Clearance. A grand reopening. Thee johnson will outline strategy today, expected to include an increase in Community Testing andriy incorrect reintroduction of tougher restrictions. Biden iselect joe said to have landed a longtime advisor as his secretary of state as the president reportedly moves closer to banning tech exports to dozens of chinese companies. 7 00 and in london, from first, and 10 00. In three weeks, there will be a vaccine for everybody and herd immunization. This is the standout note from fauci. We will vaccinate. 7 of the population. These are big ambitions. Annmarie they certainly are and the news over the weekend from the head of warp speed saying we could start in potentially three weeks, but it is only going to be december 10 when the fda looks at approval for the pfizer vaccine. You made a good point this morning, the fact this is the developed world. What remains in the developing world could be a difficult picture. Isus a question for markets if so risk on, the futures are trading, so lets see where the treasuries go. Are we closer to 1 . That is the question we will put to our guests. Yes, already citing the mliv question saying it is going to be closer than 1 . Trade thishere we monday morning. Risk on across Global Equity markets. Hasnt futures moving to the upside. The kospi is the standout in asia. China,ging trade data to but europe and the United States up nearly 1 and. 9 . Would have passed this morning 45 a barrel on brent. The oil markets is trading the vaccine news instead of the narrative of lockdowns. The pound this morning, 1. 33, encouraging news with some trade deals like china between the u. K. We will he or from Boris Johnson later today. 2. 0 inse, lockdown london, keen to hear what he has to say in terms of the winter strategy. Manus i can tell you it is probably the top of the pound because i went to the money changing machine last week. U. S. Officials, the first vaccinations could be administered in just three weeks. If given the green light for emergency use. Task forceouse operation warp speed says it is aspiring for herd immunity across the country by may. On the 11th or 12th of december, hopefully, the first people will be immunized across the United States, all states, in all the areas where the state departments of health will have told us where to deliver the vaccine. Multistrategy multiasset strategist at Societe Generale joins us. We are extolling the virtues of bullishness. How do you want to be positioned . A bit of a rumble and then yawn on credit, but you are still a buyer of equities. Theyrrently in markets, tugofwar between the covidterm outlook of new cases, how long it will take to vaccinate people, and the more mediumterm outlook, which is constructive, which the fact that at this point, the lshaped recovery from any scenario, we will be focused standpoint, one thing to keep in mind is compared to other cycles, you will have slightly more impetus versus previously because of the low Interest Rate environment but also the fact you are looking for bond proxies that could protect the portfolio. At this point, the equity space could continue to perform well, even if i think by the end of the year it is unlikely investors will move fully risk on. Divergencee see this between bonds and risk assets. Is that set to continue . We havent seen the vaccine news upend that at all . Casee it hasnt been the on the equity complex either, with nasdaq performing well, s p. Give have stop and go where investors have been short bonds. A smooth path toward the reflation trade. Techlating between long versus cyclical to more short duration with higher bond yield and cyclicals and value performing well versus growth, and it will continue to do so. Portfolios will be trending next year when investors would want to hedge themselves because we dont know who is going to lead the recovery basically. That is maybe where the barbell approach comes in. You say the two risks next year offdriven by the risk higher bond yields and that is a debate we are having in the question of the day. Inflation surprising on the upside. Where is that inflation surprise going to be pushed from and how do i prepare for it . On the commodity complex or on the bond and yield complex . The risk you mention is haverue risk investors been mentioning to us as the two premium risks for the portfolio. In terms of inflation surprising to the upside, i would say it is more from a portfolio standpoint where you want to hedge against it. Globalization into more localization, so at this point, what you want to gear to is how to gear your higher inflation expectations. Portfolio asn the a replacement for treasuries makes sense. Whatrie speaking of manuss question was, what do you make of our my question . Will the 10year treasury yield hit. 6 first, or the line in the sand 1 . Everyone mentions the 1 as the threshold, but we think it is going to be more 1. 20, 1. 30. Year ofe full expansion, normal liquidity injection from central banks, what is going to matter next year is going to have to be earnings. Earnings do not rise as you have on children rising above 1. 2 , then the equity complex will start to have a hard time. Given thel fine, current expectation of earnings for the next three years, especially for cyclical sectors that still have some leeway up, but when you start to have 10 year above 1. 2, earnings will have to deliver at this point. Sophie sophie, stay with us. The societe, generale analyst, our guest host. Lets get your first word headlines. President elect biden is planning to name his longterm aid and lincoln as secretary of state. That is according to several sources. Former Hillary Clinton aide Jake Sullivan is expected to be the National Security advisor. An announcement could come tomorrow. The u. K. And canada have reached a trade deal. Theyll keep the current terms the u. K. Has through e. U. Membership and begin talks on a broader pack. That will cover digital trade, the environment, and womens economic empowerment, a boost to Prime Minister johnson who is working on a variety of post brexit bridget trade deals. Moodys and fitch lowered south africas Credit Rating as the coronavirus is hitting the governments finances and pushing the economy into its longest recession in almost three decades. The downgrades will have an Immediate Impact on borrowing costs. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. Breaking news come through on credit agricole. One of the big things flagged is crossborder m a within banking. Credit agricole doing a deal in italy, they will pay 10. 5 euros for stocks. This is a deal, they will launch a cash deal. 20 more premium for the bank, 10. 5 euros per share. There is lots of speculation about m a in the banking world so this is one torchlight in that prism. Coming up, u. K. Prime minister announces post lockdown rules today in parliament. We take a look at what is expected. That is next. This is bloomberg. Manus its daybreak europe. Im manus cranny. Released in a few hours. The readings will see a reversal, will reveal how much theidence was hit as Monetary Union imposed new restrictions to control the pandemics spread. Dani burger has been looking at the expectations. Good morning. What can we expect . Pmis aret off, flash the most closely watched market event of these ratings because they are the most relevant for the market. It should be no surprise we are expecting a pretty sizable contraction through the eurozone u. K. He not as severe as the spring, but still, any contact intensive industry will likely show. Service pmis will be what dragged down the wider index of manufacturing. Manufacturing likely held up. Factories, mostly open and u. K. Instant construction was encouraged to continue. Germany should fare better because restrictions werent has harsh curbing activity. Break it up into two parts. The big two, germany and france, and then you get the rest of the eurozone pmis. This will be important because it really will show us the unevenness of the european economy, how the core is performing versus the periphery. Lookll be interesting to at the breakdown between the two eurozone pmi readings. Youve been looking into highfrequency data. What are they saying and showing for european economies . Dani the highfrequency data doesnt show this huge contraction during november. It started to recover a bit toward the end of this month. In the first couple of weeks, things like mobility, energy usage, transportation, it sharply fell at the start of november, as did most advanced economies because you had the spike in coronavirus cases. Weve seen over the past couple of weeks, it starts to move sideways. You start to get stabilization inactivity. Remarkable ones, friends in the pink jumps and overtakes the u. K. In terms of economic activity. These things might not show up exactly in the pmi, but looking through the highfrequency data, it does show a slightly more bright picture for the european economies. Manus thank you very much. Thes dani burger with great debate on what the data will show. This is going to be news for you, the u. K. Prime minister set to reintroduce tiered restrictions a little later today, the curbs will replace the nationwide lockdown on wednesday, december 2. The restrictions are set to be tougher than before and will include guidelines for family visits over christmas. Johnson will announce massive increases in Community Testing. Alongside usis this morning. If you look at europe, we are having this discussion about how you allocate. You got liquidity, you like cyclicals. Value in europe is pacing head of value in the u. S. Is that how you look at europe, through a value and cyclical lens . Sophie i think there are two things at this point. Value shiftnt into toward leverage. Investors will make the distinction within value between those who have strong balance sheets, enough cash to resume dividends on buybacks and on the other side, those that were value but have weak balance sheets. The story is going to come back next year i think is making investors think about it. At this point, what we call strong value would be more the laggards that could potentially benefit from the vshaped recovery investors expect in the mediumterm, but portfolio reshuffling is going to be done quite gradually. It is not going to be one go in the next month, where investors will be full risk on come along value and short growth. Does anything regarding the recovery fund, the fact we are not at the finish line, does that change your view on europe and your allocation . It is a question of timing at this point, but when you look at what investors are thinking, it is the first time in two or three years that u. K. And u. S. E investors are mentioning whether they should reallocate out of u. S. Equities into eurozone, and you see this change of mentality. I think the recovery fund, everything about the structural themes, infrastructure spending, green deal, all the longterm themes will continue to drive eurozone equities and investors will be happy to continue investing into it because they wheree in it and that is pockets of growth are going to be found next years. Euro is quite resplendent at the moment. That is more of a dollar weakness story. Does that stymie the flow of money into european equities or is it not a huge consideration . Iphie in the shortterm, dont think if you have eurodollar at 1. 30, it could be quite difficult for eurozone weight ofto bear the the strong euro. In the shortterm, what is going to matter is not the currency. It is going to be the growth themes and structural themes that benefit eurozone, but the view on dollar is going to be the most important one because if you have a big stimulus deal coming from the u. S. With the u. S. Leading the recovery, you are potentially less bearish on the u. S. Dollar done in an environment where it would be much more eurozone and e. M. , china leading the recovery so that would be something to take into account for u. S. Allocation because it will detriment your allocation among equities. Annmarie thank you so much for joining us this monday morning. At societeh generale. A bubble burst. Juliette saly wasnt supposed to be with us today because she was supposed to be on the flight from singapore to hong kong, but it was delayed due to a rise in cases. She will give us the latest next. This is bloomberg. Manus its daybreak europe. Im manus cranny in dubai. Annmarie hordern in london. This week, tomorrow, we will the daxthe results of 30, the owner of the benchmark says the index could become the dax 40. Carrie lam deliver sure annual policy address after postponing it last month. Thearie also wednesday, latest fomc minutes from the fed and an update on u. S. Gdp in the third quarter. Friday, annual shopping next za boostof extravagan online. I hope youll be spending something in the post. The first quarantined free travel bubble in weeks after a surge in new coronavirus in hong kong. Juliette saly was meant to be on the first flight to hong kong. Friday, you were telling us about the paperwork that went into this, but now, this just shows how tenuous these travel arrangements can be. Supposed to be a first flight and it got pushed to the sideline. Juliette and love to everyone watching this and hoping it would be a template for other air travel bubbles. We started to see a spike in coronavirus cases in hong kong last week. Saturday morning, i got a text from Singapore Airlines saying it is going ahead, but then another spike of cases in hong kong saturday and by 5 00 local time, they had called off the air travel bubble. Anyone who decided they would still travel from singapore to hong kong or vice versa would be facing quarantine. Initially, it was going to be an extra test henri arrival on rearrival due to the surge. It bodes the question of how we are going to get travel up and running into cities that seemingly had a strong handle on the coronavirus crisis, cant seem to get this off at the moment and we have seen a huge blow to Cathay Pacific shares in hong kong, Singapore Airlines under pressure too after both airlines have seen a little recovery on momentum when the air travel bubble was first announced. Manus i dont know how the passport took the news. About how hong kong is offering payments to those infected with coronavirus. People in a bid to get to get tested. Juliette youve seen this spike in hong kong over the last few days, the most since august and there is a worry with this travel bubble that if you saw the rolling average between hong kong or singapore hit five over seven days, they would call this off. It hit 3. 9, but the fact you have seen a spike in the last couple of days was worrying. Hong kong will pay 645 u. S. Dollars to anyone who tests positive that will help for the recovery, but it is a hope people will come forward to get tested. They will set up another five Community Testing centers, adding to the four in operation and hong kong, imposing new social restrictions. Hoping they can stamp out this new wave, this fourth wave in hong kong and the air travel will resume in a couple of weeks. Does, andwe hope it we know you will be on the next flight. To it. Ooking forward Juliette Saly in singapore, supposed to be on the flight, but waiting patiently. Coming up, planning a share buyback. Ceo. From bob vandyke, this is bloomberg. Are you frustrated with your weight and health . Its time for aerotrainer, a more effective total body fitness solution. announcer aerotrainers ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. Do the aerotrainer super crunch. The prestretch works your abs even harder, engaging the entire core. Then its the back extension, super rock, and lower back traction stretch to take the pressure off your spine and stretch muscles. Planks are the ultimate total body exercise. Build your upper body with pushups. Work your lower body with the aerosquat. The aerotrainer is tested to support over 500 pounds. It inflates and deflates in less than 30 seconds using the electric pump. Head to aerotrainer. Com now. Now its your turn to lose weight, look great, and be healthy. Get off the floor and get on the aerotrainer. Go to aerotrainer. Com, thats aerotrainer. Com. Annmarie 6 30 a. M. In london. Im Annmarie Hordern with manus cranny live from dubai. Optimistic, a risk on tone for equities as the u. S. Plans its first virus vaccinations within weeks as the nation sees a jump in hospitalizations. And reopening, Boris Johnson will outline the u. K. s winter strategy. The measurements to include an increasing Community Testing and reintroduction of tougher tiered restrictions. Team, president elect biden is said to have landed on blinken asvisor tony secretary of state. London, 10 30 in dubai. We have been talking up for weeks about this tugofwar, vaccine optimism versus restrictions. Today, here in the u k we will get fresh guidelines on what the winter has in store in the United Kingdom and in the United States, the fact we could potentially see inoculations within three weeks, which could be a game changer. Manus yes, and potentially Anthony Fauci talked about the possibility of herd immunity,. 7 of the population being done by may. Mr. Trump at the g20, remaining focused on america first, vaccine for americans, vaccine for those who live in america rather than the global solution. That is potentially a risk. Annmarie that is, and the likes ,f chancellor Angela Merkel this needs to be multinational approach, not a unilateral approach and potentially, a different change of tone. Likely that will come with the biden administration. You can see with this bloomberg scoop about tony blinken who wants to hold International Approaches and cooperation, but the lot markets, liking the vaccine news this morning. Manus we had another red headline, south korea makes a record high. Global equity market hitting record highs last week. Risk on, the vaccine is three weeks away, but are we ahead of ourselves . The market is ahead of where Analysts Expect the s p to go. You are at a fiveyear high on the csi 300 come up 1. 22 . Escape velocity from covid19 more quickly than the rest. You are in the eye of the storm in the United Kingdom. Value, pacing away in europe. Our previous guest warning about inflation being a risk to the market. Have a look at perhaps the protagonist of that inflation narrative. Oil, up. 6 . Oil and Energy Company down in the middle east in the uae. The dollar rolls down point 1 8 of 1 . How does that play out across the market . Morgan stanley saying sell the dollar, buy stocks in credit. By mexican peso and rand, and the 10 year bond futures, cash is closed, but futures are trading. Are we setting up for a big cap from the fed . No, no, we are not going above 1 on 10 year government bonds. Let me set the agenda for monday morning with your first word headlines from around the world. The u. S. Is hoping to start vaccinations against covid19 in less than three weeks. The head of the governments operation warp speed told cnn it plans to begin on december 11. 70 of he wants americans immunized, adding most the shot before life can get back to normal. Coronavirus vaccine may get fast tracked. Every adult in the country could get a shot by april, but the paper says Health Officials are warning it is too early to commit to a timetable. Global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. The European Tech giant prosus is planning a buyback of 1. 37 billion. It will also buy shares in the Parent Company masters. Inestment is a 31 holding tencent but the chinese giant is facing pressure from antitrust pressure in beijing. Bob vandyke is the ceo of prosus. Great to have you with us. Well done. You are in the process of doing this share buyback. The question we want to know, is this the start of a multipronged buyback . From we expect more and if so, what size in 2021 . Bob thanks for having me. One of the things you have seen we have announced the results today and i think it is fair to say theyve been strong. Weve seen particularly growth accelerate after initially we and that has allowed us to increase profitability, which weve done over a number of years. Act gives the Financial Flexibility to start a buyback and at this point in time, it is an excellent use of capital given valuations are running very high and on the other hand, our stock trading at such a significant discount, it is an excellent buy for us. Annmarie was this a oneoff, then . Bob we havent even started, so the most important thing is the rationale behind it. Have theoint, we capital to invest in our core business and do this buyback. We think the buyback is a significant one which will start after results are fully digested by the market and we will see how it works in the future. Manus i want to get a sense from you, bob. The big news flow was you missed out on the deal. I want to get a sense of your risk appetite. Has missing out on a deal made you more aggressive to find the you deal or has it caused to take your foot and step backwards and go that was a bit of a shock . Bob i think it was a very specific area. How things a member played out, in the end, we decided we did not want to pay more than our final and best offer. In the end, another player was willing to pay meaningfully more discipline we decided not to overpay for this asset. With that, the same applies next time we look at an acquisition. What is it worth to us . How can we create value in the longterm . If it is worth the price, we pay for it and if it is not, we wont. Manuse in terms of question about are you still aggressive and where you are looking, can you give us a sense of what sectors or geographies you are open to in terms of potential acquisitions . Bob if you look at the last six months, we published results, we invested 600 million in different businesses and if you look at the majority of that spend, our food Delivery Business where we have fantastic business is growing at well over 100 year on year in many parts of the world. Weve invested meaningfully we became an early stage investor about five or six years ago. We have seven investments in that space that we have done follow ones on in the last period. You have Business Models that were on a great growth trajectory and have been accelerated because of covid and people having to stay at home and we intend to keep investing in those great models to make sure we benefit from further growth. Area thatt is the one you think really will hold through and stick after covid19 and after we get a vaccine . Where do you think is going to be the Winning Technology trade postcovid with endurance . Is as at we have seen result of covid, many people tried online models they previously hadnt or used them for occasions they hadnt used them for. Think of buying certain sets of real or ordering food for occasions and what we see now, even when covid has taken a step back over the summer, in most places, a lot of those habits driven by, so necessity, people have changed their behavior and we see it becoming a habit that will stay so in both food delivery, weve seen many new customers come onto the platform and people using it for different things. Atve seen people be more home, wanting to educate themselves and that doesnt stop when people have more fleet freedom. Forward the user generation that was coming and doing it earlier. Annmarie it has been more than was spun outprosus and part of that was the market value between prosus and tencent. The gap has not narrowed. Why not . Bob if you look back to the prosus listing, it had a few objective and the main one for us was we are a growth company. We have become very large as a company. We are about 25 of the index. It was necessary for us to attract a new investor base, u. S. Based and europebased investors and prosus has delivered on that. If you look at the shareholder makeup, it is a different makeup , but we have become a victim of our own success. In the last 10 or 11 months, we outperformed the stock index by more than 35 and as a result, sharee is now over 25 of the swiss index, which leads us to seek see pressure on the discount but in the end, we have diversified our Shareholder Base and gives us the opportunity for restructuring firms. Anus thank you so much we wish you well. Close the gap, bob. Ob van dijk, ceo at prosus coming up on the show, finding perspective. I try every day to find perspective. Some days i win, some days i dont. The market is looking for something to hang its hat on and she says the incoming president of the United States had potential Coronavirus Vaccine could be just that. Bullish . We will ask fiona. This is bloomberg. Annmarie good morning. This is bloomberg market the european open. U. S. Officials say the first vaccinations against covid19 could be administered in three weeks time if it is given the green light for emergency use. The task force known as operation warp speed says it aspires for herd immunity by may. Ofning us, fiona frick, ceo unigestion. Which have positive vaccine news, the u. S. Election done. To points the fact point the fact that global risk has shrunk a bit but what risk, the pocket of risk that remains, what for you is for most front and center . Risk has been going down because with the news of the election and covid, two macro risks in terms of trade wars and having trouble for another four years and covid has morepeared, so the risk is Market Sentiment risk. Andties are quite expensive equity on a crosssectional atbetween asset class price, if you look at level of yield and now, if yield will go up, equities become more expensive again. The Principal Risk is inflation. Another risk is the discussion and rhetoric about Fiscal Health and this can be in the u. S. With the treasury having some problems agreeing on some things, which could delay some funding, and spain and europe, for you have hungary and poland trying to hijack the european recovery plan. These are the shortterm risks at the moment. Lot in there. Ed a lets unpack the picnic box. The risk is yield spread higher. What the fed even tolerate that in the United States of america . Fiona theres a good chance they wouldnt, but there could be worry if there is a fight at the treasury and the election process becomes more cumbersome. At one point, investors could be worried. What are you expecting from the fed next month . Many are saying potentially now, we will see the fed target longer maturities. Isnt that yield curve control, just not calling it that . Fiona it is. The fed is going to go through longerterm yields. Is yield curve control. Investors areg, in front of that also and the u. S. Has to show there will be fiscal policy because there is need of fiscal policy for the economy to remain good. It is important this come together because you have the risk of Companies Going they grow up going bankrupt and then Financial Risks in the market. 1980 was the last time we saw the s p 500 ricochet like this on the upside. Where is the flow of money . Is the trajectory flowing into the United States or is it becoming more diversified toward gardenomics . Japan and europe . Yield asia, the trade that was signed last week is a point that some growth will move to asia in coming years. With china being the only with strongerntry gdp next year, it has been an engine of growth this year so there will be a slow flow into asia. Europe is still trying to tackle economicit has some numbers that are less than the u. S. For the moment so we see flows going to asia, a lot of interest into asia. Annmarie if we could stick with china, do you think xi jinpings dual circulation strategy over the medium term is the right solution . Will it work . It will, because he has the strength to transform an industry, and investment led growth industry into a consumption led industry. He has the power to tackle the tech and corporate and thereh is public has been strong rhetoric today about some of these Companies Went bankrupt. At this point in china, you need to transform a country that needs to be transformed. Manus thank you so much for being with us. Iona frick, ceo at unigestion coming up come president elect joe biden begins to assemble his cabinet. Even though donald trump has yet to concede. This is bloomberg. Annmarie this is daybreak europe. President elect joe biden is pushing forward with his transition plan. Is expected to announce tony blinken has secretary of state. The veteran diplomat served as bidens National Security advisor and it is a bloomberg scoop. Joining us is Senior Editor derek wallbank. What do we know about tony blinken . He worked under the Obama Administration and more directly but will heas vp, be apple to be confirmed in a Republican Senate . Derek you would imagine someone like tony blinken wouldnt have too much trouble in a Republican Senate, just because hes somebody that everybody has known for a really long time. , and it iso somebody going to be interesting for the world to get used to this again, but tony blinken has been with joe biden so long that when tony blinken talks about World Affairs, it is going to be assumed that he is speaking joe bidens words. After the last four years, when there really has been this disconnect between a lot of when Donald Trumps aids will Say Something and you have to ask yourself, what does the president think . What has he said . That may not be the case in World Affairs going forward, because the biden team is probably going to take a much and tightly held line, everybody singing off the same song sheet. Even though that is something the u. S. Has tried to do in years past, it might be a little jarring to see how fast you go from where we currently are and have been for four years into a blinkenke that, where biden are ond the same page. Manus where are we on transition . There seems to be a growing number of voices calling on trump to start the process. Is pressure mounting on him to concede . What is the straw that breaks the political camels back . Ek there are a couple of things to unpack and quickly, aa government a total gsa operates of security. It usually focuses on buying furniture, very minor, but in this case. They have to supervise an apparent winner and the transition starts. A trump pointy heads the agency, has not signed off yet, hasnt said what the criteria will be for signing off. In terms of a tipping point, i would say you are looking at state certifications. Those moments where all of the legal and appellate and other stuff sort of goes away, youve youusted your outlets, and have states sitting there saying electors are, the picked. That is a moment you say that is game over. In michigan today, there is going to be a meeting decide off sign off. Manus we will have to draw a line under that. We will keep an eye on michigan. Derek wallbank, Senior Editor. I leave you with a view. The best song in 1980 was dont stand so close to me. Good morning. 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 welcome to Bloomberg Markets the european open. The cash trade is less than an hour away. Stay optimistic. Theties stay risk on as u. S. Planes to start vaccinations in less than three weeks. Dealu is close to recent a with moderna
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