Begin with some working news. Lisa Moderna Vaccine information has come out. Rate is what we saw, i higher efficacy rate then pfizer. Last week, people were talking about pfizer and how it had to be kept at ultracold to birchers until a couple of days before it was distributed ultracold temperatures until a couple of days before it was distributed. This one has a 30 day shelf life at standard refrigeration. This is very promising, and we are seeing a reaction in markets. Jonathan they are the headlines. Lets plug them into the financial markets. There is the pop on what irna. Equity futures in the United States, on the s p 500 come on the nasdaq, and on the russell as well. Futures, up russell by a little more than 2 . A record high at the close on friday in the russell, and we advance once again. I want to check in on the bond market. Yields higher, curve steeper. Switch of the board. Bonds lower, yields higher, up three basis points on tens. On 30s, we advance three basis points. In the space of one week, improving news on the vaccine front from pfizer, and now moderna, at a time when infections in the United States above 11 million in the United States. Tom my wisdom is the dow almost printing 30,000 on futures. We did that november 9 with pfizer, and we do it again. Yet, 29,998. Ere jonathan this is the story that has dominated the program. The near term is getting darker. Tom no question. Jonathan on the horizon, just a little bit of optimism, from pfizer and now from modern. We got to get to the expert, sam fazeli of Bloomberg Intelligence. Can you compare what we have learned from moderna this morning and contrast that with what we learned from pfizer last week . Dr. Fazeli yes, good morning. Can i just say that i am kind of speechless, to a degree, at this level of efficacy. I was really getting ready for 70 or 80 . I am not going to call this better than pfizer because we are dealing with such few cases, but thank god it is higher than that number rather than below it, and we get more from these guys. We are getting more with regards to the statistics. That the 11hearing severe cases so far were all on placebo when you read further down. That is great. If that carries on, we will be very happy. Lastly, only 15 people in the 95 trial were older adults, but it does not tell us which were in so that is, something we would love to know. A difference between 94 degrees, and as lisa mentioned, the refrigeration headlines. Are all of a sudden messenger more distributable worldwide simply because of the freezing to refrigeration path . Dr. Fazeli yes, that is pretty much as simple as it gets. Release that first came out from moderna is actually incremental. We knew already that the storage and distribution was at 20. We knew it was ok to keep it in the fridge at the 28 degrees for a certain period of time. They have just extended that. With got to get more as time goes by about how long these things can be kept. It just makes the use of the vaccine easier at the end of the line, and of course, it is already easier to distribute then pfizer. Tom right now we are confusing everyone because i refuse to quote celsius, and dr. Fazeli refuses to quote fahrenheit. Lisa it makes it a lot easier to get the Moderna Vaccine distributed if you dont have to have some cold ice on it here. I am wondering whether we can take a 30,000 person study, when we are talking about sample sizes of five people or 11 people, and extrapolate that out into something that can really immunize an entire world population. Is this sufficient in your eyes . Dr. Fazeli it is a start, and i think this is what i have been saying with regards to pfizer. The levels of effectiveness that we expected at this point. Everyone was psychologically, mentally preparing themselves for 50 , 60 , 70 , which would have been good, but these are levels that nobody expected. Again, as i say, we have taken the first step, from the first set of dice, and we got two sixes. It is a great start. Jonathan just a final question from me. Is there a difference in providing this information in a press release compared to a peerreviewed journal . Can you compare and contrast that, just how this information is distributed to the public . Dr. Fazeli the absolute level, you have to give it up because it takes about to get these documents public. You need to know how well the two groups were balanced. If there were lots of people with comorbidities in the Placebo Group which did not respond to the vaccine as well, i doubt that is the case because theres already large numbers, but you do need to see that. Jonathan sam, great to catch up, as always. Sam fazeli of Bloomberg Intelligence on that breaking news. Modernaust turned in, giving us an update on some of the data from their vaccine trials. The Coronavirus Vaccine found to be the 4. 5 isnt effective in their analysis. This is the price action off the back of that headline. Moderna up about 10 in premarket trading. Have a little we bit of fuel for it. The nasdaq rose over. The russell, the small caps rolls up. The s p 500, a record high at the close on friday. Set to add some weight to that as we count you down to the opening bell. Doing us now is ben laidler, Tower Hudson Research ceo. The story over the last week hasnt changed. It is the shortterm risk, the longterm opportunity. Does the news this morning help us become more tolerant of some of the more negative stories we have heard over america over the last weekend . Ben absolutely. It gives you more visibility on where we are going. Accelerates this rotation into cyclicals and maybe values of the market, but has lacked the courage to make that leap. Weve now had this double catalyst where we are through the election and we can face forward into a very big 2021 growth rebound, and the vaccine or the incremental vaccine news, i think weve got a lot more still to come here, helps us bridge that gap over the winter infection spike to a gradual renormalization of activity, and the way to play these cyclical stocks, where i think we are massively overestimating the operating leverage. Tom you have been way out front on this. What we have is the distributed base with maybe some catharsis in march or april. What is your percentage of visibility out 12 months, 24 months, 36 months . Idlerig is the la leap . Ben i think it is huge. If i look at those reopening stocks that have been most impacted by this, even with rally of the last couple of weeks, they still underperformed the sort of market darling work of 80ome stocks way percentage points. They are not making any money. All of the biggest surprises have come on the positive side, and revenues are still down between 30 to 100 . I think this rotation has sort started, andting the fuel on the fire is investor positioning. Just in the last week, you have seen it begin to turn and actually turned quite dramatically. That i think is the fuel that is going to come into the market here. Lisa what on a day like today are you actually buying or doing . Theres a feeling that longterm is going to be a good scenario. Shortterm, there is still a lot of volatility. You still active on a day like today . Ben your average investor is not carrying anything is much risk as they should be right now. Overweight small caps, overweight industrials, consumer durable. We are not overweight cyclicals or value. It is more of a cyclical story than a value story. I would make a distinction there. But i would be focusing on where are you getting the most operating leverage to the sort of fear of the virus beginning to moderate over the next few inths, and i think it is these small caps, industrials, and real estate particularly. And it takes you outside the small caps. If you really want to get that play, youve got to take it to europe, which has been beaten up so badly, and it has that mechanical composition towards the names you are talking about. Can you walk me through your europe call right now . Ben i would also say the cyclical bid of emerging markets. Yes, domestic cyclicals in europe, for us that is financials. Its pretty much the cheapest, most hated, and one of the larger sectors in europe. We are overweight there. But also, everyone who has been hiding out in china and north asia, firstin in, first outcome of the rest of em is really a much more cyclical bit of em relative to this u. S. Reopening story. Very depressed earnings, a lot of operating leverage. I guess the one caveat on europe is just watch the dollar, and the strength of the euro. A lot of these european corporates are very global, very international. To the extent we get too much of a euro move, that is definitely a headwind, but europe, much cheaper, much more depressed earnings, and just seeing a lot more operating leverage here. Jonathan great to catch up, as always. Then labeler thereof Tower Hudson Research. Thank you very much. We start another monday morning with some good news for you worldwide. This time it comes from moderna. The Coronavirus Vaccine they are developing is found to be 94 effective in analysis. Some encouraging signs around the storage of that as well. Off to the races before the news, and off to the races after it. Tom i am going to set it just below the enthusiasm that we saw with the pfizer lift, and that may change. I am looking at dow. I know look i know john publix at s p 5 i know jon looks at s p 500. We are not on speaking terms about that. Will we get there i say a 21 vix . Jonathan i think it is fair to say we are from different generations. We cant imagine the vix is going to go a little bit lower on this. The nasdaq, that is the story we should sit on for just a moment. We are pretty much unchanged on the session. It is that tugofwar still. How may times did we have that chat last week, the tugofwar between the nearterm risks, the longterm opportunity, between big tech and smallcap value . Lisa a lot of people are going to be asking the question, will the big tech names continue to underperform, will it actually lose value . Butds are shooting higher, not by as much as you may expect. You dont necessarily see people start to worry about what happens when yields go up dramatically, which matters for big tech because that has been a rate play. If yields are so low, big tech is worth it at these high valuations. Questions. Jonathan 97 big questions. Jonathan 97 basis points at the top of the range, that is the number to watch this morning. Coming up on the program, dr. Robert murphy, Northwestern University professor of infectious diseases. For our audience worldwide, this is bloomberg surveillance. Ritika with the first word news, im ritika gupta. There is word that another vaccine has been found to be highly effective at preventing the coronavirus. This time it is moderna that is out with details of a late stage trial. The drugmaker says its vaccine has 94. 5 efficacy. As oats also suggest the vaccine may block severe cases results also suggest the vaccine may block severe cases. This after another vaccine from pfizer and biontech was found to be 91 effective. Of joe biden say that i National Lockdown are not on the agenda. They say the preferred approach is a dial that turns up or down based on severity. U. S. Cases have hit records over the past two weeks. Boris johnsons attempt to get his premiership back on track stumble before they even begin. He is being forced to selfisolate after meeting testedker that positive for coronavirus. He hoped to gain control of the National Agenda following a tier four at 10 downing street. Themberg has learned president plans several new hardline moves against beijing in the remaining weeks of his term. Future president s will find it say thatthe they future president s will find it suicidal to reverse these changes. The largest margin of victory at the masters and 23 years. Global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. The overwhelming majority of people taking the vaccine, then you have only one hand and effective vaccine, on the other hand a high degree of taking the vaccine, we could start getting things back to relative normal as we get into the second and Third Quarter of the year, where people can start thinking about doing things that were too dangerous just months ago. Jonathan that is the optimism from dr. Anthony fauci there. Plenty of optimism in this market right now. Alongside tom keene and lisa abramowicz, im jonathan ferro. Heres the price action a couple of hours out from the opening bell. On the s p 500, we advance. You get a bigger bid on the small caps in america. The russell getting another lift. In the fx market, the euro slightly positive. Eurodollar, 1. 1844. Lisa talking about the muted response in treasuries. Up just three basis points on the 10 year to 0. 9275 . This off the back of the headline from a dharna that the Coronavirus Vaccine from moderna that there Coronavirus Vaccine is found to be 94 effective. We are trading on the good news. We are not trading on the fact that the u. S. Recorded more than 2 million covid cases in the last six days, on the fact that Governor Whitmer of michigan came out with new restrictions come on the fact that governor inslee of washington came out with new restrictions. It is not about the short terms for this market. It is about the back end of 2021. Tom the pandemic news is grim, not only that, but also in south korea and continental europe. Right now we are going to do what we feel is really important. We do the markets, economics, the politics, the international relations, but you need to understand the science of what we are talking about. Robert murphy is a claim that Northwestern University in infectious diseases, and long ago and far and way, went through lynn enter through leningers biochemistry. Explain how messenger rna goes out of the cell, into the cytoplasm, and kill this virus. Are we assured that can happen . Dr. Murphy apparently so. Messenger rna vaccines that had been put out there in tens of thousands of people. This is not a small number of people. I think the pfizer one was over 40,000, and the motor no one 30,000. A lot of people have taken this vaccine. 50 ould have been happy if or 60 of them were protected theygetting it, and are 90 and 94. 5 . This is way beyond expectations. Mrnait is original in research as well. What will be different in this distribution versus a polio vaccine, a flu vaccine, or bacterial shots as well . Dr. Murphy it is a vaccine, just like the other ones you mentioned. Messenger rna is a very small protein, and its fragile. It has to be kept cold. The difference between the coldr and moderna is how does it have to keep. He pfizer one has to be kept at 70 celsius, or 90 fahrenheit, very cold. It is doable. It can be done. But that is a challenge in the whole supply. The moderna one has to be kept cold, but once a get into the market, it can be just above freezing, so it is going to be a little easier to move that around. But either one of them, it can happen. We are probably going to need both. Lisa i am going to go home today and talk with my eightyearold and 11yearold son and tell them there is a vaccine. Another efficacy study coming out. And they are going to say, when is the pandemic going to be over . What is the answer based on the models you have seen . Dr. Murphy a year from now. Lisa really, a fullyear . Walk us through what happens over the next year. Dr. Murphy these companies have to submit their emergency use authorization. The data will be gone over by an external advisory board, and they are going to make sure it is safe, and they are going to continue to follow those patients that are in the study. Will be Vaccines Available probably at the end of december, most likely. They will be maybe 20 million doses from each one of the companies, and they will get out there, and who is going to get those first 20 million doses . Right now, there is a lot of reluctance in the world to take it. Theres a lot of people think it is going to bask. Theres people against vaccines. ,ut once the data is out there people are going to be lining up for this thing. They will start pushing the vaccine out, and it is going to come out to different populations. People on the front lines. People with high risk for severe complications. Diabetics, older people, people with underlying cancers, for instance. The higher risk people will get it first, and then i would think that by the Second Quarter of next year, there will be enough companies out with a vaccine that it will start really penetrating into the general population, and then basically jusco lineup and get it basically just go lineup and get it. Jonathan for our audience worldwide, we are with dr. Robert murphy of Northwestern University off of the back of news from moderna that their corunna voice vaccine was found to be 94. 5 effective. I want to turn for a moment and have a look at what is happening in the United States. Equity futures are picking up, with a bid on the small caps. We advance 46 points. For our audience right now, we are grappling with the same question we grappled with last week. How much bad news can this market ignore in the short term on the hope that a longterm spatter longterm looks better . Can you really untangle and draw a hardest engine between the two stories . Shortterm not great, longterm looks better. Does the shortterm shape what the future looks like . Tom there is always a balance of that. Notice the red on the screen for the nasdaq 100, where this is a rotation. I would point out as you go back to dr. Murphy in chicago, i would point out very importantly that the rebound in value cyclicals, midcaps and the rest of them isnt even back to the previous regression. We came up off pfizer, we came up off moderna, but we are not even back to trend, they were so discounted. Jonathan i just want to finish with a final question on the price of the vaccine. These are private companies. Some of them have worked with the government. Any idea how much this might cost to provide the general public with a vaccine like this . Dr. Murphy the u. S. Government is already purchased hundreds of millions of doses, so it is already paid for. It will go out for free. What it will actually cost is anyones guess. Jonathan great to catch up this morning. We appreciate y