manus: good morning from dubai. it is "bloomberg daybreak: europe." i'm manus cranny. nejra: nejra cehic from the city of london. toll from the coronavirus climbs to 500 and multiple cases of infection are confirmed from japan to singapore. ahead afteres push u.s. stocks surged to a record. nancy pelosi rips up the state of the union speech. trump states the economy is outperforming on his watch. >> america's fortunes are on the rise and america's future is blazing bright.

the years of economic decay are over. [applause] and a beat, bnp paribas keep space with walmart peers in the fourth corner, and -- fourth quarter. the cfo gave us his line on the impacts of the ecb hearings. >> the impact is compensating the effect of the lowering of the rates that happened in september. there was also a negative impact. the other negative impact that hurt and -- happened early in the summer. manus: welcome to daybreak europe. the number for fixed-income commodity and trading of bnp paribas.

where does that put the relative to the street? out of a hundred million euros, that is below the billion number in the third quarter. morgan stanley nearly tumbled their numbers -- -- numbers. -- double to their numbers. bank of america rose by 25%. strong results across the business and the key takeaway is of the about the revival banks trading performance. a dividend payout of 50% and return in equity of 10%. nejra: slight cut to profitability targets amid falling rates. the red headline, revenue and adjusted industrial businesses missing the estimates. the headline takeaway, siemens is warning of a tough year after quarterly decline. misses the lowest

estimate at 20.4 billion. confirming its full-year view, subdued 2020 macro development and is talking about lifting siemens energy in september. siemens was buying stake in the turbine maker for $120 million and the holding was to be folded in the planned energy spinoff. it is about the latest push to dismantle the company's conglomerate status, focus on digital services and factory equipment. these numbers are coming in at a miss. there is some level of exuberance in u.s. equity markets, in the nasdaq record high, but the yuan is more distrusting of the short covering rally in the states. have a look at the yuan, because we are above the seven level on the five-day chart. it is about the pboc messaging

clearly what is available liquidity, liquidity, liquidity, and there is no tolerance for a major break above seven. cutsd we prepare for rrr were more moderation in lending facilities to the real economy? we closed some $50 for the first time in year. thquestion for the market is how dramatic will the cuts be? can you get the russians on side? could it be a million barrels? you are seeing a moment of her preview the oil market. bond -- barnstorming. -- upver 100% on the year over 100% on the year. tesla, bitcoin on wheels. that is not my line. this company is bigger than gm, vw, and sears combined. let's head to the asian

session because some tesla suppliers mean the index has recouped its post-lunar new year losses. back to back games for the first time since the coronavirus concerned on the msci asia-pacific after big gains in the u.s. yesterday. the s&p 500 having its best day since august. you've gotutures and contradicting calls from some of the big thanks. citigroup, exiting its bullish treasuries call, but bankamerica saying we could hit a 125 handle in the first half of the year. thedeath toll of coronavirus is nearing 500 with more than 24,300 confirmed cases. the world health organization says the virus hasn't shown much mutation yet or caused a pandemic. it added the bulk of the cases remain in the chinese province. preparing for what it sees as an impending pandemic and more cases outside china continue to emerge. hong kong authorities are

keeping 1800 passengers and crew members detained on a cruise ship. japan confirmed 10 people on a cruise ship tested positive while singapore found six new cases and two more in south korea. joining us, the senior multi-acid strategist at state street. pricing a sharp but short shock to china's economy? very tragicall, situation from a human point of view, but from a market point of view, what surprises me is the market capacity to absorb bad news. andof us have been writing, a few strategist have been on the positive side. swans, theck moreiran, potentially serious right now and markets are still taking it in stride. core narrative of

the market is -- we don't know what will happen -- it could be a shock to economic growth but what we know is central banks, governments are very much behind our back and the market takes comfort from that. manus: good to see you this morning. i wonder, if there is a differentiation. theok at a record in nasdaq, the reprieve the u.s. equity market has had. have they led the charge relative to the other equity markets around the world? do you draw the same distinction? marija: we have been fans of the u.s. market for a long time. we see the u.s. market with the strongest fundamentals and has the more proactive central bank. for us, that is the market to be. nejra: does the coronavirus in your mind put china in a position of weakness when it comes to negotiating phase two of the u.s.-china trade deal?

larry kudlow said last week the u.s. will not take advantage of the situation in negotiations, but are investors factoring that in? marija: i would probably say not yet. right now, the u.s. authorities are quite forgiving. we have seen the yuan we can. -- weaken. seen china not being as aggressive, for filling the commitment. -- fulfilling the commitment. i think there is probably some leeway, some kind of grace period. we will see how long the virus will be there and what position china will be in and that is important for the market to understand. nobody knows. report, but we actually don't know how quickly. the hopes are it will be resolved, but it takes time. that is the difficult

part of the story because if you look at the data, 500 deaths. there is a quarantine ship in japan. the story is evolving and not off a hyperbolic move up. it seems to be ratcheting higher. nara's point.f of they will take proportionate actions if the chinese don't comply. that is a bit of a warning. i started the show with the yuan. the yuan does not believe the market equity story or the rest of the fx stories. the yuan is sending me a different message. what is it sending you as it continues to weaken? is very interesting and i suspect that was very much a story of last year, where we had fixed income and foreign exchange markets with a lot more concerned than equity markets. i suspect the difference is equity markets actually do like lower interest rates.

market, aincome realization of weakness. trade off seems to be playing in the benefit of equity markets. equity markets have a push in the positive terms. nejra: what about potential earnings? the latest from the fourth quarter will not affect -- be affected by the coronavirus but others are thinking about the impact in future earnings. you were saying to us offset you were looking forward to the end of earnings contraction. does this put that at risk? theja: we are looking for end of earnings contraction in q4, so fairly optimistic about earnings coming out right now. what is going to happen in the ceo of a if i was the company, i would be cautious but the uncertainty is very clear. nobody knows what is happening, where we draw some optimism

from is the markets ability to withstand shocks and the central banks reaction. it is not going to fight the virus, but we know it will support markets. that is the distinction we are focusing on. manus: it is the glorious backstop called a central bank. we all live to fight another day. marija veitmane from state street stays with us. let's get to the bnp paribas story. they kept pace with with gains quarter. fourth a gain in fixed-income trading revenue and rebound rates. bloomberg sat down with the cfo in paris. >> the result for ciba is a continuation of what we saw in the year.

i'll come back to it in a second but let me picture the year. the bank clocked in solid results. ityou look at the top line, was up 5% on the back of intinued commercial drive the other two poles and the delivery of the transformation plan. we continued the strengthening of our customer relationships on the corporate and institutional side, leading to market share increases, and this leads, if you look at the metric, cib in europe in the global space. and is where we saw entry we delivered on costs, operating in all of the entities. year in advance. very rapidly on the other two. international financial services remain the engine of growth,

particularly if you look at private banking and domestic market was well resilient in the low interest rates environment. that is basically a nutshell. if i look to cib -- particular, fixed income in the fourth quarter, up 62.5%, equity services also sharply as well. can you maintain these performances in 2020? at what has bnp has thedoing well, if capability to do industrial ed data but vari products. it has the capital to serve clients and the intimacy to serve excellence with customers, so what we see is we capture market share on all of those. it, also on 4x.

there was a rebound because it was weaker last year but on all is doing wellking because the bank is positioned well to do with on capital and systems. paribas'st was bnp cfo. donald trump posts about the strength of the american economy. the democrats dispute the assessment. more on the president's state of the union address next. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." nejra cehic in london. manus: i am manus cranny in dubai. state of trump in his the union address on the eve of likely acquittal in the impeachment trial. hasspeech to congress focused heavily on u.s. economic growth. >> america's fortunes are on the rise and america's future is

blazing bright. the years of economic decay are over. [applause] nejra: in his speech, trump has also embraced the partisan divide when he took the stage, he turned his back on nancy pelosi when she offered to shake his hand. and losey seen ripping up a transcript of his speech. a theen with marc response to the address and questioned trump's assessment of the economy. we have stagnated while ceo pay has skyrocketed. president says the economy is strong, my question is strong for whom? maria from state street is with us. touted as the great american come back in the address. a number of ceos and fund managers, it is too early to get

worried or put hedges on, etc. buttigieg coming up from nowhere to the top of the iowa caucus. are you worried about an upset this year? how important is the election to markets? let's get the order straight. donald trump has been very good for the markets. markets have taken it as lower that hasregulation, been good for the stock market so any upset to that would obviously be negative to markets. progressive democrats will be taken more negative the moderate candidates, but to the upward, i expect until we know who is the democrat nominee, it is probably too early to start worrying about it.

we track very closely the media is thent to where democratic candidates and i have foray, the media sentiment moderates and progressives is equal right now. they are ending and flowing, but it is hard for us to say there is preference to one or the other, or one is leading. yesterday was very interesting in terms of iowa caucuses. we had some delay. four candidates were in position to be declared winner. that tells you how close the field is and how difficult to get a sense out of it. i expect to the point you made earlier, suggesting it is too early to hedge is probably correct. nejra: too early to build position and hedges, but what might you be looking at in the event you need to be ready to

build those hedges? socgen are looking at old versus new tech. are there other areas in the equity markets? marija: energy, technology, health care. those are probably the three sectors that are most sensitive. , a lot of notes have been written about the mob market -- bond market. jpmorgan said -- there is great saying in ireland, let its it. --tever think settles down whenever it settles down, the 10 year paper will go back to 2.05%, 30 year will go back to 2.05%. is that a case you can support? a normalization in the bond 10's? back to 2% on tens will bes the flat to down and that has a lot

to do with asymmetric reaction of the federal reserve. they have told us they are -- if data is weakening or strengthening, it will take a lot of improvement for rates. on any bit of bad news, bad economic news, rates going down, if we have better news, real rates will probably still be under pressure because you have inflation protection kicking in. it is very difficult to see rates going a lot higher. that maybe they settle at 2%, but in the historical context, that is a for peoplet rate like myself. that is low enough so that would make me happy. that will not upset my positive story we are seeing. manus: we like the glass half-full. marija veitmane stays with us,

our state street guest. force of, the technology has toppled another stock market milestone. we bring you the charts. to theplus, we speak director general and ceo, live from the qatar aviation summit. don't miss that conversation after 8:30 a.m. london time. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe ." i'm nejra cehic. manus: i'm manus cranny. technology stocks aren't just driving the s&p 500, they are beating it. annmarie hordern has been looking at the data. annmarie: good morning. it is all about tech, and we saw that yesterday. this morning, a broader picture of technology.

you can see relative to the s&p 500, you can see we have hit another peak. this is the second peak since june of 2018. far ahead of the s&p 500. some ofex is made of the big tech majors like facebook, apple, alphabet, twitter, and also tesla. the latest boost can be given to tesla. 13% yesterday, tesla rose. its shares doubled in. over a year. . the technology index outperforming the wider market. nejra: and recorder, thank you. marija veitmane from state street is with us. out of the tech giants that have reported, it has not been amazing out of all of them. mixed pictures under the hood. facebook, some concern and apple expressing concern around coronavirus among other things,

but why is tech reaching new highs? -- the for us, the story ,tock that has future revenues very low interest rates, you get high-value. that is the story, probably the best realization of the trade and we look at underlying fundamentals. facebook -- health of that is a good example where the market is not very happy with revenue grew 17%.t it how many companies can show that? missingen siemens forecasts, revenues falling down , lots of sectors contracting. tech is growing fast, but still the fact this growing sector. the most profitable sector, the highest margin. is that on a

positive market outlook, on a markets are, when point, markets want quality and if you want quality, you are driven back to the sector. corny to say it is a sector for all weather, but i would not be surprised to see on the chart that maria just shown. like quality, but this is amazon, google, alphabet. even what you said, is this priced to perfection? you could get a demand shock with coronavirus. to20 seconds, are we priced perfection in the trillion dollar club or is there more to go? i'm going to sound controversial, but we find technology stocks are the most

expensive stocks in the market because the earnings stream is so superior to other sectors, so -- manus: we love controversy. hold that thought. marija veitmane from state street.

nejra: good morning from bloomberg's european headquarters in london. with manusehic cranny, live from dubai. manus: these are this morning's top stories. the death toll from the coronavirus climbs toward 500 with multiple cases of infection confirmed from japan to singapore. to pushuities continue ahead after u.s. stocks surged to records. house speaker nancy pelosi rips up the script during the president's state of the union speech. outperforming on his watch, trump claims. america's fortunes are on the

rise and america's future is blazing bright. the years of economic decay are over. [applause] manus: and a beat, bnp paribas keeps pace with wall street peers in the fourth quarter, posting a jump in fixed income revenue. the cfo gave us his line on the impact of tiering. there is ampact -- positive impact, but there was also a negative impact. the other negative impact that happened in the summer, they don't have a contributing factor. nejra: welcome to "bloomberg daybreak: europe."

mixed signals, green on the screen in asia for a second day but u.s. futures are lower after the nasdaq hit a record yesterday and the s&p 500 had its best day since august. the 10 year treasury yield, slipping at seven basis points yesterday. andightly bearish citi bullish bank of america. we get reaction from around the world. manus: absolutely. the treasury market, turning back to 2%. it was the state of the union where the president talked about your 401(k) return. let's spread the wings of the markets to singapore. juliette saly, meera shaw. dani burger has the markets in london. stocks headed to their first back-to-back daily gain as the fears of the coronavirus deepened last month. juliette: absolutely. from the solid rally on wall street in the overnight session, but perhaps

investor optimism that the impact of the global economy might be more short-lived. chinese stocks, having their and two-day gain since june small-cap stocks in china, reversing post lunar losses. back to the level before the weeklong holiday. we were talking yesterday to the impact to macau's gaming stock. seen a little rebound coming through in some of those casino players. iti, forecasting gross gaming revenue will fall 12% versus its prior change to 8% it made earlier this week. nejra: juliette saly, thank you. in china, we see tesla suppliers catching a bid. what is happening in india's tech sector? niraj: good morning to both of you.

much more late than other currencies, but india in different sectors, all of these without exception have been on a tear the last one month. free i have chosen have gained 30% a piece with the biggest gain coming from part of the indian railway stable. the ticketing and catering, and it is up 60% in a month. higher return ratios and low supply have been the reason. all of these stocks doing exceptionally well. manus: let's get across to you. pressure, whatry have you got? don't know if i would do that because when you look at what the commodity indexes doing, specifically the

bloomberg commodity index, at a four-year low and the raw material makers are under pressure, and china being one of the biggest consumers of raw materials. this might prompt some inflation hedges. despite how many skeptics might be out there, look at the u.s. breakeven rate on two-year. it has fallen to 1.3. it was 1.6 at the start of the year. however short-lived these virus fears are, it looks like it might be time to buy inflation hedges. saying he iswill disappointed and uncomfortable with u.s. inflation rate running below the 2% target. it is clear this might be a persistent problem. nejra: thank you so much. let's get back to earnings and novo nordisk hitting the tape. the red lion seeing 2020 operating profit growing at constant fx. that is the mainline to look at. it said its launch in the usa is off to a good start.

it sees a 2020 share buyback of up to 17 billion danish krone and 48 ebit. andestimate was 2.4 billion it came in at 2.8 billion. for your sales, 122 billion danish krone. speak to the will ceo of novo nordisk, the world's largest insulin maker. 9:30 a.m. london time. we have numbers from a chip maker. this is very much about the global appetite for tech and chips. up city and not only beats, but gives higher guidance on actual numbers. the fiscal first quarter, 297 million profit. when they talk about sales for the guidance for the year, they see sales 3% to 7% higher.

that first-quarter total segment beat the highest of the slate.es we had on the when it comes to the second torter margin guidance, 14 14.6% and we see the full-year margin at 16%. i want to tie that together because what i am seeing from china, it constitutes a quarter of the demand for smartphones, pc -- tv's, and pc sales. that that in mind with your coronavirus impact. we could see a 20% drop in electronics in china and global demand dropping 45% according to notes. those are the numbers on the infineon forefront. let's talk about the eu government and the envoys have begun to discuss the process of a post-brexit trade negotiation with the u.k. that is after boris johnson and the eu's chief brexit negotiator michelle barnier laid out two different versions about the

terms and conditions for cap -- attached to the relationship. marija veitmane from state street is our guest. you are doubtful. we seem to have two extremes. it is normal, but you are doubtful of the ability to do a deal and that has negative consequences. talk me through them and why you are doubtful. marija: in generalija: in generl , the prime minister has an ambitious plan and will have some deal with the u.s. by the end of the year -- historically, it takes a long time to complete those deals. some deals take decades. fromw we are starting regulatory lines, but if you look at speeches from various some are in britain, contradictory. it is not clear what britain wants from an alliance with europe. forwe more keen to go

regulatory dependence and be free to make deals with the u.s. and australia? even internally, we don't have complete clarity. that reminds us of the brexit debate of the last three years. we are probably not clear still so it is not clear what the british position is and until we have -- know what you're up and america is to say, it is difficult to see a clear path. i know the prime minister said we want a deal by the end of the year and i suspect we will have phase one likey the u.s.-china trade deal. to get that all-encompassing trade deal, that sounds very optimistic. nejra: do investors have much conviction in u.k. stocks versus common dental -- continental

european stocks? no clarity onis the negotiations. economic data is getting weaker. ont is putting pressure sterling and weaker sterling means outperformance of large cap u.k. stocks. that seems to be the consensus building. nejra: marija veitmane stays with us. coming up, we will speak to the finance minister as the country salt largest euros data bond in the sub-saharan african continent. this is bloomberg. ♪

manus: this is "bloomberg daybreak: europe. i am manus cranny in dubai. nejra: i'm nejra cehic in london. donna is selling the largest dated eurobonds, a 40 year maturity and part of a wider sale in 2035 and 2027 in order

to raise $3 billion. for more, we are joined by the finance minister of ghana. welcome to the show. thank you for joining us. >> it is good to be here again. nejra: this offer, the eurobond often was five times over subscribed. does this mean you will test demand an issue longer-term securities? the last you were here, we talked about a sanctuary bond. >> last year, we tried a 31 which was successful. we moved 10 years more to 41 and yesterday was successful. $3 billion, 14 and 41. we had a 15 billion book to work so clearly the markets have rallied in support of ghana. that is good indications of the future for us. manus: minister, good to have

you with us. what is the complexion of were most of the demand came from in that $15 billion book? had under seven-year, we 3.5 billion, on the 14 year, we had about 5.6 billion and on the 41 year, also beyond 5 billion. really good showing on the long end of the bond. nejra: this comes at a time when the premium investors have asked to hold risky assets is rising because of the follow from the coronavirus. do you foresee if we get any more concerns around the coronavirus outbreak, this could impact you issuing more bonds or how you think about that? ken: we will not come back until next year, but we had the jitters and we clearly went through that. i think clearly for africa, the accommodative issue of the is down some 20%,

copper is about 9% or so. and crude oil is about 17%. looking the market was for donna paper, confident in the future. we are quite comfortable, at least for the continent. can i ask, you, have outlined some of the big commodities, which are a tour de force in your income and that has issues or run your debt to gdp. the imf warned against debt to gdp at 63% at the end of 2019 against 59% a year earlier. will that get worse, given the commodity outlook we are facing at the moment? cap we expect the debt to gdp ratio to rise rather than fall this year? ken: actually, what we have with have twos that we specific issues, which is a financial stec -- sector

restructure, and the energy sector restructuring. if you net that out, we are around 58% of debt to gdp. a key to all of this is the export boost we expect and this will be outside of commodity. if you look at nonoil contribution, that is about 5.4% growth compared to the oil growth. we have a more diversified economy than most, and we expect to do that. as you know, the continent and free trade act headquarters will we willana, which means be the pass-through of trade and investment in the future and we are banking on ghana becoming a regional hub for financial services. logistics, trade, etc. for us, once we get through the rigidities and re-profile and, in exports andt

other areas we should do well. nejra: all of the banking sector cleanup, which you mentioned, those sort of costs, risks surging to $3.5 billion. that is the number we have put out there. do you see this escalating further and if it does, will you issue more bonds to cover those new guarantees for depositors? about 16.8 billion, we have already done about 12.6 billion. about a billion dollars in change, which we should be able to support, so that we take out all the other depositors. so far, we have felt and think we should be able to manage that. were plans to ipo the gold mining royalty fund -- the last we wrote about it, it was delayed until march. can you clarify, will it happen in march? is it proposing -- postponed

definitely? what guidance can you give us? until we have made considerable progress, and we will have more meetings tomorrow, but we are confident and watching for the ipo, which will go to strengthening our foreign exchange reserve and diversify the economy into a more modern economy and take advantage of our branding has the largest gold exporter on the continent. nejra: can i come back to the 58% debt to gdp ratio. is that a comfortable you are comfortable with, or do you want to bring that down further and how would you plan to do so? where is the floor for you? ken: we look to bring that down. currently, our domestic revenue mobilization is where we need to concentrate. we have changed the whole

executive of the ghana regulatory authority and these past three months were phenomenal results. ghana is currently about 12.5% revenue to gdp compared to our peers, who are about 18%. clearly, you can see the gap of 6% that we need to bridge. ourre just about completed national bid and vacation drive, which means we will be on a database and that expectation is the space will be broadened and we should be able to get the 6%. increasing 6% would be another really moveshich toward being able to support the infrastructure drive and therefore relying on debt. manus: thank you for being with us. the finance minister of ghana, ken ofori-alta with the latest on debt to gdp and ipo plans. caucus chaos.

the ceo of the app that through the caucus into disarray. monday night, he apologized. this is bloomberg. ♪

nejra: this is "bloomberg daybreak: europe." i'm nejra cehic in london. manus: time manus cranny in dubai. a ceo who through the island caucus into disarray monday night has apologized. and record earned, was it a big apology? -- annmarie hordern, was a big apology? annmarie: we feel terrible, the exact words. his app called shadow broke down last night. he said the problem became apparent around 6:45 p.m. local time when volunteers tried to submit results. he said it wasn't the app itself

but the way it transmitted data to the democratic party. official.m., the results, leading to confusion and anger. a big blow. it questions the integrity about the process and data it produces. around 10:00 p.m., a bug in the code was discovered and fixed and they were able to successfully transmit data. within 24 hours later, we are awaiting 100% of the votes. the results show pete buttigieg leading. this cements his status as a candidate -- contendable candidate. this is someone from a little-known town, the mayor of a small town in indiana. a close second, promising a political revolution, is bernie sanders. we are still waiting for the 100%. manus: annmarie hordern with the latest on the tech in the iowa caucuses.

chinese stocks recovered monday. traders are scanning the charts for clues on where the index can go and analysts remain on watch for fresh declines in the shanghai composite. to say it may take time before the market can agree on what looks to be a safe place to buy. em picture, our guest host says 2019's most unloved region is poised to outperform at improving and signs of bottoming economic activity. what is the region, how long does she want to be? marija veitmane is from state street. or is it and how much do you want to lump up? marija: we have been positive on emerging stocks in our year ahead outlook. they are the regions that suffer the most from trade wars, from chinese slowdown.

particularlyets, asian markets, under loved, under owned, undervalued, but it has a lot of growth opportunities. we have been very encouraged by asianws from semiconductors, korea, taiwanese stocks. they not only exceeded expectations, but gave positive guidance. very unusual in current markets. admittedly, that happened before the coronavirus struck but in terms of this market, quite a lot of pessimists have been priced in and we are beginning to see -- what we began to see before the virus, some improvement and korean exports picked up, chip shipments picked up. those are positive didn amec stories that are up -- dynamic stories that are optimistic. i don't think the growth stories would be canceled out. we know demand for

the5g -- 5grs with roll up should be there. corporate's doing with their balance sheets versus u.s. corporate, an area? about: the way we think corporate strengths is the u.s. is here, the rest of the market is there. if you see a pickup in global growth, there is a lot of potential for emerging-market corporate to do better. what we saw throughout the earnings season, it is early to draw a substantial conclusion about how much market companies have reported so far. very substantial bid on technology side and quite a lot of disappointment on the industrial and financial side. there is a clear distinction there. nejra: marija veitmane, senior

multi-asset strategist at state street. that is it for "bloomberg daybreak: europe." after strong gains in europe yesterday, futures are pointing lower in the u.s. after the nasdaq hit a record. ♪ when it comes to using data,

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bloomberg. we are live from london. i am anna edwards alongside matt miller. stocks bounce after a new record high with tesla rallying with comparisons to bitcoin. the cash trade is less than one hour away. ♪