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tv   Bloomberg Markets Americas  Bloomberg  December 28, 2020 1:00pm-2:00pm EST

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identified the men bleach to be mannd the nashville -- the --ieved to be risk possible believed to be behind the nashville christmas bombing, they are seeking a motive. the eu rollout could be about three months behind that of the u.s. and britain, and authorities are concerned slower pace could force longer lockdowns and even more economic damage. across europe, there have been more than 400,000 reported deaths from the virus. spain's death toll now surpassing 50,000. in the u.s., transportation security administration says that saturday and sunday after christmas marked the busiest we can for air travel since the pandemic caused mass shutdowns in mid-march, with 2.1 million passengers getting on flights despite calls from the cdc to limit all non-essential travel.
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u.s. health authorities warned of a potential spike in virus cases. 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 karina mitchell. this is bloomberg. ♪ alix: it is 1:00 p.m. in new york. i'm alix steel. ."is is "bloomberg markets we are following chinese regulators asking ant to return to its payments routes and overhaul its entire business model. thatl investors worry scrutiny will spread beyond china. you will hear my conversation e -- with stan irk.
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a quick check here on the markets. it is definitely a risk on rally, but you have to imagine that trading is pretty thin. volume is pretty light. you have a shortened trading week, and many taking today off. s&p is up by about 0.9%. the risk on trade is comedic asian service is leading the way higher. dollar index flipping into -- trade isritory communication services leading the way higher. dollar index looking into positive territory. two basisby about points. and bitcoin up to $27,000. this is the longest winning streak we've had for bitcoin since 2019. some tech heavyweights in china like alibaba, tencent, and lost over $200 billion in
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market cap over two trading days. here's the by. regulators -- here's the why. regulators telling jack ma's ant payment go back to services. for more, we want to bring in bloomberg's sam amundi. is this move against ant or jack ma? sam: that's the $300 billion question right now. the fact of the matter is no one quite knows. whether this is a concerted attempt to take on the power that ant has within the chinese market, or whether it is a question of jack ma maybe got too big and said some provocative things about japanese regular -- about chinese regulators. alix: does this discourage or change at all the trajectory of money that was going into the chinese tech sector from abroad?
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i look at silver lake, carlisle, all of them were investors and are investors in ant. does this change the denny mac? dusty dynamic? -- change the dynamic? billione you said, $200 has been wiped off of the stocks of other companies. -- clearly there is concern. the investors you mentioned are going to be in wait and see mode just to see exactly what happens. regulators have stepped in every now and again with these companies. tencent in 2018 came under scrutiny because it was criticized for having a lot of mobile gaming that was attracting china's youth, and they didn't like that. the shares dropped, but then rebounded to all-time highs, and the tech sector was a darling again. it is very difficult with china to know exactly what the -- exact a the regulars are going. wherey they -- exactly
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the regulators are going. the way they write the regulations. but this could be a potential flashing red warning sign for them. alix: it is hard to understand the regulatory framework in china, but therein lies the problem, particularly as china is trying to open up. what specifically did they say "wrong," or doing what they need to fix? sam: they came out with a quite strong statement yesterday 'sying that essentially, ant governance hasn't been great. they've been not quietin payinge enough attention to the regulation -- not paying quite enough attention to the regulation, and they need to rethink how they are going to run their business going forward. so they want a plan for when that gets put into action. is lookingright now
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at it. risk wherebe a everything moves along, or the regulators could keep saying no into any plan until ant's back with a plan that complete the bricks them up. these multi--- completely breaks them up. these multitrillion dollar businesses would get broken up. alix: it seems like part of the issue is that ant is not taking them on -- taking on enough risk. -- itthe intermediate is is the intermediaries taking on risk. can they take on more risk to satisfy regulators? sam: yes, it could. it would be a much less profitable business, but in theory it could. to your original question, if this is simply a matter of bringing jack ma into line, or if it is simply that the authorities in beijing have twoded they don't want is alsopanies, but it
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an investor in almost every big tech company in china, or it has some relationships with them. they could comply, but again, i know it is frustrating i almost give you the same answer every time, but there's a spectrum of what could happen, just being some small fixes and tweaks to ant no longer existing in its current state. alix: talk about binary. appreciate it. bloomberg s sam -- bloomberg's sam mamudi, thank you for joining me. we are going to hear from -- from-- from novak novavax's ceo about his vaccine candidate, next. ♪
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in the latest large-scale effort to evaluate vaccines, they have begun the last -- last stage trial for novavax. if itdown to find out will beat the new virus strain. >> everybody is in the middle of testing the vaccine against the string. our platform uses the same that's worked very well against the flu. we've shown our flu vaccine showed protection against multiple streams. we are hoping we have the same effect with covid.
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y update us on your timeline -- can you update us on your timeline? >> this is the third efficacy trial we've started. with 400d in africa volunteers. in september we started a phase three program in the u.k. like all the other vaccines, you unwind when you have a certain number of cases. we are waiting to get to that level early in the first quarter and the u.k. now in the u.s. we will be doing the same thing. accruing 30,000 volunteers and watching for the number of cases. we've got three ways to look at it over the coming months. is it fair to compare novavax to the mrna and their efficacy? >> i think it is.
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we all measuring the same thing. globally we have fairly harmonized influences, taking a look at the type of disease we are trying to prevent. across otherible] vaccines. >> do you expect efficacy in the 90's? >> we don't know until we know. based upon what we did and preclinical nonhuman primates and first human trials, the immunogenicity data we have demonstrated has been at or above the levels of the moderna and pfizer. to you have an understanding of the side effects, did they increase, change? do you have a read on that yet? onwhat we have is a read
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side effects from earlier studies and what we've been doing on phase 3 in the u.k. we have a benign side effect profile. we have the antigen, the protein we just put in. we just finished a phase 3 pivotal trial with influenza earlier this year with a very benign trial. early studies with the covid vexing are the same. about the newed strain, if you had to go back and tweak things for the new strain, how quickly can you do that with a traditional b -- a traditional vaccine? >> it will take time. i don't believe we will have to tweak it.
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but if we did it would take time. you would do some comparability studies. all?e you concerned at would that delay the scale of process? -- scale up process? participants want to understand what the new risk is and how they need to think about it. k it's a low i thin risk for a vaccine -- our cannot work on the new strength. i think it is a low risk for our vaccine to not work on the new strain. was novak ceo speaking to me earlier today. health officials are now warning that those christmas search and -- warning of those
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christmas surges in infections. is any strain in the u.s. yet and can we detect it? from a peerless scientific standpoint, we don't necessarily know the answer to that. one of the things we should probably pursue is that it is, given how widely it's been found elsewhere around the world. and the theory that it may be far more transmissible. seems safe to assume that it is already in the u.s.. we've identified it early here. that seems to be the assumption i have seen from the people i follow online and read. there's no reason why we are special or different than anybody else. i was having a conversation earlier that it would not
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necessarily affect the vaccines. they can be helpful against many different strains. immunity.ld hurt hurt herd immunity. have you heard chatter on that? the conversations around herd immunity are far more complex than what we are able to have in a really quick way. yes, that is certainly -- that does certainly quite make a bit of sense. the priority for public health is already getting people vaccinated to start with. off from herdy immunity. more infectious the disease is, the higher threshold you have on some kind of herd immunity in order to have protective effect
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throughout society. vaccinatee you can the better, so that leaves us astrazeneca. and you give us the latest on that and when we can expect other countries to do the same as the u.k.? is out ofeard from us the ceo from astrazeneca. another report they have great data they are waiting to show. we don't know when the u.k. might add. you want to see the backing for anything that's going to be approved and really know what you're dealing with. we do know is we don't have an emergency authorization application into the u.s. fda from them. while it can move fast, i think
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that is something we have not seen that we would probably need to see first. lackinguntries would be from the u.k. significantly until we see more information from the company. was barely up. novavax was down 5%. are we losing the market thoughtfulness as it relates to vaccines? has the story been played out already? i think one of the things people may beginning to realize the goal from a public health standpoint is to turn the ascines around as quickly possible into essentially cheap commodity products that are functionally interchangeable. from a public health standpoint, what you want is a whole bunch of highly effective very easy to manufacture, inexpensive vaccine.
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that all worked just as well as each other. -- that all work just as well as each other. from a public health standpoint and ending the pandemic standpoint, it's great. it's exactly what you want. the flipside of that is that you get to reopen the gold book economy. >> you lose your differentiation with the for the biotech guys. coming up, we switch to the retail recovery. retail sales, meeting expectations. also what happens when you get stimulus checks down the line. this is bloomberg. ♪
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sales areliday retail coming and stronger according to data out of mastercard. night have stimulus checks coming down the pipeline. what does that mean for consumer spending? now with more. mary, the stories that here is that we need a check because no one has any money or consumers have so much saved they are going to spend it all. which is true? >> i think people made money. yes there are people who are in the stock market, trade, with big portfolios. we are not going to cry for them. but the majority of americans rely on these checks and aren't certain whether they are going back to work, whether they have money coming. while they may have some saved, it's not enough to get them through six months.
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i think it's going to be a challenging time. and has been challenging. while we did see some good retail sales, what i want to express is much of that was done with margin erosion. i think we are to see some profitability issues. the goal of the retailer or the brand or website was to chew the merchandise out. >> you're looking at playstation, xbox, kitchen electrics seem to do well, but those are higher ticket items. they were not as high ticket as a normally are? >> you are talking about the exceptions. four exceptions were merchandise sold above regular price, the xbox, playstation. if you can even find one, you are lucky. those were among them. ditto for the tech equipment and the merchandise that is
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highly coveted. the retail and brand market, we saw a lot of discounts. those are the ones that we really need going forward to work if our fashion business is going to work. >> where our inventories right now after this? everyone is desperate to get rid of their inventory. they had to do a lot of moving around in the spring season to prepare to the fall and holiday season. so the objective has been to get out of the merchandise. in my opinion, the department stores are in decent shape. the ones who really won were target, costco, walmart. of course, amazon and the robust website. the rest of the brands that really have to rely on brick-and-mortar business to
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make their season are a little bit more stressed. they will keep marking down and liquidate it. >> who are those names? it's not that the stores don't have a strong on the channel presence. it's just that most of the businesses are still done in brick-and-mortar. when you talk about department 70%-80% of their business is done in stores. that's essentially been gotten rid of. let's use macy's as an example. 600 stores, you do the math. it's really hard to make that up in the omnicell. -- the omni channel. good job of a
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inventory and marketing, but it's not a foolproof thing. they've had to take a lot of markdowns. because the worst thing you can do is carry all this inventory into the new year. >> break point. thank you very much. coming up, not only do the stimulus -- do you have a stimulus deal, we also have a budget deal. there could be a big win for solar and wind energy. we take a look at the energy space coul -- the energy space coming up in 2021. this is bloomberg. ♪
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>> let's get the first word news this afternoon.
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this after a sweeping national security law was instituted by beijing. the group was detained in mainland china since the summer. the serious charges could result in a lifetime [indiscernible] in moderate magnitude 5.0 thehquake hit croatia near capital early monday, triggering panic and damage to buildings south of the city. there were no immediate rep boards of injuries -- reports of injuries. >> were also felt in neighboring bosnia. actress lori loughlin has been aftered from prison skimming to buy their kids entries into some of the country's most elite schools. her husband, also convicted, continues to serve on a five-month sentence in california. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in
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more than 120 countries. mitchell. this is bloomberg. ♪ >> welcome back. another record for the s&p. no surprise there. volume, very light. only the nasdaq has strong volume, over 7%. in the index,ving big tech, airlines, cruise lines, hotel stocks doing particularly well. 3 start is for the novavax vaccine. it's down by .6%. the boost for vaccine news seems to be fading in the market.
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everyone just keeps buying tech and bitcoin apparently. sending clean energy stocks soaring. for more, we are joined by alan wald. what is in the bill when it comes to the energy when it comes to the budget? >> we are looking at a tax and that's been provided to clean energy providers, solar, wind, and the like. these tax credits were supposed to expire. have not seen them increased yet. which i think there are definitely people in congress who like to increase the more expand them. right now we are seeing the expansion of these. is why a lot of the companies that are providing these services are doing quite well in the stock market today.
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because the tax credits provide incentive for consumers and other businesses to purchase their services. , the carbon offset that may help provide. e also got interesting legislation in terms of a really interesting thing in this bill that provides money for a study to be done to look at how much carbon do we need to remove from the atmosphere by 2050. that is supposed to be done in six months. june, we should have the results of the study. it brings up the question that if most of the carbon capture stuff is being done today, it's actually being done by industry and companies. you are basically capturing carbon dioxide that would have been released into the atmosphere and storing it. plan.l has a really big
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exxon was in the process of it. one of the things we haven't started doing it is actually removing carbon in the atmosphere. seems like an area where we will hear more about to come. >> me understand the money. $35 billion. is that really enough to incentivize oil companies to become energy companies? >> i don't think that is enough toincentivize them, alone, do more in this area. oilt of these inpanies, they are engaged the supply chain in those areas,
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but also do research and to other points of energy. when it becomes a profitable business for them whether it is through regulation or societal costs come down, they will enter that sphere. because these people know and understand energy creation and transportation. i think it is enough money alone to incentivize it, but we're seeing a lot of movement in this area. and i think we will continue to see it. >> they have the infrastructure in so many ways that other companies may not. the sets the stage for biden. his green plan. the other part of his presidency that is important is what his policy will be on iran. casesnder what your base -- i wonder what your base case is. >> this is what we have to pay attention to win both the whale market and in the geopolitical market. iran is preparing for a biden
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administration. the iranian calendar turns over in march. they are preparing any budget. -- a new budget. 2.3 million barrels a day for next year. right now iran is at about one million barrels a day. which is pretty low and has gotten that low precisely because of the trump era sanctions and have a have gone around prosecuting the violators of the sanctions. iran is certainly acting as though either they are about to be lifted or the violations of the sanctions just will not be prosecuted or pursued. are looking into their usual customers. china being one. they like to send more to venezuela, as well. this could really be a factor on l market and
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geopolitics in the beginning of 2021. >> it seems like we have seen iran get a little more aggressive. there was also a tax in yemen. houthi rebels from iran. what did you make of that? >> there's a real downside to this. there's no real downside for iran to continue to pursue its its seenist desires in her. there's been cases where the trumpet ministration did retaliate with the killing of qassem soleimani. but it's been a year since then. i think they believe a biden take anyation will kind of aggressive action. why not continue in their minds was working? -- in their mind with what is
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working? >> in that case, how much oil could they realistically be able to put in the market, and when? if they did that, how would they tweak or not their nuclear program? >> that is a big question. they want to have 2.3 million barrels on the market. that does depend on whether the customers are willing to take the risk and by american oil. it will do better if oil prices go higher. than they will have more people interested in discounts that they can provide. more money for iran will definitely mean the iranian economy will do better but also extra operations outside of iran, provoking things in the middle east. e, are seeing saudi arabia, ua other countries becoming more concerned about that.
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i think they are getting more concerned and we should definitely be more concerned about these kinds of small naval activities or missile firings flowing in the persian gulf region. >> i want to get your take on demand. and wonder what your models are showing you, are they restocking at lower prices? higher prices on the road? this at ripoff demand in the future -- does this ripoff demand in the future? is it not as a solid as we think? >> the demand picture for china is questionable in some respects. the chinese stimulus to have done has really helped oil demand. we understand they are planning commission something on the range of 100 million storage.ore of
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which means they've got an incredible amount of storage they can fill with oil. there are also planning on opening more refineries. which means oil demand for china is set to increase throughout 2021. oil prices go too high, china will slow down on their purchases and use that to kind market.r the china is in a good position to play the oil market and purchase a lot when prices are low and ea se up on it if they think they are getting too high. it is going to be china's year in terms of oil demand. china is where the big growth story is. wald, thank you so much for joining me. coming up, we look at the biggest risk for emerging markets and the year ahead. particularly in latin america. wrongcut a consensus be
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-- where could a consensus be room? >> -- be wrong? this is bloomberg. ♪
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>> let's focus on some of the challenges of 2021 when it comes to emerging markets. said over the if the m policymakers do not continue to recognize that they face much higher due to their dm counterparts, they face a spiral developossibility in dm
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markets. saudia, what do you think about thecosts ? -- claudia, would you think about the costs? >> that is certainly the main risk of the region. latam could be considered the weakest link within the region. that is the region we cover the least. i think you can characterize the risk to the upside and the downside. the risks to the upside would be the u.s. recovers so fast relative to the west of the world -- relative to the rest of the world. on the dynamics world for latam. on the downside, we have another second wave in latam also and
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in developed markets. latam willth and suffer. the good news is [indiscernible] for longer. developedly be markets, central banks, can do a lot more. thek those are the risks market is underestimating a little bit. >> in terms of region, if you ask someone what they like and 2021, they will be hard rest to not likeone that did emerging-market asia. is that the opportunity for latin america? too much risk in latin america? >> that is a great point. that is an opportunity for la tam.
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latam is a bunch of commodity exporters. not only the global growth is picking up, but also the composition of global growth is good for latam, because china is driving the recovery. that is good for latam. not as good for mexico. mexico will contract 10% this year and recovered 2% this next year. discussed before, the dynamics is about growth versus interest rates. latam needs the global interest rates. to remain lower until growth except strongly and looked him -- in latam. that is not going to happen because of the distribution of the vaccine will be slower than
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most of the governments of the governments in the region think at this point. >> how do you play that? outperformedlly most major banks. copper will continue to outperform. how do you invest in that? is it the individual miners? is a fixed income? effects wille capture a big chunk of that story. because carbon sees weaken a lot lately despite some recovery. in a scenario [indiscernible] by china, a weaker dollar. that should be good for em. companies, of mining they will benefit in particular. interest rates, there's a much
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to do because they are already quite low. in chile. there's not much room to go any lower. effects on equities would be the main way. >> what would you do in a country like argentina? >> argentina is a little bit difficult. we have important midterm elections in argentina. we have a lot of midterm and presidential elections in the region as a whole. with the exception of brazil, all the countries have an important election next year. in particular, it is key the government struck an agreement as soon as possible and start policyy tying and fiscal or putting the fiscal house in order and start signaling to the rest of the world they are serious about tackling the imbalances.
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there's a lot of homework to do still. and obviously, the government is talking tobetween the constituencies and at the same time talking to the market. obviously, the message is not the same for the constituencies in the market. gradually, they are moving toward the right direction. >> i guess the other broader as we get back to, if the vaccine is not distributed dm, as the drug going to be on the? -- on that? in latin america are different from the first wave. interest rates are raised super standards and fiscal policy is quite stretched.
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take a look at brazil. they are badly in fiscal consolidation. be more fiscal policy done the road. it's going to be extreme limited. there are some countries that have some room. like peru and chile. veryther countries are restrictive in terms of how they of public in terms policy. obviously, there's a lot of social 20 for implementing lockdown -- social fatigue for implementing lockdown. >> the so -- does the dollar go down? is it going to be a catalyst? >> it depends on how the distribution of the vaccine plays out. i think not only in developed -- in developed markets, if
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it is available in the next three to six months, probably, the time for the dollar should be lower. despite the fact that we can have probably some and missionary purposes -- some inflationary purposes in the u.s.. there's a lot of uncertainty about the timing of the distribution of the vaccine in meaningful terms, because unfortunately, depending on the way you see it, the immunization levels are pretty low pretty much across the world. around 25%. pretty low relative to the 70% to get immunizations. if the second wave [indiscernible] it could be nasty. claudio, bank of america head of latin america, we appreciated. it will take you to the strugg e
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travel stocks we mentioned earlier and take you through the winners. this is bloomberg. ♪
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>> time now for stock of the hour. the travel industry, breaking up a bit today. astrazeneca, indicating the vaccine may be ready for use. disney, celebrating news. we have the story. >> it is one of the surprising turnaround stories of this covid-19 year. disney shares come at an all-time high and getting a further boost on this positive vaccine activism and the idea that -- optimism and the idea that numbers will start to rise. one of the areas most impacted by the coronavirus is the theme park business, which has lagged due to the shutdowns. theme parks are down 61% from a year ago.
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despite $5 million in losses over the last two quarters, disney shares are making a big comeback. they are up more than 20% year to date and have more than doubled from the lows in march. part of this renewed optimism is around its streaming business, which has overshadowed the struggle and other areas of the company -- ni other -- in other areas of the company. disney plus now has 80 million global six writers. -- global subscribers. announced 32,000 layoffs by the first quarter of 2021. ory of these layoffs furloughed workers, now it's been made permanent. it's another sign that the stock market is not the economy. and collect.
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really appreciated. let's take a look at where we are within the market. light when it comes to tech stocks. the s&p, hitting another record. tech, up as well. liners, airliners, doing particularly well today. you had a sloppy to your option earlier. option earlier. live from new york, happy monday, everybody. this is bloomberg. ♪
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>> i'm karina mitchell. let's get the first word news. they are be nations have unanimously approved closed
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brexit trade deal with the united kingdom. welcomed it. it is still under approval and set to be approved by the legislature. runoffsgeorgia that will decide control of the u.s. senate begin their final stretch this week. president trump heads back to georgia to appear with david perdue and kelly loeffler on the eve of their january 5 runoff. none of the candidates manage more than 50% of the votes in november. thailand has reported its first coronavirus death in nearly two nears after a resurgence the capital continues to infect more people. a 45-year-old man who had a pre-existing heart condition died today. it was


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