tv Bloomberg Surveillance Bloomberg December 31, 2020 5:00am-6:00am EST
francine: china approves its first vaccine for general use, this as a second u.s. case of the u.k.'s covid-19 variant is detected, this time in california. cutting it close. u.k. lawmakers approve the post-brexit trade deal less than 24 hours before the end of the transition period. the lockdown bites in england. boris johnson imposes tighter restrictions on most of the country, warning of extremely tough months ahead. good morning, everyone, and welcome to "bloomberg surveillance." i'm francine lacqua. happy new year's eve. for everyone on surveillance, we wish you a nice new year's eve and a better 2021. 2020 has had its challenges. we will talk about them now. a couple of things that have come out of it, positive news i guess is stocks. first and foremost, thoughts to people who have lost loved ones this year. bloombergs get to the
first word news with ritika gupta. ritika: mitch mcconnell has made it clear that direct payment and the stemless package will not be increased to $2000. a senate majority leader says that the house bill that does that has no realistic path to quick passage in the senate. mcconnell says the house legislative -- legislators fall short of what the president wants. approving boris johnson's trade deal with less than 24 hours to spare. britain formally leaves this single union market tonight. the four-year saga that gripped british politics and defined the country. a british judge will rule monday whether wikileaks founder julian assigned should be extradited to the u.s. to face criminal charges. in recent weeks there has been talks that president trump might pardon assange. praised assange
during the 2016 campaign when aboutaks released emails the hillary clinton campaign. the immunization program is off to a slow start. that raises the prospect that the all in bet on vaccines could be hurt by the same infliction that hobbled other measures to contain the pandemic. about 2.7 million americans have been vaccinated by last night new york time. that is a fraction of the 20 million the government hoped to receive shots by the end of 2020. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i ritikacountries, gupta. this is bloomberg. francine? so much. thank you let's go straight to the markets. ending a pretty tumultuous week -- a tumultuous year on a quiet note. this is what i'm looking at in the market. european futures, in general
global stock indices holding the record highs, dollar at the lows. the trading at the euro stoxx 600 almost 80%, below the 30 day average because many people are off on holiday. -- a couple of other things that we should be watching out for is of course and pound. the cryptocurrencies seem to be showing no signs of slowing down. bitcoin actually vaulted above 29,000 before pulling back to 28,825. i believe it is still sort of on track for the biggest monthly gains since may of 2019, and i also wanted to show you what the pound is doing simply because we have a brexit deal, and from tomorrow, the u.k. is officially out of the you joining us to talk about a number of things is patrick armstrong. first of all, happy new year. i don't know how you will be
celebrating or what is the thing that you will want to own in 2021. but do you worry that markets are ahead of themselves? patrick: it is something that i think about every day because you cannot help but think it. valuations are extremely stretched on earnings. 100% on all those measures right now. if you look in interest rates, they have never been lower. you have $18 trillion in negative yielding debt around the world right now. it is at the point where things are highly valued, definitely. i actually think that continues, though. i think the path of least resistance, given the liquidity out there, angst continue to move higher because there are no alternatives and central-bank policies urging you to take risk if you have any hope to preserve your purchasing power. you have to put capital to work. you cannot keep negative real
yields everywhere, negative number yields in europe. those are punishing to keep assets in cash. i love your festive background. when we hear corrections, where do we see it first? patrick: i think it is going to be any questions about the result of central banks to continue to let the economy, or if they show hints, they will not let the economy run hot when they get there. jerome powell unequivocally has said we are not thinking about thinking about raising interest rates when the economy starts to run hot. if there is any wavering on that, my base case and i think the whole market's base case will start to get questions, and we may have a scenario like we did at the end of 2018 where the fed started to push up interest rates, where they were real yields all of a sudden on cash. higher interest rates probably feeling by people not
as comfortable that the fed will keep interest rates at zero forever. coupled withh appy inflation, or would that be because -- would that be coupled with inflation, or would that be because of the upside? patrick: i cannot see anything even remotely hawkish on 2021. but even powell saying we are aware of inflation, things like that can spook the market because if you look at the fed's interest ratesve .t zero there is a ton of savings. savings are higher now this year than they were coming into the year. there is pent-up demand. there could be inflationary pressures. we have got higher cost structures now, commodity prices are back to strong again. we have brexit and there will be tariffs, things like that. you can make a case that there
will be some form of simmering slow inflation i think in 2021. it will not be anything that provokes the fed, but any change in the language with the market that is completely driven by for assetss a risk at these valuations. francine: given the extra restrictions of lockdowns, the small clusters that we are seeing that we have not seen before in beijing and australia, what kind of recovery will we see? it is reliant on vaccines. there are two risks with vaccines. it is about getting them distributed and administered. i suppose there is a reticence about the population taking the thesee, and you need logistics to work and a population willing to get vaccinated. our base case is that happens. we do get more into the herd immunity by the summer. the economy reopens and the pent
spending happens. does not allow that to happen, creates significant risk obviously. francine: patrick, thank you so much. patrick armstrong stays with us. we will have plenty more with patrick. we will talk about bitcoin and maybe gold as well. also coming up, karen peers. we will talk about brexit and joe biden as president come january 20. that is at 6:30 a.m. in new york, 11:30 a.m.
the agreement aims primarily to extend access to the chinese market for foreign investors. the president of the e.u. chamber of commerce in china spoke about the deal early on bloomberg. >> we are very happy about the fact that we have stopped talking and now we can walk. we have to look at the details. there are some areas where we see an open arena stage where we financed insurance. we see independence for european business, but this deal will be overd out by the lawyers 2021. we have to get this deal passed european parliament, another body that will look into the content of this. we are happy that this has concluded. >> you touched on some of the sectors that will be impacted there. can you give us a sense of which businesses you think will benefit the most? >> i guess it is the service sector. manufacturing does quite well in
china. cars, chemicals, machine building that is all over the place. services have been very constrained come in health care as well as domestic transportation. again, in real estate and transportation. details,o wait for the at the indicators that we got commission showed that we can do stuff that we were not able to do in the past. in the dayt is early and you are keen to go through the details. do you have a sense of the shortcomings of this agreement? no deal is perfect. the shortcomings are possibly still we have a negative list, something that we always resented. we have no negative list in euro for chinese business. we get told these areas you cannot invest. we have to see how the squares
off with the deal, but still we have these constraints. year 400 pages with more than 900 recommendations. we have to work through the details in order to see where we have real improvements. shortcomings are possibly -- if you look at the negotiation side that wants to have a stronger sustainability market, there has been very soft language on forced labor. so the soft point of that could actually be challenged by the european parliament, in the second part of 2021. it gets passed ultimately by the european parliament? >> i hope it will be passed. business really cannot wait forever. this is something where we have done the first stamp in the right direction. parliamentarians
about human rights situation in china, that will not go away anytime soon. so in a way i really hope that our parliamentarians are pragmatic, and actually passed this deal through the system in order for us to implement more jobs in europe, to get more business done with china. we really want to be part of that, and the deal opens the door for at least some of the stuff that we could not do now. you touched on the question of human rights, and of course that has been a criticism from some members of parliament in brussels. members of the european parliament. i guess the question for some would be should europeans be striking a trade deal, an investment deal with china, a country that is jailing people, that there could be as many as a camps, people held in
involved what canadians call hostage diplomacy? as europeans, we cannot welcome this. we are having a very different system back home, and it is very unfortunate what is going on. at the same time, we are seeing korea,stralia and japan, there was none of these sustainability -- as mentioned, the phase one u.s. china deal at the beginning of this year, we had much less language of forced labor. so in a way, european negotiators managed to push the envelope for the first time on this one. but again, i think they made it very clear that this is their first step. when it comes to market issues, we have to find a better toolbox. francine: president of the e.u. china, of commerce of
speaking earlier on bloomberg. that's get back to patrick armstrong -- let's get back to patrick armstrong. we spoke in the past about cryptocurrencies. what happens to bitcoin in 2021? has it finally grown up because of the type and investors that want to buy bitcoin? probablyg up, that is a good question. it does seem there's more infrastructure around it now. it has been probably 12 months now that there is a contract futures exchange on it. we have seen institutional interest that has grabbed the headlines. thet is a currency, exchange unit of account, those are the things where you measure a currency by. a fixedlue, there is number of bitcoin and they know exactly what that will be. transact with it, it is still very cumbersome. with gold you could make that
argument as well. you cannot transact with gold very effectively. with zero interest rates and record high valuations, better asset classes, you can see why there is an attraction to bitcoin, but it could be house of cards that regulators could bring down. -- orird biggest crypto it was the third biggest crypto -- that has gone by about 60% because regulators are taking a dim view on if some of these coins and tokens were viewed as security transactions, things like that. there is still a lot of power and they could determine how bitcoin ends. if you are owning bitcoin, that is a risk you are taking. you buy: patrick, would gold in 2021, or any bitcoin? patrick: we own gold. we own gold for all of 2020. our view when we cut it was that
the cyclical backdrop was improving, and you may start to see higher 10 year yields. so negative real yields are the drivers of everything, unfortunately. it is hard to have a diversified portfolio because negative real yields are pushing tech stocks, bitcoin, and gold. if you look at monetary aggregates, the money supply is growing at 18%. in 2020.s growing m2 there is a record amount of money being presented. --d, like bitcoin, is not a over the next three years, the amount of reserves are going to reproduce. it is something i like to have in a portfolio as a store value. francine: is there anything else ,hat if you look away from gold that is a haven? i don't know if it is currencies or what kind of role currencies will play in 2021 if we see turbulent times?
turbulent times. i think the consensus view is that we will have a weakening dollar based on stimulus, zero interest rates, and between deficits. if we do see any risk in markets , the dollar always gets a safe haven bid. i think a lot of the trades that people have on the consensus views are carry trades. they are going long emerging markets, going long risks. the dollar is a safe haven currency. we think the dollar will weaken in 2021 because of a constructive outlook on the second half growth. but all those trades are incredibly correlated. the strong dollar brings down most risk assets. francine: patrick, if there is something that you were to play now that is a little bit less fuel for 2021 -- use a change in auditory policy being the
biggest unknown -- is there anything in geopolitics that could benefit some of the asset classes that you are invested in? patrick: i think people are generally optimistic. there is a roaring 20's analogy that some people are making, that people after being locked down for most of 2020, are really going on a euphoric spending spree, entertainment, those kinds of things that could lead to huge consumer spending. there are upside risks. we talked about downside risks as well. i do think we get to somewhat normal in the second half of 2021. equities that i find , it is aely valued huge problem in america once we get past -- once we get past the virus, people will have to do with diabetes, obesity. nordisk is my favorite pic
ritika: this is bloomberg surveillance. it hasobil has indicated suffered a straight quarterly loss. a write-down of as much as $20 billion on its upstream assets. exxon also reported much smaller non-cash impairments related to its refining business. a is struggling to maintain $15 billion a year dividend program. a sign of an end to bitcoin's red-hot december rally. it has set another record today. has risen almost 50% this month and is up roughly 300% for the year. and the maker of nordictrack , their software is reportedly going public. softbank has been added to picture role here.
thrivedmpanies have during the pandemic. icon has 700,000 subscribers to his service. -- to its service. francine: a lot going on in the markets, or i would say quiet data the markets after a tumultuous year we have had. but we are still seeing records across markets. bitcoin surging past 29,000, and then just below 29,000, still a big psychological level. pound, 1.3674. tomorrow it is the first day of the u.k. after the referendum. we speak next with paul hunter. this is bloomberg. ♪
>> a second person has died in central china after being infected with a new sars like virus. our top story, shadow bands traveled from the coronavirus epicenter with 17 dead and hundreds infected. names, and it is covid-19. in theee fresh cases u.s., germany, france, iran. >> with the dow industrial said to record its ninth -- worst drop since 1987, vix is the highest since 2008. and all other policy institutions are called upon to take target big actions to address the public health crisis of containing the coronavirus. >> we are looking at sending checks to americans immediately pres. trump: the united states is working with our friends and americans around the world to stop the virus.
>> there is uncertainty in the market, especially with the u.s. overtaking china as the number one place with the most confirmed cases of coronavirus. >> i have had mild symptoms of the coronavirus. >> this is a crisis like no other. >> global deaths from the coronavirus now surpassed 500,000. >> president trump positive for coronavirus. pres. trump: i've learned a lot about covid. i've learned my really going to school -- i learned that by really going to school. >> cases are surging across europe. cases total are 394 billion pounds this year, equivalent to 90% of gdp. >> it's amazing to see the vaccine, and this tremendous shot in the arm for the entire nation, but we can't afford to relax now. >> look back on the way coronavirus pandemic has updated 2020.
the drama of it cannot be underestimated. joining us is paul hunter, professor of medicine. you for joining us. is the new strain overshadowing the positive news of a vaccine? dreadful think it is a new development, for a variety of reasons. that althoughmber we had a locked down -- although the long-term we had in england was good at putting other variants into retreat, this variant was able to increase substantially during lockdown, and that bodes poorly for the future. doubtful whether the tier four system we have -- that most of us are living in, will it be sufficient to slow the spread of this new variant and hopefully,
we will have lots of people vaccinated in the near future which will reduce the death rate. but we are still a long way out of the words. organizationlth scientist said we don't know that the vaccine has stopped transmission of the infection. case, this all concept of herd immunity might not be valid. the people who choose not to have the vaccine can no longer fromon the protection everybody around them being vaccinated. so it is very concerning. i remember every time i interview you, one interview we had in february, you were the first want to tell us this
pandemic was just a disease that had started in china and was coming our way. why has it been since so difficult to model? why is it difficult to understand the pattern of this for example,ans, the government in the u.k. says fine, have christmas, but a severe lockdown afterwards. prof. hunter: i think the christmas issue was a bit of a side issue, because i don't of us did not think christmas would be that much of a problem. the issue is this new variant has thrown everything, all our predictions and expectations, out of the window. because it is so much more infectious. that is the problem. that means it is almost certainly going to continue to increase the pressures on our health services, not just in england by many countries around the world. this new variant has appeared in
the u.s., canada, denmark, many european countries, australia, japan. this is a global threat from this new variant. caroline: doesn't mean the social distancing needs to change or rules we have been told so far that keeps us safe once we go back to normal need to change, because this variant is more aggressive? prof. hunter: the issue is, what we change them into. -- into? tier four in england is free much like lockdown with the exception of schools being back. ultimately, schools being able to go back. so we don't know what more we can do. we have to continue do that, to protect ourselves, especially if we are in the vulnerable age group or have pre-existing disease, but also, reduce the
increase. it is doubtful, and i hope i am wrong, but it is doubtful, looking at the data, that we will see a reversal in this increase, even within tier four systems. i hope i am wrong. we still have got to do that, because we have to minimize the number of people who get this infection before they have the vaccine. caroline: how much protection does one get once you have the first toast of the vaccine? of the vaccine? prof. hunter: it is a little uncertain, but it is certainly the case that the size of the vaccine seems to provide good protection after about 12 days. the astrazeneca people are talking about reasonably good protection after about 21 days. absolute, it is not
but when you are looking at the risk to the population as a whole, i think the decision to extend the time period between the first and second oc is a good one. it is one that will, in my view, save a lot of lives. if the astrazeneca vaccine, you stretch out the time but between the first and second does, you get a slightly better overall response to the vaccine. , and iskes good sense probably one of the things we can do to ultimately reduce cases and deaths. caroline: professor, thank you so much. covid-19er there on and the vaccine. let's get to the bloomberg first word news. here's ritika gupta. >> mitch mcconnell has ruled out passing the house bill that would give most americans $2000
payments. mcconnell says the measure has no realistic path to quick pass in the senate. instead, the senate will work on combining the payments with legislation on election integrity and rolling back social media protection. the senate is closing in on a vote to override the presumed trump's veto on the defense bill. it's a battle with the white ause that may not end before new congress begin sunday. congress has already expected to override the veto and senators are to follow stu. -- follow suit. then, a dispute to boeing and airbus. november, -- thea has now approved
countries for expecting of the coronavirus. the shot is made by china national biotech. >> we will continue to speed up the vaccine r&d and will not let up for one moment. we will provide more vaccine products and technological platforms, paying close attention to various mutations around the world, and respond scientifically to ensure the vaccine uses effective. first, we will continue to verify basic research and will surprise -- supply support. ritika: global news, 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. on bloomberg, powered -- powered by more than 2700 journalists and analysts in over 120 countries. trackne: coming up, we
caroline: this is "bloomberg surveillance." i'm francine lacqua in london. millions of people like up to tougher restrictions after the government has moved most of the country into tier four locked on amid the report of this fire variant. at the same time, regulators have approved the astrazeneca vaccine for use. it is expected to roll out next week, and we spoke to the u.k.'s covid vaccine deployment minister.
here he is. >> we have begun vaccinations on the eighth of december with the and webiontech vaccine, have vaccinated over 600,000 of the most learnable people in the united kingdom -- most vulnerable people in the united kingdom to the covid-19 virus. we will continue now with both vaccines, pfizer and with astrazeneca approval. today, we start vaccination with that vaccine as of monday, and we have 500 30,000 doses of the astrazeneca for the first week -- from the fourth of january, from the first week, and then we increase the numbers. quicklypendent on how we can vaccinate through the joint committee
have set, so that we can take the most honorable. the good news from the regulator is that the time period between -- for both vaccines, we have 12 weeks, which we plan to do so before january. then, we mac -- we will vaccinate more people quickly and get to a place where we can take away some of these nonpharmaceutical interventions, as they are called. >> this is emma chandra. 500,000ioned you have toes and are awaiting them get more doses and the how secretary saying we should get one million more from the beginning of february. do you anticipate we could be waiting a long time for some of the vaccinations through the end of january? secondly, do you have a target number of people who need to be vaccinated in the u.k. to lift some of the tier four and tier three restrictions? atpublic england was looking
that inflection point, as boris johnson refers to it, between when we protect the categories over agers, national health workers, and other workers. at the moment, this new variant is on the rise in london and in the southeast of the u.k.. we are beginning to see it -- london, and in the southeast of the u.k., we are beginning to see it rise. the quicker we can vaccinate people, and if you take the nine categories, which is about 26 million people we would need to vaccinate in those nine categories, which would eliminate 99% of the mortality -- deaths from covid.
>> when do you expect to get to the 26 million? when can we expect to get to that key number of 26 million people vaccinated? >> we have put in place england,cture in nhs, wales, scotland, and northern ireland i can deliver, as the ceo of astrazeneca can potentially manufacture to million doses per week. we have the ability to deploy that. my limitation is this be that which we can get deliveries from astrazeneca and pfizer, not the infrastructure. all hospital hubs will be up and running. which reduce-- the gps, the primary care networks in the u.k.. of course, we are going to the vaccination centers, which we are launching as well.
then pharmacies, both the community pharmacy and independent sectors. we have a massive infrastructure in place to deliver the 2 million doses per week and more. francine: that was the u.k. minister for covid vaccine deployment. let's get straight to the bloomberg business flash in new york city. here's ritika gupta. kong, they, -- hong sent jim ely back to jail awaiting trial for allegedly violating china's new national security law. reversing a lower court decision to let him go on free, and it avoids a showdown with beijing. gold is headed for its best year in a decade, up more than 24% in 2020. gold benefited from the weaker u.s. dollar and low interest rates. rates will stay near zero through next year. homebuyers in the u.s. face their worst affordability squeeze in 12 years.
buyers in the fourth quarter needed to spend almost 30% of the average wage to afford a typical house. low costs have-- spurred a buying frenzy and that has increased prices. francine: thank you so much. coming up, we look at brexit and the special relationship between the u.s. and u.k. with the u.k. ambassador to the u.s.. that interview is 6:30 a.m. in new york and 11:30 a.m. in london. this is bloomberg. ♪
29th. it went into the low 70% range. the coin is the reserve currency isthe crypto asset ecosystem what i told us. it is the reserve cryptocurrency, which is a very important role. it is the flight to safety currency. bitcoins technology, or bitcoin's blockchain is the most secure of any other blockchain. it makes sense bitcoin would be the reserve currency of the crypto asset ecosystem. francine: cathie would've ark investments, emerging as one of the top stock pickers by focusing on innovators and those rescuing the world from the global pandemic. i'm glad to be joined by matthew winkler, our bloomberg news editor-in-chief. he just wrote a great piece on
cathie wood and what her findings teach us. matt, as always, thank you for giving us a little bit of your time. why did you decide, for the last story of 2020, to focus on kathy wood? matthew: it is something -- cathie wood? prof. hunter: it's great to be with you -- matthew: it's great to be with you, francine. it is something we have done for a few years. we look at who is the best stock picker according to data compiled. bloomberg, sometimes it takes us longer than the last week of the here to determine that, because it was a close call. that was not the case this year. cathie was so far out in front, that she has the top three funds . i have not seen that before. there are 367 u.s.-based neutral funds with 60% of their 5 billion or more in american equities. number one, number two, number
three are hers, and are all about, interesting enough, dna disruption. central bankers have been kind to the equity market, as we have noted that and you have noted that many times. fiscal policy has been good, too. what she has done is seized on the disruptors that are having an impact and dealing directly with the coronavirus. that is where the dna comes from. she does not have a close competitor. points behind her. just to put it into perspective, she has delivered a total return, which is income plus appreciation, that is 11 times the gain for the s&p 500. 19 times the average of the equity exchange traded funds we look at. 17 times the advance of health care's benchmark. five times a similar measure for technology.
so she is, right now, in category she owns. nobody is approaching her. so what is going on with her? francine: matt how -- matthew: go ahead. francine: how did she do it? unlike most of our competitors who rely on market benchmarks, she chooses the size of her weights. how did you pick the companies and do so phenomenally well? matthew: let's take one of the fund, the ark revolution that she runs. --has appreciated a combined the companies in the fund, the top five, appreciated a combined 430%. there is ark therapeutics holdings, a biotech that focuses on treatments for diseases, including the coronavirus. fundpresents 4.7% of the and returned 750% in 2020.
thank him a there is crisper therapeutics, a switzerland-based biotech maker of gene-based medicines. at 16%turned 177 percent of the fund. then bioscience at california, maker ofiagnostics inexpensive dna sequencing. you get the idea. these are not your household names or companies that typically people talk about. francine: thank you so much for joining us. too short time. matthew, our editor-in-chief with this story. check it out. this is bloomberg. ♪ s is bloomberg. ♪
vaccine for general use. this as the second u.s. case of the u.k./covid-19 variant is detected in california. lawmakers in u.k. approve the 24xit deal less than hours before they transition. and mitch mcconnell -- his hopes for the $2000 stimulus payments. stocks are poised to end 2020 at record highs. welcome to "bloomberg surveillance" and happy new year's eve, everyone. 2020 will have been eventful. some will want to forget it and some may be fully invested in stocks. london.ncine lacqua in tom keene is off. new zealand is the first country to be part of 2021. of course, usually, a very important firework display in