up. u.k. prime minister boris johnson said to urge the country to come together as it officially leaves the european union. goldman warns the growth impact of the coronavirus while europe sees at lowest growth since 2013. caterpillar adds to the gloom. gains. bag of industrial we made it through the end of january on very difficult trading week for many. let's take a look at where we stack up. s&p futures down .5%. it is all about what happened to the treasury market. crude now taking a little bit of % despite copper seeing its worst month in about five years. we bring you today's market moving news from all over the world from hong kong to london to new york.

our bloomberg voices are on the ground with this morning's top stories. tonight marks the u.k.'s. u.k.'sat the -- departure from the eu. at 11:00 p.m.ect your time tonight and tomorrow? from good to see you hear just outside westminster in london. in someuld be parties parts of the united kingdom, vigils and other parts vigils and other parts. made up of people who are either happy about what is taking place or unhappy. boris johnson will speak at 10:00 u.k. time. he is mindful of the fact that he will be addressing the divided nation trying to bring it together. he wnats to try and find -- wants to try and find some unity. an hour after he speaks, that will be when the u.k. does leave

the european union. it will be at 11:00 here in the u.k., midnight in brussels. not much changes in terms of the movement, of people and goods and data. all of that carries on as before. oft goes on until the end december 2020. could we be talking about another cliff edge scenario there? expect outpouring of emotion on either side perhaps from brits and others over the next 24 hours as 47 years in the european union comes to an end. how deep will that trading relationship be as we get ready to negotiate a trading relationship with the european union? that is still the big task ahead for the next 11 months. alix: thank you very much anna edwards. now, for more on the coronavirus outbreak, the death toll has climbed to over 200 and the number of confirmed cases is

fast approaching 10,000. >> i am declaring a public health emergency of international concern. nor the global outbreak of val coronavirus. our greatest concern is the potential for the virus to spread to countries with weaker health systems. alix: the virus is another blow to china's already slowing economy. data is showing things are holding up, but didn't account for the recent outbreak but didn't account for the recent outbreak. -- joining me now is rishaad salamat. ishaad: what it really does it standardizes the ad hoc response we have had from various other countries to try to institute global response to get this whole thing contained. we are approaching 10,000 in

terms of the number of cases. the vast majority of them, 90% are in china. -- 98% are in china. about 1,500 our severe. -- are severe. we have got at the moment, schools and hong kong that are going to be closed now until the second of march. theirs are scratching heads as to what they are going to be doing with the kids for all of that time. we have still got 50 million people in lockdown with wuhan being at the epicenter. flights delayed or canceled. british airways saying they are not going to be flying to mainland china sites like beijing and shanghai for the rest of this month. others considering the same sort of thing, not just stopping services, but taking no bookings

cutsven extending capacity through the end of march. i am sure you're going to talk to me about the economy next. alix: yes. we will have to see how it pans out after the pmi didn't account for the recent outbreak. turning to earnings, amazon is back in session with investors. stock searched 12% on the news setting it on course for a $1 trillion valuation. joining me now is max lawson. what stood out to you? much the storyry of under promising and over delivering. they were about $1 billion ahead from both sales and profit against the guidance they gave. a lot of that came from the strength of the e-commerce. up in investments from fulfillment to get more people onto this one day delivery schedule. they were quite cautious about

sales. clearly, people responded very well to that. 150 million people have the prime service. the other two big parts of their business, amazon web services. i think they have encouraged analysts about the growth for margins and their ability to extend competition because they are squeezing another year out of life of that service. year.ising is going 40% a that has always been seen as a big source of opportunity for them. maybe they can take more ad dollars away from the likes of ugo and facebook. i think -- google and facebook. expectations for another year are definitely there. we have results from two industrial giants.

walk us through the jumble. jumble.it is a i want to start with caterpillar because that is considered such a bellwether. there are not great signals coming out of that company. shares trading down. it really has to do with that 2020 outlook. they are talking about continued economic uncertainty which is a blow to expert expectations, that we would see a sharp rebound off of this u.s.-china trade deal. that is not materializing. we are continuing to see sluggish, but stable growth. you see that with honeywell as well. they have 5% organic growth in 2019. expecting a step down in 2020. that will require them to depend more on cost-cutting and acquisitions to keep its profit going. both companies did see increases in their profits. i do think you have to take a step back and revisit your expectations for overall industrial growth in 2020. alix: thank you very much.

ibm rising after the company announced a change in leadership. switch? >> i think there was a lot of togage was not being able turn the company around as fast as investors would want. he was instrumental in the red hot deal. this could be one way for them to say we are serious about the hybrid cloud strategy. we are really serious about software. that is why we think this thing happened. alix: what is going to be the biggest thing he has to tackle going forward? >> i think a lot of that has to do with the perception of a company with customers. ibm, like all of the legacy companies from 10 or 15 years ago, always wanted to sell their

own products into the mix. the name of the game at this point is, are you able to work with your rivals? are you able to work with different cloud renders to sell the product? he has been very vocal about it in conferences. i think this is another significant sign that that is the direction ibm is taking. alix: thank you very much. finally, we end in washington. president trump's impeachment trial enters what may be its last day. joining me now from capitol hill is kevin cirilli. kevin: it looks like there is going to be an acquittal sometime in the next 24 hours. only senators susan collins and mitt romney are saying that they would like to see more information. this comes as senate majority leader mitch mcconnell has been able to hold the public -- republicans together against there being witnesses.

expect the trial to be wrapped up sometime within the next 24-48 hours. the president state -- president 's state of the union address give have an opportunity to try to lay out his vision forward, not just for this year, but also for the campaign. democrats are going to make this an issue of transparency. in terms of policy, this could provide an opening for prescription drug pricing to get done in the next couple of hours. alix: tune in monday. we are going to have live coverage of the iowa caucus. coming up, more of your morning trade analysis and today's first take. chinese markets open sunday. what do you do ahead of that? this is bloomberg. ♪

alix: time now for bloomberg's

first take. joining me for our in-house team mike, and joining us now, mark connors, credit suisse head of risk advisory. you have 48 hours until the market opens in china. what do you do? damien: nothing. cash.n't go to you basically take stock of what has been going on. everyone is rushing to revise their gdp estimates. i think we have just taken down our first quarter. that would be the lowest since 1991.ing gdp numbers in whether or not that is priced into the markets today, i think the markets are on their toes. pips.yuan is still at 450

i think you have to look at the market digest is a little bit and then make your move. mark: people have already been etf's, singleher stocks are closed. in the u.s., the difference is gdp will be projected lower. i think we are coming out with that as well. the sector is already differentiating. on our book, we are seeing people and transports and other consumer related names hitting them. nissan earnings last night, tech names -- you saw earnings last night, tech names not impacted as much. mike: it is an inflow month, but the month is over. i think we have had that umph and now it is back to reality and there is fear in the reality. i am more fearful of, we have to go back to the s&p 500. very stressed. becomes really

difficult for these big tech companies to compound at the same rate of return as they have for the better part of three years. i think that is one thing that is going to start resonating in the minds of investors. what are our return expectations for owning amazon shares? i think people are going to start looking inward. you're going to see the unloved mid-caps that have been beat up settling in. growth is up over 2%. value is down 2.5% year to date in january alone. i think there is a bit of a flip-flop. mark: on those rotations, we have seen them. that is why people have sat back and watched these happen and sort of not experienced the same flows. to your point, february will be sort of an impact more on the consumer names. overall market and developed, not impacted as much. alix: citi had a note out that's said basically by the desk.

stocks in asia will keep falling as those goes on, but yet you want to buy the dib. out,ave some room to make yes, no? damien: i don't disagree with that. i would agree with that. look, again, i look at this as a buying opportunity. let's wait until the dust settles over the weekend and all of those value names in the u.s., i think you are going to see a bit of a short-term rotation. this is the kind of environment you want to have a tactical, macro overlay on our portfolio to take advantage. mark: i kind of like buying the dib in gold. look at what is happening now. the fed f is starting to priceor for-- is starting to price ease. i said, it is not cheap.

last year at this time, the stock market was cheap. it was very low. mark: that is a good point about -- maybed make drive that basis point. maybe this will be enough to have the fed say, no inflation, no growth. maybe we have to wake up the market. damien: they have to find a catalyst. alix: bloomberg economics had a great chart out that showed the growth impact to all the major countries. obviously, hong kong hit the hardest.just the idea when you visualize this is quite striking. you have to wonder when it will actually filter through. asia,826 millennials in relative to 67 million in the u.s., those born between 1980 and 1994. millennials in asia like experiences, not things. they like leisure, travel, tourism.

the impact is are they going to be bigger, not just on china, but the asia region. alix: on the flipside, we have growth in italy and france, really dismal for 2019, which is a little bit unexpected. pmi's were not even that great and account for the virus. where are we? mark: i think we are delayed. our economist was talking about pmi's. you have to look at industrial production as that output and that trough to. this will be delayed, but i think it will catch up again in developed markets. big distinction. when we look at our platform, we look at the popular longs and shorts that hedge funds hold. they give the quickest triggers about what is going on. it was clear on monday and tuesday and through last night that asia had all the sensitivity. europe and the u.s. were just locked down. there was no difference, no sensitivity, no selling. that is something that we look at. that is why we look back and say

beta, market stable to higher but, there will be sector and regional impact and 48 hours to answer your question. alix: with that case, does that mean that there is than another leg up for developed markets? mark: no. you are leading me. they haven't moved. the point is, potentially, but we don't think so as a firm that this will be a major long-term secular move lower because of coronavirus. alix: commodities say a whole other story. mark: look at crude oil, copper. a three-year low yesterday and copper. the primary purpose of this administration is to reduce deficits. we are trying to deal with china and we are going to continue to do that, what is next? europe. for the u.s., the biggest importer is limiting their exports. in.n't see that ticking

i don't see a good place for commodities and that is why i keep going back to gold. the fed pointed out, there is no inflation. mark: if you just look again, the pool of negative yielding that has risen now to $13.5 trillion. that is a move of $3 trillion in the last week alone. those negative yields are flattening curbs. alix: $16 billion went into bond flows this week according to bank of america data. damien: that is the key thing to remember. mark: last year was the best portfoliohe 60-40 since 1997. everything won. bonds, commodities, equities. what is going to in no -- win now?

everything. to inflation and rates, i think your point about what the fed is saying now, go back to march of last year when you had saying, i don't know how to measure it. we have to change how we are measuring inflation. when someone says have we are going to change how we measure that shouldjob, garner attention. alix: and the question was asked, are you going to change your framework, he was basically like,yeah. -- yeah. my perspective, you have to take a relented approach because when they look so similar, it reminds me of the post .com days. there is a premium for that complexity. alix: guys, thank you so much.

mark connors will be sticking with me. any charts we use throughout the next two hours, though to g tv . this is bloomberg. ♪

viviana: i'm viviana hurtado with her -- you're bloomberg business flash. aston martin getting a lifeline, agreeing to sell estate to a canadian billionaire. martin will use the money to shore up its balance sheet and build a new suv. the restn wants to buy of american heavy truck maker navistar. cash.ffer $2.9 billion in that represents a premium of almost 50%. vw already owns about 50% of navistar. that is slightly less than the

--pany's biggest investor shareholder. the architect of ibm's purchase of red hat, he replaces the longtime chief executive. she expanded ibm's reach in cloud computing and ai. since 2012, shares have lost a quarter of their value. that is where bloomberg business flash. alix: another thing we are all going to watch over the next 48 hours is the super bowl. it is a little event coming up this weekend. there is business involved. the super bowl is the most-watched program on tv almost every year. most experts actually think that gambling is a large part of that. legal wagers on the game are now expected to surge to 325 million this year. sports gambling is also booming in the u.s.. 21 states have now approved illegal sports betting. 14 of those will be active for sunday's game. another 14 states have asked

state legislation to legalize gambling. the nfl profits from the super bowl as well. tv the driving force behind the league's revenue. at expects of 6% growth through 2027. you have new bidders coming into the market like apple tv plus could drive up the price. 49ers or the chiefs? i am going with the chiefs. coming up, election season officially kicking off on monday with the iowa caucus. this is bloomberg. ♪

alix: this is "bloomberg daybreak." equity markets lower as we had entered friday. exxon just out with earnings

now.earnings per share coming in at $1.33. all eyes are going to be on their downstream and chemicals refining unit as shell really disappointed yesterday. next earnings from caterpillar and honeywell adding to the downside for the s&p. european stocks a seeing a really rough go of it. it is the worst week and about a couple of months. it is a three month tenure. that's it. that's the game. is it a recessionary indicator or something else? you are also seeing euro-dollar a little bit higher despite the fact that growth is falling particularly in italy and france. crude up by 1%. it is actually up today. copper had a really tough week as well. to recap those exxon earnings coming in at $1.33 a share. their fourth-quarter production was about 1.5% below estimates.

billion --bout $8.5 their capex was about $8.5 billion. we are going to have to wait and hear a little bit more on their call as to what happened with production. they are in a really tough spot and spending a lot of money in a world where the investors taught want them to, but they keep spending it because they need the oil. you have the weaker oil price and then you also wind up having a pushback on esg. that weighing on the overall sentiment. shell, yesterday saying they were not going to have the same putback. the market really punished it. still with me, mark connors of credit suisse. a question to encapsulate amazon and exxon, how do you play upside and downside with earnings? it -- how do you play based on our book, how do you play it, turnover has dropped

pretty dramatically. the area picked up when you mentioned the oil company. when we see that turnover and our book by clients, a lot of it is kind of like jumping from a leap pad to the leap pad without jumping in the pond. they don't know where to go because of what is happening with crude. there is disruption in energy, it is under assault, no doubt. that is where people are having problems. on the tech side, people don't have to play it because they are positioned long, and they will trade, and they are accruing and growing that position. the concentration is about 5-1 in that sector versus any other sector and it is getting more to fewer. alix: it seems like part of the rhetoric is that if -- at some point, everybody who needs to buy is in it, but how many hedge fund guys or even pms are not actually in it because it is too expensive and now have to be like, all right, no matter what, i'm going to miss my benchmark. mark: that is the question.

our analysts, we have had them go after, is it a proper evaluation, are they different? jonathan got up, i think it is a huge point, the free cash flow of these companies has doubled. almost like a bond, there is some safety to reinvest. animal. a different you can't just look at pe for these books. alix: that is a really good point. let's turn to risk in the markets. now, westin joining us headed to iowa tomorrow for 20 -- 48 hours. where is the risk? david: there is risk for everybody right now. there are 4 or 5 polls all showing different results. bernie sanders seems to be really rising. he also has a lot of passion among his supporters. that counts in a caucus. alix: how does iowa still

matter? david: because it is the first one. maybe it shouldn't matter and this one, this is sort of like a cottage industry. every four years, they do this. by all accounts, these voters are very sophisticated. it is generally thought there are three tickets out of iowa. you also think about bernie sanders, he is ahead in new hampshire as well, which comes up eight days later. alix: talk to me about hedging for that. ccrv is the function on the terminal. you are taking a look at the orange line, which is where the vix is right now. since we are rewriting in the short term, is any of that like iowa, primary, elections? mark: i think more sector based. broader markets not impacted. when we saw warren's impact on health care, i forgot the exact time period. the impact in the markets, we

had people post their worst month or quarter in years in the active market because it was a whipsaw move. inhink it was 12%-15% moves $16 billion companies. iowa matters. david: it matters when that risk comes off, too. it really hit insurance companies hard. now, elizabeth warren is really fading back. the reverse happens. alix: walk this out for me when it comes to say the november election. goldman sachs talking about volatility in hedging. how do you see investors position for that? there is a volatility pick up as we get closer. mark: the skewer is to the upside. right now, we had our meeting. let me step back with the whole landscape. we had one person and our meeting who gave the most insightful comment. he said when i look at the market, it is like emi fax is

trading -- emfx is trading down but all other assets are higher. everything growth is down. when you see where our people hedging? i think -- are people hedging? i think as long as the central banks are involved, people are not that worried. these sector-based things may come and go, but as long as these companies have the balance sheet, that is what people are betting. they are not really lying out singling indexes right now. they are long and there is not a lot of fear in the market. david: we have to remember how long the markets got in 2016. alix: it did for like a day. this point, it seems much more driven by liquidity. you see that around the world. the fed didn't do anything this week.

at the same time, you had jay powell is saying we want to make sure we get up to 2%. we are going to get it up. we are going to talk to rich at noon about that very thing. on "wall street week," we are talking to julian tech. we talked about this question about what europe will do and what they could really do. she focused on green. she said green is the sleeper. i real possibility for fiscal stimulus in europe. this is what she said. is potentially a get out of jail free card and all of this, which is green, which is right now in europe. everybody agrees there needs to be green policies, green new deal, green infrastructure, call it what you want. it is not the central bank's job to start trying to necessarily call for green infrastructure. but boy, is that an and correct way to talk about more fiscal spending right now. david: there is a possible path in europe.

gillian was quick to say that she doesn't see it out of this white house. alix: go ahead. green helped by the central bank -- buy the central bank. when they go back to the sector side, who wins from that? probably technology. that is where you get scale and that is where the investors are. it is almost like they are already there because you folks had a reporter that did a great piece on our industry and all they said was, it is technology. that is all we are doing. when you say green, i translate that to data technology. alix: the big tech names are also the ones that have the balance sheet to do stuff. a jointan go and make norm is investment and use all oustheir electric -- ginorm

investment and use all of their electric trucks. mark: esg can be nested in the tech. that is kind of what you and i are alluding to. esg went from a background to i want to say foreground in the conversation. it went from a be a sidebar to a full panel. it does have a place at the table. there are products out there and there is some data and efficacy. i think the real money shot is going to be if one of these larger tech companies then dedicates a separate division. david: to draw this together for another shameless plug, go to tesla. she things tesla could have 18% of the global car industry before we are done because they have come in and challenged audi and bmw. she thinks we have seen nothing

yet despite all of the run-up, she things it is going to keep going way out. alix: we weren't sure if they were going to be able to manufacture cars. we knew they had the technology, but we didn't know if they could manufacture. we learned that that is actually not true. david: they are ahead of everybody else. stor, too.n inve alix: thank you guys, great conversation. don't forget to tune into bloomberg television tonight for the full episode of "wall street week." really insightful conversations. tune in at 6:00 p.m. eastern. tune in on monday night for a very tired david westin for the iowa caucus and on tuesday for the our coverage of the state of the union. it is rebel time -- red bull time. viviana hurtado is here with first word news. viviana: we begin with president

donald trump. he is all but certain to be acquitted because mitch mcconnell probably has the votes toend his impeachment trial -- to end his impeachment trial. democrats need four republicans to break ranks and back the call for more testimony. lamar alexander says he will oppose bringing in new evidence. the coronavirus has now spread to the u.k.. authorities confirming their first two cases of the disease. china now says they have more than 9800 cases.the death toll there has climbed to at least 213. the u.s. state department warning americans not to travel to china. officials issuing a level four advisory, that is the most severe travel warning category. british prime minister boris johnson will urge the country to come together. today, the u.k. finally leaves the european union. nvidia message, johnson will say brexit is not an end, but a beginning. "the curtain goes up on a new

act." now, the u.k. has an 11 month transition period to work out their relationship with the eu. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am viviana hurtado, this is bloomberg. alix: coming up, hiring and firing on wall street. we are going to look at goldman's strategy next. if you have a bloomberg terminal, check out tv . you can watch is online, interact with us directly, scroll through and check out anything you may have messed and ask a guest a question -- missed and asked a guest a question. this is bloomberg. ♪

you are watching "bloomberg daybreak."

the maker of reynolds and have to trash bags pricing its share in valuing the company at $2.5 billion. today, shares begin trading on the nasdaq. shares of nintendo falling the most in nine months, missing quarterly plus. what made the british pound despite just seconds before yesterday's bank of england's rate decision? regulators want to know. u.k. financial authority investigating the jump.the move prompted traders and analyst to wonder if there had been a leap. alix: we turn to wall street beat where we cover three things wall street is buzzing about this morning. first up, goldman's hiring and firing strategy. some people will see a shift in the organization. blackstonearm of

posting a third straight quarter of losses with a negative one 1.5%. now, bloomberg's should only vasek. i hear -- here is the portion of what he said about the strategy. >> obviously, there are people affected by that. we are also hiring a lot of people at the same time. there is a shift in the organization. we spent a lot of time talking about the efficiency of an organization, how we can get people into different regions that are more efficient than new york or london or hong kong. that creates cost-benefit. we are also making investments in our front line businesses. there are people moving out, people moving in. overall, we think we can run the organization more efficiently. alix: does that mean be a technology nerd and not a trader? >> that also means there could

be job cuts i had. he said they will also be hiring. the question is, how much does goldman's had count change? around 7500o moving people in operations and technology to move closer with businesses. there are moving people around the world. i think this job cut question is such a big? . we have seen 80% of the global job cuts in europe so far. alix: i wonder how much of the u.s. restructuring is because they are changing how they are doing their business versus european banks. they still can't make a return because of negative yield. sonali: you're talking about european firms because of the last financial crisis.

firms downsizing in preparation for potentially tougher times ahead. they want to use a lot of that spending for technology to stay competitive. citigroup was able to fire hundred last year, but still have their headcount rise at the end of the fourth quarter. u.s. firms are preparing for tougher times ahead. what does that mean in terms of total headcount moving forward? and then they just have these big tax cuts also. alix: let's go to the second story, blackstone. walk me through the numbers that we know. sonali: we know this is the third straight quarter of declines. gso is a very golden unit within blackstone. remember, blackstone had a record fundraising hall. some of the issues were in the energy sector. we saw other people get really burned in that sector. carlisle made a decision to wind down a $4 billion fund. let's see how long this continues to burn for -- the

executive mentioning they were keeping a very close eye on the situation. it is one piece ofgso. -- it is one piece of gso. they are the 100 pound gorilla in that room. alix: there was a great chart on the bloomberg in terms of pe funds that were raised. everyone thought after the oil crash that we were going to see a lot of buyouts and opportunities. you wind up seeing lower fundraising which means there are no exit strategies for these guys. sonali: retail also is another sector that has been having a lot of trouble into this year. are there other sectors that are going to have secular issues as a result of technology or otherwise that will make it hard for people to repay their debts. alix: third point, sounds good getting 17% last year. what is the reality? sonali: 17.1% is a rebound for download after losing 11% the

year earlier. it is well above the credit suisse hedge fund index. it has been working out because people have been spending off assets and selling assets. campbell soup is one place that you really want. sony is rebuffing his approach. he is still gaining on sony. there were some downsides in the portfolio. argentina. with all of that said, the managers really have a chance to gain here with down low really helping to lead that strategy forward. alix: do you have any idea what sectors get the least money? sonali: managed futures have been struggling. we saw a lot of problem last year. having to cut a lot of jobs. are these traits just crowded, are the factors picking up the right signals in the market, or

do you have to pick a more active approach, which is what download is doing saying we need these companies to change. alix: and that the sec might be throwing a wrench into that making it harder for him to take lots of shareholders. thank you very much. i love going through those. in today's bloomberg green focus, avenue capital co-founder mark lazaridis convinced there is money to be made in going green. will provideting the best growth opportunities for asset managers. he called the sector immensely scalable. definitions vary, but one estimate put the amount at almost $31 trillion. that is up 34% increase in two years. the problem lies in the definition. no one actually knows what can account for it. coming up, emerging market issuance is off to a record start. if you are heading out and jumping into your car, tune into bloomberg radio. this is bloomberg.

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alix: time now for traders take. joining me now, damien, what do you have for me? damien: a lot of people have been calling me in the last 48 hours telling me how bad emerging markets are. theuld point to emb, largest ems before emerging market bonds. it is at 90 basis points. we hear about equities getting crushed year to date. em local debt getting crushed.

what we are looking out as new issuance for the month of debt orin em dollar currency debt, largely driven by em investment grade issuers like saudi arabia and indonesia, high-quality issuers. they are taking advantage of our broader u.s. yield curve. what you have seen as now that the average duration for the em dollar debt universe has gone from six years to seven years, i'm talking the whole $2.5 trillion index just one year. that is a pretty big move if you want to talk about taking advantage of lower yields. alix: i am the takedown is really good? 5 times for some of these issues. --, we are starting to see they are going to be issuing dollar bonds in the near-term. good.peline looks

the technical backdrop for. em dollar credit is favorable if you look at liquidity levels, fund flows, the primary market, this is a good backdrop. alix: do you think the high-yielding guys are going to have the same look in turn -- lock in terms of takedown? damine; it depends which issuer. i think the reality is high-yield has not caught up to ig in this market. if you look at high-yield and ig spread ratios, they have blown up largely due to argentina. damien, always a pleasure. chtan up on the program, -- chetan and lori. this is bloomberg. ♪

♪ welcome to "bloomberg

daybreak" on this friday, january 31. let's take it from the top. >> i'm declaring a public health emergency of international concern over the global outbreak of coronavirus. emergencydeclares an in munich. >> what it really does is standardize this ad hoc response we have had from various different countries who are returning global response to get this whole thing contained. we are approaching 10,000 in terms of a number of cases. alix: who praises china for its response to the virus and says there is no need for a travel ban at this time. the day is finally here where the you cable exit the european union as prime minister boris johnson urges the country to unite and level up. >> there could be parties this

evening and some parts of the united kingdom, vigils in other parts.this is still a country made up of people who either are happy about what is going to take place this evening or are unhappy. alix: the you cable exit at 6:00 p.m. eastern time. >> the revenue number was above expectations and guidance. it blew away all analyst expectations. alix: amazon crushes estimates as its new spending splurge pays off. >> this is very much a story of under promising on over delivering. they were about $1 billion ahead both in sales and profits against the. guidance they gave a lot of that came from the sons of e-commerce. alix: jeff bezos, already the world's richest person added about $12 billion to his fortune and about 15 minutes. the biggest uncertainty and president trump' impeachment trial is calling witnessess. the deciding factor could come

down to chief justice john roberts. romneytor collins, mitt are the only republican saying they would like to see more information. this comes as mitch mcconnell has been able to hold republicans together against there being witnesses. alix: senators are anticipating a witness vote on friday with only two republicans was likely voting alongside democrats. hour isme now for the the host of "what did you miss -- what'd you miss?" >> we were talking about tech earnings coming in above estimates, enough to satisfy investors. there were concerns that the ones who started to get the caterpillars, chevron, exxon, you started to get more disappointment. this is seem to suggest there are still elements of the

economy that are not doing well.arily as i think that is why you see this reticence in the market that despite their willingness to buy into these, you are also seeing a lot of protection rag. we saw the highest spike. call ratio dipped well below 50 a couple of months ago back in late december. now back around that 60 level. you are seeing a lot more protection out there. alix: you can't blame anybody. in two days, china markets are going to open. let's take a quick snapshot on what the markets are doing. s&p futures down. european growth not great last year, coming in weaker for france and italy as well. the year is able to gain. yields down by three basis points. 27 basis points over two weeks for the 10 year. that is like the most on record. a large part of that are the concerns about the coronavirus and potential impact on economic growth that is whipple --

rippling across markets. thentainment type scenario, virus could cut gdp growth down to 4.5% hong kong would face the biggest blow with 1.7% staved off of growth. joining us in new york, chetan ahya, morgan stanley chief economist. , a from boston lori heinel state street global advisor deputy chief cio. see global will growth downside of about 15-30 basis points in the first quarter. if it is 2-4 months, you probably see about 30-40 basis loss in the second quarter. . joe: are you looking at this

more of a global crisis in terms of the impact or is it still regional? chetan: it is still sort of regional. even within the region, it is still largely china. you can see the number of cases outside of china is still very small. also, i have to note that in terms of fertility rate, outside of china, it has not been seen as much, which means that possibly outside of china, because people are able to get enough care, you are not yet seeing as big a problem. as of now, we don't think it is a global growth impact, which is spread across every part of the world. it is just more centered around the region. the impact of china's growth to the rest of the world is how we are implementing this model. alix: that is a striking difference to say some strategist are calling for buying the dib. the latest is citigroup saying asian stocks could sell off, but at the end of the day, you want to be done -- buying dibs. lori: certainly, this comes at a

very difficult time because we have already upgraded growth prospects for 2020. this is going to put a little bit of a damper. a lot of the demand will just be delayed. there certainly are areas like travel and tourism, particularly given chinese new year, which will be impaired forever. there are also other areas like manufacturing where this will just create a bit of pent-up demand further into the year. there is ample time for the global economy to recover. joe: for investors trying to ride this out, there is anticipation that there is going to be a lot of volatility as we try to figure out the number of cases and how it is going to be contained, if not all. how do you approach investors and tell them to deal with that type of volatility? lori: focus on the longer term trend. -- they will clearly be places in the asia-pacific region where china will be the epicenter and will be more impacted. there is likely to be more distortion with economic information coming out of those

regions. we have seen those kind of distortions on the back of the trade spot over the last year. that prolongs this period of uncertainty. we have been upgrading our views in general because we do believe that the longer term trajectory is in place. kind of keep an eye on the trends. don't be caught up in any one particular data point, but clearly, we are in for a period of heightened volatility. joe: one of the points she makes about emerging markets, we are going to see that differential between the u.s. growth and the rest of the world narrow a little bit. does the coronavirus outbreak change that at all? chetan: not at all. the fundamental story of global economy remains intact with two big drivers. the central bank has eased monetary policy significantly. in our model, global policy rate is now down to the level below 2016. at the same time, the trade tensions impact has also gone

away. we are going to see a meaningful rebound in growth as soon as you see this coming out. it is uncertain at this point in time whether it is 2 months or 4 months. this is not a reason to give up on your fundamental outlook of growth between u.s. and emerging markets going back into emerging markets favorite. alix: what is interesting to me, it feels like some of the data is not that great. we got the your area growth from last year, that for italy and france really wasn't that good. the china pmi is also not that great. what gives you the confidence that growth was already kind of on an upswing, a sustainable upswing? chetan: the way we are approaching looking at the data this time is a soft indicator. the concerns we are looking at, manufacturing pmi. the problem in the cycle is the loss of the sector. you want to look at what is happening in the manufacturing sector.

we are looking at volume trade data and asia trade data. within pmi, the new orders have started more from the month of october. even the data that we got for four countries, was also pretty good. we have seen a continued uptake in new orders manufacturing index. on the hard data, i look at the trade volume data coming out of asia for the month of december. they have really been it's truly strong. korea is up by 8% in the month of december. we are seeing this study flow of inflows indicating the global economy is on the uptake, but does coronavirus is now going to destabilize february and march. we will have to wait for that affect to fade away and see the resumption of global growth recovery. joe: lori, what is your take on that? certainly, there will continue to be distortions.

i think we remain convinced that the consumer is pretty resilient. if you look at the services sector, generally speaking, it continues to improve in manufacturing. they had at bump in the road with some of what we are seeing out of china. we do believe the bag end of this year will can -- back and of this year will continue. alix: both of you are sticking with romain and i. coming up, it is all back and fashion. story.s record sales the this is bloomberg. ♪

alix: amazon is back and fashion with investors.

i don't know how far a really went out of favor, that the e-commerce giant crest wall street estimates -- crushed wall street estimates as it is potentially looking at a $1 trillion valuation. at these levels, if you wanted to beef up a position, would you still buy more here? >> good morning. i think so. it was obviously a strong report. we had somewhat of a mixed report on the third quarter, but it showed us a lot of different things. it showed you some resiliency in aws. that was up 34%. there other revenue, their advertising unit, that was up 41%. seeink you are starting to amazon not only as a company that owns whole foods and has lots of prime members, but they are continuing to grow and other aspects of their business, that being aws, infrastructure

service in the cloud and the revenue that comes from their advertising group. i think overall, to answer your question, we still like amazon even at these levels at about 65-70 times earnings. romaine: also holding down the costs from getting out of control. that seems to be the fear heading into this earnings report. can you swing why we didn't see more of a jump? dan:. exactly it is always what i look at when i look at the amazon numbers. i look at the fulfillment costs and how they are growing versus sales. we know that sales are up about 21% and fulfillment costs were up about 21%. they are doing a really good job right now of getting those costs under control. if you have all of these prime members that came out and said we have over 100 million prime members. they are all getting free shipping.

that is a cost every time i order something that they have to take on and levy against that revenue. that is one of the things that goes back to the efficiencies of amazon, building all of these settlement centers and doing a good job of keeping those shipment costs down. sometimes, we would see the film a cost would be twice the growth in revenues, and then all of a sudden, the red flag comes up, he is not keeping them under control. that really help them in this quarter. romaine: let's talk a little bit about competition. obviously, amazon still dominates the personal cloud space. we have seen microsoft make a lot of gains. on the retail side, we see walmart and target finally start to figure out how to play the online shipping game in the same way that amazon does. are you worried about the competitive threats to amazon? dan: if we contrast the two reports in the cloud space, we know that azor came in and grew

64%. up 52%. azor's base is smaller so they are going to have a little bit faster growth. microsoft got the contract from the defense department. aws coveted. that is a huge feather in the cap for microsoft. those companies keep fighting it out, but i think there is room for both to grow. walmart and some of these other competitors on the online front, it is competition, but really, amazon has got a really unique model, especially with the prime membership that is a lot different than say a walmart or some of these other companies. i still think they have the advantage on the online marketplace and so forth. it looks like everything is going very well right now in terms of amazon. alix: it has 53 by ratings. it is like every analyst upgraded thereby price -- their buy price.

how confident are you and its ability to grow that prime reachinghen we are saturation here in the u.s. to be the next catalyst? overseas is a big part of it. their margins are very thin. their net margin is probably 4% or 5%. as they continue to expand in these other businesses i mentioned earlier, which is other revenue from advertising, much higher margins, aws, which commands about 50% of their total operating profits for amazon, believe it or not and it first of revenue, what is the recipe for them going forward? international expansion, but also a more diverse mix in terms of their product categories and growth and higher margin areas like aws and their other areas and advertising segments. i think that is how we can make a case for the stock to keep

going higher. alix: dan, thank you so much. heinel still with us. how can you buy tech? lori: we have been broadly underweight, the big tech names. certainly benefiting from the consumer, the dearness of growth. they are one of the few places that continues to beat on the topline and bottom-line. we want to be more cautious about chasing some of these valuations. romaine: the problem with saying you don't want to taste these valuations is there is a scale here in place with these companies both in terms of their business as well as with their stocks. that kind of makes them hard to ignore. lori: you can't ignore them completely, but certainly, we are finding different opportunities in places like health care, even in the banking and finance sector where we just think the valuations are more attractive, the opportunity for upside is more attractive and we

are finding places along the value chain where valuations are not quite so extreme. these companies continue to surprise and do well, but we feel like there is an opportunity there but you can find better valuations elsewhere. romaine: when you look a little bit further down the capitalization scale at some of the mid-cap space and even into small caps, we see a little bit of lag and work onto their performance. do you see any real opportunity there for those types of companies? tor,: in the tech sec absolutely. generally, we have been underweight sort of for the so. 12-18 months or we keep looking for that catalyst is to see small caps outperform. a lot of it is because of the view on global growth and the opportunity for some global giants and international players to really benefit in a more outsize way to the trajectory on improving global growth. alix: lori heinel, you will be

sticking with us. we will be taking a look at the u.k.'s official exit from the european union, coming up next. what changes at 11:00 p.m. eastern their time? i don't think anything. this is bloomberg. ♪

viviana: "bloomberg daybreak." shares of caterpillar are falling. the heavy equipment maker's out with a four year forecast that missed estimates. at machine sales falling 4%. that is the first decline in almost three years. volkswagen wants to buy the rest of heavy truck maker navistar. they have offered $2.9 billion in cash. that represents a premium of almost 50%. vw already owns about 70% of

navistar, that is slightly less than the company -- 17% of navistar, that is slightly less than the company's biggest shareholder. today, the u.k. finally leaves the european union. an have an ever the message, johnson will say brexit is not an end, but a beginning. now, the u.k. has an 11 month transition period to work out its new relationship with the eu . alix: thanks so much. ofll with us is chetan ahya morgan stanley. i can't believe it is here and i expect there to be something happening at 11:01 u.k. time. what actually happens? chetan: nothing happens, really. most of us are focused on the fact that it is good to be a hard brexit or soft brexit. we are now all just going back to our macro analysis are not focused on the tail risk. romaine: we didn't get that tail

risk, but now there is a concern on how fast can the u.k. economy grow? i think boris johnson has pledged double growth from what would be 1.5% to roughly 3%. is that really realistic? chetan: we don't think so. we think definitely, there will be some action. we are expecting a fiscal expansion that will be helpful to u.k.'s growth. i think most of the upside will come in the year 2021 because even if you take the infrastructure and expansion and spending and 2020, impact on growth will really come in 2021. next year will still be more like below average, 1.2% type of growth, which is what we have in our model. romaine: the general sentiment is that the u.k. is going to be ok. nothing really changes. there may be some short-term pain, but the general sentiment is the u.k. as a place to live and work and trade with, is still going to be just as strong as it was in the past. chetan: hopefully so, but they

have a lot of advantage of being in the union. those advantages will go away. to get. will have growth back to those trends. romaine: do they have enough room to do those reforms? if you look at household debt as a percentage that has gone up by 140% now, is there that economic room to even maneuver right now? chetan: we think there can be two sets of actions. they have a plan answered probably a much more aggressive in terms of implementing it. businesses come back and get going in terms of domestic production for the u.k.. alix: how does the bank of england help or hurt all of this? chetan: i think the monetary policy has limited room. even if you get more easing, that is really not the case. alix: is the cut not going to do anything? chetan: not really. what you need. is global growth

to come back those are the actions that we would be watching for. romaine: what about a trade deal with the u.s.? we know the trouble they might face negotiating with the eu. alix: and the u.s. romaine: trump on boris johnson seem to have a deep relationship. chetan: i think that u.k.-u.s. relationship should probably be more manageable. the debate is still focused on what exactly is agreed on the eu with u.k. because this principle decision has been taken, but the agreement still has to be followed through over the next 12 months. alix: it is not over. chetan ahya will be sticking with us. the latest on personal consumption expenditures on this down a day of the s&p. this is bloomberg. ♪

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how much risk we want to take over the weekend when chinese markets open on sunday. the three month 10 year stays inverted, down 110 basis points as the bid to treasuries. 27 basis points over two weeks for the 10 year. you also have began in the swissie -- you have the yen and the swissie at the highest of their sessions. spending coming in in line with estimates, up .3%. the core deflator on a year on year basis coming in at 1.6, bang in line. the month by month rise is about .2%. it feels like steady as she goes, nothing to write home about. consumption holding up. income is not rising the way we want them to, and inflation goes nowhere. romaine: a slowdown in personal income, slow down and personal spending, and no uptick in the

core deflator. i do not know what that means, but when you look at the market reaction, it apparently does not mean a lot. alix: i feel like it means low rates forever for longer. romaine: powell was pretty intent and saying he is not going any lower. the market seems to be trying to call his bluff. andan ahya and lori heinel will answer those questions for us. does this mean lower for longer? chetan: we do not think the fed is hiking in 2020. we think the fed will think about hiking in the second half of 2021. considering you do not see a big pickup in u.s. growth and u.s. inflation in the near term and the fact the fed wants to have 2% symmetric growth, we think the bar to hike is high. romaine: the comments we got out of jay powell early this week,

he seemed to be intent on this idea they not only wanted to get to 2% but they would be willing to let it run a little hot to ensure it stayed there. with that in mind, how do you interpret that with regards to the rate policy? does that mean the fed stays where it is, or are we talking about a cut. lori: we think the fed will remain data-dependent but we think the next move is likely to be a cut, not an increase. there has been a lot of discussion about the symmetry around the 2% target. we wrote in our recent piece we believe the fed will let inflation run hotter than a lot of market participants expect. we think there is an outside chance we do start to see a little bit of inflation at the market participants get caught by surprise. here theis the idea market is not necessarily prepared for this? lori: the market is definitely not prepared.

look at where we are in 10 year yields. everyone is waiting for inflation to finally rear its head, and despite the easy monetary policy, that has not happened. when you look at employment data , why is it we are not seeing more wage increases? we are starting to see signs on that give usage some sign we might see that wage growth and inflation process built. that is one of the things we are keeping an eye on. the market is not looking at inflation as a potential risk. romaine: pick up on this idea. we did see a breakeven risk in the u.s. calmed down significantly. a ton of activity in the bond market. inversion in two parts of the treasury curve. chetan: you have to think that global growth is relatively weak. u.s. growth had started to slow, and now we have this risk from china.

i think the markets are pricing in that risk. when you look forward, we do think growth will come back, particularly global growth will come back. that will give some kind of confidence to the rights market that we are not headed toward recession. alix: to pivot off of that, if you look at the 10 year real yield, now it is negative. is it pricing in more than just a fear? is there something systemic we will have to have central banks lower their neutral right, and then lower their benchmarks below their neutral rate, and there is a huge systemic shift? chetan: i would call it markets are pricing a risk and when the data comes in -- the data was not so great, it started to pick up. global growth was 2.9% in the fourth quarter. the starting place was not great and now we have had this risk. it will climb the wall of worry and we will see the evidence of that effect fading at the number coming back.

we think is probably two or three months away. if we are trying to read the tea leaves and understand what type of support the markets will have from the fed and monetary policy makers around the globe, do you see something more coordinated or is this the um out on it sound? -- out on its own. lori: monetary policy has all been toward easing. monetary policy makers have pulled out whatever stops they have. the fed was the one that was the most aggressive. they talked repeatedly about wanting to get off of the zero interest rate policy and the current policy was not the right level given where we were in the growth trajectory. clearly the u.s. has tools at its disposal. while jay powell has talked about being cautiously optimistic, we think he will move if the data supports the

need for easing. alix: where does this leave the value versus growth conversation? i do not see how you can look at value at good conviction here. value has been in the backyard for a long time. we do think there are opportunities within the value space. we think energy could be interesting. some of the recent drop in commodity crisis -- in commodity prices reflect badly on that. we also think there is a differential between can the high growth companies continue their romance him, can they continue -- continue their momentum, can they continue to post outside levels? we are broadening our risk appetite around the globe. last year we were focused on u.s. we are finding other places like europe and emerging markets there there is attractive valuation. alix: where in energy?

we did just get chevron earnings and exxon. i wonder where in that space is value versus value traps. lori: a lot in providers, less in the e&p companies. upx: does this also wind meeting we will see lower for longer not just in developed market central banks but in developing? what is your forecast for that if we are in this environment we cannot seem to get out of even though financial conditions are so loose? chetan: for emerging markets, inflation has been relatively low. stay on hold and keep the doctor stance. he will probably some of the central banks coming in with a hawkish tone and thinking about rate hikes in the second half of 2020, but right now we do not see any big emerging-market doing a rate hike in 2020. romaine: what about some of the other developed markets outside of the u.s.? ecban: i think it is the

where there is a more constructive tone we heard from christine lagarde where she was saying the downside risks have reduced and we as a house were thinking we probably would have more central bank staying that, but now taking that confidence away from the policymakers. there will be at does go three-month pause. after that, you will start central banks talking about the downside risk reduced and they will say the risks are more balanced. that is what we are waiting for, to see the data begin to turn up and then the central bank tone begins to change. alix: to that point, goldman had a note that talked about the hit on u.s. gdp and said the virus to knock off point for percent in the u.s. economy -- .4% in the u.s. economy leading to risk aversion and less travel, shopping, or a tightening in financial conditions. lori, everyone is saying the same thing.

short-term impact, long-term ok. we see this as an uptick in estimates in the back half of the year. the worse it gets now leaves a lot of expectation and pressure on that back half of the year in growth. lori: it certainly does. keep in mind there are pockets of strength. the consumer has been strong and resilient, even outside the u.s.. seeing better services pmi versus manufacturing pmi. a lot of this concern about where we are in the cycle has been shifting as policymakers remain accommodative, as we start to see more green shoots, and brought an out the growth not just to focus on the u.s. coronavirus puts a lot of that at risk. we believe that delays and may amplify the recovery in the back half of the year. romaine: what are some of your other grey swans? lori: one we hope will come to fruition is a sense that this gold stimulus, if you look at

europe, more than a dozen countries are running surplus of more than .5%, if you could get some sort of grand bargain where you finally get a little bit of easing of the pursestrings, we think that could be a catalyst for european growth. the: thank you both for conversation. check nyack and lori heinel. hyak check nyack -- chetan a and lori heinel. coming up, david westin will talk to richard clarida at 12:00 in new york and 5:00 in london. now viviana hurtado is here with first word news. viviana: we begin on capitol hill where donald trump is all but certain to be acquitted. that is because mitch mcconnell probably has the votes to end his impeachment trial. need fourats republicans to break ranks and bank the call for new testimony, but when they were counting on, lamar alexander, says he will impose bringing in -- oppose

bringing in new evidence. the coronavirus outbreak has spread to the u.k. british authorities confirming the first two cases of the disease. the death toll in china has climbed to at least 213. the u.s. state department warning americans not to travel to china. officials issuing a level four advisory, the most severe travel warning category. bankers and germany are hoarding so many euros they are running out of space. the lenders are stuffing vaults with cash to offset the mounting costs of negative interest rates. since may of 2014, their physical cash holdings have almost tripled. that is the month before the ecb started charging for a deposit. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. alix: thanks so much. i love the image of people stuffing cash into a safe. we do have chevron breaking

headlines for earnings. that stopped picking up a little bit of steam to the downside, down 1.3%. they had a big miss in earnings but a large part of that was a rate down they already pre-announced due to their gas prices in appalachia because gas prices have been horrible. they did wind up producing 3 million barrels a day of oil equivalent. that was the good part. great permian production, but their downstream earnings were week, down 22% year on year. we will chat about that in just a second. caterpillar also adding to that gloom. we look at the outlook and what it says about the global economy in today's bottom line. bloomberg users, all of the charts we use are on gtv on your terminal. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." i'm viviana hurtado with your bloomberg business flash. british with struggling luxury carmaker ashton martin. it received a $600 million lifeline. the company agreed to sell its stakes to a canadian billionaire. his consortium will contribute to a rights issue major shareholders support. aston martin will use the money to shore up its balance sheet and build a new suv. the maker of rental trapped raising 1.2 billion dollars in ipo. --nolds consumer products the offered value of the company at 5.2 billion. shares begin trading today on nasdaq. -- thestor hedge fund firm was boosted by a bet on campbell soup. last year campbell's rising 50%. third point also made money on sony a. it bet on the companies media assets, including its giant

videogame platform. that is your bloomberg business flash. alix: time for bottom line. we look at companies worth watching this morning. exxon and chevron both disappointing to the downside. we do want to drill into exxon. they keep spending a lot of money. they spent more than expected in the fourth quarter. they have telegraphed it and investors keep telling them they don't like it. they also have solid permian production growth. 54%. that was less of a growth rate than they had seen before. if there crown jewel of shale production is seeing growth rollover, that is a problem. romaine: hasn't this always been a problem story, is that white we have not seen performance in the stop? alix: there are so many reasons. --micals, margins have been also the big one is exxon is not doing what people want. they are focused on spending rather than cutting costs. what you got? romaine: i have reynolds.

this is a big deal. this is the biggest ipo we have seen from a household goods makers. there are two interesting things. they were able to price relatively aggressively. it came in at 26. keep in mind the ipo market has been lackluster since you have the uber flop. then of course the wework debacle. there was some concern we would not have much momentum for ipo's. this is a good sign for the market. this will there be the biggest ipo for this year. then we have casper affecting the price. stuffi guess if you make it is different than here is an office-based you may or may not use. romaine: people can relate to that. do they have an app? that is a good question. alix: airbus is agreeing to pay 3.6 billion euros to settle the french and u.k. bribery cases. it will settle those bribery

cases. the third story is caterpillar. brooke sutherland joins us. what was your take away? brooke: it is not right. the -- it is not great. the key point is they continue to see global uncertainty and slow growth. they are not necessarily saying the turnaround a lot of people were expecting for the u.s. /china trade deal. a lot of expectations were for this quick rebound in demand. it does not work like that. you have a number of limiting factors where there are still tariffs in place from china. there is a cap nonprofit growth. you are not seeing the demand for spending and it will take time. romaine: what you saw on these numbers -- is this caterpillar specific or is there broader industry issue? brooke: i think caterpillar is still a bellwether. there are number of companies we traditionally think of as bellwethers that no longer follow that category. caterpillar still tends to have

its tentacles into a lot of markets. they are calling for a decline in residential and nonresidential construction. that affects a wide swath of the industrial sector. you are still seeing demand from institutions. they are saying flat to down 5% in china. that is before any impact from the coronavirus. and it is very competitive in china for caterpillar, which raises questions about pricing in their margins down the road. alix: isn't china trying to cannibalize them of caterpillar's lower end products? brooke: that is a big trend. china is doing that with a lot of different industrial products. they are trying to get into gas turbines. trains. there is a big question about whether they start undercutting american manufacturers. that is supposed to be part of the trade deal that they have this incentive to buy american products. we do not have details on what that entails. romaine: it is not just all soybeans? brooke: allegedly it is $80

billion of manufacturing products. boeing is not known cutting at 787 production rate because of orders not materializing from china. i think we will continue to see trends where china is trying to be a player. that does raise concerns about market share. alix: i also wonder where caterpillar is in the demand chain. i spoke to the ceo of international paper and he said the second the trade deal was signed, he sought international orders, but he sits at the beginning of demand, so he sees it right away. where is caterpillar on that? brooke: they are longer cycle, but even in shorter cotton bowl -- even in shorter cycle companies they are not seeing that pickup. i am thinking of companies like 3m. they see a downbeat first half and maybe a recovery in the second half. we have seen this movie before with first half low and the second half picking up. it does not tend to work out that way. romaine: there is a disconnect

with regard to business sentiment and consumer sentiment. consumer sentiment cases are at or near record highs. we are getting reports from companies that continue to say -- it is not just report. ceo comments were pretty balanced. brooke: one reason why the disconnect persists is you have not seen restructuring from the industrial companies because there was an expectation even among the ceos that the trade deal might resolve things in my drive a pickup in growth. you are starting to see incremental cost cutting coming out of the industrial companies. does that filter down into the job companies and sour consumer sentiment? that depends whether the second half sentiment -- the second half turnaround does materialize. alix: that is a lot of pressure on the second have to be awesome. brooke sutherland, thank you very much. romaine bostick, thank you for joining me for the hour. you are back on monday so i will be in florence, italy.

amazon surging in the premarket. how high can the stock go. that is coming up in today's technically speaking. if you're heading out today, jumping in your car, tune into bluebird radio, sirius xm -- bloomberg radio, sirius xm, channel 119 on the bloomberg business app. this is bloomberg. ♪

alix: time for technically speaking. bill maloney, boys of bloomberg equity squad will set you up for the day. listen to bill on the bloomberg by typing in squa . bill: amazon reported after the bell, will join the trillion dollar club, up 11%. it has been in a long-term uptrend back to december 2018. look today for 2100, which is around figure, and then 2118,

measured move from the july high to october lows. alix: let's stay with tech. ibm has news after the bow. they are getting a new ceo. where are we seeing the stock? bill: ibm up around 4% in the premarket. it has been in a trading range, resistance 145 to 147. if you look back on the stock back to 2013, it has been in this long-term downtrend. even with the pop today, the stock does not good in the long term chart. alix: caterpillar. i'm struck i the fact that they had earnings and it does not sound good so the stock is down in premarket. 1%, heldn around around the 200 day. wascan see long-term, there this long-term uptrend, was trading low, now it is in this

massive trading range, 112 to 144. not much going on long-term. alix: if the 200 day does not hold? bill: then you are looking around 120 or so. alix: bill maloney. check them out, bloomberg's equity squad. brian up on "the open," weinstein, morgan stanley head of fixed income will be joining him on the day where you say risk on in the market. you will not see a lot of risk being taken on when you have chinese markets opening for the first time since the virus spread. it is all about the three-month 10 year. is inverted. is it dramatic or is it just structural buying? this is bloomberg. ♪

jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, the united states advising against traveling to china. bracing for fallout. the lady data -- the latest data sending global equity back. treasury down to october lows. good morning. here is your friday morning price action. equities down 13, off .4%. in the bond market, down another four basis points. 1.55 is your yield on the u.s. 10 year. euro-dollar 1.1056. the big issue -- a tug-of-war between virus concerns and equity bulls. >> the coronavirus care. >> the coronavirus is completely dominating the conversation. >> this was out of left field. >> it comes down to earnings. >> the probability of a competence hit. through the u.s. consumer confidence channel driven by the

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