Recovery strengthening, thanks in part to a pickup in Consumer Spending. Has fresh hotp bind moves against beijing in the final weeks of his term. Eu are inks with the a crucial week. The u. K. Prime minister will have to amend his busy schedule. He is not isolated he is now isolating from coming into contact with a lawmaker who tested positive for covid19. Are at a juxtaposed moment. I concede nothing. There were many tweets, but that was the conclusion. The president concedes nothing versus the virus raging in the United States of america. But the president elect has a message for now. Lockdown, and thats critically important to sentiment. You look at michigan going into a partial lockdown. To that agenda . I will turn to the right camera. Trust thenley says recovery. Thats what they want you to do. Sell the dollar. Get all in. They want you to be overweight equity, corporate bond. The message is there, you should read the Bloomberg Intelligence narrative, it is not a v it is far from a v. In a historical mindset. Here you are, this is the rising call from morgan stanley. It will be a strong recovery in their view. Went toquity markets record highs. The money flows in. Asia is spiking high. Call from morgan stanley. You will see 3900. Yields were wretched to 1. 45 . Let me show you the global risk monetary. This is what we have. Investor sentiment is a highest in three years in the United States of america. The money is rushing into u. S. Equities, 44 billion went in. These are the Global Equity boards. S p futures up a 10th of 1 . Whats look at the bond market, the dollar and copper. Its at a near twoyear high on the back of the china day. There you go, copper up 2. 5 . What does it take to break the bond yield above 1 . I will put that up question to that question to my guest. Biden, thes to joe president elect, have suggested you should be opposed to a nationwide lockdown in the u. S. That as fresh vaccine reports are on the horizon. With drugmakers including pfizer, expecting to include more data earlier this week. Awaitedtes are eagerly as the pandemic continues to accelerate. Cases have topped 11 million after adding more than one million in the last week. Maria, thenow is senior multiasset strategist at state street. Always great to get you with me this morning. We have waken up at a juxtaposed moment, but no overall shutdown in the United States of america. How important is at message as you are waking up this morning . A good morning everyone. I think it is interesting that we are talking about no National Lockdowns. We will probably true see a lot of restrictions imposed on americans. Its more likely to be at state level, but its more hard to to be peoples lives normal. We will have lots of restrictions but are it we know the virus is raging in the u. S. Not uniform, but we will have some lockdowns imposed in america. That has very critical implications for financial markets. Probably meaning that we might active said. As you were saying in your introduction, we are talking about on yields. That is something bond markets will show should we have more should a link against the recent backup in yield. That could be crucially important. Down. We will break that i want to get the sense of where you are with sentiment. I look at the u. S. Sentiment from the aaii. From andifferent institutional standpoint, but we are looking at sentiment at a threeyear high. Have we got in too far ahead of ourselves gotten too far ahead of myself ourselves . Too ahead of ourselves. It is very, very interesting. Opposite hear two messages, almost in the same breath. On one hand people are saying we have a vaccine, the economy is recovering and we are off to the races. But then almost immediately we heard a viruses rising, we have new lockdowns, and how do you reconcile those things . I think we are recovering, but i dont think it is a vshaped recovery. I think it is a fairly slow and uneven recovery and there are winners and losers. It stops the motions of can i ask you, and this is where i struggle and i probably represent the average client. I see a vaccine. My mind says look through the human tragedy that is now. Look to the back of 2021. You cannot be on invested. You cannot pull back from your monthly contributions. You must be fully there, versus the other side. Which is, it looks like a living hell that we are in at the moment. You are right, you cannot be on invested. Vaccines aredegree looking towards 2021. It is the idea that Interest Rates are so low that you cannot be an invested. You have to invest in Interest Rates that are so low. Whicht you invest in and part of equity markets is probably the more interesting discussion. Is this uncertainty that is still very important. Thats why we are speaking with more stable and more profitable companies. To a large degree with the winners we saw this year, so that momentum that we see continue. But definitely stay invested. Definitely stay invested. I know that you have the view about growth and value. And we have this discussion each time you come. The vaccine is not enough to start rotating to value stocks. 44 billion went in the Global Equity market. 3. 7 went to growth. How much more june judicious do i need to be to picking the growth . Middle willthe remain resplendent . Marija we will have tech, growth stocks, and as you have been mentioning, we love growth for a long time and it has been really a few reasons for us to like growth. The vaccine use probably not going to change that. Economic earnings growth. If we look at the forecast right bit they speak up a little for next year and the year after. But not massively. There is still technology and communication. Cyclical areas are better than the used to be. We know that by the end of next year earnings are going to be a little bit higher in those areas, but not much. Secondly, Interest Rates. Interest rates do expect rates to go higher. I would probably argue not. We are having this virus news that is going to be challenging. We might not have enough fiscal packages. We might not have enough lockdowns. So central bank needs to be accessed. The leader rates are still there and it still feels very massive you are doing it to have more stable companies, more Reliable Companies in your portfolio. All of these roads leads towards growth stocks. The one thing about tv is that i have taped to go back and listen to rather than my memory. You said to annmarie and i that we have to pay you to buy banks. You have missed a 10 move on the week, a 15 move on the month, a 20 move on the quarter. To you going to justify that me by saying rates are not going to move higher by 1 . Will we still have to pay you to buy the banks . Marija you are right, you can hold to account on that. I think banks are still secondworst performing of the year, so hang on to that notion. But i think you are right, you do need to see higher Interest Rates. Interest rate have increased in the last month. So what we have to ask ourselves as investors is, do we expect Interest Rates to continue to bank higher . I have a lot of doubts about that. I think we are in a very challenging situation. On supportingely the economy. So its interesting to see the Bloomberg Index in the u. S. Have financial conditions tightening. That is probably not something that Central Banks want to fight the pandemic. Like in the u. S. And many other countries getting fiscal packages fairly difficult on the short term. In the shortterm it is quite difficult. So we still expects Central Banks to be quite active and compress those Interest Rates. I like the fact that it is going up against the Goldman Sachs bank of america. Good to be on the other side of the trade. Stay there, dont hang up. My guest host this morning. My me get you up to speed with your first word headlines from around the world. Boris johnson a selfisolating after coming into contact with an mp who tested positive for covid19. Johnson said he has no symptoms and will continue working remotely. April, covid19 put the Prime Minister in intensive care. As the u. K. Struggles through its first wave of the pandemic. Australia is locking down for three weeks as the measures failed to slow the pandemic. Just two weeks after a partial lockdown was imposed. Its in large part for the economy opening. He hopes the new restrictions can end on december the sixth. Australia Stock Exchange suffered an outage of data shortly after the opening. The issue has been identified and trading can resume tomorrow morning. Its the latest disruption this the tokyo Stock Exchange. Global news, 24 hours a day, on air and at Bloomberg Quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. From strength to strength, chinas recovery remains on track. Thats in part thanks to picking up ining more on the story and momentum here on daybreak europe. This is bloomberg. Manus it is bloomberg daybreak europe. I am manus cranny, resident in dubai. Goldman sachs see the yuan better fitting should the u. S. China stocks improved. Some pretty big calls. Lets see how they square up to Goldman Sachs. It base case is the data from china was pretty good. Retail sales in fixed assets. The threeway flow was good, it was strong. What needs to happen next to sustain that in china . Marija more of the same. For us, there is a reason china is doing a lot better than the other countries because they have been a lot more successful in defeating the virus. That is a little bit different from our previous segment. Why we are struggling to see in otheranged pickup regions because we are still fighting the virus. When we are fighting the virus, all the stimulus that comes into the economy is stabilizing it. It is giving money to people not to work and money to businesses not to tax people but keep them on payroll other than being productive. China managed to defeat the anus and they have experience of fighting pandemics previously, so they have been a lot more decisive and a lot more successful at containing the virus. Once that is done, you can use money more productively to stimulate the economy to start growing. That is exactly what they have done. Starting with Business Activity that has picked up. We seeing minor trickling into retail. And in retail consumers start spending. But the threestep process is first you fight pandemic, first you get virus under control, then you stimulate the economy and then consumer spend. I think what we are having in the western world, we are still leaving this pandemic because to keepple are managing their dropout at home from work. Thousands of economies rely on the consumer people who work from home successfully. There is real they are still spending. At that is not a broadbased. That is the big challenge. In china we are having a more amount of people going to work and spending. Industrial activity is strong. Retail activity is picking up. Normal or a and its a very sharp contrast with the rest of the world. I am looking at asian equities this morning. All back to goldmans note and they talk about a recess. Reset. That will be in added our foot to what you are saying there as well. Adding. Of you selectively add, do you add to china . How do you add to the em or to china . I think every time i come on the program i keep going on about if you look at msci markets, about 80 of it is asia. Buying msci e. M. , you are buying asia. A lot of it is china and korea and companies. Saleh companies that work with this complex technology and the semiconductors. Lots of exports back and forth from china. But asian stocks are very, very important for us. And i hear your point on political stability. Means is the Biden Administration very positive to china. Beis a bipartisan issue to in the u. S. To have concerns about how china is growing. But we suspect and hope that the next administration will be more predictable and its approach towards china. Rulesbased. Re so that is probably quite positive compared to where we are. By no means will it be perfect. See does the rulesbased narrative return in 2021. As my guestth us host this morning. I touched on the data, maria and i talked about it. Chinas recovery is on track. Consumer spending picking up. Both production and the rose faster than expected. Now to discuss the data. Good to see you. You are chief Asia Economic correspondent. What stood out for you . The retail sales were lighter than estimated. Should i focus my mind here . It was positive across the board, like you say it was a bit better and the investment was better. The contraction in private investment continues to slow down as well. It looks like that might go into positive territory and the retail sales missed the headline forecast, but it still accelerated to 4. 3 from 3. 3 . I think the chatter among was aists after it Broader Consumer recovery story remains on track. We saw it over mixed holidays in the month of october. Massive tourism is doing better. We had cater spend during catering spending happening at a broader sense. The only major economy to grow and it remains on track. And they expect a better finish to the year than they initially expected. Thank you very much. That is our chief Asia Economic correspondent. Coming up on the show, global stocks. Optimism on the back end. And on the u. S. Stimulus, can that lamenting continue . The details from morgan stanley, this is bloomberg. Manus its bloomberg daybreak europe. Global stocks heading towards a record amid optimism. The expected rollout of vaccines and additional u. S. Fiscal stimulus will bolster the economy. V. Ieving in the Juliette Saly has the details of who they are and why. Uliette keep the faith and trust the recovery, this according a morgan stanley. A team of analysts putting out there 2020 forecast. They say it will be this a vshaped recovery as we start to get more optimism about vaccines and fiscal stimulus from the u. S. , boosting what you are seeing in terms of stocks and credit. They are recommending investors stay overweight. They do say volatility will declined decline an investor should be patient. Forecast there. The s p 500 to reach 39 points by the end of next year. The 10 year yield on the at 1. 45 . Ote and i think the dollar will reach 5 . They have reached 18 25 an ounce 1800 25,000 an ounce. You are seeing global stocks with the losses of the pandemic. They are headed towards overboard territory. The globalley saying recovery a sustainable, synchronous and supported by quality following their tradition, so remaining on the call. Thank you very much. I will pick it up from here. Would you believe it, annmarie is having a day off . Its sort of unheard of. All on my own. I dont know where she is. Maybe she will come back tomorrow. If you want to check the volatility, you are going to have to have some nerves. It had literally a litter of a week last week. The turkish lira just a little bit lower at dollar half. Up by 10 . The best week since 2001. We are going into a credibility test and a litmus test for the new governor. Will he raise rates . Credits are in for 475 basis points of that hike. That would take you to 15 . A turkey can get away with a smaller rate hike because of the domestic inflation drivers have normalized. Whatever it is, you are going to need. Buckle up and live lard if you want to trade turkish lira this week. Down. Up, no backing officials from the eu and the u. K. Try to overcome some key barriers in the trade deal. We will discuss. 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. Word good east morning from bloombergs middle east headquarters. Has anpush higher advisor to the president elect suggests a National Lockdown is not on the agenda. Momentum building. Data from china shows recovery strength thanks to the pickup in Consumer Spending amid reports President Trump plans fresh hardline moves against beijing. And best laid plans. Brexit talks with the eu and another crucial week. The u. K. Prime minister is isolating, after coming in contact with a lawmaker who tested positive for covid19. We have this charge higher in equities. There is a gush of money coming into these markets. 44 billion dollars globally across the world. This is critically important because the covid boa constrictor train around our lives and our economies is going to change. Advisers say no nationwide lockdown. Michigan goes into a three week because i lockdown. The message from the white house, i concede nothing. Itthe equity market, much of to the u. S. , much of it to growth. Yields will not ratchet higher. That holds back from the trade and value versus growth. On record sentiment. Investor sentiment at a three year high. Standard deviations higher than the average over the last five years. Have a look where the money is flowing. Virus puts a cap on the yield narrative. Whatever alpha you might get from a vaccine repricing the rates market, morgan stanley, Goldman Sachs, noble of others, that is what is going to carry you through. At the moment, the bond market is grappling with the reality that we are living in the eye of the covid storm across the world. The dollar is lower this morning, generally, by 2 10 of 1 . On the back of good industrial data, retail sales data and Industrial Production from china, you see the market, the commodity trade along with the currency at 2. 6 . , shockxit negotiations headline, they are running down the wire. Businesses are racing for extra Storage Space. The risk the country leave the Single Market at the end of the year without a trade deal threatens the supply chain. Discussger is here to the risks. Have the british negotiating message. There is a high wire act, we are used to that. What is it. Businesses are looking at whats happening according to the chairman of the warehouse association, business is thought by this point we would have a deal that Means Companies would be able to transition and not have to worry about the goods. Recent language, the u. K. Saying they are not backing down despite the fact key advisors of Boris Johnson have left means that we have this lastminute. What companies are doing, there are two approaches they could take. One is when we have seen Harvey Nichols taken to some extent spencers over the past week or so. That is that they look for bond Storage Space. They import goods now. They pay customs duties on where they sell them. If they try to import goods after the brexit trade transition ends, they will have to pay additional tariffs or paperwork and that of course all means load out through these companies. Another tactic they can take and that they are trying to take is that if you bring a car you assemble it and then you exported from there. You can avoid paying tariffs altogether. It is this mad lastminute. We are looking at brexit negotiations and saying maybe these businesses will not have such a smooth transition. Why our business is only trying to secure more storage one this has been on the horizon quite literally for quite a while. That is true, but i think when you have that luxurious time, you think it would be further along in terms of achieving a trade deal at this point. Also, to apply to the license to have this Storage Space, it takes eight weeks more or less. We are just six weeks out until the end of the year. It is certainly too late for a lot of businesses if they are hoping to get Storage Space now, which i should say is already taken up. Thank you very much. Dani burger setting the context for brexit negotiations. The u. K. Government has warned as investigators negotiators enter another week. , and i needen down to take the subjectivity out of it, how politically a carious would it be for the u. K. Not to do this trade deal . Is there a political and economic issue . Be dangerous an issue would for them not to do a trade deal . Viewed ity consensus would be the skinniest of skinny that is the point. There is some Political Capital gain from doing are not doing deals. Im sure advisors wanted to overdrive in terms of the best andatives to talk about, oneill scenario. , it is impossible to have an allencompassing deal. The deal we can have is not that different from i think it is more a political angle and it is more more than it is an economic angle. Manus i like pitting you all against one another. Ti says they want to go along long on the u. K. Relative to the u. S. Wait for the kicker because you love it. There is going to be a treasury selloff and therein lies the point. Youre going to scoop up value in the u. K. It pushes me into the value trade that is the u. S. What do you reckon . I would love to comment. First we appreciate value. Ime are two charts watching for u. K. Stocks. One is priceearnings in u. K. Relative the rest of the world. That has been going only down since the referendum. A Straight Line down. Investors are paying a lower multiple than they used to since referendum given uncertainty. The second chart you can watch is that earnings. Earnings in u. K. Have come down 86 this year. There is no other country, no other large country in msci the has done Something Like that. 86 this year. Lower multiples, lower earnings. Citibank the u. K. Has been the worst performing region in the msci. U. K. Comesng onto your radar. Given the fundamentals are so down, it is the last place i would look. The reason to be more worried about u. K. , what u. K. Used to offer to a lot of investors is income, dividends was a big big driver for a lot of people. Guess what . The one thing we see is dividends. The number of companies that talked about cutting or postponing dividends has been record high. Hasher reason to go there been cut down under it. U. K. Is probably not the market. I think that is one of your best answers ever we have had. That is even better than i would have to pay you to buy back. Here, you dont see any elf on a trade deal in the currency other. Is it that alternately the economic tragedy you have ultimatefor us is the cap on the currency . Currency is more volatile. What we see is cable manus you would be tempted to buy the pound . I would not. On political news, and mention today we get news saying but longerterm, we know what kind of deal it is. We know that is not a very substantial deal. Absolutely, but it is kind of news driven. Very shortterm, it is twoway risk, but anything mediumterm is quite negative. Manus let us leave it there. One thing that is positive, the global market. Now you have very clearly got her u. K. Views. Great to have you with me. Is there more upside . Fromave american sentiment investors at a 34 month high. You have a message from the president elect, no National Lockdowns from his advisors. That is the momentum driving markets this morning. From the words president of the United States of america, i concede nothing, not holding it down. The continuation of growth relative to value. The dollar is lower. That is the narrative. The rest of those recovery currencies are flying higher this morning. Those to you in just a moment. A quick check on your headlines, 741 in paris. President donald trump is still refusing to concede the election. Said the the president election was rigged, a claim flagged by twitter. We have a long way to go. President elect joe biden is promising to make history with the most diverse cabinet ever, but his inner circle of advisors would likely remain dominated by white men. He is looking to the former fed chair janet yellen for the role of treasury secretary, the first women in that role. Spacex has lost four after absent orbit on the first regular nasa mission to the International Space station. The dragon capsule is set to arrive at 4 00 a. M. Tuesday morning london time after blasting off from cape canaveral. It is a milestone in the development of commercial spaceflight. Day onnews 24 hours a air and at Bloomberg Quicktake powered by more than 2700 journalists and analysts in 120 countries. Loreal says that will be a revival of makeup after the pandemic. Conversations with the ceo. This is bloomberg. Shiftshe Global Economy from high carbon to green, governments are looking for ways to make a transition which leaves no one behind. This is the monumental challenge of diverse issues. Countries like france, the United States, poland, and saudi arabia, have Gross Domestic Product linked differently to emissions meeting the face different challenges to reach and a zero. Countries like poland get power from coal, employing 110,000 people. Two thirds of saudi arabias state revenue is generated from the oil industry. There are 400,000 auto jobs at risk in germany as the industry moves to electric vehicles. Despite the potential economic and political fallout of this transition, countries agree it needs to happen. The Intergovernmental Panel on Climate Change in 2018 outlined the steep decline needed to 2055 or evenin 2040. There is hope and a way to do this. Places like the u. K. Have shown increased growth while decreasing their consumption. Creating jobs in new industries as a result. Renewables are getting cheaper and costs are expected to decline. Jobs in ther 10,000 offshore wind industry in the and in former industrial manufacturing hubs. The industry expect this number to more than triple over the coming decade. Other countries are finding their own successful formulas. India has some of the cheapest solar electric cities in the creating 100,000 jobs in Renewable Energy while increasing the competitiveness of its economy. With politics, policy, and economics aligned, a Just Transition as possible. Is possible. Manus the Bloomberg NewEconomy Forum takes place this week bringing together Global Leaders to focus on rebuilding the economy in a post covid world. Virtual events can be watched online and on bloombergs new social channel, on twitter and on facebook. Some pretty good Panel Discussions coming up. Stay tuned for that. The cosmetics giant loreal see the makeup revival after the pandemic. The ceo told bloomberg ecommerce has gained traction during the crisis. The market will not completely move away from brickandmortar stores. That as you have seen uber already back to growth in the third quarter, the market is still negative. The market should recover. There is a very strong appetite everywhere in the world for beauty products. As i explained several times, the crisis that we have this year is not a demand crisis as we used to have. Consumers cannot buy the product. We are back in europe after lockdown, but ecommerce is getting traction. There will be a when, when the virus is gone, we will be back to a very good consumption. The appetite for beauty is absolutely there, more than ever. Your chief digital officer talked about ecommerce. They were talking about the fact that it is your biggest market now. All of this fueled by the pandemic. See it ever be 100 as we an ease up or phaseout of brickandmortar Retail Stores . I do not think so. I think there are new options for consumers and consumers are switching part of consumers are switching every year more from brickandmortar to ecommerce. Of course it was accelerated this year. It was already going very fast before. Sales wereecommerce growing by 50 . This year of course he goes even faster. And the stores were closed, it represents now 25 . To keep growing. Consumers will always want to see products in stores. Im a great believer in what the ma described as offline as online. A combination of options. Seeing given the fact you are dealing with the second wave, france is in lockdown, the u. K. Is in lockdown. How has that affect your business . It does not help. I am sorry for our partners. It is really difficult for them. Lockdown, werst froze payments of all of our small customers, no more than 100,000. We accelerated payments to our suppliers. We are doing the same to try to help our system. It does not help consumption, but i hope it is not going to last too long and consumers are so i think now are more aware of other options. They find solutions. Does not help. It should not last too long. Hordern on aie welldeserved day off, speaking gon agon. Let me show you what is going on with the effects the fx markets. Stanleyesque, Goldman Sachsesque narrative, you must be invested. That takes equity risk higher, dollar risk low. That is the backdrop. You are seeing a small move in dollaryen. There is not a huge move. That is a slightly cautionary tale. The data is better from china this morning. Yuan. Ve a stronger there is a board out there that says you want to be long you want according to Goldman Sachs. The narrative is driving sterling this morning. We go into the eye of the brexit storm. Coming up we will talk about the president of the United States and his refusal to concede at this juncture. Manus axios is reporting the president planned several new hardline moves against china in the remaining weeks of his administration. Derek wallbank has been reading this through. ,hat do we know about the plans the last days of this administration . What President Trump is apparently looking to do according to axios which reported this citing multiple Senior Administration officials familiar is to set a sort of tone for u. S. Relations with china that will endure and will be difficult for joe biden to easily reverse without taking real political fallout. What you could be looking for his increased scrutiny of companies that work closely with or are seen as tied to the chinese military. That is one area. You could also look for additional disclosures about how china is dealing with the United States in terms of intelligence activity the u. S. May be aware of. All of this is setting the stage trying to ensure trumps brand of dealing with china is the way the u. S. Deals with china Going Forward to make the possibilities of a reset trickier. We will see what the new administration brings to bear. Derek wallbank. 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. Anna good morning. Welcome to Bloomberg Markets the european open. The cash trade is less than an hour away. Virus cases in the United States past 11 million. An advisor to the president elect suggests a National Lockdown is not on the agenda