Jon ferro is off on a welldeserved vacation. Tom, we have gotten complaints from viewers about the good morning, the lack of the british accent. I am not going back to the british language but we can give you good morning. We are seeing that enthusiasm persist in the new year, despite the fact that we have some sobering data out of the vaccination schedule and despite some of the ongoing political uncertainty. Tom it is also the back half of the year. Im going back to the great missed calls. A doubledigit gain for 2021 on the markets. Look of the look at the 47 reasons to not be on board. Everything out to record highs. The nasdaq is going to be at 13,000, with another lift in the market. Lisa on the flipside, despite the enthusiasm you are seeing, the russell 2000 is not at record highs. It is off of its highs and is dipping a little bit, which is interesting. Will the rotation trade remain on if you get the numbers we are seeing out of the pandemic . Tom the only that, but the rotation trade rolling into all these other sectors. 2020 one walk away in and actually underperform . Lisa, run us through some data. Lisa right now we are seeing record highs on the s p, up about 2 10 of a percent. Im not going to quote the dow. I will let you do that. You are seeing dollar weakness and this is pervasive across the markets. Gaining, 10 year yields doing nothing and crude is dipping a little bit, ahead of that opecplus meeting that starts today. Tom i would also note the loonie is really important to look at, the dollar canada. That is a shock, really interesting to the commodity based canadian experiment. Right now in atlanta, she is at centennial park, the olympic site of 1996. Emily wilkins is studying a georgia that is stunningly different than those olympics. I was reading about the county, reading about the sheer shock, that this is not Newt Gingrichs atlanta, is it . Emily absolutely not. We have seen two major things happen in atlanta and across georgia. Number one, the demographics of the population have changed. We have seen more hispanics, asian americans, more blacks living in georgia. We have also seen a lot more of them become politically active over this last decade. There has been a strong concert at campaign to register people and turn them out to vote. We saw the results of that back in november. It remains to be seen what results we will see in tomorrows runoff election. Lisa the voters who turn out on election day, to they tend to be republican or democratic, and how are people expecting the turnout in that capacity . Emily that is a great question. Normally for a runoff like this, republicans are seen as having the advantage. They are good at turning out in big numbers for special elections like this one. However, all over georgia there is a strong concerted push from both sides to turn people out. Turnout is the name of the game, and we have seen some fairly strong numbers, 3 million georgians have already cast their vote in this election. Either through early voting or absentee. Tom one final question before you start your georgia day. What is the turnout in the right in vote, the writein the prevoting, compared to november 3 . Emily we are surprised at how many people have gone ahead and voted early. I dont think people were expecting the numbers to be this high. We are also seeing a number of people who voted early who did not vote in the november 3 election. These are people who got registered and cast their ballots when they were not able to do so just a month ago. Tom Emily Wilkins in atlanta, and for the next few days, david westin leading our coverage. Right now, on the markets, david riley joins us. A huge value to us in 2020. We will see if that can struggle forward and do it again. How was your 2020 . What a strange year. An absolutely extraordinary year, and it does intolike it is strangling ling intotraggli into 2021. David but there we go. Say that we are looking forward to 2021 with a reasonable degree of optimism. Rotation out of tech stocks that performed the best and into some of the cyclicals and more beaten up areas . Is that still on . But toi think it is on, the point you have been making, one of the key parts of that rotation is what happens to core rates and particularly, u. S. Rates. They havent really been moving, and as long as they remain very well anchored, then actually, it is kind of hard to see why some of those outperforming sectors, particularly u. S. Tech, is going to meaningfully underperform. I think that leg of the rotation, i think you need to see higher treasury yields and at the moment, that is not barking. Lisa in other words, it will take higher inflation to disrupt the leadership we are seeing so far. Am i getting that right . Certainly the fed at its last meeting signaled very strongly that it is not even thinking about thinking about raising rates. Certainly inflation is one of those expectations, those things that could shift. Of course, also what would happen in washington is additional fiscal stimulus, in the event the Democratic Candidates win the Georgia Senate elections tomorrow. Looks at a market that went through the lower lows this year, and then closed in 2020 at higher highs. It happened four times in 90 years. Is the greatest missed call that we get a range bound field . Is that what we are missing . David potentially. Situation and there is a consensus view. And itacknowledged that, depends on how much of that consensus is already in the position. We are in a situation where we are going to see a pretty strong global rebound. I think the rest of the world is going to catch up a little bit, with the u. S. I think we will see that, in terms of asset performance. In that environment, i think emerging markets do pretty well as well. If rates stay where they are, than even those assets that performed very strongly during 2020 would still be pretty well supported. Tom a flashback to late 70s and early 80s. Are u. S. Investors going to have to hedge their Foreign Investment . We are at a point where we are talking about hedging Equity Investment against currency risk . That thedo think weaker dollar is a very powerful one, and when we look at the performance of china, for example, and the chinese currency continuing to get that a lot do think of and a lot of International Investors are going to be thinking about how do they try to mitigate some of the dollar risk they may have within their portfolio. For investors generally speaking, part of the benefits you get from Holding International assets and equities comes from having some of that currency risk as well. We are innk strongly, a sustained dollar bear market, i think a number of investors are going to be looking to do that. Tom david riley, thank you so much for your help. We appreciate it. The gentleman from bluebay asset management. I went to the bloomberg terminal. Im not going to going to the details, but i have you want uanreciation over 8 yo depreciation over 8 . That is tangible. Lisa questions over when the peoples bank of china will step in. They have taken tepid action because versus the euro, they are seeing some consistency with the yuan, but pretty agreeable. Tom we are watching it. Futures up 17. Lisa abramowiczs bond market is dead in the water. It has done nothing. Lisa you asked a fantastic question earlier. Im going to start the year off well. Whether stocks are increasingly a proxy for bonds and it was interesting to hear david riley talk about how as long as yields remain low, how can you get out of tech stocks . That is going to be the discussion. Tom a Credit Suisse call i know as well. That will be one of our themes through january. Coming up, the themes of politics in the nation. Julie norman joins from ucl. Futures up. On radio and television, this is bloomberg. Ritika with the first word news, im ritika gupta. An extraordinary attempt by President Trump to strongarm color republicans. In a recorded telephone call saturday, the president urged georgia officials to find thousands of votes and tilt the state to him. He range from flattery to threats as he urged officials to take action. Some democrats are calling President Trumps call impeachable. Nancy pelosi will once again be the speaker of the house. She was elected with 216 votes, just two more than a majority of those present. There were questionsbut no democratic no democrats challenged her. She opens the new session of congress with a smaller majority. A british judge blocked the extradition of Julian Assange to the u. S. Because of his health. U. S. Lawyers say they will appeal. Criminal charges in the u. S. Over leaked military documents over a decade ago. They Worlds Largest cryptocurrency fell as much as 17 . Bitcoin is up more than 300 in the last year. Argue it isorters moving on goal. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. announcer do you want to reduce stress . Shed pounds . Do you want to flatten your stomach . Do all that in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design to help you maintain comfortable, correct form. That means better results in less time. And there are over 20 exercises to choose from. Get gym results at home. No expensive machines, no expensive memberships. Go to aerotrainer. Com to get yours now. Look at what is happening. It is very clear where the country wants to go. Point iscle at this the government that continues to put out roadblocks. The former congressman of the commonwealth of massachusetts, Joseph Kennedy decided to go after the senatorial. That was big news up in massachusetts. We are thrilled that joe kennedy could join us this morning as we look at the top risks of 2021. We thanked dr. Bremmer for a spirited two hours. Right now to advance the dialogue, Lisa Abramowicz and i speak on radio and tv with julie norman of ucl. A good and distant viewer of american politics. Julie norman, joe kennedy paid the price of going after the moral left. Maybe joe kennedy represents a younger middle ground in the democratic party, along with president elect biden . Marco rubio having a spirited weekend in florida, as he is reticent to join what are considered republicans strident in trump support. What is the state of the milk of the middle politics in this nation . Julie i think that is the big question out of the trump era, in particular, but not just trump. It has been an era of polarization on both sides. Liberals moving further to the left and conservatives moving further to the right. The question is for 2021 moving into this new administration, where does that leave the middle . Where does that leave moderates . Is there space for them right now . We are seeing that play out in the Republican Party this week, but weve been seeing it play out over the last few years with the democrats also. I think right now, there was a lot of American Voters who really support that middle, and want to see a stronger voice and a stronger space for that. We know that the elites and mobilizers of both parties are on the edges and so there is that constant tension between those forces. Tom there is constant tension but i asked this question , the fourth of july, that is an american holiday butng to do with colonies, professor norman, i am fascinated by the idea that the middle ground will be tested. Which party is most fragile at the end of the festivities tomorrow . Julie i think going into the events of this week, which is shaping up to be a wild week in washington, we are seeing the rifts in the Republican Party between the faction of at least a dozen senators challenging the and reallysults, again,ating but then one take away from the election that hasnt been talked about as much is the progressive camp did not succeed as much as they wanted to, and they will be trying to figure out their way forward for the next four years but this week, the main focus will be on the republicans. Lisa you talked about this wild week we are heading towards in washington, d. C. Bet of this is going to wednesday, the certification of the Electoral College, or not, if these dissenting republicans get their way. What do you make of the attempt by these republicans in the senate and house and President Trump to try and challenge or delay the certification of the Electoral College . Julie i think what you said is right. As we approach, it wont actually change. We both know that biden will be confirmed and will be inaugurated on january 20. What we are seeing is it is critical it is political theater, a lot of performance, especially led by senators who are eyeing april potential president to run eyeing a potential president ial run, or least having going down with the support of his base and the electorate that has been following him. This is a political game. In particularcruz liking likening it to challenging in a way that is not meaningful. This is just a political maneuver and not one that will change the results of the end of the day. Lisa maybe so, but when do political games matter . I was looking at a washington the formerand all of living secretaries of defense said the military should not get involved, and that there should be and there has been a peaceful transfer of power. From a historical perspective, how concerning is it that these 10 former defense secretarys even had to write this oped . It extremely concerning and notable. It is extremely concerning and notable. That this group of different political backgrounds, different political ideologies were all so concerned about the current messaging, rhetoric and potential actions coming out of washington, to write this oped, affirming the elections and transfer of power, but also quite notably saying the military should not be pulled in to any kind should not be pulled in, and any kind of way, trying to preempt that. The fact that the individuals saw the need to say that is very concerning. Pandemic, it a seems like Prime Minister johnson is being incredibly whipsawed along with the news flow. We saw the critical hospitalization levels within the united kingdom. Is Prime Minister johnson to a pandemic uturn . Julie i think johnson has already had to make a big uturn he did not want to make. He was hoping to have things opening up again by christmas and instead we have the opposite, and we are looking now at a potential further restriction and locked down. This is the last thing that johnson wanted, the last thing that the conservatives wanted, but he is just responding to what looks to be a pretty dire situation emerging with the new strain of the virus. Tom julie norman, thank you so much on u. S. And british politics. We greatly appreciate that. Dow futures up 106. Morning has to be on the Foreign Exchange markets. Lisa i thought you are going to say bitcoin. Tom i watched it over the weekend, and i dont want to go into a bunch of math right now, moonshot. Nt trend a lisa that is fantastically put. Tom there is no math involved on what is clearly a moonshot. To iller is going lisa i do think it is amazing how much it has rallied coming off quite a bit. Tom i believe the quote is 31,000 on bitcoin. I am looking for an entry point. Lisa arent we all . Tom on Bloomberg Radio and television. Stay with us. This is bloomberg. Tom good morning. Bloomberg surveillance. Elcome thank you for your comments. The love notes and the hate mail i have received. It has been pretty cool. We launched it. Lisa full disclosure, jon ferro is not out there heavily investing in bitcoin and will be returning. My love notes are people saying you have gotten it wrong again and again with your bearishness. I still do wonder looking at the pandemic news. Tom im glad to have given you a reason to email me and say you have gotten it wrong, goodbye. Joining us now is someone who got it right. What is so important is the courage to participate in the markets. Gina martin adams, where do you find the courage to participate the equity markets . Thank you for the compliment. Happy new year. I think most people looking across Asset Classes see the earnings yield on stocks is extraordinarily high. Despite the fact that there is negative news flows, despite the fact the economy is not growing quickly, you still get an earnings yield on stocks of about 4. 4 compared to the 1 in treasuries. Same as itnce is the was at the beginning of 2017, just for perspective. So, to suggest there is no value in equities that were overbought purely because of Economic Conditions kind of misses the broader perspective. There is a tremendous amount of cash. There is a lot of capital out there. It has to go somewhere. It will naturally migrate to where can get a decent yield, especially in an environment where you will see risk improve as the Economic Outlook improve. It will naturally go towards riskier Asset Classes. Are people going into stocks as a proxy for bonds because you are getting a higher yield . Digging under the headline numbers of the s p and nasdaq, is the rotation on regardless of what we get from the pandemic data or washington . Rotationntinue to get into cyclicals and away from tech . I think that is a good question for this week specifically. As i am sure everyone recalls, prior to the election, tech had a significant meltdown anticipating a blue wave in washington. We priced that out after the election. If we do have the Georgia Election swinging the senate toward the democratic it wouldhe aisle, affect talk in particular due to the anticipation of more onerous tax policy and a potential regulatory wave as well. A lot of it depends on what happens this week. Are carlesseneral, what happens in the election or washington regardless of what happens in the election or washington, is you do see a rotation toward cyclicals favored. You will continue to likely see tech underperform the more rapid growth cyclical segments like continued that through december and will probably continue into 2021 regardless of what happens in washington. It is questionable right now because we do not know what the outcomes of the election in georgia will be. Audiencek most of our on radio and tv no it is about 40 . What is your view on the acclaimed multinationals . This is a great question. Holidays, wethe wrote about this because there is this misnomer that a weaker dollar is something of a panacea for tech, a big stimulant for multinational earnings. The reality is a weaker Dollar Benefits nondomestic stocks more. The weaker dollar is reflective of the stronger risk tolerance environment more than anything right now. The result is value outperforms growth. Just work through the math on how much dollar weakness impacts the earnings outlook. Youve got to get a 10 drop in the dollar to get a 2 bump on earnings on the s p 500. It is not that much. It is not a huge benefit to multinationals relative to what it means from a risk tolerance perspective. Tom what you just heard from Gina Martin Adams you can bottle and play 15 times this year. That is such an incredibly important asymmetric observation. Dollar dynamics is about four namics foreign dynamics. Apple computer, what does it mean . Lisa that will be us later. There is a question about what Gina Martin Adams was talking about with the economy and how much it could deteriorate in the first quarter. People could shrug it off given that we are getting a worsening of the pandemic. He has been tracking economic data, he is senior u. S. Economist. As you look over the swiss alps, i wonder what you are expecting with employment as we get a decrease in the mobility data and increase in virus counts across the nation. Good morning and happy new year. Side, iabor market think it will be a bad start to the year. I expect a poor employment report for december on friday. The virus continued to spread in the u. S. With rising infections. We have seen initial jobless claims data in december on the soft side as well. A week report. There has been positive news with respect to Unemployment Benefits and 600 checks. I dont think people want to spend it in the current context of the virus circulating. Vaccines are still not deployed as quickly as expected. Being one i am jaded the island of manhattan where things seem to be grim. What is your calculation of the true Unemployment Rate of america . I think it is higher than the current number. Series, thepayroll amount of Job Description destruction, and how much we have recovered. We have only recovered 50 of the way and are hitting a plateau. That is quite worrying. In the u. S. , gdp has outperformed the labor market. That is a worry. It is good news for the stock market and companies because they are efficient, but it is worrying because you see a lot of labor left aside. Tom i dont mean to interrupt, but this is your wheelhouse. What is the Public Policy that helps us out of this labor conundrum . Be to reflect some good news, companies have been efficient and have streamlined production, which is probably good. On the others, it means we need to think deeper about how to support incomes on a more sustainable basis. Not necessarily new checks. Sowing the we are seeds of pain for years to come. Lisa meaning you see some sort of universal income . Is that what you are saying . I see checks being sent. I see the Federal Reserve buying a lot of debt and committing to keep buying Government Debt in large amounts. If you put that together, plus the fact we have a jobless recovery, i think there will be growing calls to go in that direction. What we are seeing now is an experiment that for some people will be seen as working quite well. Lisa this is a huge concept, the idea of universal income, especially as people expect the permanently unemployed rate to remain elevated. What kind of spending boost could you see that giving the economy . You bring the light on the vaccine. I think you need confidence to spend. I dont see that confidence right now. You have the money. The macro story in 2021 is there is a pile of savings that should be spent later this year. The problem is you need a positive confidence shot. So far, we dont have it. You need vaccines mass deployed. I think if you have cheap tests quickly,o at home very that would help bring the positive confidence shot you up the economy. Costerg, thank you. Ism data. 10 00, durable goods, factory orders stuff. Economyre is the labor january 8. Lisa how much do markets care . How much of this a backwards indicator . How much do we shrug off this data as being noisy . Mike mckee talked well about the concern people have. Tom mr. Mckee would suggest you are 100 right. There is a huge backward look to it. I would say at the end of the day it is a natural disaster. We are dealing with a pandemic that is not in the economic textbooks. The diffusion of the pandemic and sustainability i dont know how you forecast right now frankly. Lisa that is completely valid. The idea of the destabilization of people losing jobs again and again, what that does to psychology and spending. Tom i would point out what lisa and i are seeing on the island of manhattan. I think we are colored are the real struggle we see in the story centered in the around the pandemic. Stay with us on radio, on tv. This is bloomberg. President trump pleaded with Georgia Election officials to results overection the weekend. The president ranged from flattery to threats during the conversation. Georgia officials did not back down. Nancy pelosi will have a smaller democratic majority as she begins another term as speaker being reelected with 216 votes. There was talk progressive and moderate democrats wanted new leadership, but no democrat decided to challenge. Fauci says the rollout of vaccines in the u. S. Is picking up speed. He told abc news the program could be back on track within a week or two. The u. S. Missed its goal to have 20 million vaccinated by the end of the year. Dr. Fauci says the rate has picked up to 500,000 people a day. There is speculation about the whereabouts of jack ma. He skipped the recent taping of an african tv program he created. He has not been seen in public since chinese regulators ipo, not longs after he delivered his now infamous rebuke of government. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. M riddick a grouped up ritika gupta. This is bloomberg. As the vaccination spreads, as the economy opens up, we will that willn area support future investment which has been cut dramatically over the last year. I. H. S. Viceas the chair. Sh im excited to talk to the bond king at oppenheimer. Who will be talking about how to position in a time of strong concession. Tom i cannot imagine the challenges he is seeing. That looks to be a good conversation. The top risks of 2020 is always part of our global g. M. Economy. Economy. To the 60,000 feet, down to the granularity of supply and demand dynamics. What is the distinction of supply and demand gyration . Happy new year. I think we start of the year where we ended. I think you are going to have this pull and push between demand and supply. Torybody is looking forward things normalizing. That will not happen until the second half of the year. The first half is still negative data. Virus counts are going up quickly on both sides of the atlantic. It will get worse for gasoline and diesel demand before it gets better. A lot of people are looking out to positivity in the second half and positioning for it already, especially given how loose Monetary Policy is. Shale has not recovered. That will be interesting as demand recovers, can supply recover . My book of the year you have got to read because the first third is on what we do not know about shale energy. Recovery energy have a . I think that is the critical thing. The points he makes are very valid. I think shale will struggle. I do not think it will go back to the 2019 highs for the simple reason investors do not have the withite to invest broadly restrictions and the focus on clean energy. Shale companies are forced to focus on the green agenda which they have not done. We know that shale is cost intensive. You have to constantly drill. If the money does not flow, they will struggle to recover. Do Large Companies deal with the green agenda with a biden presidency . European companies have been forced to deal with it. They talk more about Renewable Energy and electricity than oil. Exxon is taking a different path. They are focusing on oil and saying this is what we do best. Despite all the focus on green energy, you mentioned china. Chinas own demand numbers continue to be revised upwards through 22030, even though they continue to say we will have a peek and demand around 2070. The last three years, they have revised higher. Up accelerating when we come out of virus restrictions. People will go back on the road. 2030 is down the line. There will be less oil demanded. But the next five to seven years, we could get a shortage of oil because there is no investment either. Tom i could not get an answer out of dan yergin. He is too busy negotiating the movie rights for his book. What is the banding of brent crude . The think we will see it in 45 range because of the downside with the virus. But there is so much free money because of the qe and the weakness of the dollar. I think we could go to 55 quite easily. Today. Meeting later by year end, i could see 65 brent because inventories would be drawn down. Tom you get to 65, you got demand. You got the whole green thing, tesla. You get to 65, what is the new responsiveness of oil . Great question. The elasticity of demand does not kick in until about 75, 80. The green agenda and evs will be government mandated. It will not be the price of oil driving it. What i think will become more important is the carbon price. Under a biden administration, you could have the state level come up with carbon pricing. The costd increase with more taxes on canadian or they would nore longer be viable to compete. Those are the interesting dynamics. Tom i need a one hour conversation with you. This is so important. Do you think we will finally get efficacy to carbon taxes this year . I think the roadwork has been set. Tom agreed. Countriesar, so many came out with Carbon Neutrality targets by 2060. One of the easiest ways to get there is you need a carbon price. It will probably not be a global one. That is just too far down the road. China is launching theres this week. The e. U. Has the biggest Carbon Trading mechanism. I think you will start to get regional pricing this year and it will continue to evolve over the next few years. Tom just a joy to speak with oil. Amrita sen, on 35 to 45. As price moves up, does demand start to come down . You heard her say 75 and up. We are nowhere near that right now. The vix 22. 23. The yield 9. 3 . Texas, im, west going to round it to 49 dollars a barrel. Dollar weakness the story today. Up, they forced me to read this after the holidays for the pandemic pounds. Weight watchers international. They had toted out change the name. Indy will tell me what to do the 2 00 hour today. Lisa i am lisa in for jonathan ferro. The new yearg off at record highs. Furthermore, lets bring in kailey leinz. The everything rally at the end of 2020 is rolling into the first trading day of 2021. Optimism about the vaccine and hope for a Global Recovery boosting risk appetite. The index is up 60 since the bottom in march. Asian equity markets inning mostly higher. The best manufacturing growth in two years is part of the reason. You have the removal of the brexit risk. Equities up