The coming days will be pivotal in reaching a trade deal. Two of the most senior officials from the Brexit Campaign left Boris Johnsons inner circle last week. The chief negotiator says he will not be changing his position. Hurricane iota will be slamming into Central America today as the strongest hurricane of the year. Now a category five storm, it will bring torrential rain and catastrophic wind to an area still reeling from a storm two weeks ago. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im Mark Crumpton. This is bloomberg. Vonnie it is 1 00 p. M. In new york, 6 00 p. M. In london, and 2 00 a. M. In hong kong. Im vonnie quinn. Welcome to bloomberg markets. Here are the top stories we are following on the bloomberg and from around the world. U. S. Equities in the green after that positive news on a covid19 vaccine, sending shares tied to an economic reopening higher. Stayathome stocks lag. Bonds on the move. We will be speaking to ed yardeni. And a closer look at modernas vaccine that is said to be 94. 5 success against the covid19 virus. And with the virus surging around the globe, and the future of the work lace still uncertain, we will speak to Christian Ulbrich, president of jll. First, lets get a quick check on the markets. Equities rallied on the coronavirus news, and they continue to with the data 1. 25 . The pack by the nasdaq up by. 75 . The, 90 basis points. 0. 8 . Oil up by for more on this, lets bring in ed yardeni of yardeni research. Much movement in bonds today on the news of this second Success Story in terms of a vaccine. What does that say to you . Been watching the weekly data on the feds balance sheet, and it shows they have been very aggressive in what i call qe4 ever. On march 23, they announced they would have an openended commitment to buy securities without telling us for how much and how long. They have been doing it in billions since then, more than offsetting the issuance of treasuries by the government for all of this covid emergency need. I think the fed has been doing its best to keep the bond yield under 1 . So far, so good. Vonnie are we talking about different markets with different philosophies, mindsets for outcomes in the pandemic . The stock market has good jobmazingly anticipating a vshaped recovery in the economy. The economy only had a twomonth recession. It is bizarre, but it only basically lasted march and april. We have never had a lockdown restriction. Hadhe lift downs lifted, we cabin fever, some of us got Unemployment Benefits bigger than in the past, stimulus checks, and the economy has been on a vshaped recovery since october. It could start to weaken because of the second round of this pandemic, but the stock market is telling us that right now we are going to get a vaccine. A week ago, we had the visor news. Pfizer news. Now we have moderna. Both are similar genetic technology. I dont own the stock, i wish i modernasou can put in the refrigerator, whereas the other you need massively cold temperatures. Vonnie what you said makes a lot of sense to somebody who is not really involved, but if you are a Small Business owner who has had to shut their doors because ppp money ran out, or you had to let go of staff, or if you are somebody going to a food pantry that has never been before, what you just said doesnt make sense. Know. It is terrible when you focus on people in business that are in pain from this, not talking about the health care consequences, which have been horrible for a lot of families. The stock market is very forwardlooking. The markets are telling us that we are going to survive this, come out of it. But as you said, people have clearly been hurting, and they will continue to hurt for at least another three to six months until everyone can be vaccinated. Vonnie do you feel we need a fourth round of stimulus . Im increasingly hearing that it may not be necessary. Given your stated outlook, you may be in that camp, too. Ed to your point, people that are suffering could use some additional cash to get them through all of this. But i have to deal with the reality of politics in washington these days. It has been partisan for at least the past four years. I dont know that it will suddenly be bipartisan. It is conceivable we dont have the political will to get another stimulus package. The good news is the cares package passed on march 27, there is still a lot of cash int has been sitting savings, a Record Number of liquid assets. People are still cautious and fearful, so we need to get the vaccine. Once we do, a lot of this cash to go back into the economy, Financial Markets. But it has been already, which is by the economy and Financial Markets have been performing better than one would have thought. Challenged Service Companies are hurting, but anything housing related is an absolute boom. Anything related to homes has been on fire. Vonnie janet yellen was on a panel earlier on and she specifically mentioned she doesnt think the fed should target individual groups, which i thought was interesting. It is the current position of the fed that everything that can be done in that direction should be done, if possible. Is it possible to target individual groups . If so, why shouldnt the fed do that . Ed the fed was originally created to give us financial stability. They didnt have that double mandate that was passed by law in the 1970s to keep inflation and unemployment low. Everyone knows that is a tough job to perform because sometimes they are contradictions, when unemployment is low, the economy is doing well. We have seen conditions improve until the pandemic it. But youn has been low, are right, as of late, the fed has said that they believe they have some responsibility for targeting specific groups. When we say specific groups, we mean the people that have been hurt the most, remain unemployed. , the cares the tools act provided 450 billion earmarked to give to the fed as capital to give out. In many ways, the fed has become the banker of the united states. They have the ability to lend 4 trillion out if they need, but they didnt come close to making those kinds of loans because Everything Else they did worked so remarkably well in providing for the economy and Financial Markets. They didnt feel like they had to make those loans. It looks to me that they are gearing up to use that lending power to help some sectors of the economy. Whether they should or shouldnt , we could spend hours on that one. They were created to be independent. Is nok their independence longer part of their act. Vonnie i know that you had been looking for yields to go above 1 . Where are you on that, when do we see that happen, do they stay there . Ed what i have been looking for, as the economy improves, particularly if we get another stimulus package out of washington. Is the fed is probably going to continue to stimulate. That should drive the stock market higher. Ifterms of the bond yield, the bond yield goes above 1 , i will not be surprised if the fed initially officially announces yield curve targeting. Not only would they be pegging the fed funds rate near zero, they may announce they would do their best to keep the bond yield below 1 . Forcesas up to economic operating in a free market fashion, we probably would see the bond yield move higher than 1 . But as we discussed, the fed has taken on more responsibilities, and it seems to be giving more weight to employing people and inflation. They said they would be more than happy to see inflation above 2 . They havent been able to get it at 2 in the last 10 years or plus. Vonnie maybe a little bit of imbalance. Thanks very much, ed yardeni. Coming up, it is one of the biggest bank deals since the financial crisis. Billiondollars bid. This is bloomberg. Vonnie this is bloomberg markets. At 11. 6greed to billion deal that will make it the Largest Regional Bank in the u. S. Americanbuying bbvas banking operations. Its a valley took a hit from the pandemic. Us for more is hannah levitt. Is this a done deal . Thanks for having me. They announced it this morning. They said they expect it to close halfway through next year. The calculus in pnc . The deal for they had a bunch of blackrock cash they wanted to put to use, but why this particular use . Hannah pnc did this during the last crisis, where they bought another smaller plate bank. Heading into this year, they sold out of their massive blackrock stake. The ceo was very vocal about looking for potential opportunities to do a deal here. This is on the backdrop of pursuing this National Expansion strategy. In the past few years, its been largely organic, so this is supplying that capital to really jump up the ranks in terms of their size. And he we had bill on mentioned that they are always looking at potential deals. Obviously, one of the ones they were looking at. A few hours after the news, we got news in spain that bbva is merging with another bank in spain. Helpful, does it help them to get rid of the u. S. Operations . Hannah it certainly frees up bbva to pursue a deal of its own, anything ranging from buybacks to pursuing another deal. This could serve to do that for them. Vonnie it may help with the regulators in spain, too. So further Bank Consolidation in the u. S. Is this the start of it now . Hannah that is the forever question. We saw that when bb t and suntrust merged last year. It is still a question now. Clearly, we have seen it happening today. What we know is that rates are low, they will likely be low. Meanwhile, banks are spending a lot on technology. The combination of these factors creates an environment where they want to bulk up their size a little bit if they can. Vonnie we will continue to follow your reporting for any more murders on the way. That is bloombergs hannah levitt. What the former fed chair janet yellen have to say about fiscal policy, and more highlights from the Bloomberg New economy forum. This is bloomberg. Vonnie this is bloomberg markets. It is time for the latest Bloomberg Business flash. Buy depot agreeing to building distributor hd supply for about 1. 9 billion. That reunites the Home Improvement chain with its former subsidiary. Home depot paying a premium of about 25 . The biggest meat producer in the u. S. , tyson foods ported higher than expected earnings. The demand for beef and pork offsetting beaker chicken sales. It says the pandemic may increase cost and affect demand. The chairman of the sec is stepping down. Jay clayton is leaving at the end of the year. His term was set to expire in june. That is the latest Bloomberg Business flash. The Bloomberg New economy form is underway with business and political leaders discussing various issues from the fallout of the pandemic to the future of global trade and climate change. Thet yellen weighed in on necessity of fiscal policy going forward. The notion that the fed can do all that it is required at this point to support the economy is just wrong. The fed is really pleading for fiscal relief. I believe it is essential. Course, we know the former fed chair has also been placed as a potential treasury secretary candidate. For more on the mornings on how limited centralbank action can be, we are joined by tom orlik. Give us the motivation behind what the former fed chair said. It is not usual for former fed chairs to comment on Monetary Policy, but she clearly did. Tom this was a very senior Economic Panel officials, janet yellen, larry summers, the former chief of the reserve bank of india, mervyn king, former governor of the bank of england. There was a clear message coming through the paddle. Central banks have done what they can. They have stabilized Financial Markets, the crucial contribution back in the beginning of the covid crisis. Now Interest Rates are at zero. It is not realistic to expect Monetary Policy to do the heavy lifting or even the lighter lifting of driving the recovery. It is time for fiscal policy to step forward. Vonnie she made that point, but she also said several other things, like the fed should not be targeting particular groups of people. She made some very strong comments on the fed. It made me think that maybe she was thinking about a treasury role. She said she would not comment on whether she was asked i would consider going to treasury. Tom no comments about whether that treasury role is in prospect. But the discussion, as you say, did go wider. By larryrn articulated summers, echoed by others on the panel, was about Mission Creep for Central Banks. If we think about the last 50 years, the period since the great financial crisis, Central Banks have stood out as the most effective policy institution. Jobtary policy has done the when other institutions maybe have not done so well. There is a tendency when we think about issues like climate change, elevated levels of unemployment for black and african americans, to think that Central Banks can step into that role and help provide solutions. The message coming from summers, echoed by others on the panel is, that is just not what Central Banks can do. If they do their job right, they can contribute at the margins, but really climate change, differential employment levels for different groups, these are not things which Central Banks are equipped to deal with. Vonnie u. S. China relations were near the top of the agenda. What was the consensus there, if there was one . With a president elect biden and his team preparing to assume responsibilities for the u. S. Side of that relationship, clearly, it was near the top of everyones minds. We have a stark warning from Henry Kissinger saying that without good channels of communication between the two sides, we could be facing a catastrophe comparable in scale to world war i. Practicald a suggestion from former secretary guy paulson, of course, the who created the strategic economic dialogue which helped to frame the relationship between china and the u. S. In the obama era. What paulson was calling for was Something Like managed reciprocity. Be intensewill competition between china and the united states, but the u. S. Needs to manage that competition in a way which retains the andfits of openness dynamism, which is a longterm driver of u. S. Competitiveness. For theseveral messages presumably incoming president joe biden. Hank paulson talking about coordinating the global economies to get a framework for upgrading the upgraded trading system, but there should also be targeted reciprocity on china. Are the two compatible . Is that theognition Trump Administration, while they have made a number of tactical blunders in their relationship with china, did strike a chord with American Voters and some in europe about its reframing of the china relationship as a more competitive relationship. Paulson plea from and im sure we will hear it echoed from others as the new economy form continues that competitive relationship can be managed in a way that does not lead to an ever widening risk. Where there are areas where there can be Mutual Benefit like climate change, the relationship can be maintained. Vonnie thank you so much, tom orlik. That forum continuing all week. [ sigh ] not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkinbath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkinbath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkinbath provides independence with peace of mind. Mark im Mark Crumpton with bloomberg first word news. Former secretary of state Henry Kissinger says the Incoming Biden Administration should move fast to restore lines of communication with china that freighted during the trump years. Speaking at the Bloomberg New economy forum, dr. Kissinger said if not, the u. S. Could be risking a military conflict. Unless there is some cooperative action, the world will slide into a catastrophe comparable to world war i, with that is even more difficult to control. Of thate technology period. Mark kissinger, who paved the way to nixons trip to china, said he hopes the shared threat of the covid19 pandemic would provide an opening for political discussion between the countries when joe biden takes office. New York City Schools will be the test rateas for covid19 remains below 3 . Led mayorection rates bill de blasio to warn parents that schools may be closed today, but the rate dipped over the weekend. The mayor says we have a fight had to keep them open. The citys average of new cases jumped to more than 1000, something de blasio called very worrisome. French president Emmanuel Macron says europe cannot go bac