unveiled as soon as today and a final vote could drag into the weekend. anna, where are we in terms of sewn in for this weekend as you said, it looks like the boat could flip into the weekend. which means you would need a stopgap spending measure to extend government funding or a brief government shutdown over the weekend. i do think we are actually going to get a good deal at this point, it's just a matter of timing. alix: what is going to be specifically in it? anna: the main provision is $300 billion for small businesses, part of that will go through the paycheck protection program. we are also looking at $300 per week supplemental unemployment benefits. $600 to $700 check for individuals. those are the main provisions. the two tricky provisions that have held up talks so far our liability protection, aid for state and local governments. looks like that is not going to be in the deal. alix: thank you a lot for the update. in the meantime, the labor market showing some >>, rising to its most in about three months. joining me now, michael mckee. set the stage for us, mike. mike: it's an interesting story, it shows the difference between fiscal policy and monetary policy. let's hope that they come through with fiscal, because jobless claims are in terrible shape. 862,000,ast week from which itself was an increase. labors to show that the market is deteriorating. we saw the same with the philly fed numbers today. from 27, but the jobs part, from 27.2.ex, a .5 -- 8.5 from 7.2. the monetary policy side, housing starts were up more than 12% on a year-over-year basis because of course thelowered ine are seeing the lowest mortgage rates ever. so, we are seeing the power of the fed, but they can't do anything about the labor market because interest rates don't matter here, the virus does. alix: 2.6 730 year fixed? i didn't call the bottom this time. mike: you are jealous. [laughter] alix: mike is going to stick with me. jay powell struck an art been a stick tone and promised that the fed would keep dividing support. based guidances outcome and tied towards progress for employment insulation goals. if progress was to slow, the guidance would convey the intention to increase policy accommodation to a lower expected path of federal funds rate and a higher expected path on the balance sheet. overall the interest rate balance sheet tools are providing powerful support to the economy and will continue to do so. alix: joining us now, nathan, head of global background -- global macroeconomic research. thanks for joining mike and i. what did you make of powell? some of the rhetoric was that it could be a goldilocks situation but the fed will keep their foot off the gas pedal for a while. nathan: roughly saying i would say that the fed mark -- matched market expectations yesterday. didn't clarify the forward purchases, asset primarily driven towards getting inflation back to 2% on average over the medium term. but that clarity will also drive some support to markets and tweak the economy in the near term. beyond that, powell was very dovish in the press conference and made it clear that the fed would stay stimulative, use its tools to provide necessary support to the economy. implicitly he said look, if we see a further deterioration in the economy over the next six weeks as a result of the coronavirus, we will have another meeting soon and we will do more early next year. mike: i thought it was interesting, too, nathan, that the fed chair address the fact that the forecast had been wrong. when you look at what they were thinking about what happened to the economy in june and what they think is going to happen to the economy next year, things have gotten a lot better looking. they are holding rates steady but saying maybe we are going to see a much quicker rebound. i think this is very much a subtext of the press conference yesterday. that on the one hand powell sounded cautious and guarded, as any good central banker should. in making promises about how they would deploy their tools. but if you read between the lines, he came close to suggesting that we are hoping we areat more than what doing now may not be necessary. specifically the, as you point growthe forecast marking that was stronger over the next few years with unemployment expected to be a little bit lower. the vaccine is on the way. and it looks increasingly likely that we will have a meaningful fiscal stimulus package that will help dredge the gloom over the next few months into the brighter, sunnier second half of 2021. do you interpret that to mean that the economy will be going on all cylinders or that the fed will have to start hiking sooner than the market anticipates? nathan: well, my sense is that the economy will be moving on all cylinders during the second half of next year. that there is going to be a meaningful snap act and the level of economic activity. particularly in the services sector. in that context i think it is altogether possible that we could see various kinds of bottlenecks and shortages emerge in the economy that put some temporary upward pressure on inflation. i think the fed is going to have vigorous debates during that time in how to talk about it and how policies should respond. my strong expectation is that the fed will look at it thoroughly and it will be, as a bloomberg article said this week, and inflation mirage. it was did also think interesting, mike, how he couched the pe situation. i could be wrong but i don't thing i have ever heard him talk about price-to-earnings ratios, saying admittedly that they were high but maybe not as relevant in a world where we think the 10 year treasury will be lower than it has been historically. mike, did that also talk more about the inflation m for the short-term? like hey, go buy stocks? -- mike: no central banker is going to tell you that they have inflated a bubble. even though we have seen some high multiples. cameron has a good article today where he looks at this and says, you know, it's a stretch, what jay powell is saying. if you look at the earnings that can't beat, can't be explained by earnings and the fiscal plan of the companies, you do see a very large, as cameron puts it, hopes and dreams component of this built-in because of the fed . you wonder, nathan, how long it can go on. the equity markets continue to rise because they think the fed is always going to be there. well, i would say that this market is aggressively priced. ad i think it is priced for favorable scenario. one where we are able to get the vaccine out, where the economy rebounds during the second half of next year. we are monitoring policies to stay stimulative. those are the favorables here that are broadly consensus and from that perspective i think that the economy is likely to provide support for that next year. by the same token, there are downside risks that you have to be careful about that are not priced in. we also know that trees don't grow to the side. at some point equities will be, if they continue through this trajectory, at some point equities will become overvalued. it's just hard to say where the point is, given the low rate environment and this new world. like the fed has really anchored the front end and it seems like they are trying to do similar things with the backend through the qe programs. what happens if we get some serious stimulus, though question mark game that out, 900 million this week, what happens if we get something more substantial? do we break through 1%? is there ever a steeper yield curve? , if we get the stimulus i do think that it could put some upward pressure across the yield curve. i think a part of that is a pure supply issue. in addition, with stimulus and with recovery, the economy is going to for a while feel somewhat stronger. but as we get into 2022 and into the medium term, my sense of the economy is that it is going to look and feel a lot like it did before the pandemic. inflation,owth, low and i think consistent with that we will see a persistent low rate environment for several years. mike: let me wrap it up by asking you, nathan, if you agree with the question asked yesterday by jay powell, paraphrasing here, are you guys basically irrelevant because it is only fiscal policy that will get us out of the whole right now? say that theld relative importance of monetary policy versus fiscal policy in the current environment has very much shifted towards fiscal policy. that said, i think we sought yesterday, the markets responded to jay powell. fed announcements and policy moves continue to be important for the market and the economy. really want to give that monthsver the next few and longer term, structurally, i think that the challenges are much more in the fiscal policy domain then the monetary policy domain. alix: michael, thank you so much. nathan, you will be sticking with me. talking about stimulus, house speaker nancy pelosi said progress was made this morning on stimulus talks. we will see if we get anything this afternoon or early friday morning. the number they are working with is $900 billion. next we get thoughts from nathan about europe and what to do in china for the growth potential there. this is bloomberg. ♪ in on theheck bloomberg first word news. i'm serena mitchell. state unemployment benefits unexpectedly jumped to the highest level in three months with initial jobless claims rising to 885,000. continuing claims that the number of americans seeking extended jobless benefits rose. government still haggling over a benefits package, americans getting a $106 -- a one-time $600 payment with weekly supplemental unemployed benefits and aid for small businesses. democrats would have to give up their demand for state and local governments and republicans will drop the call for lawsuit liability protection. the french president emmanuel macron has tested positive for the coronavirus. the presidential palace said that he took the test as soon as symptoms appeared and that the symptoms are mild. he will continue to work while he self-isolate's. european leaders will be restricting their movements after recent contact with the french president. at a final battle in britain over fishing rights with the european union, one of the major issue standing in the way of a post-brexit trade deal. the focus on fish is a sign that the two sides have largely settled their differences over another issue, a level playing field for businesses. globalnews 24 hours -- news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. thanks, serena. interventions countering upward pressure on the frank after being censored by the u.s. catherine beausoleil asked about claims of currency manipulation. >> we are not currency manipulator's. we look forward to a constructive dialogue. ofx: still with me, nathan pgm fixed income. this is my fancy way of asking you if it was currency intervention or we are actually talking about a weaker dollar, here? nathan: i think it's much more about the broader church actor he of the currency markets and the downward movement of the dollar that is impacting the swiss franc. has workedreasury consistent with legislation to look at countries, their bilateral surplus with the united states and a surplus overall and whether or not it regularly intervenes and currency markets. by those metrics, the swiss national bait checks the box. but it's really hard to say that swiss are the manipulating their currency. it's still a strong currency. so it didn't make that cut, but it is still on the currency to watchlist. i wonder what you think he is going to have to do about that. you could make the argument that is fundamental, chinese data holding up much stronger than anywhere else in the world and if the dollar continues a downward slide, what does china do? nathan: my sense is that if the you want -- the wand was market-driven as a currency -- the yuan was a market-driven currency, it would be 10% stronger than it is today, reflecting the realities that you point out on the cyclical condition of the chinese economy. china is simply way out ahead of everybody else in terms of its recovery and has become the exporter to the world, exporting ppe and medical supplies, tech products and so forth. in a functioning market, its currency would have appreciated substantially. be pboc is going to squeamish about that and continue to lean against it. but i would also expect that over the next six months to 12 months, as china continues to outperform it will see gradual ongoing appreciation of the chinese currency. expect the new biden administration to have some quiet but very intense conversations with the chinese authorities about currency valuation and currency management. quiet? that would be so strange, nathan. nathan: it's going to be different, it's going to be different. alix: what is your idea about how chinese currency develops? some of it has done well and you could see the pboc pulling back next year, but that there is also opportunistic restocking and if that comes to a pause you could see difficulty with growth holding up. how do you look at the chinese trajectory? by every metric i can look at, the chinese economy seems to be quite strong. exports have led the surge over the last couple of quarters. but the consumer is gradually bouncing back. investment is solid. it really feels like the chinese economy is humming on all cylinders. it really is an extraordinary performance, given where the rest of the world is. accordingly, i think the pboc in recent months has taken some steps to reduce the amount of stimulus in the system. i would be surprised if they implemented a full-blown contractionary policy, but i think we will see income quarters moving towards a but i thinkce area that china's growth will stay solid and over the longer-term it will gradually converge on the other emerging markets and i think we can expect five, 6% growth from china in the years ahead. alix: hey, nathan, it's always a pleasure to talk to you. next time i hope we can get you in the studio. someday. coming up, the amazon help wanted ad share is all over city buses. even between songs on classic rock stations. but the hiring spree has some critics. this is bloomberg. ♪ alix: welcome back to "bloomberg markets." i'm alix steel. the world's biggest online retailer, amazon, has made a real point of a starting wage of $15 per hour and we crunched the numbers to find that amazon is actually dragging down peg and the logistics industry. as a result it has changed from being a career destination to one that is seen as being a notch above a burger flipper and that when amazon sets up shop in a community, wages actually fall. in the 68 counties where they opened a large facility, industry compensation slipped i 6% in two years and they don't return to the pre-amazon level until five years after the facility opens. amazon didn't care for the numbers, the company called the bloomberg conclusion false and said that many of their employees join amazon from other jobs in retail that tend to be predominately far -- part-time at substantially less than minimum wage. what's next? so far they have not been able to keep unions out of the warehouses but now the department store union got the government go-ahead to form a union on behalf of workers at amazon. workers are going to vote on a howosal and we will see that shakes out. do you see any sort of ability to get pricing power, union power, wage power back, that's a big question to the downside of a huge monopoly. compare that to the wall street versus main street situation. for the trading division they 20%.oosting i up to two totally different worlds right there. getting a quick check on the markets, you are looking at the s&p and nasdaq sitting at record high here. stimulus helps, maybe that three-month jump in jobless claims will be enough to get d.c. to come down to a deal, 900 billion dollars in stimulus helping to boost markets and weigh in on the dollar. took me a long time to get to work today, the northeast is digging out from the seasons first big winter storm and we will break down what that means, the price tag, and the economic impact with our key research disaster modeler. this is bloomberg. ♪ alix: live from new york, i'm alix steel in this is bloomberg markets. we just got hit with the first big storm of the season, from virginia to new york. brian sullivan has been tracking that storm and joins us with the latest. was it as bad as we thought? and how long does it last? >> it should be winding down in new york now. the latest out of central park was 10 inches as of 7 a.m. this morning, so i am sure they squeezed out a few more inches. they were expecting up to a foot. i think we got close to that in many places in new york. what's the impact of that as we deal with covid? does it change the dynamic? >> excellent questions. it's in line with what we would expect out of a nor'easter. one of the stronger storms we have had in four years. for december storms it's probably one of the strongest we have had in a decade. covid is obviously having a major impact. down, andng traffic in a storm like this pre-covid 4000, 5000et 3000, flights canceled around the country and we are only seeing 1400 right now, giving you an idea of the differences covid is having. alix: that's a great point. when is the next storm? we know yet? [laughter] >> probably sometime next week and it might be on the warmer side. it could come in his reign. all of this is still computer model conjunction at this point. -- alix:s always good it's always good to catch up with you, brian. thanks for joining us. chuck, i live in park slope, full disclosure, and literally if you see a snowflake, the clouds are out in full force and i did -- snowplows are out in full force but i did not see or hear one until 6 a.m. what's going on with that? >> a lot of local governments are deciding to hold fire on this one. partly because of the squeeze that has been put on them. the thinking is you have only got so much on your snow emergency budget for the years and they are stressed out right now because of covid and reduce revenues. i think a lot of communities are dryding to maybe keep it for the next one. alix: is that a good strategy? >> it's questionable to me in a lot of cases. so world of covid is different. as brian was saying, the economic impacts of this, foot traffic retail right now in the new york area, new jersey, it's 60% normal. a lot of the small businesses are on the verge. it's another hit. a lot of these small businesses are literally hitting the last straw. if you lose a day or two around the week before christmas, that could be fatal for some of these businesses. i'm not sure i would do it that way. point,hat's such a good can you give me a sense of the economic impact? you are the guy we go to for all of that. >> the whole year has been distorted. hurricanes, for instance, economic models, we try to tweak and the hurricane impacts this year were running 20% in louisiana under normal because of the reduced retail impact. we are seeing that same kind of thing here. normally there is a transient impact of several billion a stormper day from that's dumping a foot in the new york city area. upstate, i saw the roof work from a few minutes ago. three feet of snow i couple places. traff going to disrupt not a lot of damage, really. it's i storm. they tend to cause disruption. ordinarily these kinds of things would be transient. going to the supermarket, you need cat food and she does, right? you go and do that, you can't do it today, you do it next week. the problems with these kinds of transient disruptions is that fatal in a covid world, it's hard to come up with what the long-term impacts are going to be. alix: have you been able to suss out but they have been? talk about disaster. any idea yet at what you are looking at? >> i was on in march talking it will be $80 billion to $20 billion in impact -- $8 million to $20 billion in impact but, but we underestimated what it would be. in terms of the impacts of covid , we are not far off the mark on the epidemiological models. we have been thrown for a loop on the economic side. we are looking probably at $2 trillion worth of impact from covid. that's like 10% to 15% of the entire u.s. economy. a lot of that is hidden because when you look at summer, that's going gangbusters. it's a complete hide of what's been discussed. impact tend to get hidden. that's the great thing about your reporting, it's more with the stock market up. the economy is more than the stock market. the rest of it is really taking a huge hit. it's a huge number, chuck. i wonder how, markets, markets are looking through that to some extent. they are looking through that time until we get a vaccine. on the back half of 2021, i'm wondering, with the optimism around the vaccine, how are you modeling your estimate? >> honestly, we use darts. [laughter] there's an old saying in my business that some models, all models are wrong and some are useful. you know, there are so many variables. i can tell you what the impact is likely to be. saar, look at what the if vaccines are such a huge if. they are a vaccines, complete unknown. there's no long-term track record. what happens if we get a rash of allergy reactions? instance we if for get mutations? we know the virus is mutating. so, got to go back to the drawing board. if we stay behind the curve on , we have a look at and this miracle that everyone hopes it's going to be, that's the real economy impact of that. but if that realization hits the bekets, i would not want to walking under the tall buildings on wall street. it,y to be depressing about but if you look at, you are looking at huge impact if this doesn't happen. look at the credit markets, the strength of their. the major reserve banks have used up their ammunition trying to keep things going. so what can they do? there's obviously a lot of ramifications. just, thosecs are scenarios are absolutely frightening. out that way,ing those of us who look at this thing, we don't get much sleep. alix: chuck, i hope you start to end that that scenario doesn't play out. we really appreciate that, chuck, that deeper dive. much more coming up. this is bloomberg. ♪ alix: this is "bloomberg markets ." you are looking at the principal room and you can catch a holly jolly celebration on bloomberg television at 7 p.m., friday, eastern time. don't miss that. this is bloomberg. right, more breaking news here on stimulus as details continue to trickle out, the white house is optimistic on a stimulus deal over the next 24 to 48 hours. a spokesman for trump said that he's adamant on delivering aid to workers and that it is the language on fema that is a roadblock on stimulus talks. usually you just hear about liability and state and local aid. looks like the white house is optimistic of a deal over the next two days. remember, looking at the nasdaq and the s&p it's another record high. news now in the business world, some of the biggest stories in the news right now, robinhood has agreed to pay 65 million dollars because of federal allegations by the sec, who accuse them of failing to inform clients who sold their stock orders to high-frequency traders and other firms and they agree to have an outside consultant so that they can provide the best execution for trades and they have attracted a massive customer base of young investors. bloomberg has learned that goldman sachs plans to expand the trading division by up to 20% and they reclaimed their stature as a golden goose with a 49% jump in revenue this year after a sluggish decade for golden traders. imax is looking to expand its footprint in the world's largest movie market. they see the potential to at least 400 locations in china by 2023 and they are known for their massive screens in about 700nd they have movie locations in china. i can't remember the last time i was in a movie theater. that is your bloomberg is this flash. here's one more story that caught my eye in that christmas shopping rush. looking to get up playstation 5? good luck. scalpers are the new grinch of christmas, they marred the launch for gamers buying up scarce supply and purchasing them a higher price. console sales are now online allowing scalpers to track them down and scooped them up. retailers are charging three times retail on sites like ebay and twitter and it could be of a problem for sony, this could hurt their ability to draw gamers and developers to playstation 5, which could hurt profits for years. coming up, another thing flying high is bitcoin. we will talk to jeff curry about his outlook 2020 one coming up in today's futures in focus. this is bloomberg. ♪ to starte the decision allocating towards bitcoin when bitcoin was at 10,000. it's a little more challenging with the current price closer to 20,000. amazing over a short amount of time how big of a run-up we have had. having said that, our, our fundamental work showing -- shows that bitcoin should be worth about $400,000. scott minerd making a bullish call on bitcoin, trading at a record high again today. i should point out that bank of america fund managers said that it was their third-most crowded trade. where to go from here? joining us is the head of commodities research at goldman sachs. jeff, we never ever really talk or start with bitcoin, but i had to get your take. when you look at the commodity world, how do you think about bitcoin? chart of overlay a bitcoin on the price chart for copper, they look very similar. what do they have in common? they are both a risk on growth proxies and i would argue that bitcoin is the retail inflation hedge. if you look at gold, people like to say that it stole demand from gold, but there is no evidence of that. gold is traded lockstep, the way it should, in this big rotation towards, you know, defensive assets and cyclical rotation. you know, i don't argue. i don't think there's any gold -- gold into bitcoin can coexist and in terms of thinking about the run-up this year and bitcoin, remember what happened to iron ore and copper? they behave similarly. interesting. a risk on asset. does it have any correlation to the real yield? it used to, now it just has a correlation to copper, which people are using for a proxy as the risk on to a global economic boom that is currently going on in places like china and potentially going on if you get the vaccine to take hold in the western hemisphere. so, it's acting much more like, you know, your typical risk on asset. let's look at copper more here. if you take a look at a 20 year chart, the run-up we have seen makes me think about the early to thousands with the super cycle driven by the chinese industrial sector. it's a different economy now. what is copper actually moving to? could we see another super cycle? , if you look at the markets today it looks similar to what it did in 2000 when you had all the telltale signs of a super cycle. not only our metals prices reaching multiyear is highs, oil hitting $50 a barrel this week, but the dollar hitting multiyear trendlines it hasn't hit since 2011 and you have global reserves beginning to increase off surging global trade. remember, durable goods in the u.s. are up 15%. the demand is up 15%, year-over-year. trade is booming into long beach from china with the dollars off that trade going into fx reserves, creating liquidity to create more credit in a multiplier leading to a lower dollar with higher commodity prices. then you start that virtuous cycle that drove prices so high during the 2000s. all the evidence points to hey, that positive feedback loop, the virtuous cycle is turning again. jeff, do you think that is the case for all the main metals? you mentioned iron or, nickel as well. copper, silver, which one would you bet on for 2021? jeff: copper. wewe saw in the 1970' re the 2000s and we think the current one ll the 70's. you had that structural underinvestment. remember the revenge of the old economy where the.com stole the capital? well, now it's all the things stealing the capital from the old economy. you have the same supply constraints that are turbocharged because of the esg overlay and negative oil prices. capex is down 40% the first half of this year in oil. the second reason is policy driven demand. the green capex boom is going to be on par with what we saw in china in terms of creating a capex cycle. not as big as the one in the 70's that was driven off of the war on poverty in the cold war, but it is likely to be as big as the one in the 2000s. leave oil, does this then? in theory this should be good for oil. jeff: well, we have that sustained backward degradation. you might not get it in wti. that is a landlocked crude. flip into aextbook backward curve and you simply don't see that when you have inventories as high as they are right now. some of those options are because of the oil that turned up in contract. they bought it back at $22 per barrel and they keep selling it forward on the market. in terms of looking at the oil story, it is the vaccine trade. people get back into those planes, you will have solid, robust oil demand in the second half of the next year when opec can bring back on the supply they have kept off the market and our target at the end of next year is $65 per barrel. we are bullish on the entire commodity complex. alix: you brought up the different spreads and degrees of backwardation. there is definitely bifurcation between west and east with china dealing with more manufacturing industrials. as opposed to the west, which is jet fuel and gasoline. how do you play that dynamic? jeff: well, at this point you want to be long on anything that is an asian oriented commodity. strength is very good in that part of the world. now, when we think about how you want to play this, looking at the brent market, low in europe, dead center on the u.s. and china. it, too, is backward dated right now. but we want to do is a simple, plain vanilla gsa it -- gsci commodity index where you roll the front-end of the curve. but we don't want all the concentration in one commodity. we want the entire suite of commodities like the goldman sachs commodity index. for those who are worried about esg issues, we recommend being long carbon neutral on the index . you get your own -- well, the whole index and then you buy the carbon offsets, the eua market to offset the emissions. so basically, 13.5% of the index is carbon and then you actually tally that as friendly exposure to carbon. last question for you, energy stocks have been crushing it in a good way. what do you think is going to have -- happen to u.s. production with brent at 50? jeff: capitals the name of the game now. the group that was about growth, the management has changed. the mentality is very different. they are going to be very focused on returns to shareholders and you won't see that rapid growth. the base case is to take rapid u.s. production right now, likely to go to 9.1 by the end of next year and we don't really see it growing until you get to 2022 at 10 million barrels per day and given that, it's strong, robust demand growth that is more than enough for shale and opec production to him -- increase. good to see you, as always. tune in later for "bloomberg commodities," coming up later today and we will dig into the offset carbon markets. coming up on this program, the barclays chief u.k. economist will be joining us next. the boe does nothing, brexit deal should be coming soon? although you have a 50% possibility of it deal getting done. markets feel more optimistic and we will break all of that down. this is bloomberg. ♪ alix: live from new york, i am alix steel. we will cut you down to the european close. the covid spread, emmanuel macron tested positive while europe should roll out the vaccine on december 27. onceentral bank of england the economy will be hit hard in the first quarter. a brexit feel within days. the parliament set a deadline to repost a trade deal. possible deal on friday. let's get into the market action. brexit deal is coming, maybe. that is having an impact on the markets. utilities and technology leading the way for a cyclical feel. downstealing

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