little lower on the day. They are just flirting with this idea that longterm, we are not changing the scenario, even with this incredibly good news. Equity futures are elevated on the s p 500. A big move in the equity market. We stayed elevated over the last week. 10 year treasury yields have unwound the move from last week, almost all of it. On twostens, that yield curve is now basically in line with where it was last monday before the pfizer news came out. What is the bond market telling you right now . Tom the bond market without question has been the most supple of the markets. To me, you are right. The depth of the bond market indicating this balance between what we see in the economy, and critically, the no stimulus washington, and what is percolating wednesday. Are we on wednesday . In my right . Jonathan well done. Tom it has been a debate about not if, but when the fed will act. That is a change from early november. ,onathan wednesday morning seven 03. Lets bring in sam says ellie morning, 7 0 three. Lets bring in sam fazeli. What do you see in the details . Dr. Fazeli quite a lot of interesting angles. Ofobviously see the details the efficacy in the elderly population. This is the group of people who suffer most from the disease, so ofve 94 reduction in risk cases of covid is really positive. We had not seen this. We had been speculating until now. The next thing is the side effect profile looks quite interesting because modernity gave us some details, and it looks like it is better tolerated than the modern of vaccine. Moderna gave us some details, and it looks like it is better tolerated than the mother and then the moderna vaccine. It may be slightly safer. Tom where do we from 400,000 purchase bits . 400,000 participants . Theres placebos, i get it. What happens after this good news . Do they throw it into the hospital . Is it something more sophisticated than that . Dr. Fazeli i think the way i think about this is theres two ways to do this. You either decide what we are going to do is use vaccines to put out the fires, so vaccinate where they are the source of infections, so the younger population, to stop the transmission of the virus. On the other hand, which i think they will do, they will go for the Health Care Workers who are exposed to inordinate amount of virus on a daily basis. That is about 16 million folks in the u. S. Then go for the elderly, which is probably what they are going to end up doing. Lisa what are your thoughts based on the results, that they actually showed improvement rather than the opposite, which is normally what you see when you broaden out these studies . Dr. Fazeli indeed, that is Something Worthy to remember. At least it didnt get worse. It might have been that greater thenis was 90 , but that is a great positive here. Weve only got 50 million doses they are going to be able to distribute by the end of the year, so i am expecting that is what is available for about 25 million individuals. That covers the Health Care Workers and some perhaps people in nursing homes, etc. Jonathan great to catch up. Lets hope you are back soon talking about more great stuff. For our audience worldwide on bloomberg tv and radio, pfizer showing its covid19 vaccine to lived infective, they the equity markets days. We advanced 0. 3 . Joining us now is gabriela santos, jp morgan Global Market strategist. Sidelines, what is left to allocate . Theres quite a lot actually. Money market funds had an increase after the pandemic hit of the 1. 2 trillion. Really since the middle of the year, that started to get deployed slowly, but you still have 700 billion extra on the sidelines, waiting to get deployed. So i think that means any sort of pullback we have in the market, when you see days with more bad news, it gets absorbed by this cash being deployed. It is especially your hardest hit sectors, your more cyclically, economically oriented sectors and regions that are going to see the biggest bump from this cash being deployed. On the same side comes your higher risk credit, emerging market data as well. Ago,back to 2007, 13 years i believe the math is. Index really hasnt broken out. It is now the time . Gabriela i think there are so many stars aligning for emerging markets. First you do have this visibility of a cyclical upturn forming next year and beyond with the vaccine news. Emerging markets are still cyclically oriented, over 50 of the index. Number two, you have the results of the u. S. Election, and which we have a president elect biden that to us and investors represents a return to more orthodox, clear foreign policy. That is huge for your very trade oriented e. M. Number three, you have central banks, whose reaction functions have changed so much, in which case you can have good news and Interest Rates still stay low. That is a great set up for emerging markets, not just the ones that have led this year, which is north asia and technology, but a broader set of emerging markets. We are extremely bullish on ian ,quities on ian equities debt, on e. M. Equities, debt, fx. Ethics and lisa the bank of America Survey says we are getting close to full bull, and yet you have howard marks of Oaktree Capital coming out with this quote yesterday. When the level of optimism is high, there is usually room for disappointment. Can you square the optimism with the reality on the ground of a pandemic that is only getting worse right now . Gabriela i do think in the very shortterm, we are very much do for a tough time. We see cases rising significantly across the United States. Very high cases in europe. That is going to restrain the recovery here in the Fourth Quarter and the first quarter. But i think the vaccine news is good news because it gives investors the freedom to think less month to month and more 12 months out and beyond, which is what we should be doing. We shouldnt be thinking about the here and now so much. We should be investing for the future. That is why i think you can have a difference where cases do pick up in the shortterm, but the market is able to absorb it better looking into the future. It doesnt mean there wont be pullback. As you mentioned, there is more bullish outlook now, but a much more normal pullback of 5 to 10 instead of the bear market we had last time cases were rising. Jonathan , calling our guest is lisas jonathan being rude to our guest, calling our guest consensus . Rude . Gabriela, was that gabriela i think jon is starting to start stuff. [laughter] jonathan maybe that is what jon is doing this morning. At him, women upset that is really good, jon. It looks better on radio than on tv. [laughter] jonathan ive lived it before. Im used to it. Theres nothing new about that. Dollar china, can i go there . From the end of the year, what is left to squeeze . Gabriela we think the chinese n has pretty of room has plenty of room to appreciate over the next few years. That is as you get an upturn in the global economy, you get the more friendly outlook of the u. S. Election. Beyond that, you have the more anduan getting more added into investor portfolios. You have more and more investors also wanting to invest directly in chinese equities and bonds. That is also a structural of the to be one currencies that appreciate the most over the next decade. Tom lets talk about the brazilian scream, and that is not you angry. It is ferro. The brazilian scream is when you get strong brazilian rial, strong taiwanese dollar, and they start screaming about weak u. S. Dollar. Are we closer to that, or do we have patients up to 2022 on weak u. S. Dollar . Gabriela from brazilian perspective, it is the second worst performing currency this year. It has depreciated close to 40 . There is much more concern about the depreciation then there is for any sort of nascent appreciation. There is still the concern about the weakness of the currency feeding into higher goods prices, higher inflation, and a vicious cycle with higher Interest Rates, so i think there is plenty of room for the real to appreciate further, and brazil is a very cyclical currency, a cyclical market, so it is part and parcel of the cyclical recovery that we are seeing in Global Markets. In that sense, it is very much welcome. Jonathan great to catch up. Appreciate your time, as always. Gabriela santos from jp morgan Asset Management on this market. Equity futures advancing on the s p 500. We advanced 0. 3 . Two private companies are going to battle it out for a higher efficacy rate. That is great. Well, buts is down as nevertheless, nice comp sales. Youve got the boeing news over the laying that. Somebody has got to get on a plane. We will see what happens with that approval. But i agree, it is about vaccine therapy. What is important to me is it has been three announcements back to back. It is not spread out. Jonathan there is some real urgency right now. Tom well said. Jonathan it is the reality of the moment we are in right now. Yesterday, the white house covered task force, i will quote it. Broad Community Spread across the country reaching most counties without evidence of improvement, but rather furthered here you ration. Further deterioration. That is from within the white house. That is the concern. Tom futures up 12. Thats all youve got to know. They advance. Jonathan from london and new york this morning, good morning. For our audience worldwide, this is bloomberg surveillance. With the first word news, im ritika gupta. Pfizer says a final analysis of Clinical Trial data showed its Coronavirus Vaccine was 95 effective. That clears the way for the drugmaker to apply for the first regulatory authorization of a vaccine. Pfizer and its partner biontech says it is effective in people of all ages and ethnicity. President trump has fired a security official who went against his claims of election fraud. Night, theet last president said that his in a tweet last night, the president said that his comments about Election Security was highly inaccurate. He had said to the election was one of the most secure ever. Boardcounty election caused a national uproar when republican numbers block certification. State officials have been asked to conduct an audit of some of the precincts. Michigan was crucial to joes victory. Could still track to consider the nomination of judy shelton to the Federal Reserve board, but it is unclear if the result would be any different. The senate handed Majority Leader Mitch Mcconnell and. Resident trump a major setback u. S. Regulators say the boeing 737 max can safely return to the skies. The plane will resume flights after a grounding two fatal crashes. Bestsellings jetline. 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. We need the fiscal stimulus. We needed relatively quickly because i can see where the second wave is coming. You can see consumers bending beginning to get impacted again. From london and new york this morning, good morning. Alongside tom keene and lisa abramowicz, im jonathan ferro. Want to turn to the price action at the moment. For our audience worldwide, this is the story right now. Equities with a lift off of the back of some pfizer headlines. In its final analysis Clinical Trial data, its vaccine was 95 effective. That is the good news this morning. Futures up 12. We advanced 0. 3 . In the bond market, treasury yields unchanged at 0. 8652 . The story of the yield curve, last monday before we got the initial pfizer news, the yield curve, 67 basis points the spread between twos intends. Between twos and tens. That yield curve is not confirming the rally. That has rolled back over again. Do you need the bond market to come with you if you are longer . Tom it is simply the desire for the fed to step in here. I go to the Research Note of the ,eek at Standard Chartered making clear this is a fed that could act before the december 16 meeting. There is just a belief that the fed to the rescue again. Right now, with a terrific newsletter this morning, lets get a Washington Update from our chief washington correspondent kevin cirilli. There are so many different ways to go, i am going to start with an open question. What is the to do list for the president of the United States this wednesday morning . Toin he was supposed to go maralago for thanks giving, and they have since canceled those plans, so he is going to be at the white house for the remainder of the week, as well as next week. In terms of where things go, the president has been firing Top Administration officials. He has also been meeting with his International Team of advisors with regards to winding down military presence in the middle east as he has still been taking to twitter with regards to the results of the election the other week. It has been a transitional period, whether or not acknowledged, unlike one we have ever seen before. Tom how does he respond to a loss at the pennsylvania supreme court, etc. . Is there any reaction to those defeats, or are they ignoring the judicial system . Kevin i put this to a source yesterday who is very close to rudy giuliani. I said, where are the goods . Where are the goods . You cant just talk about them. Youve got to have court documents. Youve got to have precise accusations. The source didnt have anything for me. There is acknowledgment around people like rudy giuliani, officialsior campaign that this is going nowhere fast, but there also is another acknowledgment that there is also a political strategy here. From the trump perspective, it is what is the longer play, not just for President Trump, but also for members of the first family. What is their play going to be . And then obviously, the georgia runoff. Jonathan this is important. Youve got to talk about the objective here, the primary objective. For most people, a contested election, ok. You are talking about separate objectives as well. Shine a little light on that for us. Kevin from the trump family perspective, what is the next play over the next 12 to 15 months . From the rnc perspective, who will keep control just at the top, but who will have influence at the rnc as they head into midterm elections . From President Trumps perspective, will he look to get involved in media circles, or what will he do as a kingmaker if you want to choose that route , or even be a force in 2024 . Then of course, it is from the Party Perspective of the rankandfile members. How are they going to coalesce and reorganize . The first test of this is on january 5 in georgia, whether it is karl rove started to fund raise and put more money to try to be a force to be reckoned with in georgia, who is going to try to claim credit for those winds if the republicans win and keep control of the senate, and theres a lot at stake for all of those various parties i mentioned and the senate Majority Leader Mitch Mcconnell. Jonathan theres an assumption in some places that after january 5, some daylight opens up between the Republican Party and the trump movement, so to speak. Do you anticipate that will actually happen, given the implications that could have for the next two years, the next four years . Kevin no, and heres why. When i talk to sources and President Trumps world of political advisors and whatnot, they are all trying to figure out what their longterm objectives are, and right now theres a lot of infighting because they dont know what each of their objectives are in terms of the strategy laid out in front of them. But i can also tell you, and i will make this point quick, is that there is a real deep belief that the Republican Party is in a position of strength heading into 2022, and because of that, that is why you are seeing a bunch of fog, so to speak, trying to sort out where they all think they are going to end up, where they are going, and where they want to go. Tom i am dazzled by the idea that while youre on with us, we can hear the construction of your new office. [laughter] i just think it is great how you do that. Lisa i will say, that brings me to the here and now, which might be the drill. Kevin metaphoric. Lisa but also just to shift this transition to the here and youveterms of policy, got yesterday, President Trump saying he is going to have further withdrawal of troops from afghanistan, as well as from iraq, but on the financial side, the sec coming out with a proposal to delist chinese firms from u. S. Stock exchanges if they dont meet certain accounting requirements. This is not necessarily going to get through before biden takes office. How much political pressure is there on the Bided Administration to put Something Like this through, to finish it out given some of the concerns about china and the u. S. . And we alsoficant, got word that the chairman is going to be stepping down so there is now an opening for the Biden Administration to fill with regard to foreign policy. You heard this earlier this week, but the president elect discussing matters of geopolitics in terms of joining internation

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