Im on Francine Lacqua. Weve had quite interesting and big political news in the u. S. That started late last night, overnight and first we know that transition is more on its way than was 24 hours ago. Global stocks advancing on the back of that. If you look at what stock markets are taking a positive, the general source of administration acknowledged joe biden was the apparent winner of the election and the move reduced Political Uncertainty in the u. S. , giving biden access to Current Agency officials, briefing books, 6 million in funding and the market. Energy stocks leading the stoxx 600. Travel companies. Banks also notching gains. Haven assets weaker. We are getting some eco figures. Looking forward to speaking to the president of the Ifo Institute shortly. The estimater than of 87. 5. Ifo coming up in 15 minutes. Here is leighann gerrans. Englands National Lockdown ends next week but Prime Minister Boris Johnson says it will be replaced by a tougher threetier system of regional restrictions which will last until the spring. Head dressers and gyms can reopen but in areas under the tightest curbs, restaurants will be takeaway only. More details will be coming out this thursday. Bloomberg sources as joe biden plans to nominate janet yellen as treasury secretary. The former fed chair will be the first woman to serve in the role. Shes a kennett that is likely to find support from both wall street and progressives. Noah comment from bidens team yet. The surging coronavirus is stoking fears over fresh dampers for the World Economy and putting pressure on governments and Central Banks for more support. Wall street economists say it would not take much for the u. S. , euro area or japan to contract again either this quarter or next. Global airline lobby ir to is working on a mobile app to help travelers demonstrate their covid free status. It will display test results alongside proof of inoculation. A drop program will begin with British Airways parent before arriving on apple and Android Devices in 2021. 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 leighann gerrans. This is bloomberg. Francine. Francine thank you so much. The formal transition of power between President Trump and president elect biden has finally begun, three weeks after the election. Now that biden is the apparent winner. President trump has called on his agency to cooperate. Still, he says he will continue to challenge the outcome. Joining us to talk about this is our Senior Editor Derek Wallbank. What is the significance of the significance of the gsa finally acknowledging joe biden is the apparent winner . Significanceggest is biden and his team get access to security briefings. They can start some of those conversations and learning some of the intelligence they dont have an members of the general public. I think there are some other benefits like having a dotgov website. You can start going through security clearance processes. One thing that usually would be a big deal which is probably a little overrated now is some of that contact with Trump Administration officials the figure out what the Trump Administration is doing. The reason that is partially overrated here is the Biden Administration in large part wants to do nothing the Trump Administration is doing. Im not sure they will be heartbroken that is not going on quite so smoothly. Aboutne what do we know the administration . Who is in joe bidens cabinet . It seems like a lot of familiar names we know about already. Derek that is true. Biden started out with national security. You are talking about a lot of names that are sort of experienced old hands. John kerry a climate advisor. You know, things like that. Antony blinken, secretary of state. The name that is making a lot of names now is janet yellen who reportedly is going to be named the treasury secretary. I dont think any bloomberg viewer needs an introduction to janet yellen. That is precisely the point. Biden campaign in a lot of ways on the sort of return to normalcy. This idea of putting experienced stable hands. The suggestion may be politics can be boring again. By putting in a name like yellen, where you know where she stands on a lot of Different Things the Biden Administration is signaling both a little bit of stability, but also a little bit of project ability. Both other things have been in short supply the last four years. Francine i know we are expecting pentagon, things like that. Is there any appointment that could be controversial . What is the key appointment for biden that is still to come . Derek i think the key to controversy Holiday Lands with the Senate Elections in georgia. Realistically, when you are talking about these confirmations, generally, people defer to the incoming president. But we have seen an absolute partisanship in washington over the last couple of months. This transition has not been easy and has taken republicans a lot time to even call biden the apparent winner. I think that if chuck schumer, the democrat out of new york, is the majority leader, even if by the narrowest of possible tiebreaking margins, it will be a lot easier for biden to get his people in. Right now, i am not necessarily seeing a lot from the biden folks pushing really controversial names. They seem to be fuming towards a lot of mainline choices that would have bipartisan o appeal. Francine thank you so much, Derek Wallbank. Joining us this morning, Melanie Baker, to talk about them markets and the impact of these appointments have. Sees a senior economist. A great pleasure to speak to melanie about all the things that is going on. Senior economist at Royal London Asset management. When you look at how the markets and the economy could fare because of these cabinet picks who is in joe bidens administration, what is the takeaway . Array going back to what we had prePresident Trump . Is that only a positive for the economy . Melanie i think what we are seeing, appointments that speak to confidence. Highly experienced people coming in. From an economic perspective, any election when you are looking at new appointments in these sorts of roles, those other qualities you want with janet yellen. Someone who is highly competent, highly experienced economic policymaker who is just reassuring. Thats exactly whats needed in the midst of crisis. Francine what does she need to do . How does she get along with Mitch Mcconnell . Will we get the stimulus the u. S. Needs . Melanie that is still a big question, right . Part of the blockage it seemed for in terms of getting a package through did not seem to be coming from the white house. It seemed to be coming from Senate Republicans. As has been pointed out, a key will be what happens to the georgia, the georgia runoffs. How the balance of power in the senate shifts. Look, youve got someone come in and, highly respected. Who hopefully can work somewhat between party lines and get something done. It is important in the u. S. We see fiscal support provided. There are a number of key revisions federal off the end of this year. We have seen the provision of the cares act rolloff. There is a concern here. We saw a willingness from Senate Republicans before the election to pass something in terms of stimulus. I am hopeful we will see a package in the nearterm. At some when you look of the things we could see from yellen, how useful is it to have someone who was a central banker at this juncture in the economy take care of fiscal policy . Can that only be an asset . Melanie i think what is important in terms of economic crisis, Monetary Policy and fiscal policy can work together, there is some coherence, cooperation, good communication between the two areas. Yellen,fully, janet that will be the case in the u. S. I think that is important. What is also important this she will have Great Respect for the independence of the fed. Workvailability to together while respecting that independence, that is a good combination. Francine thank you so much, Melanie Baker, from Royal London Asset management stays with us. We will talk about the transition to the economy. We will also talk about vaccines and the Bloomberg Covid resilience ranking. The worlds biggest economies have handled the pandemic. That discussion in about 30 minutes from now. This is bloomberg. Economics, finance, politics, this is bloomberg surveillance. Oughs and vaccines means the end of the pandemic is closer than ever. Ands from Moderna Astrazeneca seem to be effective. Despite the positive news, World Leaders cautioned the fight is far from over. Still with us, Melanie Baker from Royal London Asset management. I dont know if you worry about still scarring in the economy, because maybe we dont return back to normal straightaway despite vaccines in early 2021. Or whether you worry more about some thing else. China, defaults, and the fact all this factory news, all the underlying concerns are getting lost. Melanie yeah, there are always plenty of worries. China was around precrisis. It was a theme back then as well. You know, i think you are right. Theres a lot of road to travel between now and when we actually get the vaccines. There is the potential still for some longterm economic damage to be inflicted. It is the really important policymakers continue to provide support in the period between now and when we get the vaccine. One of the longterm worries i have around the debt buildup we are seeing with Companies Firms have a lot of debt. When you get heavy debt overhang, you expect that to make Many Companies reluctant to invest into the recovery. It could be one of the things that holds us back more than expected. Melanie, what would a policy mistake look like . Is it too must the millage too much stimulus or not enough . If there is too much stimulus and enough people get vaccinated, will we see inflation shoot up . Melanie in the near term, i worry about not enough than too much. It is that stimulus is kept in place for far too long would be the way i would look at it. Once we have vaccines, once the recovery is well in, how long does it take before central bankers take their foot off the pedal before we get some, just rolling in . That would be a concern, i think. In terms of central bankers here, if we saw a return of inflation, if inflation really started to pick up, i would not expect the major Central Banks of the world to let that happen. I think we would get higher inflation in the media term. I am not sure we will get high inflation. Evenine what happens with the medium inflation, we have Central Banks thinking about normalizing . Do at some will point but it is a long way off. The message from Central Banks is there a long way from thinking about hiking rates. I think it may happen sooner than markets currently have priced in, but this is not a story for next year or possibly the year after that. Francine melanie, thank you so much. Melanie baker, senior economist at Royal London Asset management. Plenty more on expectations and what we are seeing in the u. S. Coming up, german deals with the second wave of coronavirus. How restrictions are affecting europes biggest economy. This is bloomberg. This is bloomberg surveillance. Lets get the latest on europes biggest economy. German Business Confidence. German Business Confidence losing as coronavirus cases forced authorities to introduce restrictions. 91. 5tations gauged fell to from 94. 7 in the previous month. A steeper drop than economists forecast. To talk about this is clemens fuest. Thank you for joining us. How are you expecting businesses to react for news of a vaccine . Are they going to really think that everything is going back to normal or will there be a lingering feeling that we have to be cautious . Clemens i think most businesses see this was good news. The vaccines are coming around, but they also think this will take some time. Before that reaches the economy, before the vaccines are distributed to a sufficient number of people, this process may take months and the Business Outlook and the ego index refers to the next six months. It looks like most companies are saying, well, the index will be later. Francine when you look at current expectations about restrictions being put in place, what do businesses tell you about what they want . They wanted longerterm plan to understand what it will look like in the spring or are they ok with the stepbystep process . Clemens they would like a longer term plan. Some also say we would like to see a longerterm strategy. It seems like the political strategy is one tailored to the next four weeks, but it is not a longterm strategy. Most businesses are aware there is not certainty about the pandemic. We dont know how this develops. It is inevitable that adjustment will be made. So, my impression is that businesses are more or less resigned to the fact this uncertainty, measures that are coming in that are lifted again, this uncertainty will stay for some time. Francine how much of a vaccine boost if we get the right vaccines and we are able to vaccinate enough people, does it mean we see in economy that fully recovers in 2021 . It is not going to be in economy that is fully recovered in 2021, but recovery were certainly become broader than today. Whats important is there is really light at the end of the tunnel. We dont know, will the vaccine be available widely enough and distributed enough in the summer, or will it be more next years winter . I suppose the hope is we will not have the third way in the winter of 2021, 2022. I would say the recovery will be in 2022. That we will reach prepandemic output levels in 2022. Unfortunately not in 2021. The recession is just too deep. Francine private consumption, i think we are looking at some of the numbers, crunching some of the numbers in the newsroom. 10. 8 e consumption rising three months through september. What are you expecting in the Christmas Period . Clemens so, private consumption is going to be will continue to be recovering. Of course, there are some sectors where people cannot spend. Hotels and restaurants, people cannot travel. This is holding back spending. People spend more on other things. That is clearly visible. Part of the retail, theseyourself retail things are working quite well, but other parts of retail and restaurants arent working. The result is Consumer Spending is going down. Or is lower than before the pandemic, but not because people dont have money. Its because they cant spend it. Much, forthank you so doing this today. President ,st, ifo with great insight with what german businesses will do. Coming up, we will talk more about janet yellen. We understand she is the pick for of joe biden to be treasury secretary. We will discuss the path of the worlds biggest economy. The market seems to like what they are knowing so far. This is what they are focused on, not only the janet yellen appointment. I am seeing a lot on twitter by people that have worked with her. As Derek Wallbank said, she is no stranger to bloomberg viewers but it is clear stock markets are turning higher after the gsa knowledge that biden is the apparent winner of the president ial election. 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. The notion that the fed can do all that is required at this point to support the economy is just wrong, and the fed is really pleading for fiscal relief. I believe it is essential. Francine that was former fed chair janet yellen speaking about the need for more stimulus last week. She is joe bidens pick for treasury secretary. And charged byen the treasury department, we will likely be prepared to be the policy for lower for longer interest rates. Im pleased to be joined by someone who works closely with janet yellen at the federal reserve, randy kroszner. Randy, as always, thank you so much for coming on, especially coming on to talk about janet yellen, who youve known for many years, and who you met over three decades ago. What will she be like as treasury secretary . Randy i think she will be a very effective treasury secretary. She is someone who knows washington policy really well. Now secretaryed, of treasury. I think she is very good at trying to build relationships across the aisle, in congress, a very goodshe has focus on really trying to get things done. How difficult it does seem that we are at a juncture, right . It is lower for longer, you have concern about exactly what Monetary Policy can do. How much coordination could she actually do with the fed . How does it work . Is this going to be a new tandem force that will be that we will be reckoning with . Naturalt is a very conversation because she and jay know o each other very well. It will keep policy accommodative through this challenging time, and exactly as the quotation that you had from janet said, she understands that Monetary Policy is superpowerful in certain realms, but it is by no means allpowerful. It requires a foundation for recovery, but unless you have appropriate Health Policy and fiscal policy, you will not be able to have a sustained recovery, and i think shes going to understand that well and be able to articulate that will within the administration and to congress. Francine because of the secular stagnation environment and the complex new ways of working between monetary and fiscal policy, what should be her number one priority right now . Think Monetary Policy is, from her perspective, a very good place. She needs to start thinking about building the coalition for the kind of programs that she thinks is most appropriate for sustaining recovery, so for parts of that is making sure that households are provided support during the transition, making sure that there is a really solid environment for investment, and so not punishing companies for making profits, but trying to make sure that they are encouraged to make investments, to build productivity, to make sure that wages,en leads to higher which is the standard way that things have worked. There is a clear program, and i think that is what you focus on. What kind of stimulus do we need . Is it size . Will she be able to get that with republicans, or is it actually whatever is signed, where they will spend it . Randy i think it is more about where to spend it than how much to spend. We spent 15 of gdp, 3 trillion in the u. S. , in march and april, and i think that was sort of a shock of berber. But now we have to look at policy a shock absorber. Then i we have to look at policy and think of growth and what is next. So thinking about not just support packages, but also, how do you retrain workers from hospitality and transportation sectors to go in more Technology Sectors . How do you encourage investment in an uncertain environment . I think those really need to be the priorities that i think both sides can agree on. It is not about how much well, if we do two chilean dollars everything will be fine, 1 trillion is not if we do 2 trillion, everything will be fine, one dollars trillion is not enough. Forcine what does it mean inflation . Is there a danger that suddenly the economy picks up and we are not ready for it . Randy i think in some sense the fed can only hope they are in that difficult situation because the fed has been undershooting its inflation target since it announced it in 2012. It has now adopted the average inflation targeting policy which says since we have been running below, we will be happy to run above for a bit, so i think they would like to get to 2 or even a little bit above. And then they can deal with those issues. What i would really love to see is that the economy turns out to be stronger than i expect that ofis and that we face more an inflation problem than a stagnation problem. But it is something to be concerned about, but at this point making sure that we get to that good situation i think is more important than worrying now about the possibility that inflation might get a little bit high in six months. Do we need to start worrying about debt now, or is that a problem that we dont even talk about for at least 18 . Onths the echo randy randy it gets back to what we were talking about before, what do you spend the money on to get the economy growing faster . It is just like with a company, if a Company Takes on debt and doesnt spend the money wisely, it doesnt do so well and it is not so good for the people who bought those bonds. But if it is a company that is that money is being used for investments to , allowing the economy to grow faster, i think that is really the key. If we can focus on policies that are going to revive growth and revive jobs and really get us to transition to this new postcovid economy, then i think that we can deal with the debt issues. If it is just spending for spendings sake, than that is a real problem. Francine thank you so much for joining us today, with great insight, working with janet yellen for so many years. Randy kroszner there, former fed governor. Lets get to first word news with leighann gerrans. Leighann President Trump is backing the start of a transition despite saying he will continue to fight the election results. A key u. S. Agency is now recognizing joe biden as the apparent winner of the election. That triggers a full formal transition process, giving biden and his team access to government officials and 6 million in funding. Now, according to local media come is really Prime Minister Benjamin Netanyahu secretly flew to saudi arabia to meet with mohammed bin salman. It is a major breakthrough between the two nations that have no official ties. A saudi official is denying the meeting did take place, and net and yahoo is refusing and netanyahu is refusing to comment. Elon musk is the second richest person in the 130 billion. 100 billion is from this year alone. He rose through the ranks, largely driven by tesla, whose market value is nearly half 1 trillion. 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, im leighann gerrans. This is bloomberg. Francine . Francine thank you so much. Then on has cut up to 2000 jobs including quarter of positions at its global headquarters. That is the biggest yogurt makers is revising profitability. Chief executive spoke with bloomberg early this morning. The question of local, sovereign governments are talking about local Food Sovereignty and multinational environment, talking about the local and that the consumers going local. We had the global category p ls, and we have been great doing that. But we have been over probably hit by some of the some of that has got to do with structural weaknesses that we did not address. We have decided to go with two geographies with a unit of danone of dan and entities. We will download, the local decisions for Capital Expenditure for Brand Development or innovation. We produce locally. Most of what we produce we consume. Global, think more to so that is essentially what we are doing. Size, hencee the the savings we expect from that. Yesterday you admitted misuse of resources, and analysts are skeptical about this plan, one saying we have been here before with danone. We are not sure this will make a difference. How are you going to convince the market that this plan will actually work and you will be able to stem those changes . Well, i think that is not a statement that is made based on facts. Significant global problem that we had is the very modern one that we had years ago that was about saving one billion euros out of our indirect sense. That doesnt change anywhere the way we work, and today we have tomorrow we will have tomorrow we will have only two. It is really about savings on the way we work, which wasnt the case before. It is the only big chance this company globalization that this company has ever made. Systemto end valuation that we also extract several hundred Million Euros across category in the countries that we were able to attack in the category. Huge ambitions. The market is perhaps a little bit short of breath and short of time for you to execute. How much time do you give yourself to fully execute this gargantuan task . Well, it is not gargantuan. It is wellplanned. I have absolutely no doubt on that. Have to execute that plan at the same time in parallel. We expect to start that in the early part of next year. With full completion in the course of 2022. The First Benefits of which will be in the second half of next year already, which means that we have said that we will return to profitable growth as soon as the second half of next year. The danonehat was chief executive, emmanuelle faber. It is not of we will look ahead to the next six month and who will do a great job with a global covid resilience ranking. We will also talk about the vaccine. The results next. This is bloomberg. Yes, we have had some good news in terms of vaccines and a chance to overcome the health crisis. But we are not there yet. Need to beneed is we stronger. The next six months in the Northern Hemisphere will be very tough. It might be accelerated, but i dont think that is going to be a game changer. Practice, it is done by each country its longterm someion has to be on global basis. Toi would very much hesitate declare victory now because the fight is far from over. Francine Global Business and political leaders on vaccines and the path ahead. Lets talk about covid19. With little less than two months where hast in 2020 the pandemic been held most effectively and with the least amount of disruption with business and society . Joining us to discuss all of with the global rankings is rachel chang. How have you actually consulted this new ranking . I think rachel is having a couple of technical difficulties, but i do have the main takeaways from the top performance here. I dont know if rachel is with us, otherwise we will call her back to get a better understanding of what is exactly behind this research. The top performers, no surprise, new zealand, number two japan, number three, taiwan. Rachel, can you hear me . I think we have lost rachel. We will get that connection backup. In the meantime, lets look at the markets and we will get back to all of this great work done by our Bloomberg Team to figure out if access to vaccines and the right vaccines means that some of these countries will be on better footing into 2021. Stocks are definitely rallying. The dollar see weakness. Bidense start of joe formal transition. If you look at dollar extending its decline to the lowest since 2018. Stock markets globally trending higher. The General Service administration acknowledged that biden is the apparent winner of the president ial election, and the move produces lyrical uncertainty in the u. S. This is bloomberg. Francine lets get to rachel chang, who put this together. First of all, how has this been constructed . Rachel thats right, we spent months on this new ranking, and what we wanted to look at was indicated was indicators of the situation in different auntries right now, almost year into covid19. So not only do we have the usual cases, mortality rate. We have also looked at access to phase 3 vaccines, we have looked theockdown strictness, health care system, and the overall idea is to show the places that it is best to be in right now in the covid era. Francine so top performers in the past and i know you have taiwan at number three, new zealand at number one does it automatically make the top performers also for next year because of early deals with vaccine makers . Rachel what we have seen is access to vaccines indicator is going to become increasingly important, and this is the most obvious of an example in the u. S. , where the administration of donald trump basically said it was not going to put an effort into controlling the virus, it was completely focused on finding vaccines. That has initially looks like it vacciney off with the moving quickly toward approval. So the u. S. Is positioned very well with the most vexing orders in the world, and as the approvals start to come through, that will feed through quickly in terms of what we see in terms of cases and fatalities and could really bring about quite a big change in the ranking. Rachel, how did western European Countries fair . Unfortunately, western European Countries are in the bottom half of the ranking. We know that major countries, france, the u. K. Come have struggled a lot, they have struggled the last few months with a second wave. Seen they have had to reimpose lockdowns. The fact that it is not true, that it may be a cultural or regional thing, that is not true because we see the northern scandinavian countries are ranked very high. Three nordic countries are in the top 10. Although these countries are in the same area, they did not let outsiders into their countries are pretty much the whole year among where is what we saw in the western European Countries is that summer vacations reignited the situation that we see now with people crossing the continent. Francine thank you so much, rachel chang joining us this morning. Benchmark is about to go under his biggest overhaul. Operator contango announced rules for making membership rules bigger and more strict. Dani burger, what changes are we going to see from the dax . Dani in terms of getting bigger, the dax is going to have 10 more members, the dax 40 instead of the decks 30. The midcap index is going to shrink, so that will be 50 members versus 60, so the changes will happen next year, september 2021. New requirements as well for those included in the dax, companies that are going to be included from now on must have two years of profitability. Are means current entrance more or less in the index even though they do not have yearly profit yearly profits, although they will be grandfathered in. The important thing here is that they dont meet those requirements, they have a speedy exit. They need to post them within 30 days, or else they get kicked out of the dax. I should also mention that one of the proposals that was rejected by this fourweek review was to exclude companies with exposure to controversial weapons. The operators here saying that in its comments that it got in the feedback it got, there are questions as to whether esg requirements have any place in the benchmark index. It said that it really committed to these various esg parameters on things like the dax esg 50 index. But otherwise the current benchmark, not going to include that controversial weapons ban. Francine very quickly, how much of this looks like a reaction to wirecard . Dani certainly most of it does. Doing,what they are outing companies to speedily exit the dax if they do not meet these requirements. For two months wirecard was insolvent and stayed in the dax, so this is the dax reason to pull those companies out, francine. Francine dani burger, thank you so much. With the very latest on the dax. We will have plenty more on the markets. Bloomberg surveillance continues. Tom keene joins me out of new york, an overlook at the transition, finally starting to happen for joe biden. We will also look at the administration and some of his cabinet picks. We will also speak especially about janet yellen. This is bloomberg. Francine three weeks after the president ial election, joe biden is formally designated the winner. The transition process can begin. Stocks and futures climb. The dollar slides. From the fed to the treasury. Biden looks set to nominate janet yellen, a supporter of more fiscal spending, as his treasury secretary. She was the first female fed chair. If confirmed, shed be the first woman to head the treasury. Plus, the dax gets the biggest makeover since its inception, increasing the index to 40 members, with tougher rules on reporting and profitability. Good morning and welcome to bloomberg surveillance. Im Francine Lacqua in london. Tom keene is in new york. Tom, the markets are pretty quiet at the moment. A sigh of relief that they got through for the moment not only a treasury secretary picked, which we are still waiting for confirmation of, but multiple sources have said it is janet yellen. They are also siding because for the first time in three weeks, there is acknowledgment of the tr
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