Citigroup, Steve Whiting, Lisa discussed on Bloomberg Surveillance
Farrow off today. Tom Washington drama mounting. We've got eight days left over eight days of drama filled action in Washington, D C. We've been talking about how nothing matters it matters. People are just looking at money, more of it from Washington, looking for more of it, and also the headlines coming out. This is a Washington waking up. We welcome you on radio and TV across This nation, the secretary of state massive controversy yesterday over Yemen real outrage I'm told across both parties on the hill today. Mr Pompeo commenting. Those who participated in capital attacks are criminals. Secretary goes on to say history or reflect on quote. Good work. The Trump Administration did so some of the beginning headlines of an historic Tuesday morning Lisa to the markets, and I know we're gonna get through this and Steve Whiting in a minute to me, Lisa the major message if you can bring it up. Abroad on that Bring it up right now. The four day 10 year chart just simply shows yield up and price down. Yeah, this idea that people are explained, expressing their reflation trades in that yield curve that steeping in that 10 year yield. That's the highest since March. 2020. But really, actually, what Michael Collins said. Which is? How much more room does this have to go at what 0.2 people start seeing Bonds is cheap relative to growth expectations, Tom No, no question about it again. I would note secondarily Lisa comment on oil up. I mean, Jeff Curry of Goldman Sachs looks smart at Morris working with Steve Whiting and Citigroup talking $60 a barrel. We may get there by Romain Bostic Show this afternoon which you're gonna plug because he is doing us a solid I will say I do. I find it interesting. What? Mark McCormick of TD securities today, Which is that the more belt mobility data is tracking the vaccination schedules as vaccines get distributed more quickly in certain nations. You're seeing people move around more, and this is positive for oil. It is positive for growth, and that is what he is tracking to determine which nations have an edge when it comes to their currency and their economies. Tom. Welcome to all of you. I'll give you the statistic that I saw yesterday, folks Good morning to San Francisco on Bloomberg radio, and they're early. Morning. It was the difference between mask wearing Lisa and San Francisco versus mass query in Los Angeles. Huge difference. And you just go. Why? I mean, what is the cultural imperative that gets you to that? Yeah, well, we see that all over right? And why is there a cultural difference in something that seems more medical than it is just a matter of opinion on this historic Tuesday will try to stay on the markets but again, looking for political headlines as well. Steven Wieting Is with that, Morris. It's Citigroup sitting your private bank and he joins us this morning. Steven Wieting, do you readjust your 2021 view with the tumult of the 1st 12 days of this year? We don't Not because of political shocks like this. I think when we look back at history, we confined 20 events all the way back and including World War two. Really qualify his political or geopolitical shocks. Only two of them really turned the direction of the world economy, and this is one that I would doubt is going to turn the direction of the world upon and for all those that didn't Effects in financial markets weren't felt for more than 90 days. See the one you didn't come in on that Morse an oil to 60 as well. You've got frontline commodity work filtering into Citigroup Private bank. How do you filter in the work of Edward Morse? Remarkably, because it's across asset classes. It's powerful when we understand what's going on in the oil market. In particular more than other commodities, but certainly in commodities like copper and iron or These might have directly relatively small shares of economic activity, but the sensitivities to credit Movements and currencies. The read through the broader acid allocation. It's been really powerful. So it's been a fantastic contributor to our work in terms of broad arrested allocation, even beyond commodities. So what you're saying is that you by the reflection trade? Is that what you're saying? Why'd you because I believe in the vaccine. On and we see already with just three producers, probably five billion vaccine doses will be distributed over the course of 2021. That's not the end. The vaccine pipeline. And you can hear it from the Federal Reserve. If you don't want to believe me, that the course of the virus the pandemic and the vaccines will really determine the course of the future economy. This has been in external exogenous shock. We were came into this event relatively healthy, with low inflation rates, no booms in any industries. This virus knocked us down incredibly deeply. It's treat every asset price in the world on it when it leaves. It will change every ISIS asset pricing the world on there's a lot of the economy that can still be restored. In later in 2021 22, a zit reports, all right, so in the near term, how are you looking at the vaccinations in order to determine your investing pieces were speak with Mark McCormack about how he's tracking which nations are doing the best job of getting vaccines into our arms. Are you doing the same to determine where in the world to invest? Well, it's no surprise, for example, that throughout Asia, the pervasiveness of the virus has been lowered. Maybe it's the experience with stars, for example, very, very high compliance with mask wearing I just had a different economic impact there. I just think that we are very early on in terms of the vaccination. I mean, it is fairly miraculous that we have effective accidents at the levels. What we're seeing. Right? Epidemiologists expected 60 to 70% efficacy. You know, a little bit closer to flu vaccines on here We are with some of these well above 90%. The rollout may be slow, but I think this is a little bit like sand in this eve, right? It'll move faster as we as we go forward, Steve waiting quibbling about a couple of months is not something that I'm going to do with acid allocation. She writing Ben later over Tower Hudson. Very courageously. He's been dead on and optimism on the equity markets. Calls for three years of double digit return, he says. There's a knot certitude but the likelihood of that you want I have lived in the certitude of single digit returns. Is that where we finally are? Look, we're not expecting returns. His robust is 2020 on headline, especially for US equities, where we had a lot of defensive equities and technology sector. They provided the solutions to the covert economy. Their evaluations were driven up by falling interest rates right, so is more than the door ability their earnings. There's that evaluation, so we're not expecting to be strong is last year's 19% return for US equities. But there's a lot around the world right now, where 85% of our equity Overweight is outside the United States where we've seen some pockets of the world lead badly behind. Now when we think back to 2009, where conditions perfectly lost jobs, the entirety of 2009. That was a 35% gain right for global Blackwood using that here less for the United States more for the rest of the world. People thought the Expansion was over that we priced in recovery. It's now time you know the way for the next crisis when then went on for 10 years in which we had a 180% game. In global equities kings and nine out of 11 years. And what was the returning cash over there? Find 6% Daniels? Yeah. Steve. What's the distinction of the Citigroup view on markets and 2021? Given? What you've laid out is very much we're hearing for most people in the show..