The influencer jon ferro for you on Bloomberg Radio, bloomberg television. Got all of this going on this morning. I want to do the markets to start our simulcast in this hour. We will do the data check as we talk here. Spx up 0. 7 , and once again, the nasdaq less. Is the trend in place . Jonathan the trend is in place, and the small caps outperform. Many people, and the words of jonathan callup, willing to look of Jonathan Golub, willing to look at the forward outlook. Tom we are getting into all of the year ahead looks and all of that parlor game. D a fewwhat ferro di years ago. Forget about it, wait for march. Would you say the consensus right is cyclicals, materials, and small caps . Jonathan overwhelmingly it is the consensus. That is the story. The other consensus story as well is the weaker dollar. Socgen out to 1. 27 on eurodollar, year end 2021. We still havent got through those levels from late august. We didnt close below them yesterday. A little bit of weakness again this morning. Started to fade again. That is the call that sticks out. Do we finally get the 2017 had story of synchronized Global Growth . Tom i get it. Stronger euro, stronger yen. ¥95 is unimaginable. That ifturn to the idea you get that, those countries will react because they dont like it. We will have to see how that plays out in the coming weeks. What we are not talking about is the bond market. Lisa abramowicz dozed off in the last hour. Why are bonds not part of the discussion . Lisa because growth is not necessarily going to take off. I am looking at the russell 2000, 1 of the consensus trades, up 25. 5 in the past two months. This idea that the growth area is going to go gangbusters, and yet long term, how does oath accelerate given the overhang of debt, given the 20 trillion of extra debt this year . I am looking at that suppressing yields, not just the idea that the Federal Reserve is going to buy more treasuries, and wondering, is it incoherent . Is the bond market sending a message that is incoherent with the growth story we are seeing in stocks . Tom and now a question i ask folks once a year because i really dont care, lisa, how about those auctions yesterday . Wasnt it mixed . Lisa way to sell it. Thank you. You nailed it. I will say this, they didnt do so hot. People actually cooled a little bit on the fiveyear treasury auction. We are going to get a seven year later today. Dealers taking down more, yields come again a little higher. Tom what is the mood in london that you see on equities . Jonathan on the equity market, the mood is really picking up. Ive got to say, people are becoming more constructive. If you want to go to cyclicals in the u. K. , look at the weighting of the ftse, heavily weighted towards the energy story, the mining story. People are becoming increasingly more constructive on the u. K. As well. Tom that sets up the landscape. On this tuesday into a huge economic day in america tomorrow because of thanksgiving jon, thanks giving his pilgrims, turkey. Lisa hes trolling us all morning. Jonathan ive only lived there for four or five years. Ive only been 245 thanksgivings with you. Ash only been to four or five only been to four or five thanks with you. To patrickget armstrong of plurimi wealth. Patrick following pfizers first announcement on the vaccine, the markets really pricing and now the recovery. Hat is going to be lasting thanks giving week is when people get their outlooks out. With the growth you get, the cyclical rally is what is priced in. We have been repositioning our portfolio basically, getting into some of these more value and cyclical companies. We still have a lot of her largecap growth companies, but we really removed the bias to be underweight cyclicals coming into this month, and we have neutralized that over the last couple of weeks. Jonathan where does gold fit into all of this . Patrick basically, november has been a month of everything that is great is being funded. You sell those things to buy things that have been terrible. Gold we still own. We came into the month with a 6 weight. Weve cut that in half to 3 in our multiasset portfolios now. The outlook for gold was based on a blue suite, whether it be massive amount of debts, huge deficits, and they need to monetize that in the future. Now that it is looking like a republicancontrolled senate, that spending is not going to be as rampant as it would have been otherwise, and the cyclical risks are starting to participate with the vaccine. We still like gold. There is still a mountain of debt overhang that will be needing monetization, but probably not as extreme as it might be a few week ago. Lisa has the strength in the bond market been in the coherent with this bullish call on growth been incoherent with this bullish growth . Been incoherent with this bullish call on growth . Patrick you have to see higher bond yields, things in emergingmarket currencies the thing dollar, but with currencies and bonds is they are not just Market Forces. Central banks are still the drivers of these things. Theres no let up from the fed and purchasing bonds. I dont know what level they will start to worry, but yield curve control will start to come in if the economy is not reaching its potential and bond yields get past 1. 2 . So it is not just Market Forces driving bond yields. The new pain is threshold for this market. Youve got a highclass problem. You bought credit in march, which really reduced the yields. What do you do with that debt now . Do you sit and hold it . Do you sell it . You were talking about using the winners as a Funding Source to buy something elsewhere. What you do with the credit you bought back in march . Patrick we havent sold it yet. We were buying bonds yielding 4. 5 Investment Grade debt, yielding 1. 8 today, so it is not going to govern inspected inflation that you do have credit risk with. Valuation is definitely not. Ompelling you are not preserving your capital purchasing power if you it in corporate bonds, so pushes you up the risk spectrum. I think that is where we see the euphoria right now of chasing cyclical assets. We are trading extreme alltime highs almost, so it is not necessarily a healthy dynamic, but it is eight any mac that Central Banks and Monetary Policy forces investors to make those decisions. Tom jon ferro influences there with that important question. Price up, youll down. Is there a history where it rotates to stocks . Patrick it is hard to assess exactly where it goes, but that is what is happening right now. In march, butld thehowing corporate bonds, banks are going to start paying dividends next year, youre not getting a real yield. Many investors put their capital at risk. You do have to take more risk to do that now. Jonathan patrick, great to catch up. Patrick armstrong of plurimi wealth, thank you. If we keep this surface level, if you managed to get in there when credit was following and got high yield with an 11 yield , youve got some pretty nice income over the next five years. What you do with that . You could cash in a massive capital return right now, or just sit on it. That is the decision people like africa like patrick have got to make. The people got it really right where the people who bought credit in march. What he would do now i think is an interesting call. Tom i thought your question was actually a really serious question. My experience on this is getting out of a successful parade is. Eally easy it is a four step process, not out of bonds and into oil lightly lisa did with two oil drums in her living room years ago. It is out of bonds, into cash, andn cash and then what that is the then what that is so brutal. Jonathan many people saying we can chip away at that. That money needs to be deployed. Where are we now . We we still have lisa still have that overhang. My question is how much is going to go into stock, how much goes into bonds, and a much goes into seeking some alternative bonds. People want to cash, especially without the vaccine of a 70. Jonathan how much of it just stays allocated to cash . Thats a fair question, but a lot of it sits there. Lets say youve got up barbell on institutional money and your or 20, fine, you need to cash on the side to barbell. What as an influencer, should people be using their cash on . Jonathan i dont think i should be recommending trades for anyone out there on new makeup lines. [laughter] tom and i used to talk about the line outside new york. Im not even sure that store is there anymore, but you should never listen to us. When we talk about it, it is probably the top and more the ways than one. Karnathonmercedes mercedes carnethon, northwestern Diversity School of medicine professor. Lisa with the first word news,. Ritika with the first word news, im ritika gupta. President elect biden will reportedly name michelle for annoy as secretary of defense. She would be the first woman to run the pentagon. Former fed chair janet yellen be the first woman to be treasury secretary of she is confirmed. Yellen pushed for additional fiscal spending to help the economy get through the pandemic. She is likely to win support from both wall street and Democratic Party progressives. President trump is finally calling on his agencies to participate in the transition to a biden adminstration. Still, President Trump says he will contest the outcome of the vote. British Prime MinisterBoris Johnson has concerned that Englands National lockdown will end. It will be replaced by a tougher system of regional restrictions designed to last until the spring. Everyone who needs a vaccine will get one by april. 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. Dosing,pective of the if you get vaccinated, it is clear that the vaccine is safe and has an effectiveness of 100 , irrespective of the dosing. That is currently important to remember. And of course, we all have that cash we will have that description with the fda as well we will have that scripture and with the fda as well. Jonathan that was the astrazeneca executive Vice President speaking with bloomberg. Alongside tom keene and lisa abramowicz, im jonathan ferro. Heres the Tuesday Morning price action. We add to the gains of monday. Every monday seems so far to be a vaccine related story, and the story is positive. This is the Tuesday Morning price action. Cant believe this marriage has lasted as long as it has come at. 3600 on the s p 500. Eurodollar, 1. 18 67. Who did they move off the show first, tom or me . [laughter] tom hes going to leave me for some influencer on instagram. Lisa tom, its the greatest hits this week. Youve got kicked the ball hard, and its tuesday, not monday. Tom we welcome you to this simulcast on Bloomberg Radio and bloomberg television. I out to be a little sleepier. The vix now under 22. That is a big deal. Weve been looking at the pandemic, and we look at it now guise of thanksgiving. On joins us ofth the Northwestern University school of medicine. Would you fly this week . Wasedes i have to say, i very tempted to wish that i could be somewhere a little warmer than chicago right now, but i think it is really not safe. What concerns me is the crowds and the number people at the airport, and what i would be bringing from illinois come which currently is a high burden states coronavirus, to my loved ones in other cities. I am not willing to take that chance personally. Lisa could we have had vaccine with our families if there had been better testing, if it had been more available and faster to return . Mercedes i think testing is a huge part of it because it does tell us who is infected, but it is only those individuals with symptoms or direct exposure that prevent themselves for testing. We still dont know what is going on with asymptomatic transmission. That is really the wild card here. Testing wasnt going to do the trick on its own. That needed to be combined with everyone adhering with the recommendations to stay six feet apart, socially distance, wash hands so that we can drive down transmission to a level where we can get around and see one another. Jonathan the hope has come all the way off the back of the vaccine news of the last month. I just wonder from your standpoint how quickly things can normalize and the vaccinations can ramp up, to the extent we need to pull back on these restrictions. Do you have a timeframe at all . A colleague said to me we are closing in on the horizon. Gettingill start vaccinated in december and the First Quarter of next year, following with other vulnerable populations. So there is what we hope to be an end in sight. However, without the general public adhering to the behaviors to reduce transmission, this virus is going to scorch the town on its way out the door. Tom on the pandemic and the hope of a vaccine, i love the idea in articles over the last 24 hours from distribution to arm. Explain that to us. It is like the cable tv last mile thing. How hard is it to get the armenation to my sor left to my sore left arm . Know, two ofyou those vaccines require ultracold freezers that are typically only in major urban centers, academic medical centers. That is one piece of it. Aey has been has to get to given region. Once it gets to that region, appointments need to be scheduled, eligibility for it particularly as we have a phased rollout has to be verified. There are multiple steps, and we can forget the steps of the individual. Are they willing to receive the vaccine . I think that is where we are going to have the biggest challenge. The data i saw last night said 58 of americans were willing right now to take a vaccine, and there was even concerned about the vaccine coming from medical perhaps also who we would like to vaccinate first. We can have it, but will they come is the big piece lisa perhaps is the big piece. Be airlines will require it on your passport that you have taken the vaccine. What will travel look like in the future, disclosing that you have been vaccinated to get yourself back into a public forum. Mercedes i am not sure that is ever going to be legal in this country. There are requirements for vaccinations for school enrollment, for example, but there are waivers to that for personal and religious reasons. Are going to be able to overcome the american feeling of i can be responsible for myself in order to require vaccination in any setting. Jonathan lets finish there. Final question from me. The lesson from this pandemic, lets hope we never go through this again. But western democracies have really grappled with the idea of bouncing restrictions with civil liberties. What is the lesson for western democracies through this pandemic . Mercedes i think the lessons are that weenie really need to print out that we really need to promote collective action. It is because of this individualism, you cant tell me what to do, the government cant step in and regulate my behavior , youre not going to see western democracies flying overhead, telling people to go back indoors. But what really does need to happen is that we use this at the example of how quickly things can go when always think about is my liberties and not about someone elses. We have an effect prolonged the byage from this pandemic this slipshod approach to managing it, and i hope we can use this as a lesson Going Forward because there will be more Infectious Diseases that come. Jonathan professor, appreciate your time. Always enjoyed catching up with you and getting your perspective. I think that is the challenge as we work our way out of this. , and whathe lessons you do in the meantime . Freedoms, you give up maybe you dont get them back in quite the same way. Tom theres two ideas. The first one is everyone is talking about covid this, covid that. Weve had three or four covid events to get to a pan covid vaccines out there. On the civil liberties, theres going to be a lot of vaccine pressure. Jonathan coming up on this program, frederick michigan, as chair yellen lines up to become second. This is bloomberg. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Jonathan from london and new york, this is bloomberg surveillance. Here is the price action. Equities advancing. If you have the cyclical trade, you will like the look of this market. Our on the small caps. The nasdaq is outperformance on the small caps. Limited movearket, higher in yields. A little bit higher on the 10 year. On the 30 year by three basis points. The purple little bit steeper. The curve a little bit steeper. If you are bullish on the outlook for growth in 2021, this is where you want to see things move. Switch up the board one more time. We start with the aussie dollar where the outperformance is. Also in crude, in copper. Copper in a june 2018 high. Crude at a post pandemic shock hi. A post pandemic shock high. Gold with a difficult chart. 1809 an ounce. The progrowth people in retreat. Most of 2 move on bold. Ist we are trying to do people our conversations with yesterday afternoon with not only people that know janet yellen, but understand the theories and bringing the theories over to policy. No one has done the movement of theory to policy like Frederick Mishkin of columbia university. He is a former governor of the Federal Reserve system. Rick mishkin, i want to go to chapter 16 of one of your books, i think it is the 47th edition. It is simple. Policy andout fiscal government budget. How far removed will that be for chair yellen from the every day of the Federal Reserve . The Federal Reserve is not supposed to focus on the budget directly, but clearly it is very important in terms of the ability for Monetary Policy to do its job, and particularly in the environment we are in now. Fi