Percolating issues, whether it is trade tensions or brexit, which goes to the heart of the uncertainty in 2021. Francine there is a lot going on, and i guess this is the concern, you have a million angles of things that turn out sour. Bloomberg first word news in new york city with ritika gupta. Senatorone republican dix President Trump will get on board with a bipartisan 908 billion senator bill cassidy told foxnews Senate Majority leader mcconnell will back it, too. Cassidy is a member of the Group Pushing the measure. President trumps lawyer, Rudy Giuliani, has tested positive for the coronavirus. According to reports, he has been hospitalized in washington. Giulianis son says he is getting great care and feeling well. Giuliani has been leading the effort to overturn the results of the election. In china, exports jumped in november by the most since 2018, pushing its trade status to a monthly record high, and thermined underlined how pandemic and global related goods is helping the chinese economy rebound. It is a potential blow to new york citys stature as the u. S. Home of the financial industry. Is moving its financial unit to south florida. Firm leaders have been persuaded that they can move jobs out of new york to save money. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im ritikauntries, gupta. This is bloomberg. Francine . Francine if you look at global stocks, there is a bit of a downward movement. Lets look at europe. European stocks dropping, the pound weakening the most in three months. A couple concerns brexit talks could collapse. That is one of the number one concerns in the u. K. , but there is also talk about sanctions that mike pompeo could put on chinese officials. We understand that they could go up, so that could box in the Biden Administration, certainly for the first couple months, into a feud with china. On brexit, im looking at pound, 1. 3262 is the pound versus dollar, and then eurodollar, the one that the pros look at, 1. 2089. Lisa you are looking at s p futures that are down, 45 percentage points. Of apercentage point decline, not that big of a drop from alltime highs that we reached on friday. You are seeing the dollar again a touch versus the chinese weakest yuan, the versus the u. N. Coming off with trade tensions getting themed, more than the expected export data out of china overnight. Italian 10 year yield hitting that record low, 0. 513 percent. The expectation is that the ecb will do more as the euro area does not necessarily come to an immediate agreement on fiscal support, and copper off some of the recent highs in the postcrisis era. As people take a look at the possibility of a Global Recovery and perhaps have a little bit of skepticism, but just a little. Francine happy monday. There is quite a lot to get through the week. Europe, Christine Lagarde and the European Union, there is what they will do in terms of the stimulus or not. Then we have stimulus with talks on going. Thisg us to talk all about is patrick armstrong. Patrick, thank you for joining us. A million things going on. It is brexit, stimulus in the sanctions onxtra hong kong. The markets are nearing record highs. What will they look at for impetus . Patrick the thing that the markets are looking onto is that we will almost certain he a sharp recovery in 2021, so with the success of the vaccines and the number of vaccines showing high efficacy, you can put a base case of very strong Economic Growth in the second half of next year. Economies reopening, getting past the big headwinds of lockdowns and partial lockdowns. That is the driver of the cyclical recovery story. Youve also got fiscal stimulus. Although things are looking good, they are not good yet. Monetarymy still needs and fiscal stimulus. We have a situation in the United States of almost 1 trillion. All these things come together coming together create a bullish narrative, that there are other minor things ticking away as well, creating more sure more shortterm uncertainty. Francine how much is the vaccine a boost to the economy if we dont have debt relief, or some of the pandemic relief measures still needed in large parts of the economy in many countries around the world . Patrick i think we are going to continue to get them. Any politician knows you cannot punish people who are unemployed due to the pandemic. If you want to get reelected again in democracies, you have to show youre willing to support the economy. The republicans were short, indicating they might be more hawkish on debt after it became apparent that biden was the next president , but very important, Senate Runoffs in january in it may swing reporter it may swing voters away from republicans if they are too tied with the pursestrings. It will start to wane in the second half of next year, but hopefully the economy is Strong Enough by that point, and there are jobs growing again, that we shouldnt need it. Lisa how much is this fiscal support already priced in . Patrick everyone expected some fiscal stimulus. Getting close to 1 trillion is good news because Lindsey Graham and mcconnell were both talking about debt and deficits in the days after the election. Getting to the trillion, biden characterizing it as a starting point, and there will be more from there. We will see. But very important. We need to have Monetary Policy working together with fiscal policy. I guess all of the central bankers have been we will see how yellen can do in the previous central banker. We will see. It is very important. Unemployment is still very high, definitely need to fiscal stimulus in the coming month. Lisa you talk about the high Unemployment Rate and the struggling economy. The fact that we are reaching record highs on record indices around the world, at one point will the economy matter again, when you look at some of these metrics, versus the expectation for more fiscal support . Patrick you have to be artistic to justify buying a lot of equities right now because multiples across the world are at record highs. The s p 500 is at 99 percentile on trading earnings, 99 percentile versus its history on forecast earnings. And to the 100th percentile on price for sales. Unprecedented multiples at a time where we have got unprecedented low Interest Rates, i suppose, as the backdrop. So you dont have many alternatives. I think that acronym about there is no alternative really is working. It is very hard to deploy cash and save assets because youre looking you are losing real purchasing power when you stay in more riskfree assets. Francine i love that, patrick, you have to be very artistic. Inot of the markets, a contrast to popular belief, are very artistic. Patrick if there is a population that is not willing to take a vaccine, anything that creates a risk to recovery in the second half of next year. Companies are realizing that they can get by with less and not rehiring along expectations, there are still risks there. Growth we anticipate is coming off even getting 5 growth in the u. S. Economy, which is a very strong number, still puts us below the trajectory that we were on before the covid pandemic. We are getting growth from a lower base, but anything that hinders that potential growth, i think could trigger a correction at these valuation levels. Does copper need to correct . Im running with this analogy all day of an artistic trait. Is now the time . Atrick we dont have position on copper. We had some iron ore producers if you look at chinese iron ore demand, china is a map i suppose the world wants to follow in terms of economic recovery. The chinese economy is doing very well. And you factoring is very strong. Manufacturing globally is strong. I think copper and Clement Tilly incrementally is part of the fiscal stimulus, part of the ev vehicles, all of those kinds of things. It has probably run a little too far, but longterm if we get back to that growth trajectory, i think these prices are both fair. Francine thank you so much, patrick armstrong. Coming up, we also talk with the london mayor, sadiq khan. We will talk about brexit. We will talk with him of course about covid and vaccinations. That is at 6 00 a. M. In new york, 11 00 a. M. In london, and this is bloomberg. Now, neither have said we will sign your bill. Thats fair, we have final language. Our final language probably come out earlier this week, and so people can look at it and we can modify it as needed. But indications i get, the pain of the American People is driving this, and i am optimistic those leaders will come on board. Lisa that was senator bill cassidy, a republican from louisiana, talking about the fiscal support package. It seems to be gaining steam in washington, d. C. , which puts a strong focus on fiscal support packages in the United States as well as the euro region. Joining us again is patrick armstrong. We were talking about how markets are depending on the fiscal support packages to pass. What is the deadline, the nearterm risk of a market turbulent effort based on some of these deadlines and the talks that are ongoing in the you you debt in the eus well the echo patrick i dont know if theres a specific deadline, but if you dont get the stimulus, it creates the risk of a downward spiral, so people relying on stimulus jobs stimulus checks, they cannot pay their rent, and then the landlords have issues. When the landlords have issues, the banks have issues. It is a risk, but i dont know if there is a specific deadline. You do seem to be getting close to it. People are as stretched as they can be almost. It is needed soon. I dont think there is any disagreement and that is why we are getting something bipartisan. Lisa do investors care at all about the massive amount of debt will the up and sovereign economies around the world . Patrick it is something i look reallythe time, and we almost have to ignore it unless you have a longterm view. It is really not driving markets right now. Debt is viewed as a positive, so any spending is viewed as rewarding. It is a function of Interest Rates being zero, so that is essentially costless. There will come a point where Interest Rates rise and the curve starts to steepen, and then the massive amount of debt that has been built up have to have an exit strategy, whether it is monetization or austerity still to be determined. I think it will be the monetization direction that things go. Francine if Central Banks do more from here, how painful will be readjustment once we get inflation, and how far away is that . Patrick the good thing is that Central Banks, almost all of them, indicate once there is inflation, that is not going to be the end of stimulate of policy. Howell said the economy can run hot. There will not be powell said the economy can run hot. It is hard to say when inflation will come, and i think there is going to be a transition in the economy. If you look at m2 growth, it is running at 24 growth over the past month. That is higher than the spike in the 1980s when there was rampant inflation. He begets money in the hand of investors. Qe buys treasury, and i think if there is a transition in policies where money goes to spenders who are spending on goods, Biden Administration might facilitate that, that might be the very beginnings of some inflation. As the higher cost structure well, such as higher minimum wages, those things will also provoke inflation. Francine i hope you are not thinking that we would not talk about brexit, that you would get away with it. Will we get a brexit deal, patrick echo patrick . Patrick i think so, yes, on 11th hour deal. Bojo has indicated he will walk away from talks if there is no progress. Sterling selling off. In our story sterling portfolios, we have kept all our cash and moved it back into sterling in anticipation there is some sort of deal. We wont know until the last minute. Lisa did you move it sterling today . Are you investing on the dip . Patrick exactly. This morning we did not expected to be dipping the way it is, but we moved everything back into sterling now. We expect it to be progress this week. E. U. Leaders meeting on thursday, friday, that can go into the weekend so i dont know what the official deadline will be there. This weekend is as late as it can go to get to what will be a final deal. Lisa assuming it is into sterling and perhaps out of dollar, there is an expectation in markets, the consensus euro will continue to strengthen versus the dollar, based on the Risk Appetite markets as well as ongoing stimulus efforts in the United States. Do you agree with that consensus . Patrick i do. It will be interesting what other Central Banks do right now. There is a pain point where the ecb has to do more, they will never target the currency rate officially, but all of the Monetary Policy stimulate of policies weaken our countrys currencies when we put them in place. Strong currencies are needed everywhere for headwinds everywhere else in the world. There are punitive measures on trade and you may see more Aggressive Central Bank policies everywhere in the world just to combat their own strength. Does qe actually work anymore . We have seen it for such a long time and with such a large amount. At what point will he become negative . Patrick i dont know the efficacy of qe anymore. Qe1 was very effective, to be too is less effective. Where we are today, i dont know if it creates any economic roles at this point. It gets money for free and that is put into risk assets, and you are seeing credit spreads now, you are seeing share buybacks, alltime high multiples. It is definitely good for asset prices. In terms of the economy, i think it has very little efficacy at this point. Lisa patrick armstrong, thank you so much for joining us. I think a lot of people are coming to the same conclusion that you are when it comes to quantitative easing, yet expecting more. Coming, jens nordvig. That is at 6 00 a. M. In new york, 11 a. M. In london. This is bloomberg. Ritika this is bloomberg surveillance. As early as this week, facebook will be hit by federal and state antitrust lawsuits. Bloomberg has learned it has used the social network of of flaunting competition. Airbnb and doordash are set to begin trading this week and longawaited ipos. Both companies are boosting price ranges as they head into the final stretch of marketing shares. They are each expected to raise as much as 3. 1 billion. Ipos on u. S. Exchanges already raised a record 156 billion dollars in 2020. The pandemic has taught independent Investment Bank if you lessons. The founder sat down with bloomberg for an interview. The big lesson is liquidity. My hope is that companies will rethink what optimum capital structure is and not price into perfection, which is the expected case. And what can happen ritika that is your Bloomberg Business flash. Lisa thank you so much. You cannot keep a good market down. In the u. S. , s p futures are lower, but off the earlier lows, now down less than. 4 , looking now at the dollar, which is strengthening just a touch versus the u. N. After reaching the weakest in since 2018. Just interesting considering trade tensions c seem to be overwhelming. 0. 513 , the low, italy 10 year yield. A lot of speculation whether there will be a surge after copper with copper after the economic recovery after people begin to right size their expectations for the global economy. Great chartere is a on the bloomberg by terminal users, and citigroup is saying if you look at technicals come it looks overbought. How, i know you were waiting for the exit update because of where we are. Pound is definitely slumping. Investors fearing a breakdown in talks. I would caution a word of advice, that they are also speaking to their own constituencies. We know a british official warned that talks over a future trade deal with e. U. Could fail. The Prime Minister is also ready to walk out. He probably needs to say that at home, i dont know if that means a deal is off the table, but certainly the pound is sliding, both against the euro and the dollar, and again at the u. S. 10year yield, if you look at european stocks, it is really banks and retailers leading the loss on that index. We will talk about brexit and u. S. China, whether President Trump really boxing in the Biden Administration in a feud with china. We will speak with the copresident. That is coming up shortly, and this is bloomberg. Francine this is bloomberg surveillance. Tom keene with a welldeserved day off. Are workingiators to finalize a deal by this evening. Joining us now is wolfgango piccoli, tenny of intelligence director of research teneo intelligence director of research. Both threatening to walk away. Ownhis just briefing their constituencies at home, or could we really not see a deal . Wolfgango i think there is a bit of both and that there is a lot of politics being played, from the u. K. Side, but also french politics is not helping at this point. It is not about fish. It is much more about the level Playing Field in the governments, and the clock is ticking. In our view, a deal is still within reach. This is a crucial week, but there have been other crucial weeks in the past. We are just getting some headlines from our sources, according to an eu diplomat. The u. K. And the eu have not bridge significant differences. Some progress has been made, but not decisive. Will both sides compromise to get a deal . If this is not about fishing rights, who will have to give and in terms of governance . Wolfgango to a great extent, it is going to be the u. K. To take a decision here. A decision in the domestic debate has been framed as a sovereignty issue, so it has become politically charged, but it is clear that while on the fishing front, there are ways to go around it and defer a final decision, other issues are much more complicated and much more political. That is why i think they are struggling with brussels today. There is supposed to be a negotiation between johnson and von der leyen that is supposed to take place today. The other issue from the eu side is also what happens to the bill. Oming on today in the commons lisa it always takes two to tango. We have been dealing with these negotiations for years now, and it always feels like they are never going to end, but who is at fault here . Who is the main sticking person in these negotiations that is 99 hour . T to the 11. Wolfgango there were set to be extremely complex negotiations from the start. Politics on the u. K. Side has complicated things , with seeing the election, changes of government, some backandforth there. , the keye other hand leverage was with the eu, which has maintained a fairly strong, consistent and united front despite recent noise from paris, and the big ask was on the u. K. Side, so it would is not particularly surprising that johnson is still struggling to make up his mind and to convince many within his party about this. Euis also clear that the will be the last one to leave the table at the end of the day. The eu will not leave the table december, so it very much depends on london at this point. Lisa if i am reading into what youre saying, the u. K. Has much more to lose than the eu here, so it is up to them to adhere to certain concessions. What kind of Political Support this Boris Johnson need at this point to get something through . Wolfgango we talk about politics at the end of the day because economically, it is clear that was a deal, the u. K. Will suffer. It depends which number you want to put on it. Decision. Litical is a political cost potentially for Boris Johnson. So is a delicate calculation. Hat he has to make around, soc is still i think we need to look at this. N a broader context the historyat does look like for Boris Johnson . Does he remain Prime Minister . Dealango in our view, a is still more likely than not. I dont know whether it is going to be this week or next week or on 31 december. Advantage that Boris Johnson has come a we think the party is still popular. There are no potential contenders at this point. There is no significant risk despite the noise we have seen over a couple of difficult pieces of legislation. So i think he needs to show that he is playing hardball until the last minute. He will need to get some concessions. Lets be very clear, even if we get a deal done by the end of the month, this conversation will continue for the next 10 years because unwinding the relationship will take a very , so this is an appetizer, if you put one to put you want to if put it that way. Francine good, i hope our brexit editor is watching. [laughter] i have a side job as a room rater. Here with the first word news is ritika gupta. President elect joe biden has chosen his health and Human Services secretary. Thejob will be to curb coronavirus pandemic and expand the Affordable Care act. U. S. Attorney general william barr is considering whether to step down before President Trumps term ends next month, according to the new york times. The president was angered when barr acknowledged there was no evidence of widespread voter fraud in the election. The Trump Administration is set to sanction more than a dozen individuals for their role in the recent disqualification of hong kong legislators. And a british official warns that talks over a trade deal with the European Union could collapse today unless theres progress in the next few hours. Prime minister Boris Johnson is set to speak with Eu Commission president ursula von der leyen. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Francine, lisa . Francine thank you so much. Coming up in the next hour, we continue tracking covid19 the day before we are due to have a vaccine in the u. K. ,e talk with Joshua SharfsteinBloomberg School of public healths vice dean. That is about an hour from now. This is bloomberg. Lisa this is bloomberg surveillance. Still with us is wolfgango teneo intelligence director of research. We have the question of the 2. 2 trillion euro plan that is being negotiated by the European Union. Some disagreement over whether that can go through. Do you think from your Vantage Point people are too complacent about this passing given some of the disagreements inside the European Union . There is an think element of complacency that is about the second stage, and i will get there. I think a question, deal will be eventually reached. When we look at the objection by hungary and poland, they are two different kind of domestic politics playing around this in both countries. The reality is that hungary and it is hard to see them saying no to that money. So it is a complicated negotiation. It might cause further delays down the line, but we will get there. When we look at the recovery fund, the complacency here is about the ability of countries to actually absorb this money and make the most out of that. On that front, we are concerned about countries like italy to a certain extent spain like italy, to a certain extent spain as well. I think that is been but the market has been neglecting. Lisa build on that, the idea that there could be this uses of this money. Like what . Wolfgango so far, only eight countries have presented a draft of the initial resilience plan after the countrys were asked to do that. Italy is normally able to absorb less than 40 of standard funds from the European Union. So there is the absorption capacity that is an issue. It is an issue in terms of putting to better putting together plans that are credible. In netherlands, there is a critical election at the end of march, and there will basically not be money just spread around by politicians to consolidate their support because that seems to be deplane in rome right now, for example. Francine a lot of people are over 2020. At 2021, the risks geopolitically, today we can see mike pompeo impose extra sanctions on very high up chinese officials. Does that box in the biden adminstration . Do you look at 2021 for u. S. China tensions . Talk us through the main critical points we should be focused on. Wolfgango i think there will be lots of continuity in the early days of the biden adminstration, not besides not because hes been boxed in by trump. Think hes been boxed in bipartisan commitment in the u. S. To adopt this confrontational stance against china. There are some areas where he can make some moves. For example, some target extensions, allowing American Companies to export technology to certain chinese companies, so granting more of these licenses, but biden has to be very careful because he cannot be seen as giving to the chinese in exchange for nothing. Think there has been too much u. S. China and not the european relation. The reality of the agenda is fraught with difficulties. Taxation of digital companies, dealing with china, the issue of privacy in data regulation, trade. So yes, the choreography around a bilateral transit lending relationship will improve dramatically, but whether they will be able to deliver any meaningful way is very questionable. View, based on what we have seen so far this year, there are two areas where politics will play a key role. First always the role of the state. What happens in 2021. The power goes from the basic liberties to the role of the state in the economy, so that will be a huge question mark. The other is about fiscal policy. If we assume Monetary Policy has run its course, the question becomes only fiscal policy. Fiscal policy by the definition is more political and more difficult to model. That is where politics would play a key role in our view. Francine thank you so much for all of the insight. Scandal piccoli wolfgango teneoi there, intelligence director of research. Heres ritika gupta. Ritika bloomberg has learned a deal would create an entity valued at about 9 billion, amongst the largest blank check deal this year. Safee is blocked by pay is backed by blackstone. Chickfila is suing top poultry producers for alleged pricefixing. Says they conspired to keep prices high. Tysons says the claims are unfounded. The suit is the latest in years long antitrust litigation over chicken prices. Faber doesntxel expect to combined with Credit Suisse anytime soon. Always good to talk about the missed purchase, but it is very hard to implement. These are very unusual times. It is very high uncertainty. In session and certain environment, such talks would be much more difficult. So i dont expect these things to happen. Ritika over the weekend, Credit Suisses chair said a merger wouldnt be unreasonable. That is your latest Bloomberg Business flash. Lisa thank you so much. Coming up in the next hour, terry haines, pangea policy founder. Talking about that fiscal support package in disgusting washington, d. C. From new york and london package being discussed in washington, d. C. From new york and london, this is bloomberg. Is bloomberg. The rightsident has to pursue every Legal Recourse to make sure this was a free and Fair Election in georgia, and we know that these audits have turned up thousands of votes that were initially uncounted. Ive called for a signature audit. The buck stops with the secretary of state. They are wondering when the world they will get some covid19 relief. They havent gotten any from Kelly Loeffler in months. When she had a chance to stand up for ordinary people she bought 600 she thought 600 was too much. She was busy dumping millions of dollars of stock, profiting from a pandemic. Was georgiaat republican senator Kelly Loeffler and democratic raphael warnock. Joining us is number chief content officer Marty Schenker is bloomberg chief content officer Marty Schenker. We have a lot to talk about. Thatere another narrative is taking place . Marty that is the real question. A lot of the coverage is focused on Donald Trumps claims that the election was rigged and that it fraudulent in georgia. Theres speculation that that is going to depress gop turnout. That could threaten republican chances in georgia, and the Senate Majority for the gop. If the democrats win georgia, doesnt mean we will have a much bigger stimulus bill . If you look at what the market is looking at, how much of a game changer will this actually be . Marty i do think that obviously, joe bidens agenda would be exponentially made easier if the senate were to flip to the democrats, and the prospects for stimulus, a second stimulus beyond the one they are looking at right now, would improve dramatically. I think it is an uphill battle for the democrats. I think it is going to be very difficult for them to gain both of those seats. Andisa is President Trump his efforts in georgia helping or hurting . Marty that is the real question. Combating messages when he went down there saturday. One, telling all of the republicans to register and vote, and at the same time saying theres nothing but fraud involved in the Georgia Election process. So it is really questionable how that is going to come out. Lisa theres a lot of question about President Trumps support bipartisan agreement being drafted currently in washington, d. C. Is President Trump more ok with the idea of Financial Aid to states and local governments, which was the main Sticking Point for a long time . Marty that is the real question. Is kind of casual nod that he would support whatever the senate and house come up with does not show he really, truly knows what is in the bill. There is significant state and local aid in the compromise. Which willn is donald trump sign that legislation . And if he doesnt, is there enough support to override a veto . Francine through our own reporting, we are also expecting mike pompeo to put extra sanctions on higherups in the china in china. How difficult will that be for President Biden come january . How much does that box in the biden adminstration . Marty there is some narrative that says for every step that donald trump takes against china, it actually increases joe bidens leverage with the chinese when he takes office, that he can sort of use those as negotiating chips to gain some advantage. But it definitely does tie his when hemewhat becomes the president for his state department to deal with china. Theres no question about it. Francine how much of our reporting will focus on Rudy Giuliani andy fact that he has Julie Giuliani and the fact that he has contracted covid . Does that change anything in the immediate term . Marty it probably limits his tv appearances. Obviously he is not going to be showing up in court in any of these cases which he has universally lost. So i dont think we are going to spend a lot of time covering Rudy Giuliani. We all hope he comes through this in fine shape, and so far most of the people around them have come a but it is just going to sideline him as this lead spokesperson for these fraud claims that trump is pursuing. Francine marty, thank you so much. Marty schenker, bloombergs chief content officer, nice and early for us in washington. Coming up in the next hour, we will talk about the markets, exit negotiations on going brexit negotiations on going. We will also talk to sadiq khan, the london mayor, about lockdowns, reopening, and brexit and what that means for the city of london. That is coming up shortly. This is bloomberg. When you switch to xfinity mobile, youre choosing to get connected to the most Reliable Network nationwide, now with 5g included. Discover how to save up to 400 a year with shared data starting at 15 a month, or get the lowest price for one line of unlimited. Come into your local xfinity store to make the most of your mobile experience. You can shop the latest phones, bring your own device, or trade in for extra savings. Stop in or book an appointment to shop safely with peace of mind at your local xfinity store. The pound sinks on reports Boris Johnson is close to pulling out of brexit talks. Michel barnier says they are not close to a deal yet. Coronavirus vaccines begin in the u. K. Tomorrow. The u. S. May file a suit by the end of the week if the fda gives emergency approval as infections hit a alltime high. President trump and Mitch Mcconnell are set to be on board a 908 lien dollar package. Negotiators are set to unveil details today in hopes of a deal before the new year. Good morning, everyone. This is bloomberg surveillance. Lisa and francine from london and new york. Tom keene is off today. I know you want to talk about valuations in the market. There is exit because it goes back to valuations. Because it brexit goes back to valuations. Lisa and why wouldnt we talk about brexit . When do you think we are going to be done with it . Francine never. We are making a bet coming