tv Bloomberg Daybreak Europe Bloomberg December 17, 2020 1:00am-2:01am EST
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. ♪ >> good morning. ofis 6:00 a.m. in the city london. i'm annmarie hordern. this is "daybreak europe." here is what you need to know. that still concern emerges is governments are very large employers and i have to elieve the question with --
annmarie: the fed keeps policy study. d.c. drivelks in risk sentiment. the boe holds its final meeting of 2020 as politicians see a brexit deal insight if they can agree. bitcoin on its -- scott minerd says it should be worth 400,000. very good thursday morning, 6:00 a.m. in the city of london. markets start to digest the past 24 hours. looking forward to what the next 24 hours will bring, the fed on the back burner now maintaining a policy unchanged in the stimulus talks so that is what is driving the market. a very grim milestone this morning. record ofday fatalities. milestone,tating fresh record out of the united states. that is why the fiscal stimulus
and deal is so needed. we see the divergence between the financial markets and monetary policy but the disconnect from what the reality is in the real economy. they are looking forward to the stimulus deal potentially being done in d.c. up more thanific .5%. s&p 500 had back-to-back closes of gains. futures now pointing north of 3% and the 10 year yield, 92 basis points. a modest selloff in the treasury markets. i'm disappointed the fed did not reveal a plan to tilt towards longer-term securities. let's take a look at what's going on. a lot of it has to do with dollar weakness. the british pound this morning north of 135, up nearly .4%. the pound to hold into brexit. ursula von der leyen saying fishing rights are the last major hurdle to a deal. that count down for a brexit deal really underway as december 31 is the final day. bitcoin not just topping 20,000, look at that, 22,000, up more
than 4%. underlying is the erosion of things like the u.s. dollar and other fiat currencies as a result of central-bank policies. we will hear what scott minerd had to say to us about 400,000. that's an extra thousand. branch north of $41 a barrel. nearly $42. stockpiles declining, vaccines rolling out, potential stimulus deal, all of this is fresh momentum for more consumption. oil market clearly shrugging off any of the bad news and just looking forward to all the good news. potentially demand picking up in the west. overnight, as i said, the fed is staying on course supporting the u.s. economy, promising to maintain its massive asset purchase program until it sees substantial progress in inclement and inflation. sounded thewell most optimistic he has been since the coronavirus crisis began. >> substantial further progress
means what it says. means we will be looking for employment to be substantially closer to assessments of its maximum level and inflation to be closer to our 2% longer run goal before we start making adjustments to our purchases. >> that's a long time to be very accommodative but that's basically the horizon that we are talking about here. knows how uncertain everyone's macroeconomic forecasts can be. particularly in the sort of environment. it was quite an admission. unwind of these programs or stopping them leaves the vulnerable, specifically of concern is the corporate bond purchase program. they can buy more bonds and longer maturity bonds. that would put more pressure on long-term interest rates. that's not the problem facing the economy right now.
>> on the fiscal front, congressional leaders are rushing to finalize the latest stimulus deal in time, which they hope will pass by the end of the week. for more, we are joined by derek wallbank. it's coming down to the wire, similar to what we are seeing on brexit. they do need to pass some. most likely by tomorrow. you that they are will get this over the finish line, seeing as we have been talking about this for the past six months? >> you are right. i cannot count the number of false starts we have had here . wall street analysts have said something is imminent for the last three months. it seems to have a lot of conventional interests in alignment. on thed to get something board ahead of the georgia senate runoff that are coming on. you have democrats who have a smaller than expected house majority for next year and so, they don't necessarily have the
leverage they thought they were going to have at the start of the biden administration. you do have a confluence of alignments here. it does seem like we are getting closer. it seems you're getting nearer to a deal in principle. the devil is in the details and so we have to see some of that stuff but it seems like we are trending in the direction of a stimulus deal. as you said in your introduction, the red headline crossing the terminal -- uss from covid-19 on a daily basis is the worst since the crisis started. he and a human term, the situation might be as bad as it is in the u.s., but obviously the market is taking a look at the stimulus prospects. note of grimthat milestones, we had crossing the terminal another -- german virus cases jumping by 45,113, the
most since the start of the pandemic, so clearly, europe and the united states, very similar pictures, and being unable to get the virus under control. $900 billion is what the price tag will be. derek?nough, derek: you will get some folks on the progressive side as well themme republicans among who think that the amount of direct aid going into people's pocketbooks is insufficient. they are looking -- reports are they are looking at somewhere around $600 a person. with some income restrictions based off of like 1819 taxes, and the problem that you get there is some of the reaction that i started seeing is people are saying, well, you have a really big package and that's really not a lot per person after months and months of trouble. in most u.s. cities, that's not going to pay for rent. that's not going to pay for childcare.
it's not going to pay for daycare. up being a bit of a difficulty on that side. on the other side, compliments compromises like this, you will never get everything you want. do you want this or do you want nothing? when you get to that point, congressional leaders think they might get there but until you have seen everything on the paper and until people have found a way to count the 218 votes in the house and 51 in the and thethen it's all -- talks are ongoing. annmarie: thanks to derek wallbank. he will be covering this for us. i'm sure we will have you back tomorrow, derek, potentially, if there is that deal as well. joining us now, paul brian, head of fixed income. very good morning to you. i want to start with the fiscal side of things before we move to the fed. that is what the market is waiting for. derek outlining this $900 billion plan.
we have been talking about it for weeks now. do you think we will have any impact on the markets if d.c. was able to get it done given the fact that markets have been placing it in for weeks on end now? has beenct that it talked about for such a long time, it's always the case that it's the details and then reacting to the details. i think it's priced in. the details of that package and how long it lasts and what impact it has, it's fully priced in. the markets will still go up on a deal. essentially, the components in that deal, how long it lasts for, is the most important thing. want to talk about what jay powell said yesterday. the new word that was added was substantial, getting to a substantial point when it comes to unemployment, getting to a substantial point when it comes due on inflation, and that is when they would start to actually tweak policy. when do you start forecasting
that "substantial progress" in the united states? paul: it's quite interesting the way that powell actually phrased that rhetoric and also talked about inflation being consistently above 2%. i think we would probably push back the forecast of when the fed would start to reverse some of its policy just because i think we need to see maybe even 12 months of substantial growth, or at least six months, before they react. it's interesting. it does push back the possibility of the fed changing its policy. from our point of view, we are looking at a more substantial recovery. major economies, the u.s. as well, in the second half of next year, so 2021, you will get substantial numbers coming through, so enough for the fed to start considering it. it looks like they will not react until 2022 for the need to change policy.
annmarie: what do you think could trigger the fed potentially shifting some of those purchases toward the longer end of the treasury curve? they did not do that yesterday, a disappointment for some people, but what do you think would be the trigger point that jay powell would say we need to start doing this? paul: the curve in the market has been well behaved. they have not needed to apply any pressure to dampen yield. the yields have risen modestly since the summer. things will be very well behaved. i don't think they need to do anything. up 1%,eed to see yields maybe 1.25% before we start to get a little more concerned for the fed and the yield curve and the rise in yields. we see yields rising gradually because the economic recovery is going to be a start time recovery and inflation will be pretty subdued for the first
half of next year. i think they need to put in place in the yield curve control, if you call it that, until at probably the second half of next year. annmarie: paul brain stays with us this thursday morning. a quick recap on a first word news with laura wright. laura: the e.u. is pushing to expedite the approval process for the covid-19 vaccine from pfizer and beyond tech -- bom tech -- biontech. if the vaccine wins the backing of regulators, the commission could signoff the same day. bitcoin has hit a new record, topping $22,000 for the first has a long wayll to go. he says it could eventually climb to about 400,000 dollars, plus the rally is polarizing opinion. some think it could lead to a meltdown similar to the one we saw three years ago.
texas is accusing google of reaching an illegal deal with facebook to maintain a chokehold over the lucrative digital advertising market. 10 states have filed a lawsuit which targets google's central role in the buying and selling ds across thes -- a web. google says the claims are meritless. 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. this is bloomberg. annmarie. annmarie: thank you. fishing for a deal, officials are cautiously predicting an agreement within days even as differences remain over access to u.k. waters. we go to brussels, next. this is bloomberg. ♪ are you frustrated with your weight and health? it's time for aerotrainer, a more effective total body fitness solution. (announcer) aerotrainer's ergodynamic design and four patented air chambers create maximum muscle activation
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heading for a final brexit battle over fishing rights. officials are predicting a deal within days but some negotiations worn substantial differences remain on access to u.k. waters. joining us for the latest is maria tadeo. negotiations have gone quiet over the past few days. what's going on behind the scenes? is it looking more positive? maria: it's true that they have gone quiet but that's actually not a bad thing. when you have a negotiation where the stakes are so high, that's actually a good thing where stocks are around-the-clock and we know this is happening but not a lot is leaking. they are interested in getting into a landing zone. you don't want to shoot it down before it can fly. the head of the european commission said yesterday the idea of governance, to some extent, has been resolved, or they are working on that, and this is fundamentally about the big issue.
is key for the european union, and the other is very symbolic. when it comes to the fish, we know the e.u. said they want to negotiate a quota in which they can fish in u.k. waters. the u.k. said we want to go for one year negotiations which means we will renew that quota every year. there's thecourse fundamental question in terms of what kind of access do you want for the single market and what kind of rules are you prepared to accept? is a topics -- if there compromise, what we do here is that there could be a deal within days. we heard this before but what matters is the tone of the conversation has shifted. we have gone from last week, we are headed from a no deal to almost on the final stretch. what i would say of course is we are headed close to that december 31 deadline. this is not a political deadline. it is a legal deadline. if there is no deal at that time, the u.k. will trade on wto terms with the e.u.
annmarie: we have already started to see some messiness when it comes to that, a lot of lines. the united kingdom has the pfizer biontech vaccine. european union does not. that's why we are seeing overnight this approval on the european side. maria: very much. we know the vaccine will not approach until the european nexty says it's -- until monday. there is huge pressure to sign this off, purely because the u.k. is starting to vaccinate. this vaccine was very much made in europe. they wanted the rollout to happen before the end of the year, they wanted to do this jointly at the start of the year to see that distribution. themselves into a situation where they might not be able to deliver on that promise so there is huge pressure on the regulator come
next monday. the european commission will go that same day and they will start to see mass distribution. annmarie: maria tadeo, thank you so much for joining us bright and early. paul brain is still with us. paul, i want to pick up on the vaccine narrative. the u.k. has it, the united states has it, we are still waiting for the european union. the companies that could do well are they get out of your house kind of companies. is that a win for europe because they have been lagging far behind the united states when it comes to valuations and the fact that everyone says europe is really about the value trade? paul: it could be something that europe has missed out on through this year. as we get more of a move towards value as economies recover, getting back towards normal, the vaccine -- the rollout of the vaccine is happening. it takes longer than the markets will extend.
they are putting it out to populations which will see the benefit coming through and that will benefit cyclicals and value stocks over the next 12 months or so. annmarie: you talk in your notes about the u.s. high yields having 8% of the market maturing in the coming year and in europe, it's 12%. are you concerned now that so about defaults then? paul: we have got a lot more comfortable -- we have got a lot more comfortable about the prospects of defaults. it's a change after the lockdowns in march and into april. we did expect companies to struggle a lot more but the availability of financing, the ability of support for companies, and the way the economies have officially been on life support -- default rates or expectations have been coming down so a lot more comfortable
as we move into next year. companies can survive the next six months and it looks like most of them can. be coming down. not every company will be surviving and not every part of the company will survive the transition. there is a change going through in the way business is done. it's a difficult but certainly a better environment in april and may. annmarie: it's going to be better in the end, but it sounds like you are saying it's going to actually get worse before we see that uptick? paul: the default cycle is heading still higher, still expecting it to continue to rise , probably peeking after the second quarter next year. and that is concerning if you are investing in high-yield right now. there are certain parts of your people will be less
than they thought it was. the economy sees so much support and availability for cheap money is still there. there's a lot of companies that perhaps do not deserve to survive but have been able to keep going just because of cheap finance. make sense. thank you so much for joining us. paul brain. coming up on the program, bitcoin pierces through $22,000 this morning. $400,000 is next. scott minerd, bullish on bitcoin. that call, coming up next. 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
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22,000 dollars this morning. scott minerd thinks it's fair value but has a ways to go. >> we made the decision to start allocating toward bitcoin went bitcoin was at 10,000. it's a little more challenging with the current price closer to 20,000. amazing over a short period of time how big of a run-up we have had. but having said that, our fundamental work shows that bitcoin should be worth about $400,000. annmarie: turning us now to discuss this is dani burger. what fundamentals is he talking about? is this just the argument that central bank easing, the erosion of fiat currency, is just going to help bitcoin? is that the single final mental? dani: it has to be because -- fundamental? dani: it has to be because it's not tied to a country. it's difficult to assess in that
regard. that's really exactly the argument that is starting to emerge, especially when we are in this environment where rates are so low. the fed seems to be signaling they were going to be keeping rates potentially low as well and not tying it to a specific inflation number but rather an average of members so if we continue to get this to basement of fiat currencies, all of a sudden, you are in a situation where perhaps bitcoin looks like an attractive inflation hedge, and part of the appeal of bitcoin is that there is a fixed amount of it, it's supply is limited. if people want to get in on the action and use this as an inflation hedge, its price has to necessarily appreciate this because there's not enough out there to really hold the value of everyone that potentially would want to pile in. i should say though that the idea that inflation hedge -- that might remind you of an asset light gold -- like gold. bitcoin will overtake gold as value.
that argument is not really the consensus, i don't think at least yet, because at the end of the day, we have to remember bitcoin is speculative, unlike gold. annmarie: as manus said, it's the millennial gold. how much of this rally is driven by retail compared to the rally of three years ago? it is starting to change. dani: there does seem to be a healthy amount of short covering. people bettering that bitcoin would not pierced $20,000 and now that it did, you get the short covering. yes, retail interests is still there, but when you look at things like google searches for bitcoin, they are not as high now three years ago when there was that initial really big have seen a7 and we lot of institutions pile in as well. our thanks to dani burger. bitcoin potentially going to 400 k. bank of england policy makers are do to make their final decision of the year.
annmarie: good morning. from bloomberg's european headquarters, it's six: 30 a.m. in the city of london. i am annmarie hordern. this is "daybreak europe." here is what you need to know today. >> the real concern that still emerges is state and local governments are very large have tos and i just leave the question of what to do with congress. annmarie: the fed keeps policy
study. jay powell moves to the backseat as stimulus talks drive risk sentiment. the boe haolds its final -- holds its final meeting. tear.n on a the cryptocurrency tops 22,000 this morning. scott minerd says it should be worth 400,000. very good morning to you. 6:30 a.m. in the city of london, 7:30 a.m. in brussels. we are potentially narrowing in on a brexit deal. market digest in the past 24 hours, fed getting moving to the back burner. the next to me for hours is whether or not d.c. can clinch a stimulus the. next 24 hours is whether or not d.c. can clinch a stimulus deal. record grimtates, a milestone when it comes to covid-19 deaths, more than 3800 fatalities. in germany, virus cases jumping by more than 48,000.
we are seeing this divergence with covid and what is happening in the financial markets. we can take a look at where we trade this morning. they are starting to price in that optimism of stimulus out of washington, d.c. the benchmark in asia up .5 percent. s&p 500 futures extending gains north of .3%. back-to-back gains on the closed. modest selloff. some disappointed the fed did not reveal a plan to tilt towards longer-term securities. a lot of that has to do with the weakness of the dollar and we see that in the strength of the pound. 135.59 is where we trade this morning. bitcoin, as dani us through that, scott minerd saying we could say 400,000. this morning, we traded north of 22,000, an absolute tear.
$51.64, up more than 1%. vaccines are now starting to hit the ground, and there is this optimism of a stimulus deal. all of that is net positive for consumption. the oil market shrugging off any of the negatives. u.k. and european union are heading towards a final brexit battle over fishing rights. officials are protecting a deal within days. -- predicting a deal within days. whethernot tell you there will be a deal or not. you that there is a path towards an agreement now. the past may be very narrow, but it is there. path may be very narrow, but it is there. theffering partners across channel will see sense and do a
deal, and all that takes for them to understand that the u.k. like every other country to be able to control its own laws and fishing grounds. closere: but some negotiations warned that substantial differences remain on access to u.k. waters, and that uncertainty is looming large over today bank of england, due to make its final policy decision of the year. the central bank is expected to keep policy unchanged for now. joining us now is the senior u.k. economist at hsbc, so it's not just the final boe meeting of the year, it's the final one before we actually have brexit. it's not a political deadline. this is a legal deadline in terms of the trade agreement. how difficult does that make andrew bailey and the rest of the boe? how difficult does that make today's decision in terms of what we can potentially here on the committee case inside -- the communication side? >> it's quite wide at this point
in terms of the midterm disruption that we could have. someoe have assumed disruption at the start of the year. even with a deal, but a no deal would make that considerably greater, so you know, i think they probably thought coming into this meeting, but at least by december 17, we would know whether it's a deal or no deal, but we still don't no one way or another. if it is a deal, i think it's very straightforward for them and they will vote unanimously to keep policy on hold. they did 150 billion more q. week, so they are on autopilot. but if it's a no deal, it's a much more difficult decision. they don't know one way or another. i think they will keep policy on hold this time. but they will probably alluded to the fact that there is risk of a no deal and possibly that they could act if that happens. annmarie: they could act and they might alluded to that risk.
what kind of insurance could we see the boe put up if brexit trade negotiations do become messy and the u.k. does leave and we go back to wto rules? what kind of insurance policies might the boe alluded to today? liz: i'm not sure whether they will alluded to anything specific. we stand ready to active talks do collapse but our view of what they would do is that they could cut rates to zero. we are at 10 basis points now. they could announce another 100 billion pounds worth of qe. the q. week program -- qe program they do have shows a substantial slow down to the pace. they need to slow down the pace and if they announced another 100 billion, that would allow them to keep going at a faster pace which would be a gesture of reassurance. knows how brexit is
going to turn out and what will be the implications in the first quarter. they will take the view of michael thornburgh who argues that it's much easier to do too much and then reverse it if necessary than not do enough and try to reverse the consequences of not doing enough when it is too late. as arie: for the boe whole, what do you think would be too much? liz: too much in this context would be, you know, too much easing, which would potentially lead to inflation coming out of control, and nobody is really forecasting at the moment. it feels like a pretty low risk, which is why this would be more of an insurance policy than they think would be worth taking. their view is that inflation -- the impact of this crisis has been largely disinflationary, and we have the cpi inflation numbers are yesterday. cpi down 2.3% year on year, which would back that up. there is a growing narrative
around, that inflation is picking up, and there are risks towards higher inflation in 2021, but given everything else that's happening, the boe would really want to see that before becoming worried, which says that actually, the risk in their doing more in anticipation of brexit disruption is fairly low. annmarie: we are already seeing some of the brexit disruptions, but monetary policy, you and i both know, is not going to solve the disruptions we are seeing our borders and along lines of trucks, but when you look at the impact of the u.k. economy, given the fact that we do have obviously the confusion and struggle around brexit, and london in tier three, medical professionals talking about the fact that christmas, another high-risk event, could mean more covid infection, that's on the bad side, but the u.k. is the first western economy to have the rollout of the vaccine.
in the short-term and long-term, what do you see in terms of growth and risk to those growths? liz: absolutely. so the bank of england is quite optimistic. they are looking for a good recovery next year, 7.2% and that's driven of course by is pretty speedy rollout of vaccines and the promise by the health minister that we will all be back to normal by april hopefully. of course, we have all been forced to save a lot of money because we have not been able to go out and spend it this year. his view is that 100 billion in people'stting bank accounts, waiting to be spent. that's the positive scenario. less positive and that's because we are worried about brexit and we are worried that maybe this vaccine rollout will not be quite as efficient as is being assumed, and also, there is very much a story going on in terms of the reaction to covid. if you kept your job, and then
you are lucky enough to have your pay probably rising, then you save some money. but there are a lot of people for whom that is not the case and things are getting quite bad and there is brexit, which will not help that. there's plenty of optimism d.oun we are looking for the good news because we had such an appalling year but we have to be cautious around the repercussions of covid. annmarie: thank you so much for joining us today. liz martin at hsbc and make sure you keep it right here on bloomberg. we will bring you that this morning. let's get a recap of the first word news with laura wright. laura: the federal reserve is pledging to keep supporting the economy well into the future. it's maintaining its massive asset purchase program until it sees progress on employment and prices.
speaking at yesterday's policy meeting, chairman jerome powell said he expects the economy to bounce back in the second half of 2021. but he's warning the next few months will be challenging. congressional leaders are still haggling over the final details of the nearly $900 billion coronavirus aid plan. sources tell us it includes $600 checks for americans and an extra $300 a week in unemployment payments. it also includes roughly $17 billion for airlines. the u.k. expects its medicines regulator to decide on approval for the oxford astro vaccine in the next few weeks and that sets up a decision in early january or potentially even sooner. the u.k. has already approved the shot from pfizer and biontech and vaccinated almost 140,000 people in the first week. 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. this is bloomberg.
annmarie: good morning. this is "daybreak europe." copper is rallying along with other base metals as the u.s. nears an agreement on a stimulus package. it comes as stockpiles have dwindled to the lowest level in six years and as outflows continue. it hit the smallest since 2008. it highlights tightness in the global market as economies recover from the coronavirus pandemic, especially in asia. joining us now is the global head of sector investing at blackrock. i want to start with copper. i know it's one of your favorite commodities and you have a
biased tilt towards it in your portfolios. morgan stanley says go bullish on copper. goldman says if this continues, we could top 10,000. do you agree with that in terms of price point? >> thank you for having me on. i think we have been positive on the outlook for copper now for a long time actually, probably too long, a bit too early in our thinking. moves ofbviously the many commodities post the pandemic, you know, that were playing out beforehand, have been accelerated, and copper is one of those, a little bit like gold as well, so we would expect copper to get to a new all-time high. the demand picture looks much more robust than it did free the pandemic. probablyit's dramatically higher and supply-side is inelastic in the short-term because of the
inability of companies to expand capacity. when you combine that with low levels of inventories and investment in capacity over the last two years, is no surprise to see the market as tight as it is. you outlined a lot of the price is due to supply and demand but a lot of it is about other things. the u.s. might get the fiscal stimulus deal. how much are we seeing the bullishness in the price about the macroeconomic indicators like fiscal stimulus not actually the supply and demand situations we are seeing in the likes of china? liz: one thing you have -- >> one thing you have to remember with the last bull run, the china driven one, was that china drove commodities demand growth. they were in many cases -- they represented over 100% of overall demand growth because demand in the western world was flat to lower. what we are faced with today is globally coordinated fiscal spending to support the global
economy as lows from the pandemic. in addition, we have again very much a green tilt for spending toeconomies look to move lower carbon transition, and with that, commodities like copper are going to be big beneficiaries because you cannot solve both of those things without a commodity like copper. it's essential in the carbon transition. if you want to charge electric vehicles, you will require copper, so it's as simple as that. my comment from earlier about the pandemic actually accelerating trends that were already in place, copper is one of those with the spending that is planned and the focus on it being green, copper is right at the center of that. annmarie: we have a number of countries coming out and talking about when they want to reach these net emissions. china being one of them. you have jill biden campaigning on the most ambitious climate plan ever in the united states.
you mentioned copper being a winner. what other metals are you looking at for ones that might suffer from this? evy: there are lots of commodities that will be exposed to this transition. going into batteries boards the commodities related to the infrastructure that is required so you have silver going into solar panels, steel going into wind turbines, etc., and there's a whole range of commodity exposures. the key is that the spending will probably lift demand for most commodities. given the underinvestment into new capacity by the mining industry, because of the excellent capital discipline they deployed over the last five years, we do not have a huge amount of supply growth with a sudden pickup in demand, and that's why we will see prices elevate. obviously through time, higher prices will encourage people to start spending on capital again and bringing new capacity, but that takes many years for that
to actually turn into physical supply so i think we do have a window of opportunity where commodities are likely to be big enough to share raise of many of the plans by governments. companies in a stronger position than i have seen in my career, a robust balance sheet, and very disciplined approach to capital. shareholders should be a winner as well. annmarie: we talked about copper. i wanted to get your sense on what is going on with the iron ore market. for me, that was the absolute stand out, up 20%, holding about 150. do you see this iron ore supply and demand dynamics continuing to 2021? evy: it is similar to what i said earlier about copper in that you have got a much better demand picture, people have been expecting, driven by some similar factors. the big difference in iron ore is the ongoing supply disruption. we obviously saw the tragic
events in brazil a few years ago and we are still not getting back to the higher levels of production capacity out of brazil that were mentioned, you know, a few years ago now. recent guidance in some companies has seen lower production levels, but i think brazil and in australia -- i think the supply-side there is really having a big impact on pricing as people are worried about where they are going to get the iron ore to be able to make this deal event that robust demand environment. i think if we do see ongoing supply disruption, prices are likely to remain elevated. annmarie: i want to finally get your thoughts on bitcoin. i know you have a thought on gold. many compare gold and bitcoin. what do you make of this appetite we are seeing in bitcoin? scott minerd telling our colleagues he sees bitcoin going to 400,000. today, we are piercing through 22,000. is this realistic? seeingthink what you are
in bitcoin, as we are seeing some degree in gold, people are taking the view that government policies on the likely debasement of fiat currencies, people are looking for assets that are relatively scarce and will hold their purchasing power through time. gold has fulfilled that role through thousands of years and is likely to continue to do so. bitcoin is relatively new but has similar characteristics so i think just as people are looking for assets to protect their wealth, they will turn to a whole range of different things. gold, bitcoin, and other real assets are likely to provide that role so it's not a surprise to me to see people having demand for it. when it comes to saying what the underlying value is, i am definitely not the expert to give you any guidance. annmarie: thank you so much for joining us. global head of somatic and sector investing at blackrock, tic and sector investing
, they wereactivities reduced to a minimum. it goes by the pandemic. the presentation -- it has more of these coming up. for the second part of the year, we were much more positive for this attend part of 2021. >> that was the ceo of bugatti and lamborghini. let's get more with matt miller, who spoke exclusively to stephan winklemann.
sounding pretty optimistic after lamborghini sales were under pressure this year. matt: keep in mind, he ran lamborghini for 11 years and step to 12 -- stepped away to run audi and then bugatti for the past five or six years. volkswagen put him back at lamborghini so he's just taking over again and this is a very social brand. lamborghini customers spend a lot of time together doing so covid has been tough. match 2020 sales next year at lamborghini but he's also still running bugatti, so he's running two brands and bugatti has record sales in 2020. that's the kind of car where if you are going to buy it, you buy it, pandemic or not. annmarie: i guess that makes
sense. wouldn't you buy a lamborghini if you could buy a pandemic -- diet, pandemic or not -- buy it, pandemic or not? matt: if you are going to buy a car that's $3 million or more, that's kind of a solo flight. not a lot of your friends can do that. lamborghini's are more reasonably priced. they are still expensive. it's really kind of a club. people tend to do it in groups. you make friends that owned lamborghini's or you make friends and go in and buy them together or buy one to be part of a club so it's a social thing and that's why it was difficult. a lot of ownership of lamborghini's doing track days and you could not detract days when they were closed. track days when they were closed. annmarie: matt miller, he is