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tv   Bloomberg Surveillance  Bloomberg  December 30, 2020 6:00am-7:00am EST

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guy: stimulus optimism fades as mcconnell blocks $2000 checks. with days until the georgia votes, pressure mounts on republicans. the u.k. approves astrazeneca vaccine, india sets to follow. this is the first reported case of the new variant is found in colorado. the eu and china are expected to confirm their much-anticipated treaty, a move that risks upsetting the upcoming biden administration. for francineson in lacqua and tom keene. both have the day off. let's catch up with the first world news, ritika gupta. ritika: mitch mcconnell rebuffing democrats and president trump on relief checks. he is blocking attempts to force action that would increase direct stimulus payments to
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$2000. the president weren't failing to act now amounted to a death wish by republicans. a variant of coronavirus that emerged in the u.k. has been found in the u.s., raising concern that a more transmissible strain could spread widely across the country. a man in his 20's in colorado was the first known to be infected with the mutated strain of the virus. he has no reason travel history. in germany, the daily death toll has passed 1000 for the first time. there were more than 1100 deaths there in 24 hours through this morning. germany joined you partners in starting vaccinations sunday. prime minister boris johnson plans to rush the brexit trade deal through parliament today, confident it will be easily approved. a prominent group of hardliners plans to back the accord. the labour party will also vote in favor, even though it because the agreement inadequate.
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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. thank you. let's check the markets. a light volume featured on both sides of the atlantic as we head into new year. european -- going sideways. travel and leisure are the best performing sectors this morning. s&p futures pointing to 0.5% gain. light volume going to feature there. the dollar is down. in terms of the bloomberg dollar index, it is extending below its lowest depth since april 2018. bitcoin remains big. up earlier on, a fresh record high. blocked annell has attempt by democrats to increase direct stimulus payments to
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$2000. president trump warning that move amounts to a death wish. he is referring to georgia, really. let's talk more about this with kevin cirilli. kevin, good morning. how much pressure is mitch mcconnell under to increase those payments to something above $600? is there compromise somewhere between $2000 and $600 that is going to have to be delivered upon the echo kevin: -- delivered upon? kevin: we are seeing president trump trying to suggest that, should republicans lose georgia, it would be mitch mcconnell's fault. meanwhile, mcconnell suggesting president trump had negotiated too little too late. as it relates to whether or not there is a path forward to $2000, based on interviews, i can tell you that there appears to be a small but closing window
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if they would like to get this through by sunday. remember, a new congress is set to be sworn in next week. because of that, the window is rapidly closing. the two candidates on the republican side in georgia have backed the president. how much does that tell us about where this is going? watching georgia, mitch mcconnell, in terms of concerns he will face, is there a direct line to draw between these checks and the republican's performance in georgia? kevin: democrats are optimistic about their chances in georgia. this is a stage that president-elect biden carried for the first time since 1992. the last one being former president bill clinton. they are really ambitious in
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terms of their get out the vote effort and early voting. they are hoping to be boosted by black turnout in georgia, and again run a much broader referendum campaign continuing from the biden-trump election. in contrast, republicans are running as a joint ticket. david perdue and kelly leffler are saying they are the chance to serve as a check and balance to democratic progressives in the house and to the executive branch. it has been a remarkable anomaly of an election, one that has drawn in tens of millions of dollars from across the country for both sides. it is incredibly expensive. as one prominent republican strategist put it, it remains a toss up. it has republicans uneasy that it is a toss up because typically this would have once been thought to be a response --
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thought to be a republican stronghold. guy: thank you very much. kevin cirilli, bloomberg's chief washington correspondent. georgiaus ahead of the runoff, which becomes increasingly tense and a huge factor for markets. the u.s. vaccinating an average of 200,000 people a day. the goal ofshort of 20 million vaccination by year end. ofthe u.k., the use astrazeneca oxford university vaccine has been given the green light, marking the first national approval. joining us now is sanford's alley -- sam is allie. can you explain to me what is happening in the u.k.? news ontified by the the regime that is going to be used on this astrazeneca vaccine monday. basically the ideas that we are
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going to give everybody a shot and worry about the second shot further down the road. can you explain that? sam: good morning. i think the point to be careful with is that when they presented this data in the paper published december 8, there was a comment about the timing at which people in the u.k. trial who got the haddard dose of the vaccine a -- of 69 days median. of 50-86 days.e comment, with the second dose being administered 12 weeks after the first, i think is based on that point. in the u.k. file, which had that time median between the two doses, we had 60% efficacy for the vaccine.
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that is where i suspect these 12 weeks come from, which all happened because of another mistake within the trial. president-elect biden is complaining the u.s. is not distributing shots fast enough, well short of expectations. if that, because of the limitations of distributing messenger rna vaccines which have to be kept supercold, how big an impact would a vaccine like the astrazeneca one have on that number? i am sure the cold chain requirements for the two vaccines are not helping, but the companies have done the best they can and making sure the vaccines can get to people. support,em is that the
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the financial support for vaccinations across states is woefully lacking. i am hoping this is correct, states were getting something put in million to help the infrastructure to deliver vaccines. that is nothing. if you look at france, you're going to have to see a doctor before you get the first vaccine , and then see the doctor before you get the second. these cost money. infrastructure needs money. the whole process gets slowed down as a result. thank you indeed, greatly appreciated. sam fazeli, updating us on the vaccine. to6:30 eastern, we will talk the editor of the lancet. leaders arehinese expected to approve a hard auto
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investment deal, paving the way intouropean companies foreign companies -- joining us from brussels is maria. can you give us the broadbrush details of what this deal actually is? this -- in 15 minutes, the heads of the european institution angela merkel are will be back. jinping of china jumping on a videoconference that see -- that will see this plan come to fruition. two things the europeans have been briefing today, one is that china will make a pledge to be more transparent when it comes to state subsidies that have been an issue for europeans who worry about state money being dumped into the chinese company needs that can engage in predatory -- the chinese saying it is looking at is open markets in european
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capitals. this was key for the eu. the big question is what areas are the chinese not conceding. how is europe going to enforce this? dealing with china can be problematic. the you look at the impact state still has, and the idea that -- how are you going to deal with this if targets are not met? the europeans say this is a first step to recalibrate the relationship and to the trade deficit that is not working for china. how much concern as they are brussels about this deal antagonizing the incoming biden administration? the timing is funny because this is happening as joe biden is entering the white house. he is not going to change his policy on china. the europeans, to some extent,
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have welcomed that. they also say something that is repeated time after time that they have to push for what they call strategic autonomy. that means not depending on anyone, drawing your own political agenda. this is time for real politics when it comes to the eu and china. and the euuge market wants to invest. aboutthey say this is not a tight relationship with china, but more about becoming a two way street. this is not about president xi, but about european companies. that is the spin brussels is putting on it this morning. thank you very much indeed. maria tadeo. next, sarah house from wells fargo is going to join us to discuss these markets. this is bloomberg. ♪ are you frustrated with your weight and health?
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guy: 15 past the hour. this is "bloomberg surveillance." francine and tom have the day off. wells fargo you -- wells fargo says the latest relief bill should yield gdp growth of 7%. let's dig into details. summerhouse, wells fargo securities senior economist. thank you for your time. is's start off with what happening now and the impact this is going to have in terms of what the economy is going to look like in 2021. basicallysays we are
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fascinating -- vaccinating too slowly. there is relief in the market that vaccines are going to lead to a better second half for the u.s. economy, but if the process is too slow, does that get called into question? a big partvaccine is of our story in terms of growth. we do expect activity to ramp up. in large part because of the vaccine. will push backve the timing of when growth takes off. you should see activity picked up late spring-early summer but if the vaccine does not roll out as quickly as planned. you do have consumers with covid fatigue. you will see them get back out there and activities resume, even with social distancing. i think that may be delays the exact timing of the takeoff, but
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what you are looking at is a different story in the second half of 2021 than what we are looking at over the first few months of the year. the other -- in my mind is what is going to happen in georgia. it is still unclear as to which way the senate ultimately will move. where the democrats to win, we could see huge amounts of stimulus flooding over the u.s. economy. how big a factor is this going to be? how bifurcated is the decision in terms of the impact one way or the other in terms of economic projections? sarah: if you were to see democrats win the runoffs in georgia and take the senate, the majority is going to be razor thin. going to make sweeping legislation very difficult. even additional covid relief.
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on the margin, that should help in terms of squeaking out some smaller deals. by and large, i think you are looking at what is more or less going to be a divided government where even if the democrats to squeak out that majority, it is coming due to the fact they won. -- won what are otherwise moderate states. for one or take much two moderates to sink major legislation and go against their party line. you are going to be looking at a year where major legislation is going to be passed. midst, there is pressure on mitch mcconnell to increase stimulus checks from $600 to $2000. how inflationary would $2000 checks be? support thewould risk of significantly higher
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inflation in the second half of the year. are expectingwe is that inflation is going to struggle to hit 2%. you're going to get a pop around the second quarter of this year as you do easy base comparisons, but remember a lot of the growth this year is going to be fueled by services. we have pulled forward to demand for goods, that is an area where inflation has picked up. good inflation is the strongest we have seen since 2012. even if you see strong spending in services, the more tepid demand for goods is going to be a cross current in the overall inflation picture. think about the underlying dynamics, have they really changed? we have seen inflation expectations dressed up, but they are well within the range of the last decade. whether we see more than just a one-time pop in the inflation,
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whether we see an actual --tained and repeated christ repeated price increase remains in question. guy: what would that mean for the fed? i look at a breakevens a encz the u.s. 10 year, it is like 1%. that is telling me the market will see some inflation, but does not expect the feds to react. is that correct? beah: we expect the fed will -- continue asset purchases through the course of 2021. no move in terms of fed rates any time on the horizon. rate highernflation end expectations rise, you can see markets price in a rate hike sooner than expected, which could lead to tightening financial conditions. it really comes down to how well the fed communicates. what they mean by inflation, just moderately above 2%, given
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how weak inflation has been. to thecomes down communication factor in whether the fed can keep financial conditions accommodated even without adjusting their policy stance in terms of asset purchases. great to speak with you. thank you very much indeed. sarah house, wells fargo securities senior economist. fargo macro wells strategist will be joining us at 7:30. this is bloomberg. ♪
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guy: this is "bloomberg surveillance." tom and francine have a well-deserved day off today. lighter volume on both sides of the atlantic, a feature for equity markets. we are expecting u.s. markets to open up at 0.5%. hundredths of a percent. is the lead performing sector we are watching in europe. , kind of, sector distribution. we are seeing the dollar continue lower.
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122.67. on the bloomberg dollar index, we were back to mid 2018. bitcoin remains big. we were up more earlier on. we faded a little bit. the record high earlier in the session, 28,500. what is happening with the vaccine under the virus, more about that later on. hopkinsauer, johns professor of emergency message -- emergency medicine will be joining us. the icu story and the rollout of the vaccines. this is bloomberg. ♪
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ritika: this is "bloomberg surveillance." mitch mcconnell has made it
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unlikely there will be quick action on an increase in direct stimulus payments. the senate will consider boosting payments to $2000, but that will only take place in conjunction with other demands from president trump such as re-examining special protections for tech companies. the u.s. vaccinating an average of only 200,000 per day. that while operation warp speed has ordered millions of doses, some states have been slow to get them into people, according to bloomberg. theu.s. certainly won't hit trump administration's goal of 20 million vaccinations by years end. a republican congressman elect from louisiana has died from coronavirus. he was elected in november. he was 41 years old. is expected to drive growth in the wake of sanctions and the pandemic.
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it is estimated the country's gdp shrink this year, that would leave kim with a smaller economy than the one he took over nine years ago. north korea's communist party needs next month. -- meets next month. 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. guy: thank you very much indeed. the u.k. has authorized the use oxford astrazeneca- vaccine, marking the first approval. vaccinations will begin in the new year. the editor-in-chief of the london medical journal joins us now to discuss. good morning, thank you for your time. let's talk about what is happening with the distribution of this vaccine and the regime we are going to use in the u.k.. authorities seem to be putting out focus on putting as many
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people vaccinated with the first worrying about the second further down the road. can you explain the logic behind this? >> good morning. understandtant to the rationale for having two doses. the first dose of the vaccine is called the priming dose. the purpose of that is to kickstart the immune system into action. it is the most important dose of all. both theivating antibody response, and the t cell response, which over two to four weeks achieves its maximal target. follows a dose that month or so later is called the boosting dose. the boosting dose is there to stabilize the initial response
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and keep it active over the medium to long-term. have done islators look at the data and see the priming dose of the vaccine is sufficient to give protective inunity to an individual advance of getting the second dose. so, we can focus on getting the maximum number of people vaccinated with the priming dose , and that should give us the thertunity to accelerate immunization schedule. we: you talk about the fact really need to do it, accelerate the rate. can you give me an idea how big an impact this is going to have? this is a vaccine that can be stored in a fridge and is relatively cheap to produce. how big a change are we talking? let me quantify it in
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terms of population. this is an unprecedented number of people. from covid-19 are occurring in people over the age of 60. the target population to protect against premature death is that group over 60. in the u.k., that is about 16 million people. months, toxt three get through to easter, we need to vaccinate 16 million people. that is more than one million people a week. we have never implemented a vaccination program at that kind of scale. vaccine -- the biontech vaccines, moderna vaccine's, they are excellent, but the advantage of the oxford vaccine is that you can have more flexible distribution.
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you can get it into communities that are more remote and difficult to access. the oxford vaccine gives us the chance to accelerate the implementation of vaccination, which is desperately important. areave this new variant, we coming into winter, january and february are going to be tough. there is going to be pressure on health services and we are going to be ramping up restrictions and mandates. we need this vaccine to be rolled out as fast as possible. terms of where the other bottlenecks will be, as we discussed, you can put this in the fridge in your local gp surgery, but you need people to deliver. how big a problem is it in terms of managing the virus, and as we will hear later, more of the uk's going to end up in the
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four, at thetier same time having the staff to manage distributing the vaccine. is it a zero-sum game? challenge now is not about medicine, it is about management. it is about implementation. phase of vaccination has focused on hospital hubs and general practice clinics. that is not going to be enough. we need to decentralize vaccination into communities, pharmacies, schools, community centers. we can't rely on the health system alone. theseare going to reach 16 million in the u.k. over the next three months. require ag to different means to mobilize all of our communities.
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i have not seen that yet, but we need to see that earlier in the new year if we are going to protect ourselves during the winter months. interesting to see what role the military plays as well. thank you very much indeed. the lancet editor-in-chief, richard horton. katrina are speaking to dudley, franklin mutual serious portfolio manager. this is bloomberg. ♪
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ritika: coming up, dan ives. this is bloomberg. ♪ ritika: this is "bloomberg
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surveillance." bitcoin set another record high. the largest cryptocurrency surged above 20,000 today. it has risen 47% this month. that has not stopped critics who question bitcoin's as an asset class. its speculative nature and bust cycles. the company still has the lead over amazon. this year's best performer among large tech, apple is up 84% after rising 13% this month. analysts project there were covering economy will mean more demand for iphones. morris net worth has fallen since october. that is when china began stepping up scrutiny of its empire. months ago, the cofounder of alibaba was worth 61.7 billion
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and was poised to regain the title of asia's richest person. according to -- thanks so much. let's talk about what is happening with the european economy and what it means for assets. katrina dudley, franklin mutual series portfolio manager joining us now. good morning. you are expecting a v-shaped recovery in europe next year, but unlike the united states, you do not think that is priced in the markets. how big are we talking? katrina: we look at it as a comparison basis. 2020 was tough. ep expectations in europe down 33%. the v-shaped recovery refers to an economic recovery, and also a recovery in earnings. we think that is what is going to drive the stock market value
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in europe. there has been a disparity in performances between the two markets. we look at europe, it is down a few percent, that compares with u.s. indices. the s&p is up double digits and the nasdaq is up over 40% for the year. the hurdle for european equities is very low, which is why we are optimistic about their performance in 2021. european equities still outperform u.s. equities even if the european economy and its recovery underperform? we need to separate economic performance from stock market performance. 2020 is a great poster child for that. years been a very volatile , but who would have thought march when we are in the depths of the downturn that he would have markets in the u.s. up so much despite gdp being down?
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economicave an recovery and not necessarily stock market recovery. it comes down to what people are expecting. in europe, i think the expectations for europe are very low. people are focused on a lot of the negatives. they are also looking at a market that does not have the covid beneficiaries the u.s. has and also has a number of stocks in their market which have been disproportionately impacted by covid. we think expectations in the market are very low which means we could slightly underperform our expectations for gdp growth but still have a positive stock market reaction. one area you might outperform on is relations with china. the chinese economy has bounced back. german industrials have significant exposure there. we are going to see later today the eu into the chinese signing an investment packed.
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how big an impact could that have? katrina: when we think about the impact of china on european markets, let's take a look. can january of last year and what happened to a very large industrial company siemens. everyone was concerned about their exposure to china, so stock started to sell off before many other industrials sold off. that selloff was related to their exposure directly to china and to their exposure to the -- sellof those companies their products in china. what we saw was a downturn in siemens equity. if we fast forward, we look at the set up in 2021. china has really rebounded out of covid and has controlled having a second wave. beneficiary that benefiting the companies that serve china. and as you mentioned, and a
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lessening of trade tensions between china and any country in the world, from germany to the u.s., we think it is beneficial for economic activity globally. when people talk about europe in a positive light, they referred to the next generation fund that was delivered by eu leaders, the ability now to borrow on a pan-european basis. they see this as significant. is that thing overdone? italy, itsnding of ability to absorb european funds patchy. it does not have the bureaucracy to deliver these funds in an effective way. there are some that question the size of the package, whether or not it is enough. areou think we overestimating the impact this next generation fund will have? katrina: we have overestimated
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how quickly it can be deployed. we are not expecting any benefit for this come through to the real economy towards the end of 2021 and into 2022. isly is one economy which going to benefit from this because they are being a beneficiary of the direct grants. rather than loans, they will be granted money. another country i like to point out to people which shows how we have had a sea change in the economies is greece. classified as a developing market, but it has a new prime minister in place who has been specific about how he wants to deploy capital. seene past, you may have funds such as this going directly into the pockets of voters, but this time they have looked at the greek infrastructure, the buildings -- which are obviously old -- and they are very focused on
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deploying this money into green initiatives. i think it will be deployed into very productive uses. not just forive, economic activity, but the sentiment towards europe. i hope they are not going to be upgrading the parthenon. [laughter] katrina dudley, franklin mutual series portfolio manager. to the, we are back medical story. lauren sauer of johns hopkins is going to join us. this is bloomberg. ♪
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joe biden: the trump administration's plan to administer the vaccine is falling far behind. we have only vaccinated a few million so far. the pace of the vaccination program, if it continues moving as it is now, it is going to take years to vaccinate the
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american people. president-elect biden speaking about the pace of vaccinations in the united states. the u.s. averaging around 200,000 people a day. us, lauren sauer, johns hopkins associate professor of emergency medicine. to pick upto happen the pace of vaccinations of the u.s.? lauren: one of our biggest challenges right now is communication. step where the vaccine shows up at the state, we need to have a good chance of what is coming and when. systems and state health departments are used to distributing and providing thisnes, but the pace of and the unknowns and the cold change -- cold chain storage issues, particularly pfizer, are larger and more challenging than anything we have ever dealt with.
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we have to make sure that every step of the way, there is communication. what number of vaccines are coming, how long do you have to distribute them? what is the cold chain storage process like for each element? making sure the people on the end, the last mile, the people being charged with delivering those vaccines understand exactly what they are going to get and the timeline. that is critical to making sure they have the staff to and all of the resources that come with distribution. ritika: u.k. -- guy: the u.k. has approved the astrazeneca-oxford vaccine. how big an impact would such a vaccine in the united states have? you talk about the super low temperatures, the pfizer vaccine biggeste held that, how
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-- how big a problem is that cold chain? chain storage is a challenge. process that is not something we normally use, so the infrastructure was not already there prior to distributing this vaccine. there are places that have the infrastructure, but they are -- or are relatively few. fewerderna vaccine has cold chain storage issues. what we are hearing is places that have had challenges with orting the ultralow freezers being able to distribute the large number of doses are going with moderna and pfizer vaccines are being allocated to places that can manage the process easier. the astrazeneca vaccine and some of the other ones that are further in the pipeline that should not as far in the pipeline have fewer cold chain storage issues. that will be huge globally where
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cold chain can be a real challenge. theaw the reduction in challenges of moderna and we will continue to see that with other vaccines. it will be important for getting vaccines ramped up broadly across the globe. have now seen a reported case of the u.k. variant, which is more transmissible, in colorado. how big a source of concern will this be? this virusct variance now to have significant acts -- significant impact in the u.s.? lauren: we were all expecting it. we did not know where it would pop up first. is interesting to call it the u.k. variant because what we are because of their exceptional sequencing processes. see, we are seeing it
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across the globe. this colorado case is just the first. it is interesting it is in a person with no travel history, so that case probably came from someone else which means there are probably more we have not detected yet. as we start to see the backlog of sequencing data added to databases, we will see many more cases. the transmissibility is concerning, even if it is not more deadly your if it is not -- more deadly or is not causing worse symptoms, everyone is concerned by any variant that shows increased transmission because that ultimately is going to mean more cases. more cases is something our health care system can't manage right now. we are strained across the country. we are strained across the globe. hopefully, with more data on this strain, this variant, we
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will also see a push toward re-upping our commitment to those interventions that allow us to stay safe. masking, social distancing, all these things we have been hearing continue to remain important. the vaccine is giving us a lot of hope, which is exciting. ourring that we protect population, especially our vulnerable population who may not be able to access the vaccines right away, it is going to be important to keep those measures in place. lauren, thank you very much. lauren sauer, johns hopkins. this is bloomberg. ♪
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>> central banks are showing no sign they went to take their foot off the gas. >> activity is still really in the doldrums. >> we could see it get back into negative territory. >> i am expecting a tumultuous year. >> the rebound is going to be incredibly be shaped. >> it will be v-shaped for some. it may not be v-shaped for others. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. carol: a very good morning, everyone, from new york city and berlin. to our audiences worldwide, a very good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. i'm carol massar, alongside matt miller. tom keene, jonathan ferro, and lisa abramowicz have the day off. i


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