Even though the gains have been so big, up until now it doesnt mean you should bail out and not get in on the game. I do wonder, jon, especially if we dont get a fiscal support package, especially if we do get increased deterioration in the economic data, i do wonder if well see a change in sentiment. Jonathan what if we get more restrictions . California, the governor, mr. Newsome had this to say yesterday. If these trends continue well have to take much more dramatic, arguably drastic action. If hes implying they might have to have a shelter in place order like back in spring or a flavor version of that, how do we get through that if we dont have the fiscal hand down from d. C. . Thats the question going into december and 2021 . Lisa the markets have shrugged this off completely. The deterioration some of the High Frequency data. If you want to look at the v shape recovery check out manufacturing which brings us to what we are looking at today. U. S. Manufacturing data, construction, auto sales. Manufacturing is fascinating because it highlights the reshaped recovery. Bam, bam. Look at that. Just a huge recovery as people start to buy stuff. Especially with cars and other durable goods. Jay powell, steven min mnuchin hand in hand, theyll be testifying to the Senate Banking committee to talk about the point you raised which is fiscal support. How its needed. Expect them to talk about that. I am particularly curious about w Steve Mnuchin nuances to withdraw some of the crash left over from some of the programs al low kited to the Federal Reserve. Also today president elect joe biden and Vice President elect harris are introducing some key Economic Policy nominees and appointees in wilmington, delaware. Interesting to see the controversy thats building around some of them as joe biden tries to sort of hint to be more progressive type of strategy and platform. Even though its going to be a lot of pushback from the republican senate. Jonathan thats the lineup for today. Its busy. Looking forward to hearing from chairman powell and secretary mnuchin. Good morning. Equity futures up 37 on the s p 500. The United States i think the best month since april on s p. The nasdaq the best month since august. Russell, the best month every. The europe the 600, best ever. Spain, best ever. Dax best since 2009. You get the picture. Eurodollarrle 1968. Short of 120 right now. Up about a third of 1 on the single curncy. Single currency getting through 120 in the day yesterday. Just short of the year to date high on a single currency. Yesterday session. We couldnt hold that level. Back to 1967. Very interesting to hear from an e. C. B. Executive board member a little earlier this morning. Abinterview with our team. Had to say the following, appropriate to focus on preserving these conditions rather than easing them further. If its necessary to do something, that doesnt meet market expectations, we have to do that nefrl theless. That was e. C. B. I think this poses an interesting question for the e. C. B. Meeting. Are they trying to push back here against expectations and get people to focus on the duration of their assistance and not the size of it in the coming week . Lisa i thought this was fascinating as well. Especially because we got disappointing inflation data out of the euroarea today. Its a question how effective their policy has been. To your point, the idea of just broadening how much they buy. They are reaching the limits. Whats next, equities . Jonathan lisa, i couldnt want out. Le it out rule it i remember when we used to debate whether they would buy corporate debt. They took rates negative in 2014, shortly thereafter they started buying corporate debt and everything else. We have gone through a lot in europe and i dont want to rule out anything because who notes what the euroholds. We are negative 50 basis points. Say we have trouble in a few more years, whats next . The only thing that is left, japans doing it. Lisa they own 60 of the e. T. F. Market the bank of japan . Again, when do we reach diminishing returns. Many people argue we are already doing that and creating a perverse incentive, saying to investors no matter what happens Central Banks will have your back to boost asset frieses if not ilprosm the underlying economy. Jonathan troy gayeski, skybridge, reflect how the month it was and reset northern to come . Troy yes. There are quite a few rotations. Came in when markets were pricing a blue wave and got less than a blue wave. God a Biden Victory but not a senate flipping at least yet and seats lost in the house that. Caught some of the cyclical memes off a tech valley. Then the fantastic news which cant be understated enough which is how effective these vaccines are and light at the end of the tunnel. You put that together going in where you have vicks around 40 at the end of october. And you have an extremely explosive month across the board for all assets whether it was credit, cyclicals, value. The only ones that performed moore r poorly were the stoim stayathome it means. Even after this massive rally, equities are only up 3 1 2, to four. We know it will be much harder to come by, all assets in general, it is unlikely unless we get that double dip, from the data we are looking at doesnt look like its coming, just yet we have a major dislocation prior to the Biden Administration being sworn in and hopefully giving half a trillion or more in fiscal stimulus. Lisa whats the data you are looking at . Troy think of the stimulus, there is 2. 5 trillion in commercial bapping got it accounts than there was coming into this year. You look at the housing market, its on fire. Mortgage debt service is the lowest its been in over 40 years. You look at the over 100 million of debt paid down by the consumer. You look at the fact that wages and salaries have now gone above coming into the pandemic. Offsetting that is payments have dropped from fiscal stimulus going down. Look across the board what we see is there is an enormous amount of stimulus that has yet to be spent. Thats whats the assumption now, even as unemployment drops off. At the same time, we have created 10 million jobs. Recaptured 10 millionplus jobs since the down turn. There is the ability to consume. To your point on manufacturing, you have seen cap expick up. You have seen fiscal spending from federal government pick up meaningfully. Trade is not a net contributor. Those three cylinders are hitting Strong Enough we think to keep us out of a recession provided, provided that we do et another round of at least mcconnellstyle spluss stimulus somewhere in march. It its unfortunate, since there is real pain out there in the lower wage earners. Mcconnell style, and pelosi was two, 2 and a half. You wouldnt think that biden and mcconnell worked well over time. They worked together as boehner, mcconnell, and biden struck out the obama administrations deal in 2011. The 500 billion is still 2 1 2 of g. D. P. We were about 3 1 2 below g. D. P. Remarkable nufment looks like well be 2 . 2. 5 g. D. P. Is all we need to get back to the peak level. Jonathan let me stress test the confidence. Vice president mike pence said we strongly believe the Vaccine Distribution process could begin the week of december 14. That was mike pence speaking to governors in the last 24 hours. Then we heard from Governor Newsom who had this to say, if these trends continue, we are going to have to take much more dramatic, arguably drastic action. How do you think this market would process some form of shelter in place order from Governor Newsom. Something more stricter than what we have seen already in the next couple weeks. Troy that would cost a shortterm pullback. Nothing meaningful. Maybe 1 , 2 , 3 . Again its back to starting level. Starting level markets now. Vicks around 20. Thats been the post crisis vaccine post pandemic crisis low. We got up to 40 at the end of october. Collapsed back down. Multiples at 23 x, more good news looking forward than theres been in some time in terms of the economy, in terms of what the fed needs to do in terms of the vaccine. If you get a stayathome order from a state as large as california, it will take a little bit of your enthusiasm. We may not have a strong december like we have had in the past. We dont think its enough to really cause a maimingor dislocation. It could be as bad as october. Down 6, 6 1 2 isnt the end of the world. Im so much again depend upon the fact that the light at the end of the tunnel is so much brighter because of the multiple vaccine candidates which will get some of these bombed out sectors like lodging, airlines, things that really have been the bottom leg of the keg to come back. Sometime next year. Jonathan great to catch up as always. Looking well. Good to see you, sir. Ficer this morning looking for speerns pfizer this morning looking for e. Regulators. The rollout of the vaccine. We talked about it yesterday how well anchored expectations for a better outlook are at the moment. Some people would be willing to look through any potential shut down, lockdown, shelter in place, whatever you call it, lisa, in state as big as california if it comes. Lisa given the fact we have seen record performing equity indexes as we see record hospitalizations, a lot many people are looking past the now. Jonathan hopes for a better 2021. Well share them coming up. Laurence boone, they downgrade their outlook. Well get that view later this morning from new york and london this morning, good morning to youall. This is bloomberg. Berg. The o. E. C. D. Has cut its Global Forecast. On what the economy could get worse. The parisbased organization now expects 4. 2 growth next year. Thats down from 5 in september. The oecd says that the economy could slow down even more as governments withdraw support too soon or fail to deliver effective vaccine. Lawmakers are warned that the u. S. Economy still damaged and uncertain state. Powell testified today before the Senate Banking committee in prepared remarks he said recent news about vaccines is very positive for the medium term. Still powell said a resurgence of the coronavirus is concerning. And pfizer and its partner biontech have clearance for their Coronavirus Vaccine in europe. That puts it on track for a potential approval there before the end of the year. A study of almost 44,000 people showed the vaccine presented 95 it symtomatic coronavirus cases. Opec and its allies need more time to reach a deal on Oil Production policy. A meeting broke down without any agreement and Energy Ministers will try again thursday instead of today that. Will allow more time to figure out whether to delay an increase in output starting in january. Supporters say the market is too fragile to absorb more oil. Tesla will be added to the s p 500. Thats news that will ripple through the entire market. Money managers will have to adjust that portfolio to make om for a company with 538 billion. News 24 hours a day on air and bloomberg quick take. More than 120 countries. This is bloomberg. I desperately believe that we need more stimulus. We need more stimulus today. I would beg congress to go back to work and pass a stimulus bill this week. There is no time like the present. Dollars put back in consumers pockets would be very, very important. Jonathan a lot of people share that view. That was gary cone weighing in in the last 24 hours. Good morning. Alongside lisa im jonathan. Get the price action. Tuesday morning, what a november we had. Just absolutely unreal. The s p 500, that big rotation away from the index, the s p was still up about 11 on the month. Best month since april. I get t. You want it to be in the small caps, i understand that to get double the return. Still, the s p had a massive month. Outside of that the bond market yields up by about a basis point. I. S. M. Coming out. Look out for that. Eurodollar had a little look at 120. A sneak peek and came back down to 11967. Up by about a third of 1 . You wonder what the pushback will look like as we hold on to these levels. Lisa there was a really good note this morning. The dollars in the back foot. Who is on the front foot . Raising questions, especially as we look at the economy in the europe zone. Its not doing that great. You have to wonder what point people realize that when they trade currencies. Jonathan having a liein this morning. Kevin cirilli bloomberg chief washington correspondentant. He didnt make it to the office this morning. The testimony from chairman powell and secretary mnuchin is it 10 00 eastern . Kevin yes. When fed chairman jay powell is set to testify. We do have his opening remarks. From his opening remarks. We gathered hes going to continue to point out the economy is still on rocky footing. Especially if they are not able to get there to be some more fiscal stimulus. Hes continuing to echo what treasury secretary likely treasury janet yellin has been calling for more fiscal stimulus. Lisa i know youous rolled out of bed and drinking your pirs wawa coffee. Are you not fully aware of everything going on here this year. I am wondering what we could get some momentum heading into yearend, especially if there is further deterioration in the economic data. Some sort of indication there will be a fiscal support package passed in the near term. Kevin in templets next few weeks, december 11 is the first deadline for continuing resolution that lawmakers need to pass to avert a government shutdown. The uptick in cases of covid19 has made it interesting, to pud it mildly, debate in terms of just the price tag of adisal additional fiscal stimulus. The back channels of discussion in the senate, if you assume the republicans keep control of the senate, is more moderate republicans like senator Susan Collins and Lisa Murkowskis of the world they have to be the negotiating type to deal with president elect joe biden as it relates to another fiscal stimulus package. Thats the biggest unknown. But then cuppled with that is this coupled with that is this interesting tension emerging on the geopolitical front, not just the u. S. China front but the u. S. Middle east front. As commander in chief, the biden team will have quite frankly much more leeway to make more geopolitical decisions just because they have to face a divided congress. Lisa where is trump, President Trump at this point given the fact that joe biden is trying to set up his cabinet and get in the door, but there still are massive issues that need to be dealt with before the yearend. Kevin President Trump is going to be continuing to try to get there to be a republican majority. Hes going to be participating in the campaign with regards to the georgia runoff. He and Senate Majority leader Mitch Mcconnell have their goals aligned in the sense they both want to deliver a republicancontrolled senate. That would help from the political standpoint to keep President Trumps options open as a king maker of sorts in 2022 and even some extent in 2024. In terms of the pressing matters of the day as commander in chief, iran has the attention of both the Incoming Administration and the outgoing administration. Jennifer jacobs reported yesterday Jared Kushner and his team will be traveling to meet with the saudis in the coming days. Obviously the Incoming Administration and the biden team are going to be inhabiting a middle east that inheriting a middle east that is very different than what the middle east looked like in the obama years. Jonathan before we get there, lets get to january 5, not january 20. Can you explain to me how the fiscal negotiations already taking place at the moment actually play into the georgia runoffs . Kevin every vote counts. If there are fiscal stimulus package that moves after president elect biden is sworn into office, if there is the larger the republican majority, the more difficult it will be to get a majority vote for the democrats because they are going to have to pick off even more republican senators to join their cause. s hard to think that should two republicans go to the senate from georgia that they would vote opposite of the republican majority to pass a major form of fiscal stimulus spending. Every single vote counts in terms of the spread, so to speak, for lack of a better word of republican and democrats on the fiscal stimulus front. Jonathan before you go, fill us in on House Speaker pelosi. Where is she on all of this right now . 2 trillion we thought was on the able. I dont know if it was ever really on the table i dont know it would have got through the senate a couple months ago. Whats the view now on this . Kevin to be candid with you her role will be similar to what Vice President elect can malla harris role will be. The deal making in washington is between leader mcconnell and president elect biden. Jonathan there we go. Kevin, enjoy the nap. Great to catch up. As always. I am joking. I have been a little bit harsh to kevin there. Were problems with the line which meant we couldnt get him in front of the camera. From audience and radio that makes no difference, for our audience on tv allows me to have a little dig at kevin. Data out later this morning, manufacturing in the United States. Have you seen the numbers . Coming out of china, cash in the private reading of manufacturing, decade high. South korea, best since 2011. Taiwan, highest since 2018. Those numbers are impressive. Lisa thats one of the reasons why youre seeing such a rally in copper thats gaining steam. Copper at the highest level since 2013. I am struck about the ongoing divergence between manufacturing and services. You do wonder whether there may be signs that perhaps the orderings are starting to decline or whether there is any negativity or whether we are just seeing a dramatic shift in the economy. With the stayathome trends we have seen this year. Jonathan all confusing. A robust recovery thats just beginning. Off the back of a huge disruption earlier this year in 2020. Well find out. Jurys out until when . End of q1 maybe . Youre listening to bloomberg surveillance live on bloomberg tv and radio with an equity market just getting away and getting away a little bit more. Up 36 on. S p this morning. We violence a little more than one percentage point december 1. This is bloomberg. Its down to the wire, the teams been working around the clock. Weve had to rethink our whole approach. Were going to give togetherness. Logistically, its been a nightmare. Im not sure its going to work. Itll work. I didnt know you were listening. Jonathan from london and new york, for our audience worldwide, this is bloombergs surl vail lens. The price action this Tuesday Morning much after a month to november, this is what we look like right now. We had some weight to the rally. Up. 9 percent. The small caps outperform once again. They do on the month, the session. Russell up by 1. 36 . A couple things, get the month to date gains on some of these markets. Then leave you with a question about whats happening in the europe. This is the month to date gains. November, up almost 11 on the s p 500. Talk about the rotation, we still had the best month since april on the s p 500. Phenomenal month on the nasdaq, up almost 12 . Best month since august. Phenomenal month. Russell, up by 18 and change, the best month ever. Question to next year is where do you see the outperformance on these three benchmarks . You continue to get that rotation. Dot small caps deliver . Or better sitting at the s p 500. Question for you to answer the next couple months. Switch the board again. Final question from me on this market. The e. C. D. And q. E. Today the e. C. B. Had a little bit of bush p. A. C. On expectations for what we could get from them in the coming week. What will they do to the Asset Purchase Program . Extend the duration of it . Increase the size . Will that disappoint you . Eurodollar right now 1196, up about a third of one percent. A breach of 120. We almost got back to the high of early september. My question would be the following, how does the europe respond to a socalled e. C. B. Disappointment . Stronger euroor weaker . Lisa good question. Especially given the fact there is so much uncertainty still on the horizon when it comes to the virus which brings us to the news we got this morning. The vaccine news with pfizer and biontech seeking Regulatory Approval from european agencies to start distribution of their vaccine later this year. The next couple of weeks. Interesting move, widely expected, not a huge market response. Naomi has been covering it up, Bloomberg News health care reporter. What is surprising about this announcement this morning . Naomi hi, good morning. As you note it was widely expected that they would seek regulatory clearance. I think that this puts the e. U. Potentially on track to finish their assessment by december 29 at the latest they have said. This is just sort of ticking along toward approval potentially for this vaccine. Jonathan just in terms of access to this vaccine, do the governments have a monopoly on how this vaccine is supplied . Talking to a lot of people outside of this world who dont understand t can you see private actors getting their own supply . Companies who would like to vaccine or vaccinate their whole work force . How does this work in the coming months and year . Long, it will really be a probably slower than some people would like process of distributing vaccine through countries in europe. The e. U. Has made a deal for a certain number of doses for the biontech vaccine, 200 million with an option for another 100 million. Theyll distribute it to governments. Then governments will need to set priorities about who gets vaccine. Basically universally, this would be Good Public Health practice, they will be giving it first to health care workers, to high risk people. Really going according to a priority list for who gets the doses first. Jonathan great to have you on the program this morning. Appreciate it your time. Pfizer looking to get the feerns from the e. U. Did you see moderna, up by more than 20 on news that we all knew about. Lisa whats interesting to me jonathan we all anticipated. Whats that about . Lisa im shrugging. I cant explain the market move. I do think its interesting seeing that the data that came out. They did disclose more detailed and studied data from their study. It confirmed that 94. 5 efficacy rate. Typically from the experts that number tends to go down. The fact that that efficacy rate stayed as high as it did was encouraging to some people. Jonathan moderna in november up 126 . Not bad. Not a bad month at all for stock already doing pretty decently. Looking ahead to 2021, the outnot Getting Better if you are the oecd. The outlook from laurence boone. Chief economist. Talk about 2021 and why you had o cut that forecast . Laurence i do know in the middle of a pandemic. And sever wave of many countries. As well as having the pursuit of the first wave in some of the countries. 2021 is still very much affected by whats happening now in the first quarter. Now with a vaccine inside, there is much hope. I think the outlook would be brighter. We protect a recovery in 201. 2021. As you know it will be a little more than 4 . That wont be enough it miss the recession we have in 2020. What will be super important is that policies keep the support, health, fiscal side so we can a cheemb better recovery achieve better recovery once the vaccine is deployed. Jonathan are you concerned about how much damage we do between now and then . It laurence absolutely. We are very concerned. Which is why we have this overarching message of keeping up the support. If we keep, if we double down on policy packages because the vaccine is not skewing that, we need to go through the winter and spring. We need to deploy it. Sperms have been affected in some secretary firms have been affected in some sectors going out of business. Some people, large number of people have been protected by Job Retention schemes, some are falling through the crack. Firms Balance Sheets may be weak as well. We are saying with vaccines inside, governments were vindicated in implementing this huge to firms and people even must continue to do so. There will be times reflect on the debt, but it wont be 2021. Lisa what kind of fiscal support packages are you factoring in here when you come up with your 4. 2 growth projection for 2021 . Laurence what we are working on is assuming that the support to workers, Job Retention scheme would be maintained. Between the sectors which are directly affected by restrictions. We also incorporating support to firms and you know the number of countries of oecd countries have extended that to 2021. We also have considered recovery plans which have been issued by a number of countries. Hat we are saying is, with money policy, and the foreseeable way for the future, the debt services, most of the countries, is actually lower than what it was in 2014. So there is space for using the fiscal tool in this type of equation as you described throughout 2021. Until the recovery has gained more momentum and employment has started increasing, that is super important. Alternatively, we have two scenarios in our protections, if there is not enough of fiscal support, it things may falter. And we could be in a much, much lower recovery. I mentioned on the side for jobs and for firms. Lisa a lot of people have looked at stock markets globally, looked at their incredible performance of late and said look how well the economy is recovering. Yet this disnance between the economy and markets continues. When you look at the economy in real time. Are you concerned that peoples emphasis on stock markets, risky asset prices, a measure of economic health, that that actually hampers the recovery because it hampers the effort to get fiscal stimulus into the hands of people who need it. Laurence im not concerned about stock markets doing well. I think they are forwardlooking. Thats the job of people on the stock market. They include everything. And also expectation a very strong monetary and fiscal support. What im concerned about is in some instances there is a lack of connection between the ties of the fiscal stimulus and the effects on the economy. Thats where fiscal public spending not spent wisely which is why we are insisting underneath to target the appropriate people, the viable firms. Some countries do that very well. As well as all those that are left behind. And also on that now even more important, invest in the economy of tomorrow. Education, digital, energy. Jonathan composition not size. You mentioned some countries are doing it well. Who is doing it well . Laurence there are a number of countries which are doing well. Especially in asia. Which is where the virus started. We also see many countries doing much better than we could have expected in this crisis because they have put in place the necessary support to firms and to employment. I think they should continue. There are talks of softening the support or withdrawing it. We have seen that in the financial crisis. We should learn the lessons. Its not the right time to do this. Rather if we put in place the good policies, if vaccines arent deployed and fiscal support remains, we could be in an upside with even faster recovery. I hope this is jonathan we all hope so. Laurence boone, oecd chief economist. Thank you. The oecd counting its Global Forecast 4. 2 from the 5 they had in september. Lisa, worry about the damage we could do between now and once the vaccine really start to be distributed widely, worldwide. Lisa we used to talk about the psychological hit of having to reshutter businesses, having to relayoff people who had gotten fired earlier in the year. That has been whats coming to pass. Very interesting to see what we get from the jobs report. Jonathan fry payroll is around the corner. Friday payroll is around the corner. Offering 51. 9 million shares of 44 to 50 apiece. The kind of i. P. O. That gets really, really excited with the Financial Markets. Im jonathan farrow, this is bloomberg surveillance. With the first news, joe biden is stacking up his first nfirmation fight by naming tendon to be bunt chief. Drew swift reflexes on republican senators. Texas senator john cornyn called her selection radioactive. A long time democratic operative who has frequently criticized republicans on twitter. Senate Majority Leader Mitch Mcconnell has set up a vote to advance the nomination of Christopher Waller to the Federal Reserve board. Waller is Research Director at the st. Louis fed. Mcconnell has taken no action to open Judy Sheltons path to the fed. That dims the passes for the controversial nominee. Her confirmation was blocked before the thanksgiving break. White house coronavirus advisors it t. President trumps favorite by abdicating a loosening of social distancing regulations. But she was criticized for describing lockdown as harmful to americans. Atlas is a neurologist with no background if Public Health or infectious diseases. Exon mobile is about to face the biggest write down in modern history. The president will write down the value of north and south american gas field by 17 billion to 20 billion. The company will drastically reduce Capital Spending through 2021. Exxon has been hammered by the collapse in global prices, a Global Supply guts, and pandemic cells. Rash in fuel bloomberg quick take powered by journalists in more than 120 countries. This is bloomberg. Its clear that retailers have been pulling their promotions forward, trying to get consumers to start their Christmas Shopping earlier. In fact, up through yesterday we have seen over 71 billion spent. Thats up 31 over last year. Clearly retailers are trying to get consumers to do things sooner. Jonathan those numbers are incredible. That was john copeland, the Vice President of marketing and customer insights. Alongside lisa im jonathan. Check in on the price action. November, what a month it was for anyone that was along this market. The s p 500 still had a monster month. Small caps a better won, 20 gains also overwhelm n the russell. Eurodollar 119. Stronger story through the month of november. In december just briefed 120, couldnt hold it. Bond market, treasury yield 0. 8573 . What do you think the average on the 10year yield was through the month of november . The average . Lisa 0. 89 . Jonathan 0. 86. Not far off. 86 basis points. Lisa which raises a question, whats the bond market seeing . You raised a question yesterday, is this just a belief that the fed will come in and support val identification wations where they are valuations where they are and press yields. I disagreed. I thought it was more reflection of the real economic reality. This is the tension heading into next year as we look at a now that has a lot of potential to do scarring. Jonathan look at the now. We can do that with donald mullen, pretea yum pretea yum pretium c. E. O. The risk of the w. How big is that risk . Donald we think the w risk is quite real. Without well be in a position certainly that the increase in the amount of mortgage defaults that are likely to take place and credit defaults will be quite real of real. While consensus numbers on Corporate Credit defaults, for example, have a broad range between 3 and 8 . Our expectation is that we will get some sort of cares package, but still in a 4 to 5 default growth. Lisa without that cares package, and just looking at the reality of now, does it make sense to you that last month was the best month for the lowest rated junk bonds going back to 2016 as we saw record numbers of hospitalizations and people increasing number of people filing for jobless claims . Donald we talk about the Financial Market has an indicator of the economy, we have to also rather that its also an indicator of global liquidity. The volume of saves in thecies tefment the amount of liquidity the fed is putting out. The question is, are we seeing a real forecasting of expected g. D. P. Growth or seeing a desperate need to invest in a part of a meaningful cohort of investors arne the planet . Our expectations talking about the 10 year, we are going to see a tremendous drive for yield in 2021 and beyond. Our concern remains that yields are not necessarily indicative of the type of risk thats in the marketplace. We have the opportunity to look at a market that could be very ch in opportunity, or a tale of two cities. Good credit will get unprecedented low spreads. And well see a lot of volatility and that low single be triple c category as we continue to see uncertainty about the economy and the realization of the defaults that are embedded in the marketplace that may be not well priced. Lisa what an agonizing situation for credit investor. I wonder from your perspective, giving yours at bear stearns and head of credit at goldman sachs, is that era of credit mattered, you looked at the fundamentals, is this over . Donald i think we are loving from an environment where its been many years of data tradepping and avoid the industry that was problematic of the year to be a successful manage near an environment which real stock pickers type of market for credit. Im hopeful in 2021 will be onboard. An environment where your credit skills will be rewarded instead of just momentum trading skills which is whats been going on for the last couple years. I think that bodes well for active managers. We havent seen the era of the active manager play out for some time. There are certainly several that did well this year. Im hopeful that this will be the year, coming year, where we see that play out. That credit selection is critically important. And we see that within industries, even parts of travel and leisure. There have been winners, and parts of retailers, winners. Our belief is that selection is critical whether its in Corporate Credit, structure credit, or mortgage credit. You are going to see that data isnt the play but selection is. Jonathan walk us through the alternative space in simple terms. Why you think that might be becoming mainstream because of the forces you have just gone through in the last couple minutes. Donald i think we start to see mainstream because as you pointed out you emphasize that need for return in yield is increasing so dramatically. When the 10 year is at these low numbers. The expectation is the fed will hold rates down. And people need to have cash flowing assets, a strong ref flens for them, and the ability to access returns. They are not readily accessible by all the momentum investors in the world. Our expectation is almost the harder it is to do, the more valuable that task is or that Asset Management skill you bring to someone. We invested in Single Family rentals before anyone else because it required a huge barrier to entry. It keeps liquidity out and you can drive investors better returns by the difficulty of accessing that return. So we see that throughout many of the markets as mortgages are another example of that. Where stress and distressed mortgagings you need a specialized skill. Once upon a time credit was like that. Its goneway as its become more popular and we have had 780 credit managers in the world that hardly allows for great differentiation. But in new areas like stressed mortgages, even more so Single Family rentals, i think you can see a new skill set developing, enabled by technology, that allows you to be in a position to perform for investors in a very differentiated way that isnt data. Jonathan interesting perspective. Come back, soon. Donald mullen there of pretium partners. Huge issue with spreads being spread to the gee dee gree. Lisa you have to wonder what some these people get if some of the companies default. Given how low some of the assets, value are that could potentially be used to liquidate and get paid back, given how disbursed they have gotten with different factors. You whether the down side effects and whether people are prepared. Jonathan there is a lot of pushback against the Central Banks for what they did eight, 23450eu7b months ago. Could you imagine what the economy would look like if they dvent done that . Lisa it would be rough. Im stuttering over my words because im probably one of the people who has been critical. Yet if you look at what they have accomplished, yes, they have cushioned the decline. How much have they taken attention away from fiscal support . That is a key question. Jonathan sure. That was the argument we used to hear in europe a lot oferte last 10 years. Coming up, stuart keyser of u. B. S. On the equity market ripping through the month of november and this december. We are at 37 points to the s p up a little more than 1 this Tuesday Morning. Good morning to you. This is bloomberg. Insurgens of the disease promises nothing good for the u. S. Economy. The continued weakness of the labor market is something that is going to drive the economy down. We are still in a deep recession. There is pept up demand for getting out of the house. Its time to get in big and spend big. Whatever the damage done over the next few months, the entrepreneurial america will come back. This is bloomberg surveillance with john keane, jonathan ferro, and lisa. Jonathan good morning, good morning, to the second hour of bloomberg surveillance live on bloomberg tv and radio. Alongside