guy: 3:00 p.m. in london, 10:00 a.m. in new york. 30 minutes into the trading day stateside. welcome to "bloomberg markets." tech came roaring back yesterday. today not still much -- not so much. alix: the s&p having its best day since june. it is a market warning kind of day. you have china warning of bubble in foreign markets. also, bank of america sell side indicators say they haven't seen this much leaning towards the sell side since the june 2007. we remember what happened after that. in the market, a little bit of stabilization. the nasdaq off by 0.4%. the momentum trader slightly higher. we will talk about that in just a second. conversation now about the

dollar. have we bottomed? is there more room for upside? the 10 year tries to grind a little bit higher. again, not really affecting equities that much. a very different stabilization story then we saw last week. wanted to get more on that warning in china over asset bubbles in foreign markets, particularly in the u.s. bloomberg's sarah ponczek has the latest. sarah: certainly, volatility is en vogue. it came after 80% decline last -- after a 2% decline last week, so we see volatility in the sideways trading range. with equities near all-time highs, and i we have the top banking regulator in china saying that he is very worried about foreign asset bubbles, particularly in the u.s. and in china. at the same time, and property markets. he said, "from a banking and insurance perspective, the first

step is to reduce the high leverage within the financial system." chinese equities have actually outperform equities in the u.s. and europe, so it is a bit curious you have china's top banking regulator talking about bubbles just in foreign assets. take a look at the csi 300 over the past year or so, up more than 30%. we have seen a remarkable global rally. we have seen more gains in china than we have seen in the u.s. and in europe. but in the u.s., you can make the case possibly, just looking at flood valuations, that maybe there is a bubble percolating. look at the price to fail ratio at the s&p 500, at a record. for the s&p 500 technology sector, at dotcom levels. metrics don't take into account very low interest rates, although interest rates are starting to rise. guy: they certainly are. that is having a pretty big

effect across a range of assets. thank you very much, indeed. sarah ponczek setting up the conversation very nicely. mark mccormick, td securities global head of fx strategy joining us now. rates are starting to rise. the chinese are warning about bubbles in u.s. assets. people are starting to wonder whether inflation is going to come roaring back. mark, we are focused on the dollar. the dollar is the story around which so much pivots. what is your take right now? the u.s. is starting to really pick up speed. the economy is gathering pace. what about the dollar? mark: thanks. that is a great question. the dollar is linking all of these themes you are talking about your get what we are seeing is a transition from the 2020 liquidity trade, which saw every asset in the world essentially correlated, and seeing a transition to what people are calling u.s. exceptionalism 2.0. the dollar sits in the middle

because central banks have been able to repress term premium, repress real rates. they have anchored macro volatility, the vix, currency vol. they are all lower than they should be. on the other side of that is the frothiness in equity markets. some equity markets are too expensive. commodities are a little bit overdone. the wail of this gets flushed out through stronger dollar. that is kind of what we are doing now, transitioning from one theme to the next, which the markets are not positioned for and not prepared for at this moment. alix: so how does that shakeout? mark: i think it is an extension of what we see in the last week. basically, if you look at the framework we are thinking through, real rates still seem to be about 20, 25 basis points higher. we still need to see about one standard deviation moves in the vix, the currency vol. and that lends itself to a stronger dollar, a broader dollar.

em currencies are selling off, g10 selling off. but when this is over, we are blending these two narratives together, global reflation and u.s. exceptionalism, because what is key to the system we are going through now is we are seeing rates selloff for good reason, because global growth is coming back, and the vaccines are helping deliver that. there is more volatility, but we will be in a new state, may be a month or in six weeks, but we will be in a new environment that is not as correlated with the broad dollar. guy: let's talk about the broad dollar and then tried to break the broad dollar down into its component parts. are we going to see the dollar underperforming some baskets and outperforming others? the euro zone certainly pushing back. the ecb making no secret about the fact it doesn't want to see rates rise. but then you look at the commodity currencies in the chinese currency, and what is happening there, potentially preparing to open up the current accounts. how specific do you need to be in terms of your dollar

strength/dollar weakness theme? mark: i think that is absolutely critical because last year, dollar up, dollar down, it is all one big thing. i think we are moving into something that is really basically back to macroeconomic fundamentals. regional growth divergences, central bank policy normalization. it is all the stuff people love about microeconomics where you can look at these factors across countries and see which one is doing better. in that environment, you get a mixed dollar. what you see is a lot of variation on the broad dollar. your baskets really come back to what factors in the market are making money and which ones are performing well. what we have seen across currency markets is yield curve steepness is important. economic growth divergence is important. kerry is important. after this watch out -- carry is important. after this washout, it would create a correlation where this starts to break down again, but you want to look for selective

em currencies that have good gross, that have cheap valuations, and on the g10, as you mentioned, to me this is a pivot from a dollar funding market to a euro funding market because on all of these forward-looking indicators, steepness and the yield curve, growth expectations, vaccine deployment, the euro zone is lagging the u.s. notwithstanding the fact that the u.s. is delivering a 1.8 trillion dollar stimulus package with potentially $3 trillion in infrastructure by the end of this year, and there is no growth in pulse coming from the euro zone that will be able to give up with that, so that is the set up for the next month and probably the next three to six months after that. alix: let's start with the euro. what is the downside for the euro? deutsche bank was talking about how there is catch up potential when it comes to vaccinations versus the u.k. because the people who were vaccinated here have two doses most likely, versus one shot in the u.k. i am wondering if there is that catch up potential over the next few months.

mark: in those three currencies, the catch-up trade is really through euro sterling. that one has been a very surprised one. if you look at growth expectations, they are much lower in the u.k. versus where they were in the euro zone. if you look at mobility, we are seeing greater pickup in the u.k. inability because the vaccine is eventually breaking those links. both of them still have some room to move lower. on cable, you are thinking maybe it moves to $1.35. what where pricing at the bank of england is the potential to be negative. on the fed side, it is an adjustment in real rates higher, potentially earlier tapering, and markets have pulled rate hike expectations forward to some point in 2023. that context is still dollar positive, but the way you trade is through euro sterling potentially edging higher as you reach the bottom for that pair. guy: can i wrap things up where

we started, with a little focus on china? there's some interesting articles being written at the moment, interesting research talking about getting to the stage where maybe the chinese do unlock their current accounts. they've got to the point basically where there is an equal amount of foreign money looking to invest in china, and chinese money to invest in foreign assets. how big a shift could that be in terms of your world, global fx, if the chinese were to do that, to allow the currency to have a little bit more latitude? mark: that plays into the reserve diversification story. part of what we saw through 2020 that is absolutely critical is a huge divergence between the manufacturing sector and service sector. asia dominated that cycle because it is a manufacturing economy, and everyone was basically ramping up the demand for manufacturing, while services in western developed markets basically compressed. what you saw is widening trade

surplus, a widening trade deficit in the u.s. those saw asian central banks recycle back into the euro. we start to see a narrowing of that gap, over time, what is the next big thing that could happen in currencies? if china does open itself up on the capital market side, essentially what they are saying is we are willing to run a current account deficit, but we cannot offset that through a broad balance of payments surplus because we are receiving fixed income and equity flows. that is where they have been going, if you thing about how they have connected to the london stock exchange and brought her sei indicators. so china's -- broader in sei indicators -- broader msci indicators. so china's longer term trend is really just going to accelerate in the years ahead. alix: really great analysis, mark. it also explains why they say everything else is in a bubble. thank you very much mccormack of td securities.

you are looking at a live shot of the confirmation hearing for the next head of the sec. we will bring you some of that hearing throughout the show. this is bloomberg. ♪ (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that and more in just 10 minutes a day with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design to help you to maintain comfortable, correct form. that means better results in less time. you can do an uncomfortable, old-fashioned crunch or an aerotrainer super crunch. turn regular planks into turbo planks without getting down on the floor. and there are over 20 exercises to choose from. incredible for improving flexibility and perfect for enhancing yoga and pilates. and safe for all fitness levels. get gym results at home

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ritika: let's check in on the bloomberg first word news. i'm ritika gupta. president biden will announce what is being called a historic partnership in the fight against the coronavirus. mark will help make johnson & johnson's -- merck will help make johnson & johnson's new coronavirus vaccine. that could lead to a big increase in the supply of the vaccine. president biden's choice to head the sec gary gensler heads before a set it -- a senate committee today.

stockmarket drama has many calling for more regulation of wall street. gensler has experience other regulator during financial crisis. he was the head of the ftc during the obama administration. the father and son accused of orchestrating carlos ghosn's escape from japan have been detained in tokyo. he fled criminal charges. the pair could receive a three prison sentence if convicted. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. alix: thanks so much. tesla's run is attracting some attention that a large reversal could cause some cross asset pain, more than just for other tech stocks. joining us for more is bloomberg intelligence's etf analyst.

how prevalent is tesla in a lot of these etf's? and if tesla was to see a serious backlash and a big draw down, what is the sort of follow-up repercussion here? reporter: tesla is sort of the bellwether stock for a lot of this high-growth trade. about 7% of tesla shares now are owned by etf's. you double that, you get to 14% for passive funds in general. that is actually below the average. there are other stocks like apple and amazon that have more etf ownership. so it is certainly a darling of some of the more future tech, where it makes up a 10% weighting. i think tesla is more like a tip of the spear type stock, sort of the poster child of this high valuation growth story than it is a bigger systemic issue within passive or etf's, just given the numbers. but sure, if you owned the q's or arc, tesla is going to have

an impact on a fundamental basis. guy: just in terms of trying to understand bubbles and risk, how should we think about maybe not just tesla, but some of the other names you have been mentioning there? if we are to see an unwind, how could that be systemic? we are seeing the impact that rising yields are having at the moment. the direct kind of effect appears to be in tech. people are talking about yields continuing to rise. is there a kind of point at which some of these stocks start to have a meaningful impact as you get the ripple across? what are the rules for these funds in terms of the ways they have to hold them? eric: most of the big passive funds, etf's are going to hold them by market cap. tesla is probably in the top 10 of most major indexes like the s&p and the nasdaq 100. so a selloff in growth is going to have a ripple effect.

we have seen this before. basically, that is why people like to diversify. tesla is in your s&p, but only a 1.19% weighting. so if tesla has a bad run, you are protected. like i said, tesla could be part of a bigger growth selloff. but that is something that is going to affect everybody. if you look at the holders of tesla, it is also active funds. we call it the beta vortex. if you don't own the sort of faang type names, you are lagging. there is sort of a competition for actives to own those just to keep up, and then they try to make bets to do better. but everybody is tied into it. i thicket as a whole market story -- i think it is a whole market story. alix: that brings in arc innovation -- brings in ark innovation. some say that helps stabilize

the market. are those things noise or signals? eric: i love the attitude of being a long-term investor, and i will say that attitude is rare from a gun slinging stock picker. but there's a lot of vanguard investors who are not going to sell. they have been beaten, and if you have bought the dip over the past few years, you've done well. i try to tell people that the hands out there are stronger than people think, and i think people are looking to buy dips. but certainly, high rates, there could be adjustments and corrections that happen. i'm not sure you can avoid that, but some of these funds are very small. but the sentiment i think does have power, and certainly if she is buying them, that is probably good for sentiment. so i think you need a couple of months, two or three marches of last year before you see a lot

of the buy people capitulate. we haven't gotten anywhere close to that. guy: how much leverage is there in some of these stocks? eric: in the stocks, i can't say i don't analyze everyone of the individual stocks, but in terms of ark, some people to assume that she is somehow leveraged. i heard someone compare ark to long-term capital management, which was pretty laughable. there is no leverage, so she is going to hold all of these physically. if she gets flows, she has to buy the stock. that goes for all of the etf's. outside of "leveraged etf's, there is no leverage. it is all physically back. they are not borrowing the money . they are not buying the stocks on margins. in the etf world and the mutual fund world, that doesn't really exist. in the stocks themselves, i would have to defer to some of my equity analyst friends.

guy: eric, we are going to leave it there. thanks for the analysis. greatly appreciate it. what have we got coming up for you? we are going to continue the conversation looking at what is happening in the tech sector. -- founder is $2 billion richer. we will look at how it plans to stay relevant beyond the pandemic. that conversation is up next. this is bloomberg. ♪ want to save hundreds on your wireless bill? with xfinity mobile, you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing! and with fast, nationwide 5g included - at no extra cost? we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and learn how much you can save at xfinitymobile.com/mysavings.

ritika: it's time for the bloomberg business flash, a look at some of the biggest business stories in the news right now. i'm ritika gupta. hertz received an offer from knighthead capital to buy the company out of bankruptcy. according to court papers, the price could be as much as 4.2 billion dollars. macy's is tapping the junk bond market to capitalize on record

low interest rates. the department store chain is selling $500 million of senior notes to help fund its offer of the same amount. macy's reported better-than-expected holiday sales and also pretty good that pendant pressures will ease later this year -- also predicted that pandemic pressures will ease later this year. targets digital sales made up 22% of the total versus 12% from a year ago. the company said it would not provide guidance for the current year because of uncertainty caused by the pandemic. that is your bloomberg business flash. guy: thank you very much, indeed. shares in zoom higher this morning after the video meeting service that we have all come to know and love projected an upbeat revenue forecast. it expects to stay relevant beyond the pandemic. let's bring in bloomberg's ed ludlow. it has become synonymous with the pandemic in so many ways, zoom.

how do they stay relevant? how did they continue this run-up post pandemic? ed: 370% topline growth and a quarter isn't bad, is it? the issue is that growth is going to moderate. it can't sustain that level. investors are clearly pleased that 2022 fiscal topline growth is above expectation. the first is mobile. zoom on the phone was the best-performing product line in the fourth quarter, and the inference you draw from that is that as we return to offices and schools, as we are commuting, we do more communication on the go. the line that really stuck out to me from the cfo said there is no such thing as a snow day anymore. i didn't have too many snow days in the u.k. i am not sure about you. but the idea is that life has changed permanently, and they see a hybrid model. zoom is a mainstay now. it has changed the way we communicate, and they see that as being permanent. final area is the type of

customers they have pulled in. they grew the number of businesses estimated to have more than 10 employees, around 500,000 customers. we might see some m&a on the productivity side. we macy's umesh some acquisitions that makes the suite they offer a bit more appealing -- we may see zoom make some acquisitions that makes the -- makes the suite they offer more appealing. alix: what about slack? ed: slack is yet to be a $1 billion company in terms of revenue, and the price tag of $27 billion is a pretty big price premium. but if you look at salesforce's track record, they bought tableau a couple of years ago. the same question was raised then. they give the rolodex of enterprise customers who can then integrate with them.

salesforce is all about taking on microsoft. salesforce's platform only appeals to a certain section of an enterprise customer, sales and marketing. with slack, the hope is that they can appeal to a broader base within that company in terms of communication tools, offering something that competes with microsoft because micro soft has teams, but also data and analytics that companies use. he's a dealmaker, and he's grown the topline of the companies that he's acquired. alix: we appreciate it. thank you very much. tune in later today for an interview with zoom video communication's cfo, at 5:00 in new york on "bloomberg technology." this is bloomberg. ♪

alix: right now we are watching the heery's on capitol hill, the confirmation hearings for the sec -- rushing the hearings on

capitol hill, the confirmation hearings for sec. we've heard from senators earlier. we will be bringing you headlines. we will also been to this in a few minutes to get you updated on what kind of regulation could be on the table for wall street. guy: gary gensler looking like he's having a bit of fun with the whole thing being at home. i guess that speaks back to the conversation we were having a few months ago about what is going on with zoom post ben dimmick -- post pandemic. some of the biggest names in retail out with numbers this morning. here with the details, emma chandra. emma: the biggest of those names, target, coming in with some impressive comps and margins. not being rewarded in the market this morning. we also heard from kohl's. they did offer an updated sales outlook. abercrombie & fitch doing well in digital. on tour brands -- contour

brands, they own lee and wrangler, it seems like even though we spent the last year wearing at leisure, we are -- wearing athleisure, we are still living in a denim world. they really added a number of multichannel shoppers this past year, some 12 million of them. they also increased their profit margins, despite seeing more and more shoppers shifting online and the cost associated with that. sales through the roof, up some $15 billion over the course of the last year. to put that in context for you, that is more than the increase in sales in target for the last 11 years combined. what was also interesting coming out from target, let's take a look at some quotes. brian cornell speaking a little bit more than usual. really speaking about the importance of the store fleet. it is a really big store fleet

for target, where they fulfill a number of digital orders, and they are actually looking to increase the number of stores, accelerating the pace of openings, some 30 or 40 stores this year. this was echoed a little bit over at kohl's. talking about the importance of their partnership with amazon, they allow a number of customers to return amazon in-store, and that is really driving traffic and sales and beginning to impact the for them. of course, all of this great news for the likes of target and kohl's, but we have seen foot traffic really struggling to recover over the course of the past year. that is the blue line there. that is struggling even as we start to see retail sales in the u.s. increase once again. alix: great round up. really appreciate it. it has come to my attention you have never been in a target. this is true? guy: no, never been to a target.

never been to a walmart, either. alix: so what do you have there that is low price, good for online, but also has their own brand? guy: uh, i guess the big supermarkets probably fill that. but you just don't have that same footprint here. marks & spencer's is kind of its own brand, so i guess that is the one people would maybe .2, but i am not sure that ticks the box. i'm not sure there's an obvious comparison here in the u.k. in terms of the way you would go shopping. you just on have the scale either in terms of the size of the store footprint. so yeah, i've never been. it is some thing i look forward to doing. maybe when i come and visit we can go to a target. alix: we will drink that wondered $50 bottle of wine and then go to target. [laughter] guy: that sounds like quite the afternoon. alix: i dream. stacy -- my dream. stacey widlitz, swbt advisors

president, joins us now. when do we get to the point -- swi retail advisors president, joins us now -- sw retail advisors president, joins us now. stacey: you start to face these tough comparisons, but here is the deal with target. i think covid has increased the customer awareness that for mass premium customer, target is the one-stop shopping destination. i think they have taken share from kohl's, they have taken share from department stores. they have apparel brands that are doing well overcame billion dollars now. they have really taken each specialty category from the mall and said, who is not doing it well? we are going to do it better. target is the new mall, and it is not your grandmother's mall. it is the modern mall. guy: what does everybody else do? stacey: i think a lot of the

retailers are saying we need to do private label because it is higher gross margin, but how do we do it well? it is not as easy as clicking on a switch and successfully producing this. the other thing you have to do, which target was incredibly early, was investing in curbside pickup, same-day pickup, and using their stores as fulfillment centers rather than just saying we are going to ship everything from our full holman centers and build more of those. so they are using their stores to fulfill, and it is about 40% cheaper than shipping it, so their growth margins are going up as more and more people are coming into their stores to pick up orders, and as they use their stores. alix: no getting. my daughter lives in the brand that they make for kids. the pants fall apart in two seconds, but it's fine. stacey, what are we going to

learn about inventory management for these guys, as some of them try to play catch up and really envision that multichannel, omni-channel presence, but at the same time have to compete? inventory becomes a real problem, whether or not you are able to stock. stacey: i think that is what retailers are trying to figure out now. we are going to be post vaccine in six months. what kind of bets do we take going into holiday? i think a lot of them have been particularly cautious, and as we have seen over the past year with inventory shortages, growth margins have been so much higher for everybody because there's no product, so there's no promotions. we don't want to get in a situation where everybody over orders. i think the good news is that this has taught retailers and brands how to be more effective in chasing their inventory, and also how to be more effective in the supply chains so they don't get caught. so actually, it has been kind of a positive learning experience from a supply chain perspective. guy: i don't know a lot about

shopping. therefore, i am going to revert back to the macroeconomic side of things. [laughter] that makes it sound really interesting. how do these retailers take advant of the huge saving rates in the united states? do you expect those savings to be spent? if so, will they be spent in a different way than they have been over the last 12 months? stacey: you are seeing high savings rates in the united states and the u.k., and people have been sitting on cash because they don't know where to spend it. they have been spending on luxury goods. what have i been seeing in europe when stores open? lines around the block for luxury goods. i think you are going to see this huge pent-up demand as people accounts, obviously the middle to higher income bank accounts, have been so padded by the fact that they haven't been able to travel and do a lot of

the things that they usually do. so i think probably into 2022, we start to see travel again. we start to see that tourism spend again. maybe the chinese consumer comes back to europe, back to the united states. i think we are going to see an 18 month period of real pent-up demand here. alix: that is quite a long time. i wonder how you look at the conversation around tax increases. we have the u.k. budget tomorrow , rishi sunak probably going to unveil some kind of tax increase at some point over the next 18 months. in the u.s., you had senator elizabeth warren talking about a high-end wealth tax. the idea is that if you have a lot of savings, maybe you are going to keep it because you don't know what your taxes are going to look like. how do you look at those things? stacey: on the u.s. side, they are targeting the ultra-wealthy, and let's face it, the ultra-wealthy have gotten even wealthier during this pandemic,

so i think everybody is looking at those headlines, but the wealth generation we have seen, there's enough of it that is going to be pent-up enough that people want to spend on going back to traveling and all of the things that they so desperately miss, so perhaps some hesitation , but i don't think a lot. i think people are just desperate to get out. guy: we are going to leave it there. desperate to get out. that certainly sounds familiar. then very much, stacey widlitz, sw retail advisors president. later on, we will be talking to the kohl's ceo. that conversation at 5:30 p.m. new york time. coming up, we will take you to d.c. we are getting the hearing taking place from the sec chairman nomination and the head of the consumer financial protection bureau being questioned. we will figure out what is going on and the impact it is going to have on wall street and main

street. this is bloomberg. ♪

ritika: this is "bloomberg markets." coming up later today, we will hear from democratic senator of massachusetts elizabeth warren. this is bloomberg. ♪ alix: live from new york, i'm alix steel come up with guy london. this is "bloomberg markets." the senate banking committee confirmation hearings for resident biden's picks for head of the sec and consumer financial protection bureau's are underway. with us is sonata bassett -- is sonali basak. sonali: there's a lot of noise around right now, but also a big question on how far he will go outside of the direct banking system and start to look at things like private equity.

there's questions about political spending in corporations, and lastly, climate change and disclosures. i don't know if you are member last year, we had spoken to raj cohen at sullivan & cromwell. he said it is pretty expected that both on climate change and racial equity gender equity are places we could see increased disclosure. guy: i read a piece this morning talking about the fact that -- is pretty close to elizabeth warren, who we are going to be talking to later. is that comparison fair? is that a useful starting point when you think about how particularly the republicans are going to be addressing how we are going to be seeing main street regulators? sonali: that is the number one issue here. there is a big expectation that consumer protections is going to be the number one issue here. he did help set up the cfpb in the wick of 2008, and now we are hearing him address right off the bat concerns about the mortgage market, where we know a lot of private equity players

also play, as well as the big banks. we are seeing a big eviction crisis ahead of us. guy: absolutely. the hearings are certainly worth paying attention to, so let's go over now to what is happening in washington and take a listen into the hearings. >> something i am committed to at the sec and the leadership they are, and i think it is a positive step forward in the leadership at the sec that, if confirmed, i am going to take on. >> so when we spoke by phone recently, i think you committed to basing disclosure requirements on material, that they had to be grounded in materiality. is that a fair characterization? >> yes, senator toomey, that is. sen. toomey: if a company, a business, a publicly traded company spends a financially insignificant amount of money

on, let's say electricity, is it material whether that electricity came from her noble sources were not -- came from renewable sources were not? >> i think materiality, as the supreme court has said, it's got to be significant to the mix of information to a reasonable investor, and i think that will ground our economic analysis and how we move forward. in your hypothetical, it may not be material or it may be material depending upon the mixed information. sen. toomey: so even though it is financially insignificant in my hypothetical, you think it's could still be material? >> i think that materiality is the total mix of information, and often a small piece of information is not material. you are right about that. but i would have to take it into context of the entire mix of information. >> i would just suggest that if

it is financially insignificant, i don't see how it could be material. let me ask a different question. apple's revenue last year was i think about $274 billion. if apple spends $1 million on political spending on issue ads, with that me material -- would that be material, something that ought to be disclosed? sen. toomey: we found that materiality -- mr. gensler: we found that materiality is defined as what investors make decisions on whether to invest or not, to vote yes or no. i think many investors, well over 40% of investors in those proxy votes, actually think that would be material to get such information. sen. toomey: so even though it is completely insignificant, couldn't possibly affect any financial results whatsoever,

you think it might be ok to mandate that disclosure enda: -- that disclosure? mr. gensler: i will be grounded in economic analysis and the court view of what reasonable investors want in a significant mix. sen. toomey: but if this is financially insignificant information, and some investors would like to have it, why not leave it up to the companies to decide whether to disclose it and thereby ingratiate themselves with investors who care about it? mr. gensler: senator, i think it is about investors making a choice as to what is significant or what is material, to be more accurate, what is material for those investors. i will always be grounded in the courts and the law and the economic analysis about materiality, what reasonable investors are seeking when they make the decision to invest or not invest, or vote yes or no. sen. toomey: there are two

recent rule makings by the sec. one requires proxy voting at firms to provide more transparent, accurate, and complete information about their business. the other modernized the threshold to companies with repeated special interest proposals. do you have plans to revisit these rules, or do you intend to leave them as they are? mr. gensler: if confirmed, i would want to work with the staff, the economists and fellow commissioners to understand those rules better, to see whether, for instance, in the proxy advisory area, it is addressed that potential conflict of interest have the least amount of cost and see a positive in achieving the mission of the agency. sen. toomey: thank you, mr. chairman. >> thank you. senator reed of rhode island.

sen. reed: thank you, mr. chairman. i want to thank the nominees. mr. gensler, in light of the volatile trading we have seen insecurities made by individual investors, some have pointed to payments -- alix: you have been listening to gary gensler's nomination process. he is in charge to lead the sec. we will monitor those headlines as they cross and look at the highlights. a couple of things gensler did say is that he would look for best execution and paying for order flow. that it was -- that was a big issue at the gamestop hearings a couple of weeks ago. that topic came up yesterday in our exclusive interview with ceo jamie dimon of jp morgan. ed hammond asked him about that. >> this is not a new phenomenon, and i do believe that people should learn how to invest their money, but they should do their homework.

if you think you can go on and gamble and play, that doesn't have a long-term success record. to the extent that people are learning and getting involved, that is a good thing. for some it is going to end badly, and for some it will probably end well. but the best investors learn over time how to be the best investors. just like the best boxers, the best media folks. the notion that you will be great at it -- i remove or when my daughter ate her first investment and it went up, and i thought, oh god, it would be better if it had gone down. you learn a little more that way sometimes. ed: one industry that has been savaged lately is the shortselling hedge funds. do you think that industry is in crisis because of this phenomenon of the retail trade? jamie: absolutely not. you're talking about a teeny bit of market. the market is global, something like $10 trillion bought and sold every single day, and when we say investors, we are talking about retail investors, pension plans, hedge fund managers,

pension plans. my dad taught me how to read a balance sheet when i was 13. maybe i was guessing a little bit, but it opens up the notion that there are legitimate complaint about shortselling, more around transparency and the duplication vote of the ability to short sell the stock. there are legitimate issues around all of these things. if the regulators are going to be looking at high-frequency trading, disclosure by ownership of voting, shortselling, those are good things. i think payment for order flow is a very complex subject. i think there should be much stricter rules about what you mean by that. it is not clear that everyone does the same payment order flow. so if i am paying a lot more than someone else or keeping a lot more for myself, you probably have the right to know. there are certain disclosures that are not very good. ed: moving onto the biggest

question in finance right now, is stimulus enough? is it too much? you have larry summers on the one side saying enough already. you have janet yellen, jay powell, and others saying more is needed. what do you think? sen. toomey: getting through croke -- jamie: getting through covid's absolute critical. it is not a binary subject. i think democrats and republicans are like ships passing in the night. there are legitimate complaints about stuff in the bill that has nothing to do with covid. there are a lot of people suffering who need help. both are true. got to go through all of the details. unemployed definitely need help. a small businesses definitely need help. people at the lower end definitely need help. women who had to go home and basically stop working, they definitely need help. i don't know if you know this, but half the state revenues went up. they didn't go down. do they need help? we are just throwing money at people at one point.

they should be cautious about overdoing it. keep the country going, but try not to overdo it too much. ed: it isn't the risk exactly that, that if you have places and states that don't need help getting help, you flood the system and create this huge risk of inflation? jamie: in the system already has a little bit of that. it looks like we have $1 trillion unspent before this $1.9 trillion. so there will be money. there's a very good chance you are going to have a gang buster economy for the rest of this year and easily into 2022. the question is, does that overheat everything? we just don't know yet. i would but that under things to worry about it. i would worry more about covid and nuclear war than that, but i would expect there's a prig chance you see rates going up and people starting to worry about that at one point. i've been very clear, i would not by tenure treasuries, just so you know -- buy 10 year

treasuries, just so you know. guy: he kind of wanted to get that point in, didn't he? that was jp morgan ceo jamie dimon speaking with bloomberg's ed hammond. i thick it was just fascinating that he kind of stepped in right at the end and made that point. he's made it before, and then just stepped in again. i wouldn't be buying treasuries right now. he's not biting off that point. so far he's been -- not backing off that point. so far he's been proved right. alix: also saying at some point in the recovery, we will get better. we need help, but not all of the help in the bill. sonali basak is still with us. what were some of your key takeaways? we have gary gensler currently talking about the order flows as well. sonali: sherrod brown talked to mom's ago about how most americans can't come up with $400 for an emergency response. the idea of how much stimulus is enough and how to get it to the people who need it, that was a big topic they talk about, and

jamie dimon did talk about over flooding the system. the payment for order flow thing has been asked ordinarily controversial. it doesn't seem that difficult to put more disclosure behind these processes. we have talked about this before, getting rid of it entirely would be more of a blow for a firm like robin hood then it would be for the market makers. that puts regulators and a bit of a rock and a hard place. you don't want to discourage free trading that is more accessible, but you also want to make sure that the retail investors know what they are getting. guy: is there a fear that g -- that gensler is going to be erring on the side of over regulating? a lot of people are pointing out that the stability of the system is the way to go. is there a danger that people think gensler is going to step too far? sonali: huge fear. gensler was known as a very

tough regulator. that is the reputation he has on wall street. on top of that, these comments you are hearing in these hearings is how far is he going to go in making companies disclose political contributions, how far are they going to go in regulating big tech. that goes both for gensler and chopra, which may see the cfpb come out with bigger protections than before. guy: thank you very much, sonali. up next, we will take you through the european close. we've got more pushback from the ecb today. charles diebel is going to give his take on this ecb commentary. are they going to back it up with action? that is coming up next. this is bloomberg. ♪ ♪

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guy: from london, i'm guy johnson. alix steel is over in new york. we are counting you down to the european close on "bloomberg markets." steeper nominal yield curves must be resisted. the ecb's file be open at adding his foot -- ecb's file be open at adding his voice. but the ecb slowed the pace of pediment -- of pandemic growth buying last week. angela merkel pushing for an extension of germany's lockdown. the country is also no expect them to follow france in endorsing the astrazeneca shot for the elderly. volvo said its cars will be all electric by 2030. we are going to be joined this hour by the ceo of the company, hakan samuelsson. let's get back to the markets. let's get back to that ecb story.

the stoxx bid