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