5 things to start your day

Five Things
Bloomberg

Jobless data set to signal a very slow recovery, more positive vaccine news, and a big interest-rate hike. 

Claims 

Weekly jobless claims probably held close to 700,000, with continuing claims expected to fall further. The data, published at 8:30 a.m. Eastern Time, will likely point to a continued very slow recovery in the economy. Adding to the worries on the outlook is the ending of a whole range of pandemic support programs at the end of the year, with little sign of Congress agreeing to a new stimulus package to help avoid another downturn. 

Virus 

There was more positive vaccine news with the University of Oxford confirming the one it is developing with AstraZeneca Plc produced strong immune responses in older adults. Production of Moderna Inc.'s vaccine is already gearing up, with European output set to start by the end of the month. The need for a successful vaccine as fast as possible remains very clear, with the U.S. passing 250,000 deaths from the virus, and hospitalizations continuing to rise across the country

Turkey season

The newly appointed governor of Turkey's central bank, Naci Agbal, hiked rates by a whopping 475 basis points this morning. The lira, which had been the worst-performing currency among emerging market peers this year, rose in the wake of the decision -- adding to a rally which began with the replacement of the country's central bank head and economy minister earlier this month. Elsewhere, European Central Bank President Christine Lagarde promised a forceful monetary stimulus package in December and again called for governments to do more on pandemic relief

Markets slip 

This morning global equity investors seem to be more concerned about lockdown measures to stop the spread of the virus than they are hopeful about prospects for a vaccine. Overnight the MSCI Asia Pacific Index slipped 0.5% while Japan's Topix index closed 0.3% higher. In Europe, the Stoxx 600 Index was down 0.8% by 5:50 a.m. as traders opted for defensive stocks. S&P 500 futures pointed to a small drop at the open, the 10-year Treasury yield was at 0.855%, oil was lower and gold was also down. 

Coming up... 

The October Leading Index and existing home sales data are at 10:00 a.m. There are three Fed speakers scheduled for today, with Christine Lagarde also up later. European Leaders meet for a summit and President-elect Joe Biden is scheduled to hold virtual meetings with governors. Workday Inc., NetEase Inc. and Macy's Inc. are among the companies reporting. The final day of the Bloomberg New Economy Forum focuses on health. 

What we've been reading

This is what's caught our eye over the last 24 hours.

And finally, here's what Joe's interested in this morning

Yesterday the MTA, which runs the subway in NYC, said that in the absence of federal support, it could be forced to lay off over 9000 workers and reduce transit services by 40 to 50%. If this happens, it would represent a significant degradation of infrastructure in the city, hurting commerce and activity further -- and potentially turning what should be a temporary crisis into one with lasting damage.

We've come to expect that in economic downturns, as tax revenue at the state and local level dries up, that we get a reduction in services and public sector employment. And we treat that as just some kind of natural law of economics that it works that way. But ultimately it's a choice of policy makers to turn public health situation into one that causes lasting damage. There's no reason it has to be this way. One could easily imagine a situation in which state, local and federal spending automatically rise in a downturn to counteract the contraction. And to be fair, federal spending did surge this year thanks to the CARES Act, and the results have been impressive.

When it comes to prudent spending decisions, people like to sagely talk about the future, future generations and the need to be responsible. What about the children? But it's hard to see what's prudent and responsible for future generations if the present situation is allowed to snowball into degraded services and permanent damage.

Joe Weisenthal is an editor at Bloomberg.

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