Begin with some working news. Lisa Moderna Vaccine information has come out. Rate is what we saw, i higher efficacy rate then pfizer. Last week, people were talking about pfizer and how it had to be kept at ultracold to birchers until a couple of days before it was distributed ultracold temperatures until a couple of days before it was distributed. This one has a 30 day shelf life at standard refrigeration. This is very promising, and we are seeing a reaction in markets. Jonathan they are the headlines. Lets plug them into the financial markets. There is the pop on what irna. Equity futures in the United States, on the s p 500 come on the nasdaq, and on the russell as well. Futures, up russell by a little more than 2 . A record high at the close on friday in the russell, and we advance once again. I want to check in on the bond market. Yields higher, curve steeper. Switch of the board. Bonds lower, yields higher, up three basis points on tens. On 30s, we advance three basis points. In the space of one week, improving news on the vaccine front from pfizer, and now moderna, at a time when infections in the United States above 11 million in the United States. Tom my wisdom is the dow almost printing 30,000 on futures. We did that november 9 with pfizer, and we do it again. Yet, 29,998. Ere jonathan this is the story that has dominated the program. The near term is getting darker. Tom no question. Jonathan on the horizon, just a little bit of optimism, from pfizer and now from modern. We got to get to the expert, sam fazeli of Bloomberg Intelligence. Can you compare what we have learned from moderna this morning and contrast that with what we learned from pfizer last week . Dr. Fazeli yes, good morning. Can i just say that i am kind of speechless, to a degree, at this level of efficacy. I was really getting ready for 70 or 80 . I am not going to call this better than pfizer because we are dealing with such few cases, but thank god it is higher than that number rather than below it, and we get more from these guys. We are getting more with regards to the statistics. That the 11hearing severe cases so far were all on placebo when you read further down. That is great. If that carries on, we will be very happy. Lastly, only 15 people in the 95 trial were older adults, but it does not tell us which were in so that is, something we would love to know. A difference between 94 degrees, and as lisa mentioned, the refrigeration headlines. Are all of a sudden messenger more distributable worldwide simply because of the freezing to refrigeration path . Dr. Fazeli yes, that is pretty much as simple as it gets. Release that first came out from moderna is actually incremental. We knew already that the storage and distribution was at 20. We knew it was ok to keep it in the fridge at the 28 degrees for a certain period of time. They have just extended that. With got to get more as time goes by about how long these things can be kept. It just makes the use of the vaccine easier at the end of the line, and of course, it is already easier to distribute then pfizer. Tom right now we are confusing everyone because i refuse to quote celsius, and dr. Fazeli refuses to quote fahrenheit. Lisa it makes it a lot easier to get the Moderna Vaccine distributed if you dont have to have some cold ice on it here. I am wondering whether we can take a 30,000 person study, when we are talking about sample sizes of five people or 11 people, and extrapolate that out into something that can really immunize an entire world population. Is this sufficient in your eyes . Dr. Fazeli it is a start, and i think this is what i have been saying with regards to pfizer. The levels of effectiveness that we expected at this point. Everyone was psychologically, mentally preparing themselves for 50 , 60 , 70 , which would have been good, but these are levels that nobody expected. Again, as i say, we have taken the first step, from the first set of dice, and we got two sixes. It is a great start. Jonathan just a final question from me. Is there a difference in providing this information in a press release compared to a peerreviewed journal . Can you compare and contrast that, just how this information is distributed to the public . Dr. Fazeli the absolute level, you have to give it up because it takes about to get these documents public. You need to know how well the two groups were balanced. If there were lots of people with comorbidities in the Placebo Group which did not respond to the vaccine as well, i doubt that is the case because theres already large numbers, but you do need to see that. Jonathan sam, great to catch up, as always. Sam fazeli of Bloomberg Intelligence on that breaking news. Modernaust turned in, giving us an update on some of the data from their vaccine trials. The Coronavirus Vaccine found to be the 4. 5 isnt effective in their analysis. This is the price action off the back of that headline. Moderna up about 10 in premarket trading. Have a little we bit of fuel for it. The nasdaq rose over. The russell, the small caps rolls up. The s p 500, a record high at the close on friday. Set to add some weight to that as we count you down to the opening bell. Doing us now is ben laidler, Tower Hudson Research ceo. The story over the last week hasnt changed. It is the shortterm risk, the longterm opportunity. Does the news this morning help us become more tolerant of some of the more negative stories we have heard over america over the last weekend . Ben absolutely. It gives you more visibility on where we are going. Accelerates this rotation into cyclicals and maybe values of the market, but has lacked the courage to make that leap. Weve now had this double catalyst where we are through the election and we can face forward into a very big 2021 growth rebound, and the vaccine or the incremental vaccine news, i think weve got a lot more still to come here, helps us bridge that gap over the winter infection spike to a gradual renormalization of activity, and the way to play these cyclical stocks, where i think we are massively overestimating the operating leverage. Tom you have been way out front on this. What we have is the distributed base with maybe some catharsis in march or april. What is your percentage of visibility out 12 months, 24 months, 36 months . Idlerig is the la leap . Ben i think it is huge. If i look at those reopening stocks that have been most impacted by this, even with rally of the last couple of weeks, they still underperformed the sort of market darling work of 80ome stocks way percentage points. They are not making any money. All of the biggest surprises have come on the positive side, and revenues are still down between 30 to 100 . I think this rotation has sort started, andting the fuel on the fire is investor positioning. Just in the last week, you have seen it begin to turn and actually turned quite dramatically. That i think is the fuel that is going to come into the market here. Lisa what on a day like today are you actually buying or doing . Theres a feeling that longterm is going to be a good scenario. Shortterm, there is still a lot of volatility. You still active on a day like today . Ben your average investor is not carrying anything is much risk as they should be right now. Overweight small caps, overweight industrials, consumer durable. We are not overweight cyclicals or value. It is more of a cyclical story than a value story. I would make a distinction there. But i would be focusing on where are you getting the most operating leverage to the sort of fear of the virus beginning to moderate over the next few inths, and i think it is these small caps, industrials, and real estate particularly. And it takes you outside the small caps. If you really want to get that play, youve got to take it to europe, which has been beaten up so badly, and it has that mechanical composition towards the names you are talking about. Can you walk me through your europe call right now . Ben i would also say the cyclical bid of emerging markets. Yes, domestic cyclicals in europe, for us that is financials. Its pretty much the cheapest, most hated, and one of the larger sectors in europe. We are overweight there. But also, everyone who has been hiding out in china and north asia, firstin in, first outcome of the rest of em is really a much more cyclical bit of em relative to this u. S. Reopening story. Very depressed earnings, a lot of operating leverage. I guess the one caveat on europe is just watch the dollar, and the strength of the euro. A lot of these european corporates are very global, very international. To the extent we get too much of a euro move, that is definitely a headwind, but europe, much cheaper, much more depressed earnings, and just seeing a lot more operating leverage here. Jonathan great to catch up, as always. Then labeler thereof Tower Hudson Research. Thank you very much. We start another monday morning with some good news for you worldwide. This time it comes from moderna. The Coronavirus Vaccine they are developing is found to be 94 effective in analysis. Some encouraging signs around the storage of that as well. Off to the races before the news, and off to the races after it. Tom i am going to set it just below the enthusiasm that we saw with the pfizer lift, and that may change. I am looking at dow. I know look i know john publix at s p 5 i know jon looks at s p 500. We are not on speaking terms about that. Will we get there i say a 21 vix . Jonathan i think it is fair to say we are from different generations. We cant imagine the vix is going to go a little bit lower on this. The nasdaq, that is the story we should sit on for just a moment. We are pretty much unchanged on the session. It is that tugofwar still. How may times did we have that chat last week, the tugofwar between the nearterm risks, the longterm opportunity, between big tech and smallcap value . Lisa a lot of people are going to be asking the question, will the big tech names continue to underperform, will it actually lose value . Butds are shooting higher, not by as much as you may expect. You dont necessarily see people start to worry about what happens when yields go up dramatically, which matters for big tech because that has been a rate play. If yields are so low, big tech is worth it at these high valuations. Questions. Jonathan 97 big questions. Jonathan 97 basis points at the top of the range, that is the number to watch this morning. Coming up on the program, dr. Robert murphy, Northwestern University professor of infectious diseases. For our audience worldwide, this is bloomberg surveillance. Ritika with the first word news, im ritika gupta. There is word that another vaccine has been found to be highly effective at preventing the coronavirus. This time it is moderna that is out with details of a late stage trial. The drugmaker says its vaccine has 94. 5 efficacy. As oats also suggest the vaccine may block severe cases results also suggest the vaccine may block severe cases. This after another vaccine from pfizer and biontech was found to be 91 effective. Of joe biden say that i National Lockdown are not on the agenda. They say the preferred approach is a dial that turns up or down based on severity. U. S. Cases have hit records over the past two weeks. Boris johnsons attempt to get his premiership back on track stumble before they even begin. He is being forced to selfisolate after meeting testedker that positive for coronavirus. He hoped to gain control of the National Agenda following a tier four at 10 downing street. Themberg has learned president plans several new hardline moves against beijing in the remaining weeks of his term. Future president s will find it say thatthe they future president s will find it suicidal to reverse these changes. The largest margin of victory at the masters and 23 years. 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. The overwhelming majority of people taking the vaccine, then you have only one hand and effective vaccine, on the other hand a high degree of taking the vaccine, we could start getting things back to relative normal as we get into the second and Third Quarter of the year, where people can start thinking about doing things that were too dangerous just months ago. Jonathan that is the optimism from dr. Anthony fauci there. Plenty of optimism in this market right now. Alongside tom keene and lisa abramowicz, im jonathan ferro. Heres the price action a couple of hours out from the opening bell. On the s p 500, we advance. You get a bigger bid on the small caps in america. The russell getting another lift. In the fx market, the euro slightly positive. Eurodollar, 1. 1844. Lisa talking about the muted response in treasuries. Up just three basis points on the 10 year to 0. 9275 . This off the back of the headline from a dharna that the Coronavirus Vaccine from moderna that there Coronavirus Vaccine is found to be 94 effective. We are trading on the good news. We are not trading on the fact that the u. S. Recorded more than 2 million covid cases in the last six days, on the fact that Governor Whitmer of michigan came out with new restrictions come on the fact that governor inslee of washington came out with new restrictions. It is not about the short terms for this market. It is about the back end of 2021. Tom the pandemic news is grim, not only that, but also in south korea and continental europe. Right now we are going to do what we feel is really important. We do the markets, economics, the politics, the international relations, but you need to understand the science of what we are talking about. Robert murphy is a claim that Northwestern University in infectious diseases, and long ago and far and way, went through lynn enter through leningers biochemistry. Explain how messenger rna goes out of the cell, into the cytoplasm, and kill this virus. Are we assured that can happen . Dr. Murphy apparently so. Messenger rna vaccines that had been put out there in tens of thousands of people. This is not a small number of people. I think the pfizer one was over 40,000, and the motor no one 30,000. A lot of people have taken this vaccine. 50 ould have been happy if or 60 of them were protected theygetting it, and are 90 and 94. 5 . This is way beyond expectations. Mrnait is original in research as well. What will be different in this distribution versus a polio vaccine, a flu vaccine, or bacterial shots as well . Dr. Murphy it is a vaccine, just like the other ones you mentioned. Messenger rna is a very small protein, and its fragile. It has to be kept cold. The difference between the coldr and moderna is how does it have to keep. He pfizer one has to be kept at 70 celsius, or 90 fahrenheit, very cold. It is doable. It can be done. But that is a challenge in the whole supply. The moderna one has to be kept cold, but once a get into the market, it can be just above freezing, so it is going to be a little easier to move that around. But either one of them, it can happen. We are probably going to need both. Lisa i am going to go home today and talk with my eightyearold and 11yearold son and tell them there is a vaccine. Another efficacy study coming out. And they are going to say, when is the pandemic going to be over . What is the answer based on the models you have seen . Dr. Murphy a year from now. Lisa really, a fullyear . Walk us through what happens over the next year. Dr. Murphy these companies have to submit their emergency use authorization. The data will be gone over by an external advisory board, and they are going to make sure it is safe, and they are going to continue to follow those patients that are in the study. Will be Vaccines Available probably at the end of december, most likely. They will be maybe 20 million doses from each one of the companies, and they will get out there, and who is going to get those first 20 million doses . Right now, there is a lot of reluctance in the world to take it. Theres a lot of people think it is going to bask. Theres people against vaccines. ,ut once the data is out there people are going to be lining up for this thing. They will start pushing the vaccine out, and it is going to come out to different populations. People on the front lines. People with high risk for severe complications. Diabetics, older people, people with underlying cancers, for instance. The higher risk people will get it first, and then i would think that by the Second Quarter of next year, there will be enough companies out with a vaccine that it will start really penetrating into the general population, and then basically jusco lineup and get it basically just go lineup and get it. Jonathan for our audience worldwide, we are with dr. Robert murphy of Northwestern University off of the back of news from moderna that their corunna voice vaccine was found to be 94. 5 effective. I want to turn for a moment and have a look at what is happening in the United States. Equity futures are picking up, with a bid on the small caps. We advance 46 points. For our audience right now, we are grappling with the same question we grappled with last week. How much bad news can this market ignore in the short term on the hope that a longterm spatter longterm looks better . Can you really untangle and draw a hardest engine between the two stories . Shortterm not great, longterm looks better. Does the shortterm shape what the future looks like . Tom there is always a balance of that. Notice the red on the screen for the nasdaq 100, where this is a rotation. I would point out as you go back to dr. Murphy in chicago, i would point out very importantly that the rebound in value cyclicals, midcaps and the rest of them isnt even back to the previous regression. We came up off pfizer, we came up off moderna, but we are not even back to trend, they were so discounted. Jonathan i just want to finish with a final question on the price of the vaccine. These are private companies. Some of them have worked with the government. Any idea how much this might cost to provide the general public with a vaccine like this . Dr. Murphy the u. S. Government is already purchased hundreds of millions of doses, so it is already paid for. It will go out for free. What it will actually cost is anyones guess. Jonathan great to catch up this morning. We appreciate your time, sir. Dr. Murphy of Northwestern University. The question coming into the development of this vaccine is how much they would charge, especially for the companies that worked alongside the government and took funding from the government. There will be huge pressure for her river for whoever comes up with a vaccine, and we have two companies in the last week showing more success. The more we have come the much better it could be. Tom youve got to believe the taxpayer will pick it up in a number of different countries. What about the poor countries . I havent seen a real treatise yet on how pfizer and moderna, as expensive mrna style medicines, translate to poor countries, but that will be a debate for another moment. This is a celebration of that percentage number the pros are talking about. It is a statement on the delivery efficacy of going from very cold to refrigerated temperatures, and it is also a statement on confidence. There are two of them. What are we going to do when theres three of them . Jonathan lets hope theres three mothers for, theres five, and the numbers get better and better. Last week, the number everybody talked about was 90 . This morning, the number is 94. 5 . Lisa we can all start to imagine a world where we are not necessarily Wearing Masks and socially distancing, we are getting on airplanes without having our noses swabbed ahead of time, like united is beginning overnight here into heathrow. I have to wonder, your question into nearterm versus longterm, there is a question, can we mill he rate can we ameliorate some of the pain of the nearterm by investments in companies with a longterm without masks . Jonathan good morning to you all worldwide. We advance on the s p 500. We roll over on the nasdaq, and the small caps, we add some weight to it, with the rustle up by 2. 5 . In the bond market, the move is muted. We are up just a couple of basis points. Last week, 97. This morning, 92 basis points. Tom the real yield comes in a 0. 84 . Loom to jonathan coming up on this program a little bit later on bloomberg tv, and i imagine on Bloomberg Radio as well, at 10 00 a. M. New york time, 3 00 p. M. In london, catching up with the modern ceo. The moderna ceo. 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. Adapting. Innovating. Lsetting 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. Jonathan from london and new york this morning, good morning. Alongside tom keene and lisa abramowicz, im jonathan ferro. Heres the price action this monday morning. Better news from pfizer last week. Better news from moderna this week. The spread between the nasdaq and the s p opens up again. The more pronounced move is between the nasdaq and the small caps. Small caps up a more than 6 on the week. Nasdaq futures negative. Russell futures positive a little more than 2 . The bond market holds the key to this move. To get that sustainable rotation, you need yields to break up just a little bit more than this. Up to basis points on tens. Last wednesday, we topped out at 97 basis points. The spread opening up, nowhere near where we were last wednesday. Thats what weve got to watch today. How much of a move do you need to see in this bond market to support a continued durable move in that bond market . Quick look at the fx market. That cyclical impulse returns. You get a move in the euro, not really. You get a move in the aussie, the commodity currency, all that good stuff. We talked about this last week. I imagine we will talk about it through the next couple of days. What is going on with the euro, and why dont you get a big move when you get a big move in the equity market on the continent . Tom euro against yen has been stronger, looking at the dynamics as well. Right now, Christopher Harvey joins us with wells fargo on strategy, on equity and his Research Note goes to the heart of the matter, the wall of cash out there. You talk about the sloshing of cash out there. What will be the incentive for the sloshing to get into the equity market . They are comfortable, arent they, being safe . Christopher there is a lot of sloshing going on right now. We are beginning to see people put money to work, but on a corporation side, but i think is going to happen is slowly but surely, you are going to see more m a activity, more capex news in and the around vaccines starts to improve. People have been in a bunker mentality, and finally they are getting some good news. We can start to discount what is happening in the future. We can start to think about good things. We can thing about capex, growth plans, and even m a. Lisa i just want to repeat sloshing over and over again, but lets move on. [laughter] i do want to talk about the nature of this rotation. A lot of people putting increasing faith in this rotation into cyclicals, the rotation into financials with a steepening yield curve, and a rotation out of big tech and the nasdaq. What is the nature of that . Is it underperformance . Is it losses on big tech . How longlasting is it . What do you see . Christopher if you look at first half comps, first half comps for a lot of the financials, more economically driven stocks, very easy. Tech companies, not so much. More importantly, what i think has happened recently, you have the yield curve steepening, which is what it typically does after inversion, and you are getting really positive news, the news that we expect it on the vaccine front, and now we can start looking through things. Its not forget, many consumers are in a very good spot. Getting back to sloshing and to cash, theres a ton of cash on the consumer balance sheet, and there is a lot of pentup demand. This is a very different mentality and situation post recession then we have seen in the past. To spend, and i think they are going to. Jonathan that is the line from Morgan Stanley this morning. Keep the faith, trust the recovery. Any help me understand what would test that faith in this market . Theres a widely held assumption that stocks would just go up. The conversation we have on programs like this every day is which part of the equity market will go higher. Do you have any idea what kind of conditions we would need to see an equity market finish next year in negative territory . Christopher that is a great question. We get a lot of thoughts and comments around that rotation. Does big tech really underperform . Does it become a massive source of funds . To small caps put up doubledigit returns and tech put up negative returns . That is possible, but our base case is more that you will get for yourgit returns market. How do we get to negative returns for the market . It is a long 12 months. We still dont know when the gop is going to control the senate. If the gop doesnt control be senate, we may be looking at higher taxes, and if we are, that is your answer. Jonathan that is the politics. One thing we do know right now is the trajectory of the virus in the United States is terrible. Six days, when million new covered cases. Michigan and washington, more restrictions. Are we willing to look through more of that, maybe even a repeat of the kind of lockdowns we saw in march . Are we comfortable looking through that, too . Christopher it really depends on who that we is. I know for myself, and we talked about this before, my son is still doing virtual. He is still going to continue to do virtual. But if we is the stock market, yes, we can look through it, and i think we are going to see that rotation. But yes, there is going to be a tugofwar between covid cases and whether we have better news on vaccines, so on and so forth. One of the things i worry about, getting back to the negative, is you may see a pretty healthy, especially on the white collar side, a tick up in unemployment. There is a lot to worry about. We are not out of the woods by any stretch of the imagination, and theres a lot to keep your eye on. Tom what is your response to the absolute a relative return of big tech . What does it do versus a cyclical recovery . Is it going to participate, or is it dead on arrival throughout the year . Christopher i think it is a source of funds, and some of the things we are seeing over the last couple of days and weeks is what you are going to see longer term. When you have those big rotations, i think tech will be flat to possibly down. In some regards, this feels a lot like the late 1990s, when you have these massive returns from growth into tech, but the difference is the underlying fundamentals and underlying valuations are nowhere near where they were back in 1999. These are not what we would call shorts, but on a relative return basis, we really do want to rotate into the cyclicals, those smaller caps come others higher covid beta plays. Tom do you want to rotate into the banks . Christopher we do. Thanks have historic valuation, underperformance for years on end. Again, getting back to those two catalysts, yield curve steepening and vaccines in the marketplace, these are really high covid beta place, and we think now is the time to do it in the markets. Lisa three months ago, everyone was talking about fiscal support. Two months ago, fiscal support. All of a sudden, now it doesnt seem to be on the table. We dont necessarily expect anything through the end of the year with a lameduck session, and then theres questions about the composition of Congress Come next year. Does the success of the vaccine trials we are seeing now reduce the emphasis on fiscal support . How does that translate into your stock haul . Christopher it gets back to politics. We still have to wait for the results out of georgia. We will have those results in early january. If we have a gop senate, they have always wanted to pass something skinny, and maybe this gives them even more maybe it makes them put their feet in the mud a little bit further and they dont want to pass anything. If we get a democratic senate, i thing we do get stimulus. Our opinion, we never thought stimulus was going to get done before the election, and we are not entirely sure that we really need stimulus at this point in time. I dont think we need a ton. Jonathan chris, great to catch up. Chris harvey of wells fargo securities, thank you. Rest mentioned the banks. Jp morgan in premarket up 3. 5 . We add a little bit more to that rally as well. The small caps, financials. Energy last week had a massive week. You and i and lisa asked that question, what is durable . What is just the short squeeze . I think weve got to continue asking that as we look at another catch up trade through this morning. As an am looking at xoy energy proxy. I want to make clear that the distance of the vectors of big tech versus these on the bottom cyclicals into energy, as you mentioned, is substantial. Jp morgan not through the highs seen with pfizer. Jonathan do you know anyone that thinks stocks go down next year . Tom jon, that is the smartest thing you said since that comment about arsenal over that beverage this weekend. I think that is an important idea, that theres really no one out there talking vix 28, vix 30. Jonathan the numbers over the weekend in america, the covid figures are terrible. When i said we earlier, what are we willing to tolerate, i am talking about chris harvey and his friends in the equity market. I am certainly not talking about the average person on the street who potentially faces more restrictions in the United States and beyond. I am not trying to play down or on any of this. I am just trying to work out, are we really saying that we can take a brutal three months and substitute in a better back half of 2021 with a vaccine, and just ignore all of the bad news for the next three months into year end . Lisa yes, that is what a lot of equity strategists and investors have been saying. Ignore it for the longterm view. I do think you raise a really important point. This goes to scarring. Chris harvey was talking about how he expects white collar unemployment rates to go up higher as some of these companies pare back their costs to hunker during this period. How much of an effect does it have longterm . People talk about not necessarily a big need for fiscal support. Its because the consumer is flush with cash, paying down debts. How long can they sustain that . These questions become more pressing. Frankly, we cant go out to eat in the same kind of ways. We cant go on airplanes. You are still in london. Are you going to take that trans atlantic flight on united . Jonathan i was never a united kind of guy. Plenty of other airlines out there besides united. Not throwing mud at united, but there are other airlines with trans lenox lights. With transatlantic flights. Elarianl arian dr. Is very devoted to his united. Jonathan i think there is a particular snack. Le, is that what it is . That seems to get the more trans atlantic passengers, apparently. Tom in business class, they serve a martini called a t decision in honor of dr. El erian. We are 45 below where we were in january of this year. Jonathan that is the ketchup story. How much spaces are left in this trade, given where we were . 5 . T up by three point wti up by almost 4 . Coming up on this program, kathy hochul, new york Lieutenant Governor, coming up very shortly on bloomberg surveillance. Ritika with the first word news, im ritika gupta. There is word today of another promising vaccine in the fight against the coronavirus. Moderna says its shot has been found to be highly effective in preventing the vaccine, with 94. 5 efficacy. Interim results suggesting vaccine may also block severe cases. Last week, a similar shot by pfizer and biontech was found to be more than 90 effective. The chairman of the securities and Exchange Commission is stepping down. Jay clayton will leave at the end of the year. Hes led the sec since 2017. His term is set to expire in june. The u. K. Is signaling it wont back down as brexit talks with the European Union enter another crucial week. Iticials from both sides say will be pivotal in trying to reach a trade deal. Two of the senior officials from the Brexit Campaign left Boris Johnsons inner circle last week. The u. K. s chief negotiator insists he will not be changing his position. It is a milestone trip for elon musks spacex. Four astronauts are aboard one capsules onnys their way to the International Space station. Spacex and boeing have won contracts from nasa to fly crews to the space station. 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 are going to have meetings between our top scientific advisors and the officials of these drug companies, not just pfizer. There are other common thing seems as well. We will start those consultations this week. But vaccines dont save lives. Vaccinations save lives. That means you have to get those into peoples arms all over the country. It is a giant logistical project. Jonathan it will be a giant logistical project, and it has already started. That was ron klain, Vice President elect joe bidens chief of staff. In the equity market, it is another lift for the cyclical parts of this equity market. The s p 500 advancing. Small caps advancing much more so. Treasuries lower, yields higher. Crude, the bid back into 41. 74. We are up by a little more than 4 off the back of a headline from moderna, the Coronavirus Vaccine found to be more than 94. 5 effective. Some extra fuel for that cyclical rotation. Tom theres no question about the cyclical rotation. I note the red on the screen with the s p 500, ever so slightly red. We give up some of the boom we saw from an hour ago. We have been looking at the vaccines, which go out into 2021. Now we need to look at the reality of the present. You do that when you are a politician. You do that when the Buffalo Bills lose a heartbreaker to arizona, as we saw yesterday. She is the Lieutenant Governor of the empire state, kathy hochul joins us right now. Ive got to go to the money question for all of our new york city audience, on radio and on television. What is your sense with Governor Cuomo of what mayor de blasio and you will do about the School System of new york city . Lt. Gov. Hochul thanks for having me on the show, and i am sorry you had to twist the knife in my heart about the bills loss, but that is another topic. Back in the summertime when we were having lower infection rates, the parents and teachers and City Administration decided that if the number of infection rates hit 3 , that would be a trigger to close down schools. But with the governor but what the governor is saying now as we are in a different era. Because of testing in schools, the schools may be a safer place than having children back in their communities, so we are them to to work with make an adjustment here. Can we talk about having the schools stay open because it may be better . 9 many other states are at , which is where new york state is talking about, and de blasio was married to 3 . How do you convince him and the Teachers Union in new york city to get to where nebraska is, to where oklahoma is, to where chicago is on this percent statistic . Tom well, it is what the parents and teachers and the administrators feel comfortable with. We can say you are going to be going back to school, but if the teachers say we dont feel safe, they are not showing up. If parents dont feel safe, the students arent showing up. Then you dont have an educational process that works. You have to get buyin from everyone. That is what the governor proposed over the weekend, not having an automatic shutdown at 3 , but to use what is going on in the schools, testing results that we didnt have when the decision was made to trigger 3 . Now we have more data points. If a school itself has a low rate of infection, less than 1 or whatever the metrics are going to be, why not keep them open . Not only is it safer perhaps for the children, but also, youth inc. About the childcare crisis that we have spoken about on your show for a long time. How are we going to let parents, particularly women because it always falls on the shoulder of women, to your out how it effects their jobs when schools are shut down again . That hurts our economy. It hurts our comeback. Theres many dynamics involved here, safety always being first, but realizing now that a 3 threshold is something that can be looked at with consultation with parents and teachers. Lisa the reality you are looking at right now is so vastly different than the reality that equity strategists look at when they look out over the end of 2021. How much economic scarring will there be in new york state, new york city, as layoffs have to begin, and we do not necessarily get any aid from washington, d. C. During a lameduck session . Lt. Gov. Hochul we wont have that aid immediately, it seems clear to me. I would be pleasantly surprised if we get Mitch Mcconnell to do the right thing and say that yes, states have suffered. I realize now it is not just the blue states, but the red states in trouble. Therefore we will help them now. He will go by whatever is in the political interest of his party. Fine. We are at a point now where the interests are all aligned. All american states need help with the testing, with the ppe, with getting more doctors and nurses into some of our remote states that didnt expect to be dealing with this. Even if that doesnt occur in this lameduck session, i do believe that joe biden understands the urgency with this. Governor cuomo has a strong relationship with him. We all do. He knows you cannot have a recovery, and we have said this before, a recovery of the nation without states like new york being able to come back strong and reduce the chance of more massive layoffs, and to keep business is prospering. That is our objective. We have to keep that going. Under a bonded and ministration, we feel very confident that the money will start flowing for state and local governments to help us get out of our holes budgetary lake, but also help things like vaccine distribution. Jonathan we have some tough months ahead of us, as you know. The numbers out of america have been quite worrying across many states. The president has been criticized for not being engaged enough on this issue, with cases increasing at a rapid rate. What is it you need from the federal government specifically that you have requested and arent getting right now . Lt. Gov. Hochul money. Also, distribution plans for a vaccination that could be helpful. Thats work on that now, not wait until the vaccine is available and out of a sudden say lets figure it out. That has to be figured out now. In new york, we started working on our plan in the summertime. Money is the number one thing because that will allow us to continue defunding state and local communities, the first responders, the teachers, the healthcare workers, the childcare workers. I think we need money first because they didnt help us when it came to testing. We could have used the defense protection act. Basically, the president checked out. He never wanted to lead. This could have been his Winston Churchill moment. He could have been a hero. He could have won the election if he had done this right, and he blew it. Now the consequences are he needs to move over, let the Transition Team take over, let them have the opportunity to figure out where the money is, what programs need to be continued, what regulations need to be changed. Let them hit the ground running and start saving our country because it did not have to fall this far. New york state still has the third lowest infection rate in the nation after vermont and maine, at about 2. 6 . The rest of the nation could be at 2. 6 , and we could be functioning, but the president didnt care. He didnt do anything along the lines of what we were asking for early on, so the damages done. Now it is time. To Jonathan Jonathan do cleanup Lieutenant Governor time to do cleanup. Jonathan Lieutenant Governor, appreciate your time. The latest on the tension between new york and the president , very clear. President saying the governor will have to let us know when he is ready for the vaccine, because we wont be giving it to a state that is not ready to give it to his people immediately. Tom detention is there, and early in that interview, the tension between albany and new york city as well. Jonathan from london and new york this morning, good morning. More fuel for some vaccine hope, this time not from pfizer, from moderna. More to come, right here on bloomberg surveillance. We have seen a massive Momentum Shift that we dont think investors should be ignoring. Stimulus is necessary in some form, the sooner the better. The vaccine is really the game changer here to bring us back to normalcy. In the months ahead, we will see perhaps less volatility than we have seen so far this year. Markets in the next two months will start to reprice everything. Growth will pick up a lot in the second have of next year as things get back to normal. We remain in a bull market. If anything, the pattern is just magnified. This is bloomberg surveillance with tom keene, jonathan ferro, and lisa abramowicz. Tom good morning, everyone