francine: the u.k. -- ties to jeffrey epstein while the executive speaks exclusively pure he says he is been transparent about the relationship. if eltel and to the final results -- a volatility and to the final results. interviews coming up shortly. coronavirus cases spike. numbers in china surged by 15,000 after the diagnosis method.

good morning, good afternoon. welcome to "bloomberg surveillance." i am francine lacqua. credit suisse reports earnings. interviewedere i the outgoing chief executive. breaking news the international agency. global demand dropped. demand, where they see the tide going. saying moment they are they will see a demand being hit because of the coronavirus. these are what your markets are doing. a bit of readjustment after the method changed. stocks falling. this is what i am looking at, stocks are falling because china deployed this devised methodology. there is a clear risk-off

looking at companies such as barclays and credit suisse. the your trading the lowest since 2017. there is economic activity data showing the region is slowing. you ourp, we will bring exclusive interview with jes staley. we will bring you our interviews with chief executives of airbus. let's get to the bloomberg first word news in new york city. viviana: we begin in china, coronavirus cases jumping nearly 15,000 and happening overnight. it is mostly down to the new methodology. china is removing senior local officials after steepening concerns over suppressing

information about the outbreak. to jerome powell giving testimony on capitol hill. he adds it is too early to tell if the coronavirus will have a serious impact on the u.s. economy. nestle pushing back its target for sales growth as revenue from china slowed even before the outbreak of the coronavirus. the company says it will need one or two more years to return to increase to four to 6%. havings bottled water its worst performance in decades. 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'm viviana hurtado. this is bloomberg. francine. francine: thank you so much. did yen tm --s didion dm -- i have been

speaking to the outgoing chief executive. suisse -- if you look at credit suisse it produced a profit of i .1%. -- of. we are confident. considering where we started. good and on a fine year. i think really is having a company on solid ground, solid foundation. a lot of capital very significantly which allows us to go for our cycles. the. very significant than $20 million

for -- 20 man dollars. the profit also doubled. of giving an platform for growing, creating a platform, 9% rt. all divisions1 are. better.and producing francine: when you look at the plight of these banks, do you think you will be difficult for credit suisse forward? is it a world economy? >> the world economy is the driver. positive. the u.s. economy is solid. so far, one of the drivers is everyday news. a lot of work to protect our staff. we think it will be ultimately

contained. effective.n very measures and started to produce and we have seen them working very well. we can count on that. our transaction is without question. francine: of course, aside from earnings, what investors want to hear about -- i asked him about his legacy. board.ame from the it was announced. francine: are you going to meet with executives and as he told you he will continue? >> we have been very close. i appointed him ceo.

veryody at have worked closely with for five years. i have every confidence. very important to me. a true legacy. i have been fortunate to run two which is, prudential working very well. i can see q4 in spite of all of the perturbation, one of our best quarters ever. to have: it is unusual a strategy saying -- to have a ceo saying the strategies working great. 10.2%.ad

you have to look at the structuring. from 15 to 18 we took $15 billion of losses. -- in 19 we one of the best performing stocks. and in 2020 so far. we had to recapitalize. i believe that from here, we are growing. whycine: given all that, have you decided to leave? [indiscernible] anymore: not expecting spice candles? i know i asked last time.

>> i don't know the answer. i don't know of any. francine: that was the outgoing credit suisse chief executive speaking to me earlier here in zurich. barclays shares lower this morning. the sea is probing the relationship between its chief executive and jeffrey epstein. earningsny announced started asking about the probe. pressis well known in the that i have had a long-standing professional relationship with jeffrey epstein. it began in 2000 when i was asked to run jp morgan's private bank and he was already a client of the bank at that time. investigation is focused on transparency, whether i was

transparent with the bank or with the board with respect to my relationship with jeffrey epstein. mind ondeclare my own back to 2015 when i joined barclays, i have been very transparent with the bank and very open and willing to discuss the relationship that i have had with him. if you look at the are enough, it is important to know that the board has done its own review and they have looked back at my -- with the bank and with the board. fact, they have unanimously voted for me to be put up for reelection at the agm meeting later this year. full support from the chairman and from the board.

there is a regulatory process that is ongoing and we will let that run its course. francine: do you understand or is it the case that new information has come to light for which the fda has made this decision? decidedhy has the fda on this program this time? >> i am not going to go into it. a lot of press. i have been very transparent think theank and i bank has been very transparent to the fca and we will let the review reach its conclusion. >> you were talking about, to get back to the business and i think the interest of shareholders here, you were talking about the dividend, and i know you had a plan or at least an aim to supplement dividends with share buybacks if feasible.

is that feasible given the lower for longer interest rates environment that we are reporting on so often? >> yeah, you know, we generate a lot of excess capital. we look back last year, we had the one big impediment for us was in the third quarter when we ppi-- related to the final claims. we had tripled our dividend. we generate a lot of excess capital, and as we said, we look forward to returning more capital to shareholders including buybacks and when we get to the right point in time we will announce and execute that. let's see how it goes through the course of 2020. francine: that was jes staley speaking to anna edwards and matt miller. we have breaking news, we are

staying on top of the coronavirus. that have been postponed and will be postponed. this comes on the back of yesterday. the mobile world congress. barcelona saying they were not going to go ahead with their form because of the coronavirus concerns are coming up, we are in conversation with jonathan gray. that is that 9:30 a.m. u.k. time. this is bloomberg. ♪

francine: economics, finance, politics.

this is bloomberg surveillance. let's get to the bloomberg for's -- this is flash. viviana: we begin with bp signaling job cuts as the -- as they lay out their strategy. new ceo is setting an ambitious agenda promising that zero emissions from fossil fuel is by 2050 but no details yet on how they plan to achieve that. >> there is a concentration on all the gas in our portfolio. i do believe our shareholders will be well served by diversified bp. bp has a very high quality oil and gas business and oil and gas business over time is likely to get smaller. oil and gas business that overtime is likely to be the carbonized. viviana: it is looking to renegotiate its -- according to the financial times. deutsche telekom owns most of

the mobile carrier. once a lower price since the deal was proposed in 2018, sprint shares have slid. we end with the biggest annual showcase scrapped after the coronavirus outbreak sparked an exodus of participants. it is bad news for the telecom industry preparing for the rollout of 5g. it is the first time in its 33 year history organizers called off the mobile world congress in barcelona. that is your bloomberg business flash. francine: coming up, we speak to the chief executive of capgemini after the company reported earnings today. that is coming up next and this is bloomberg. ♪

francine: this is "bloomberg surveillance." i am francine lacqua here in zurich. keeping the conversation on european earnings. -- came in below analyst estimates. between u.s. market slows that the presidential election this year may give a boost according to the company's chief executive . we speak to the chief executive now, paul hermelin. thank you for joining us. after 18 years of the chief executive, you will leave to become chairman. what is the biggest concern for your business? is business is

healthy. we have very good margins for nine years. is we have toay ,how north american operation 32%. possibly more spinning -- spending because we are very high growth, 14%. i will be replaced. investing on operational wenforcement but we think are looking pretty well and we are quite optimistic. when you look at 2020, what is your biggest concern? i will ask you about the coronavirus and a second. we look at the fundamental of the economy -- , we live injust say

a new world? there are some geopolitical tension. we have to learn to live in a world where possibly technology -- the group has been with as a trans active europe and north america. we have started expanding. we have to look at this trend. band theu.s. president android,uawei to use we saw the operating season -- expand into asia. we might see the end of the u.s. only dominated energy world. we have to live in a geopolitical environment. francine: on the coronavirus,

does it impact some of your businesses, because at the moment the coronavirus is impacting travel, tourism, luxury products and automotive? we had one week but china counts for more than 2% of our revenue. in terms of luxury brand, the virus has expanded to online purchases. is good for us. what i would watch carefully is the impact on the global value chain, particularly in automotive. we are monitoring carefully the slowdown in china. francine: but is there a risk that this could impact the recovery in the world economy?

does it mean lower interest rates for longer? does it mean we could be on the cusp of a downturn? if things stay as they are regarding the virus? it is hard for me to see a connection the interest rates. china injecting liquidities in their economy but i would state, in addition to the growing protection, it might lead to a kind of redefinition of what we used to call "globalization" and supply chain. we might see a change of paradigm in terms of components and integrate them into the value chain. any change in the organization might trigger so we might be countercyclical.

fear of these extended supply chains which we need some riggins asian. -- some reorganization. francine: thank you so much for joining us. he is paul hermelin the chief executive of capgemini. conversation with jonathan gray, the chief operating officer of blackstone. this is what we are looking at for stocks. stocks are down. officials in china deployed a count andthodology to diagnose the coronavirus. this is bloomberg. ♪ sometimes your small screen is your big screen.

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francine: the u.k. fca probes jes staley's ties to jeffrey epstein, while the barclays chief executive speaks to us exclusively. he says he's been transparent about the relationship. a volatile end -- tidjane thiam's final results as chief executive see credit suisse's investment bank post an unexpected loss. wealth management beats estimates. more from the interview shortly. and coronavirus cases spike. numbers in china surge by almost 15,000 after the diagnosis method is broadened. two top officials at the center of the outbreak are replaced. well, good morning, good afternoon, good evening. this is "bloomberg surveillance ." of let's get to first word news in new york city with viviana hurtado. the relationship between jes staley and jeffrey epstein is being probed. it is his second run in with regulars. in 2018 he was fined for

attempting to uncover the whistleblower. >> i have been very transparent with the bank and open and willing to discuss the relationship that i had with him. the board has done its own looked and they have back at my transparency, and they concluded indeed that i have been transparent and open with the bank and with the board all along this process. tidjane thiam -- it demonstrated the volatility of the swiss bank's trading business. the loss over shadowing it all. his shock exit. as far as regret, i have no major, major regrets. but in the big picture of

things, in terms of going forward, the strategy has worked. viviana: and in the u.s., president trump is denying meddling in roger stone's criminal prosecutions. -- four federal prosecutors resigned from the case. trump's former and longtime associate was convicted of lying to the u.s. congress. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. francine? francine: thank you so much. let's go straight to our of interview with blackstone. my guest this morning joined the comedy back connecting 92. during that time, he served in a number of positions, helping to build the largest real estate platform in the world. john gray, president and chief

executive officer of blackstone. i am going to keep you for about three hours because i have so many questions to ask you. that me kick it off on valuations. if you look at valuations, concerns in the world with the coronavirus, the possible downturn of the world economy, equities that see no end -- is it problematic that valuations could be frothy for a company like blackstone? to step backu have and look at the global picture. what you are seeing is some challenges on the manufacturing side, and the overall global slowdown or that is going to be exacerbated by the virus, so that is sort of the glass half empty side. on the glass half-full side, consumers around the globe are in pretty good shape. unemployment in the u.k. is at a 30 year low. in the u.s., unemployment is at 3.5%. we resolved some of the big risks out there in terms of the

usmca trade agreement. the china-u.s. trade tensions have gone down. and we have very accommodative central-bank policy. so in an environment where you sort of put that together, and -- in an environment where growth is slow but steady and you have low rates, i don't think it is irrational that markets continue to hang in there. obviously fact on the ground can change. if the virus got worse and spread, you could see markets trade-off. but overall it is indicative of francine: policy. -- francine: are there disruptors along the way? are you overpaying? jon: for us, the big risk of course is you are in this slow growth environment where valuations are high. so the question is, how do you

generate outside returns? we have good advantages in the sense that our platform is very broad. we can do things in infrastructure -- life-sciences, we just announced a deal in the bladder cancer space in partnership with the swiss company. we have real estate core plus, so we can do a lot of different things. we operate at a scale that is pretty unique. we have them things like definitive $20 billion plus deals. inbought hilton worldwide 2007, our most successful deal, because we were able to intervene and improve the company. to the point of how do you find specific opportunities in this environment, we look for some big themes. a lot of that relates to disruption, which is, as the economy changes, even if it is not growing slowly, there are winners and losers. online commerce is growing rapidly. we have made a huge push into

last mile logistics pair there is a content revolution happening. there is a migration to the cloud that is happening in terms of software, and we bought a number of businesses that way. in an environment like this, you have to identify some things you believe in and go all income and that has been helpful for us across our business. francine: do you think you will go all in this year? you were talking about this mega exit. are you looking for the next big investment thing? on refitted itr will is not an asset, we be a major shareholder for number of years. we are always on the lookout for bigger opportunities, to try to find great businesses, great companies, real estate, where we see something, where we see an opportunity to improve that business, improve operations. that is part of our business,

and what we like is, there is just less competition for larger size opportunities. short answer, yes, we will be looking for bigger things to do. sectore: give me one where you're looking. is it a sector or a country? jon: i touched on some earlier sectors. i talked geographically for a moment. in the u.k. there are a lot of opportunities. this is an economy that has really great capital markets, rule of law, tremendous talent here. element ofadded an uncertainty and has slowed growth, but the u.k. stock market in dollar terms has underperformed by 50% relative to the u.s. market. that seems to be too much of a discount. so we have bought a number of things here, a big executive intersection business, we bought rail system in the u.k., the

definitive merger, we bought merlin, a themepark operator here, including the london eye. india emerging markets, is an interesting place. it is in financial turmoil today, but long-term it is a similar population to china, but the fraction to gdp, real strength in i.t. services. lots of folks who speak english, leadership there that is more progrowth oriented than historically, so we have been big investors in both private equity and in the real estate. so we are looking for those kind of opportunities. i throw out a couple other sectors that are interesting. they leverage loan market, which gets a lot of negative press, which are senior noninvestment grade loans -- that for us is an interesting area. market, which as

alternatives grow as a factor, there is opportunity because big institutions, when they want to sell their positions in private equity, private credit funds, and private real estate, don't have a lot of places to grow. we have big business in that area. even in a challenging environment, there are opportunities you can find. francine: that is pretty clear. going back to brexit, you were bullish on brexit and the u.k. from the very beginning. you bought a number of companies. are you more bullish now, or do you want to wait for the u.k. new relationship? does that actually make a difference whether you go all in in the u.k. or not? jon: i think waiting for an all clear sign generally is tough because then prices tend to react. i think the election was helpful for clarity. inyou think about investment companies, certainty gives them the confidence to invest and grow their businesses, so this election i think has helped in

that regard. regardless of where you stood on the brexit issue, i think it does provide a level of clarity that will help the economy and how the ultimate settlement will work out between the e.u. and u.k., i'm sure that will be messy along the way. but i think longer term, there is now a path there it i think that can give investors some confidence. so for us, we will continue to look for things, and, yes, we are bullish on the u.k. quickly, why do you think there is so much capital in private equity at the moment? is that a good or a bad thing? is it capital waiting to be deployed overall? jon: if you talk about private equity narrowly, putting some numbers around it, it is a $2 trillion business against global stock markets, which are $100 trillion. it has grown a lot but it is still very small relative to the overall market cap out there. i also think what has happened is people have responded to

strong performance. if you look at our business, we have delivered 15% returns for almost 30 years, so investors have looked at that and said, hey, i would like more access to that. when you look at the overall amount of capital, mega funds, they are roughly the same as prior to the crisis. so again, i think there is a lot of talk, that there are bubbles building up. we don't think that is the case. we think that private equity model is powerful. particularly at the larger size of the market, we think there is a favorable competitive dynamic. wonderful. thank you so much. coo and gray, ceo -- president of blackstone, stays with us. leaders of blackrock, this evening, 7:30 u.k. time. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance e." speaking yesterday, stephen schwarzman said the coronavirus has been enormously disruptive for anyone doing business in china, calling it especially difficult. still with me, jon gray. we started speaking about it and you said it was a wait and see situation to see what happens with the virus. is this a reason why we are seeing much more money toward alternative funds, toward private equity? does it mean that the space, the always operatedlready

in has become more crowded? jon: i think the movement alternatives is indicative of a few factors. first, large interest rates. you have to reduce your allocation in some ways to fixed income and look for higher returns. and think about trading liquidity for higher returns at the time. that is first. secondly, these platforms in particular have brought in quite a bit. so we have gone from being in private equity, real estate private equity, into all sorts of activities today, including private credit, hedge fund solutions, both of which we have been at it they while. but core real estate, infrastructure, life sciences, growth equities, the range of activities continues to broaden, and the geographies continue to broaden. the other factor has just been the returns. we have delivered really strong returns across all these areas over a long period of time. steve schwarzman likes to say it

is a bit like running a restaurant. if you serve good food, and our good food is net returns, investors will come back, they will order more, and try different things on the menu. core to our success is delivering to our customers. fortunately we have done that, and that is why you have seen so much growth in our business. francine: looking at your share prices, it is pretty impressive. i don't know if we can show it on air, but it has almost doubled in the last 12 to 14 months. is that a trend? can you keep it that way? jon: that is hard to say. if you step back, part of the big run-up has been as a result of our structure. we were a publicly traded partnership, which meant that many foreign shareholders, mutual funds, index funds, they could not own our stock. so we made a decision to convert into a c corporation last year. that helped explain a lot of the

uplift in the stock. when you just stare at it today, we trade around the market multiple, although our dividend yield is about 50% higher, and earnings growth has been about double the typical company in the stock market over the last 10 years. there is a bunch of high-quality financial firms who trade above us. and we feel really great about our prospects. alternatives continue to grow with the clear market leader in the state, and our confidence in the future is pretty high. me about real to estate. where does real estate go from here? i would say this. real estate has its challenges and the fact that low interest rates have driven up the price of real estate, and so that is a headwind. the positive news out there is that the amount of building in most markets around the world is pretty constrained, so that is very helpful. central banks are leaving rates low, so the spread between

interest rates and cap rates on leveraged -- unleveraged yields in real estate are pretty wide. the key thing is within real estate there is a lot of dispersion, so some sectors like bigil, closed malls, have headwinds in europe and the united states. other factors like logistics, rental housing, have a lot of tailwind. overall, it is a sector that has fairly full valuations, but i don't think anything that is excessive. within the market, where you select in the geographies really manner -- really matter. you want to be in places where technologies and creative industries are housed. west coast united states, london, amsterdam, bangalore, india, those are the places in the globe that we are continuing to focus. francine: jon, thank you so

much. and president of blackstone. we would bring you our exclusive interview with nestle chicas aggressive -- nestle chief executive mark schneider. that is next. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance ." thiam.rviewed tidjane more on that later. nestle is pushing back targets on sales growth. coronavirus inhe the company's second-largest market. mark: we confirmed in previous quarters, it was always clear that the first half was going to be stronger than the second half. that --the business 10%aw the business grow there that was missing in the latter part of the year. for those people who correctly

incorporated, we came in exactly as we got it. going forward, we are optimistic about continuing to grow over and above the 3.5% levels. we are saying we will need another year or so to get to the 4% to 6% range that we are targeting ultimately. stepping back early on delivering improvement, we will probably be a year later when it comes to organic growth improvement. >> you will get there, it will be a bit delayed. >> we will get there. we have initiatives in place. >> you have 31 factories in china and you said some of them are reopening, but reduced capacity. how many are closed at the moment? : a large majority have reopened this week. it is in everyone's interest that we have uninterrupted supply. the safety of our employees is important and we want to be in full compliance with any rules to restrict any outbreak of the virus.

it is going to be a reduced rate because transportation capacity is lower than usual, and not everyone was able to return from the home province after the chinese new year to their workplace. but of all of all, i think we have key products here where everyone is working hard to maintain supply. >> so far you have seen no impact on your financials. anything you can say about how this is going to hurt your business? mark: it is too early to quantify the exact financial impact. january was a low part of the year anyway because of the chinese you new year -- because of the chinese new year. >> you just marked this january, three years at the helm. you are exceeding your track of this 10% portfolio trading target. what else can we see you possibly offload in the next one to two years? mark: looking back over the last three years, we had a portfolio transformation, at 12% of crude sales, so pretty significant

change over trading into higher growth, better marginal opportunities, and promise that are more on trend. what we are saying today is that going forward, expect similar levels of activity for the next three years. we have stayed away from precisely targeting what comes next, but expect us to be very busy on the portfolio transformation front going forward. was the nestle chief executive, mark schneider, speaking with annmarie hordern. let's check in on the european markets with the main movers with dani burger. dani: hi, francine. starting you off a deal news, b software,, -- r i trading just over that. -- we are seeing declines, renault, the sunset part earnings, having to spend before year end. renault, the biggest shareholder

of nissan, so we continue to see that partnership impasse. barclays missing on their fourth-quarter revenue. also overshadowing the earnings was jes staley being investigated by the fca over ties with jeffrey epstein, so shares fell by nearly 2%. francine? francine: thank you so much. dani burger staying on top of the market moves. 20 more on market reaction throughout the day. "bloomberg surveillance" continues in the next hour. tom keene joins me out of new york. in the meantime, stocks falling. actually deploy a revised methodology to diagnose coronavirus. yen alles, gold, and advancing. this is bloomberg. ♪

francine: the u.k. fca probes

jes staley's ties to jeffrey epstein, while the barclays chief executive speaks to us exclusively. he says he's been transparent about the relationship. a volatile end -- tidjane thiam's final results as chief executive see credit suisse's investment bank post an unexpected loss. wealth management beats estimates. more from that interview shortly. and coronavirus cases spike. numbers in china surge by almost 15,000 after the diagnosis method is broadened. two top officials at the center of the outbreak are replaced. well, good morning, good afternoon, good evening. this is "bloomberg surveillance ." i'm francine lacqua in zurich, tom keene in new york. we have the economic forecast out of the commission that should be crossing shortly. that could give markets a reason to worry about the forecast, and the strength of the economy, especially after the methodology in china changed, being we have many more cases of coronavirus and previously thought. tom: absolutely fascinating to

see the headlines coming out of europe. these are a broad set of headlines, touching on all sorts of themes. you saw the 10-year yesterday under 1%. the e.u. says a greek economy will expand to 2.4% this year, to pretend next year. some of the other headlines, you see the usual -- they raised the german outlook fractionally as well. they look at the virus in china and say this will have a serious effect. bruce kasman joining us from j.p. morgan in the next hour. francine: i'm looking forward to that as well. let's get straight to bloomberg first word news in new york city with viviana hurtado. viviana: we begin with hope that the coronavirus outbreak is under control. they are fading. soaring by almost 45% to almost 50,000. reversing the declining growth trend of the previous days.

the death or has passed 1300. the coronavirus blamed for what is expected to be the first drop in oil demand in more than a decade, and it comes from the international energy agency. the iea says the virus has battered china's economy. it also says at this stage it is hard to be precise about the impact. now to burgess regulators -- two british regulators. withbe i the fca has to do a count of the relationship between jeffrey epstein and jes staley. epstein died in prison last year. he deeply regrets -- jes staley says he deeply regrets his relationship with epstein. but retains the full confidence of the bank board. and considering a plan to increase its long-standing ceiling on tariffs, a trigger -- the trump administration has long complained other countries can charge higher tariffs on certain products than the u.s.

does. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. tom: thanks so much. let's look at the data. ineal abrupt adjustment chinese data shifts last night. futures -26, dow futures negative 222. curve flattening again. certainly risk off. don't forget the inflation data that we see out at 8:30 this morning. you're having a difficult 24 hours and onto the next screen if we have it. 15.11. singapore dollar -- that is the wrong dollar currency. let's move away from that. francine: i have a couple of currency fares that i was looking at. this is overall a risk, stocks down, u.s. futures down.

the revised methodology, looking at yen advancing, gold advancing, treasuries also advancing. tom: right now in china, it is a changed china in the last 24 hours. someone very aware of the trust of data within china's unique political economy are tom mackenzie -- our tom mackenzie joins from beijing. the mayor of shanghai is moving to hubei province. they are doing what they do. nobody in hong kong is out the door as well. none of that matters if you don't know the math, the statistics. are we any more knowledgeable now on the statistics of this virus and the illness, or are we not? we are may be one step forward in this, but there remains a lot of uncertainty, so the experts and the analysts we speak to say they welcome this changinghina's

methodologies. you say a 45% increase in the number of infections out of hubei, so we now have globally 60,000 infections. the experts in hubei have included those people scanned just thosens, not who have had the acid test. you have two groups -- the people who have been having the test and those who have had the ct scans. they have been put together, and that is what you have seen this increase in the rate of infection. the death numbers keep rising, about 1300 globally. a step forward, but there are a few question marks about the extent to which the virus has spread. we are seeing more examples of it in the region and the economic impact of that in hong kong being closed until the middle of march the political side of it of course is also interesting. there have been leadership --nges in the province of wu of hubei and the province of wuhan.

francine: two top officials removed. does that mean that there is an acknowledgment that things have been done wrong? : certainly there has. president xi jinping has talked about the risks to social stability the way this has been handled. there has been this unusual spat between members of the communist party, mayor of wuhan saying that he could not articulate and partial the information as quickly as he wanted to because of the structure. he had to get a signoff from beijing. there has been this unusual backbiting within the party, and now they have had this change. tois about beijing trying reassert that authority, and these numbers as well. they want to get the numbers out into the open so the new leadership can start effectively from a new base. whether or not this will be enough to sway the anger here in china, we will have to wait and see. the experts think this is a step

in the right direction p these officials are close to xi jinping politically as well. they will be hoping that this change of leadership allows them to move forward in terms of tackling this issue. in terms of economics, we heard from the politburo standing committee, and they will reemphasize loosening monetary policy amid fiscal stimulus. tom: how do people get milk? how do they get butter? how do they get vegetables to eat? is this becoming constrained across china? tom: so far, food supplies, at least in beijing, seem to be there still. someone in ag to city of about 10 million people, and they say fruits and vegetables are still available. people are getting deliveries from their come -- to their compounds from e-commerce companies as well.

real estate agents are closed, central banks are closed, so the stimulus and the easing on the monetary policy side that officials are talking about in beijing, that will go some way to helping the big states with some of the larger private companies. but doesn't help the mom and pop shops, mom-and-pop businesses? these businesses that maybe employ 10 or 15 people per business, there is an impact there. on,longer these risks drag the more it impacts social stability here. francine: tom mackenzie in beijing. tom keene, i was looking at something on instagram, where one of our reporters had ordered some mcdonald's in beijing, and she received they mcdonald's but then there was the actual temperature of the delivery person, the person that packed it, to make sure they were not sick. we will have a lot more on these quirks out there in beijing.

quirks, but very serious situations. let's get to andrew sheets. andrew, i don't know how you measure the virus. -- does it mean what we thought is better could be getting worse? andrew: investors have to approach this with a huge cloud of uncertainty. i don't think any of us can move with a great deal of certainty about where the virus is going. i think we have seen over the last week market sentiment around these public health concerns move from one end of the spectrum to the other. so i think for investors, what they need to focus on is what we really can quantify. i think what we have seen is, some parts of global markets price in quite a bit of negativity, have moved quite a long way in terms of these concerns. other parts of the market react a lot less, so i think for an investment perspective, it is trying to focus on what we can quantify and also when you have

had large moves, potentially, kind of steer portfolios back and fade those little bit. francine: how difficult or how impossible is it to understand the impact this could have on the economy? andrew: one way we are thinking about this is, it will clearly affect data both in asia and probably globally over the next month or two. it will clearly affect first-quarter earnings. i think there is a possibility that markets give those disappointments a bit of a past era do we know the dow will be disappointing. it is in the news, it is seen as temporary, and certainly one way to explain the way markets are training is -- are trading is that these are temporary effects. the real risk will come is if they are not just about one quarter. if the data by may or june is still weak. if some of this consumption that is not happening now never comes back. thinking about the market from a

tactical perspective, near-term may be the markets are more forgiving today to weakness and are willing to give things more the benefit of the doubt, but then the greater risk might lie in a couple of months when the data which by that point is supposed to improve, if it does not. a --andrew sheets has such what is morgan stanley economics say now about china gdp? do you have a single point estimate out one year, or a banded view of the options available? andrew: currently we still have endenario of systemic because of the inherent uncertainty. first-quarter gdp could suffer a hit anywhere from half a percentage point to one percentage point, so it is rather significant. china will increase stimulus on the back of that, and thus leave overall growth roughly where we thought it would be at the beginning of the

year so that you would see a larger fiscal response. but again, i think this is something that is inherently uncertain, and i think the effect on supply chains is always very complex and difficult to model. if i am thinking about this from an investment perspective, the risk to markets might not be in disappointing pmi's next month, it is in second-quarter earnings or earnings updates around the middle of the year that suggests there has been a lot more lasting disruption from this terrible event than people are expecting. francine: andrew, thanks so much. andrew sheets of morgan stanley stays with us. up next, we hear from jes staley, barclays chief executive. and tidjane thiam, the outgoing credit suisse exec at of peer jes staley saying he was investigated by the fca with ties to jeffrey epstein. this is bloomberg. ♪

>> we are maintaining our target of 10% this year, and we will strive to achieve that just like we did 9% this year. but recognizing the new interest rate environment that we are under today, interest rates are significantly lower. that does put a headwind in terms of our performance. i have been very transparent with the banks, and very open and willing to discuss the relationship that i have had with him. the board has done its own review, and they have looked back at my transparency, and they concluded indeed that i have been transparent and open with the bank and with the board all along this process. that was barclays

chief executive jes staley talking at the end about regulators probing him and his account of his ties with jeffrey epstein, of course the financier and convicted sex offender who died last year. now to credit suisse and the bank, delivering mixed results under tidjane thiam. things go well, but i have no major, major regrets. in the big picture of things in irms of driving forward, don't know the answer to that. i don't know if there are any. tom: for the record interview with tidjane thiam, going out the door. someone who will speak on this

is jonathan tyce with bloomberg intelligence, some real-world knowledge of european banking. jon, the number one issue here is that these banks are trying to be someone that they can be, or maybe they do not know what they want to be. what does credit suisse look like in five years? what does barclays look like in five years? jon: i suspect not similar to what they look like right now, and unfortunately i expect that the returns that they are generating, will not be similar either. hopefullyey can be -- they will have a tax cut base by then, but there is not a lot of change. tom: there is not a lot of change. are they seeing renewed competition from american banks, including andrew sheets' morgan stanley? our american banks opportunistic

given these various challenges? jon: it is not really a competition. u.s. banks have done very well for a number of years. if anything, i think the european banks are holding their own now. caping at bmp or a socgen -- or a soft gent, they are holding their own. areink market share gains not something we can expect particularly from here. if anything you will see the european banks probably be more aggressive on price to try and maintain or take a little bit of share back. so more status quo, which again just means the revenue pool is streaking anyway. marchers are going only one way, too. -- margins are only going one way, too. francine: give us a sense of where you think credit suisse will be in four to five years. there was a bit of a mixed bag and he would not really say what his relationship with the board was like. does the new chief executive stay on the strategies, a strategy that is working, or

will they be much more swift looking. the sameink it is problem jes staley has. it is not that difficult to maintain her presence and stabilize revenues, albeit margins -- maintain your presence and stabilize revenues, albeit margins tick down. i cannot see what they can do. i think m&a is unlikely, so more of the same peer you will not no longerd say we like swiss mortgages. to my mind, it still has to come back to efficiency. ultimately, the banks that win with efficiency are the banks that will outperform over a three to five-year period. the revenue largess is not going anywhere. francine: efficiency -- you are talking about more job cuts and -- cuts and job losses. jon: it is not just job cuts, it

is using tech, ai, being on the right side of the trend zone, inc.'s like asset management. all of these banks in europe, all the big banks have a bit of everything. but i think y's, the sector is looking pretty good. -- one cash but i think y's thei think capital wise, sector is looking pretty good. we are cleaning up the balance sheets. there will be m&a, there will not be victim a day this year, but technically it will clean up a little bit, consolidation in germany. i look at commerzbank's numbers, and it is out very strongly today. they are not particularly high quality. that is probably on the back of people thinking, you know what, it is stabilizing and this is a warrant on emma day. tyce, thanknathan

you. here is what you should be looking for today. alibaba postserce earnings. to judy shelton, an advisor president trump's election campaign. in later today, u.s. cpi data a.m.ut 830 -- 8:30 this is bloomberg. ♪

viviana: this is "bloomberg surveillance." we begin with the parent of t-mobile. it apparently wants to renegotiate the 26.5 billion takeover of sprint. according to the financial times, which a telecom once a lower price because sprint shares have fallen. the two sides have not yet started talks about the terms. for the second quarter in a row, nissan cut its full-year outlook. the japanese automaker scrapping its year-end dividend, raising questions about nissan's ability to return cash to investors. its top shareholder is its french partner, renault. airbus raised its stake in the a2 20 jetline to 75%. leaving tompany is conserve cash. million to pay $591 the company. the government of quebec listing is share to 25%. that is your bloomberg business

flash. francine: we are just getting breaking news out of boris johnson. we understand a number of cabinet ministers have left their the last one to leave is geoffrey cox, who we knew through the u.k. press had asked the prime minister not to sack him. , weou look at the reshuffle are expecting to look at exactly was in and who is out in the next couple of hours. boris johnson also seems to have pushed away people who really supported him, who were very pro-brexit throughout his campaign. tom: i saw one chart, the leave, they remain, who will stay and who will go as well. coming up later today, jeffrey currie of goldman sachs on commodities. this is bloomberg. ♪

beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. francine: this is "bloomberg surveillance." tom and francine from zurich and new york. we were looking at the candidate

reshuffle. really calling it dramatic. a lot of the names of the people who have been fired were ousted from the cabinet is expected. , including the business secretary, this is the fate of julian smith. the housing minister, they have also been confirmed as having been dismissed. i don't know whether this is boris johnson trying to give his cabinet some more unity because he is calling a lot of the people who have supported him for a very long time. let's get the views of andrew sheets of morgan stanley on the u.k. andrew, we look at these calls, cabinet reshuffles, what boris johnson is saying with e.u. in terms of equivalency and finance. what do we know the prime , aister wants from the e.u. delicate 11 months of

negotiations? andrew: at the moment, the challenge is it seems like the government is asking for somewhat mutually exclusive things. and so i think that is why the market has been, after an initial surge of optimism, after the election, and a lot of these u.k. related assets have been sold off and retraced a lot of those movements. but i think there are a couple of things to keep in mind the first thing is a lot of the u.k. assets, equity market, currency, are still fundamentally inexpensive. we think there is quite a bit of risk premium for these risks that now lie with these negotiations between now and year-end. our economists think we will see but a bit of fiscal stimulus out of this government when we get the budget next month. i think third, we do see ultimately, even though it is uncertain, the government moderating its stance with these negotiations and not ending up with a no deal scenario. for all those reasons, we think on the full year basis the pound will be higher ed u.k. equities will be doing better than those

in continental europe. francine: what if we don't get a deal? and when doind out we find out what that means for equities? andrew: we might not know that for a while come as we saw with the previous round of negotiations. things changed dramatically near the end, that a deal seemed very hard to achieve, almost right up to the very end. i think that is one of the challenges here, that we would not know or we might not know get totain until you november, november-december. you could probably argue that maybe that is also part of the government's negotiating strategy, to tow a hard in the --es of getting some investors will not be able to have that certainty. given certainly where assets have a lot of risk premium and

the price, they are discounting that. tom: i want to go to your wonderful research as you go to the cross asset world. the greek yield made headlines yesterday, moving ever lower this morning, down in the .91.ity of a .92, the united kingdom 10-year is .579 or something in that vicinity as well. ok, the united kingdom yield is coming down. are they correlated enough where we need to start thinking about negative interest rates in the united kingdom? andrew: i don't think so. that is not the view of our economics team, not the view of our interest rate strategy team. there are big differences here. obviously the bank of england is always operating with a different view of where that lower bound is than the ecb has. for greek debt, something fueling that optimism is the hope that eventually greece will be updated -- upgraded to investment grade, and when it does come of the ecb will add it

to its bond purchase program so you know you have or you can suspect you have kind of an additional buying that is waiting on the other cited that. an economyhe u.k. as with fundamentally a tight labor market. where ultimately by the end of the year, we think there will be less economic and political uncertainty. all those things argue for the market pricing in too many rate cuts and too much easing in the u.k. tom: then where is the opportunity in u.k. equities? are there opportunities with the ftse? andrew: the ftse 100 is near one of its largest discounts ever. that overting for history, the discount is abnormally large. the other part of the market that we like there is the small caps, which are more domestically focused, also

traded a large discount. it is more directly linked to this idea that you are going to get larger fiscal stimulus, and the small-cap part of the market is not reflecting that. tom: andrew sheets, thank you so much. right now with an acute first word news, here is viviana hurtado. viviana: we begin with the chinese province at the center of the coronavirus outbreak, the number of cases soaring by 45% to almost 50,000 the stunning report is raising questions about the true scale of the crisis. in recent days there was hope the epidemic was easing the death toll has risen above 1300. oil industry leaders -- the privately -- they privately told the trump administration to trade deal with china was unrealistic. they say the u.s. will struggle to produce the oil, gas, and other energy products china has committed to buy. according to american petroleum

institute, infrastructure and production capacity will be shifted. now to amy klobuchar -- or surprise performance in the new hampshire primary has been a big boost to her run for the democratic residential nomination. raised $2.5 million. the race moves on to nevada and then south carolina. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. with andrewdo this sheets of morgan stanley, dovetail the politics we just observed from amy klobuchar doing so well in new hampshire. according to kevin cirilli. and also with inflation data today. andrew, do you just assume within this election process that it is a process of disinflation, and subdued economic growth due to china and the other worries? and is it going to be an economy

for these various politicians that is a lesser animal spirit, a nominal gdp with the u.s. under 4%? andrew: something is quite interesting. if you look at how the market is -- if we look back at 2016 or 2012, markets generally did pretty well from where we are today, february through the end of april. then markets really struggled. markets went sideways from the end of april, to kind of early november in 2012 they went sideways from the end of april 2 the early november in 2016. that suggests that even if most investors and most companies think vita power is probably the , it does increase uncertainty to delay projects until after you know for certain

that is something that would you think is a risk that might not be with us today but some thing that mounts as the year goes on. as you get to the middle of the year, you could see a strong incentive to pull back investment, and that is one reason why on the u.s. economic forecast we have a relatively low number for that over several quarters in the fall. tom: you look at this with andrew sheets -- he develops a chart of intelligence. do a scattered out chart on the american consumer. dovetail ellen zentner's great work on what you're doing with the complexity of how the americans consumer is doing giving the shocks within the global system. how would you frame that across a four-quadrant space? andrew: one of the interesting parts about u.s. consumer data is that there is a big difference, a notable difference between what the mean and median consumer is doing. you have -- this is in part

based on the fact that you do have quite a bit of inequality and income and wealth inequality in the u.s., and so for statistics like household savings rates or consumption, some of those strong overall numbers mask the fact that at the tail there are still large parts of the u.s. consumer that are not doing nearly as well. i think that is important for how we think about economic growth, it is still strong but not universally strong in every pocket of the consumer. and you can also see this in the fact that a lot of consumer cyclical stocks in the u.s. outside maybe the larger tech names are still struggling. i think it also suggests as we go into the u.s. election, we need to be careful about painting a strong u.s. consumer with a broad brush. if you look at some of the delinquencies in auto loans or in lower rated housing markets, some of those have gotten worse over the last several months. even though the overall economic data looks pretty robust.

tom: andrew sheets, thank you so much. he is with morgan stanley. for america, is america transfixed by the challenge of seattle, and i guess she ha go -- chicago. of chief executive officer -- there is too much to talk about with the state of the airlines we fly on. this is bloomberg. good morning. ♪

tom: good morning everyone, i'm tom keene in new york. what we know for certain is everybody in the bloomberg surveillance audience gets on an airplane. there is that magic of the boeing 747 from another half-century ago, however long

ago it is. i am afraid to mention it. 13 years ago, the extraordinary current of that very largest of the airbus fleet, the a's-380. 380.johnson is -- the a- guy johnson has more on the challenges of being with airbus and not with boeing. guy: the 737 max remains grounded at this moment, but the big question is kind airbus -- can airbus take advantage of that? stock is up over 30%. today the stock is treading pretty much in line with the market down a little bit. as you say, we are ,oined now by guillaume faury the ceo of airbus, who joins us now. good morning.

the market seems to have taken your numbers this morning very positively, certainly when it comes to the 2019 numbers. cash looks per to good. profit looks pretty good. the issue seems to be with the outlook for 2020, and particularly the delivery numbers that you posted this morning. your expectation. 880 deliveries expected in the year ahead. the market was expecting a little bit more. is that number conservative? well, that number reflects our intention for 2020, which is basically to continue -- there is strong demand on that product. as well, they ramping up of the 220, and other news of the day, 75% of the joint venture. we had previously. the 880 is a good target for

2020, and what is important is to make sure that we have sustainability in what we do. so the mix is changing. we are ramping up the a-300 when theit is the expectation of a growing number of airlines and we saw the acceleration moving forward. it is an objective we think is in line with our objectives and to continue to perform not only short-term, but mid and long term. guy: do you have an expectation that number is beatable? >> that is not the point at this very moment. we take an objective that is 880. it is a good objective although the cost over 12 months, many things can happen and what is important is to deliver. the 880 reflects that objective. guy: let's talk about

coronavirus. you restarted your chinese plants over the last few days, but i am curious what effect you have -- the coronavirus having more broadly. that is exactly the way we chaint it and the supply -- when it comes to customers at this very moment, it is mainly our chinese customers and want to affected and we see how we can support and help them. on our side, it is the risk that could come from the supply chain. we have a lot of industrial presence in china. we have restarted in an efficient way after two weeks of interruption and one of those was because of the chinese new year.

the second was on request of the chinese government to help them put in place the measures they have taken to limit the impact of the outbreak. it is very dynamic. we are in contact with a large number of suppliers mainly in china. we see a situation improving and we will continue to monitor to steer that situation moving forward in a dynamic way as we learn more about the coronavirus itself. guy: you are taking a great 8020 stake in the 8020 -- you are taking a great stake in the 8020 program. about air france talked it openly, so i am wondering how whether the road and that will allow you to compete more effectively with what is

going on with the max. >> it is a very good point. we would be wrong to be right too early. we have a lot on our plate with what we call the -100 and -300. of 220 platform has a lot potential and the head of sales and marketing said earlier last year the question is not if, but when and when it not in the short term. we know there is demand and appetite for some airlines. we see this as something positive for the future, but this is not what we are concentrating on as we speak. guy: final question, there is speculation you are keeping cash back, keeping cash on the balance sheet in case boeing

decides the max is no more and needs to develop a new narrowbody. what kind of cash are you keeping back? is that something you are thinking about right now? guillaume: we are looking at our broaderuation with a perspective. developing a new plane is part of what the industry is doing. i don't think there is a case for launching a new line for technology reasons. just launched upgrades with the cycle for the next generation of engines is 10 or 15 years. back to the cash, we like the credit rating we are enjoying is something we want to maintain.

we are looking at the situation, not being impatient to change and enjoying the situation in this complex environment. guillaume faury, thank you so much for your time. the ceo of airbus joining us. tom: we have images of one of the three cruise ship's, this is not the japanese ship with the increased infection rate, this singaporey north of miles and miles across the gulf minhailand from ho chi city, go directly west past vietnam to cambodia and the ship is finally found -- has finally found land. it is remote and distant from what was planned.

a ship finds land in cambodia. this is bloomberg. ♪

bloombe not say it was a noninterview. it was one of the few interviews he did and it was awkward because he is aboutwn and said he did not know if there were any spying scandals. when i am back in new york, maybe even tonight. tom: we will talk about this in the next hour. an important interview and an interview with mr. staley of barclays. andrew she's -- andrew of morgan stanley. it is worldwide, central bankers inflation says who? is a well-established narrative that there is no inflation at the moment. inflationary pressures are modest, absent and u.s. core cpi has been 2% or higher for the

last 22 months. there is some inflation. the preferred inflation measure is lower, but it is an outlier versus other inflation measures and when i talk to our interest rate strategists, they emphasize easycore cpe has some comparisons that will make it easy to lift. our base case is not that we get upside surprise, but i would note i don't think many investors or any investors expect core inflation to move higher. some numbers have easy comparisons. ber term, the market could relaxed. as the year goes on, it might be longer. tom: we see this after a huge

number of days. futures -24 off bloomberg. they have a shocking call on gdp in china and we speak to bruce kasman of jp morgan. thrilled for him to be with us today. francine lacqua with that important interview with credit suisse, the outgoing ceo in zurich and an interview with mr. staley of barclays. we move on with economic data at 8:30. retail sales tomorrow. a cabinet reshuffle, drama at westminster. this is bloomberg. ♪

tom: if you can believe the math, death in china from the ed-19 increase.

musical chairs as well in hong kong. 6% quarantined cruise ship infected. another one reaches land in cambodia, north of the gulf of thailand. .lobal economic slowdown bruce kasman of jp morgan and markets will adjust to inflation data. retail sales. retail sales data putting the heartbreaking sales at tiffany's folded in as well. good morning, everyone. "bloomberg surveillance" from new york. in zurich, francine lacqua. what does he say is the exit stage right? francine: what he says is he has reshaped the bank. a lot of people believe him. a lot more people would be

skeptical about the investment bank. he was ousted by the board and i asked if the result are good and the strategy is working, why were you ousted? he said ask the board and that he did not want to talk about it and we talked about the spying scandal. tom: very interesting to see. francine with an interview with his replacement in the coming weeks. right now, there is no replacement for her, viviana hurtado. : hopes that these number of coronavirus cases was declining is fading. growthng the declining trend, the death toll has past 1300. it is blamed for what is expected to be the first drop in oil demand in more than a decade coming from the international energy agency.

the virus has battered china's economy and it is hard to be precise about the impact. british regulators investigating his ties toeo and jeffrey epstein. it has to do with his account of the relationship. epstein is the disgraced financier and convicted sex a vendor who died in prison last year. barclays says the ceo retains the competent -- confidence of the board. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in this isn 120 countries. bloomberg. equities, bonds, currencies, commodities risk off after the four or five day celebration. i am going to be very careful, futures negative, dow futures -229.

-- euro the major story. with the vix, 15.21. 1.39.o singapore dollar francine? euros is trading the lowest since 2017. the commission said the economic malaise is set to continue. because china deployed this revised methodology, a number of confirmed cases have soared, markets freaking out, treasuries and again -- and the yen advancing. almost 15,000 cases. this comes as i was saying beijing revised the way of diagnosing the illness and demoted two top local officials.

joining us from hong kong is bloomberg's chief north asia correspondent, stephen engle. the methodology has changed and we have 15,000 more cases. does it mean we thought it was getting better when it is getting worse or is it leveling out? stephen: we have to figure out in the next couple days because this raises the base effect because they are including these other cases that were not tested with a testing kit and the testing kits are in short supply. they included those cases many people suspected were likely infected with coronavirus, but had been put off to the side usedse they were basically diagnostic test, imaging. officials have added all of those. an additional 15,000 overnight and we are just under 60,000 confirmed cases with the testing kit and diagnostic imaging

screening. that is alarming when you get that many number of cases. is that a one-off jump or will we start seeing more and more and more cases? too,ve plateaued getting 2.5 a day when a week ago it was 3000 plus a day. deaths.1367 as long as the new infection rate stays at a plateau level, it is less alarming if the death rate goes up because that is a lagging indicator. dien times who eventually due south three weeks or so after contracting it, so you will have that flag effect. we need to look at the number of new cases going forward. francine: politically, how impossible is this for president xi? they recognize they have done a bad job otherwise they would not

have kicked out these officials. absolutely. they fired the top leaders. it is the party chiefs who are the top bosses. the party chief and the city and municipality have been ousted. they are bringing in the mayor of shanghai. right now, the government is faced with two big problems among many, the health crisis, but also the political crisis. the last thing this party wants their rulehave delegitimized. tom: thank you so much. greatly appreciate it. we are thrilled to bring you bruce kasman, jp morgan chief economist. he writes with his team and acclaimed friday afternoon note that is always must reading and

on february 7, you took china 1%.from 6.3% down to everybody has been coming down, we have a fancy chart, but 4% is not 1%. how do you get to 1%? bruce: when you shut down activity, shut down the movement of people, production, and it is not coming back, but it will come back slowly. you should not underestimate the disruptive event of what we are seeing as we try to figure out the science behind it and how far it will run. it will have a big hit on china and a spill over to the global economy. tom: you have an optimistic construction about your tape of the uncertainty, the medicine. as we see corporations move from no february to march to even some doing delays up to april, how close are you to wear your v

shape becomes less ve? bruce: two issues here. one is weather the -- whether the v is being extended and the other is whether or not things are happen that will continue to keep performance weak. we are comfortable by march we will see a substantial return to more normal activity and start to see the v take hold. uncertainty as we see around how the virus is playing out is high . i don't want to predict with the time webut by are sitting at the middle part of the year, we will not be talking about the virus in the second half of the year and what we will be talking about is a set of other things that will deliver lift. francine: which are what? i want to go back to the virus because let's say it gets stuck

and it does not get worse and it is impossible to model. if we have the current -- what we are currently seeing in china stay as is, what does that mean for the economy and i want to ask about happier things where you see the lift coming from. bruce: we have a very big, disruptive event. it hits for maybe a month and month and a half and we rebound and there are very little knock on effects supply chains can handle this and the chinese authorities provide stimulus and there are spillovers to the rest of the world and we get beyond it. the risk is this extends or if it spills out and we are starting to have problems in western europe, we are going -- to figurerted out what happens to we get the recovery at the end of february

or march. either way, by june and july, we have had a big disruption, but have not derailed the underlying story, which is a positive one. positive, that means no matter what happens with the virus we cannot see a downturn? i am trying to see what data points you would be looking at. tracking thems of virus, the big issue is to what degree the virus is starting to degree doand to what we see production coming back online in china? that. seeing some of that is more or less what we are expecting. it is early march we see production levels come back to normal. tom: this on a day where we see real adjustment to the

statistics. tom mackenzie and steve engle mentioned senior political changes in china as well. we continue with dr. kasman later on oil and commodities. this is bloomberg. ♪

tom: "bloomberg surveillance." good morning, everyone. tom keene in new york. francine lacqua in zurich. there is a lot of politics talk in the united states. we have new hampshire, we go to nevada and south carolina. there is an uproar at the nation's department of justice.

within the washington post a gentleman who was a prosecutor and an attorney in the district of columbia for 12 years. georgetownhing at law, monday federal prosecutors recommend a sentence in line with federal guidelines. what changed? anyone who has not been a prosecutor may not appreciate what a punch to the gut this was . the norms concerning doj's independence have been else up over decades. for those of us who cherish the department and the ideals of which it stands, this is heartbreaking. emily wilkins joins us right now in washington. this makes east ballet of the reagan years looks like -- look like a -- keith l.a. of the reagan years look like -- this makes east l.a. of the reagan years look like a tea party.

areenior officials who formerly in the justice department, other legal experts saying this is a giant break. senator lindsey graham he felt it was inappropriate for the justice department to have interfered on this aspect and you are seeing senate democrats call for an inquiry into the department of justice and what happened. tom: will there be an inquiry? what do republicans in the house and senate do to respond? >> we haven't quite seen if republicans will start an inquiry. they are the ones who control the senate, but the house could take this up. william -- attorney general william barr will be appearing march 31. mark your calendars, that should be an interesting hearing. housel see what the committee's decide to do, whether they decide to open an

investigation, that this is something that needs to be looked at further. francine: does this actually matter to voters? >> we have seen the trump administration has been through a lot. we saw the end of the impeachment trial and the impeachment process. you did not really see a giant shift in polling numbers from the time you heard about what was happening with ukraine and the investigation being open until the end. the country is pretty evenly split and it seems like lawmakers are reflecting that on capitol hill. while it does remain to be seen how voters might respond, at this point, we have seen the trump administration whether some things that -- administration weather some things that might have rocked other administrations. francine: emily wilkins of bloomberg government. we will have more on that. tom: thank you so much. bruce kasman with us of j.p.

morgan. distract -- do we cut that boosts gdp? politicsr this year, is in the backseat. we are very much focused on where we will be in 2021 and policy can change dramatically. i don't think there is much opportunity for fiscal policy to change and i don't think election uncertainty will have a big role to play this year. deficit crowding out private enterprise? you and i read this in textbooks years ago. where is the crowding out? bruce: there is no crowding out in a world in which central banks are buying up duration. tom: they are making up the rules as they go. bruce: for sure. there is an opportunity to take advantage of that, but i don't

think it is right to say there are no consequences of building deficits now for raising debt if you are not using the money to make good investments into the future. tom: what is the holistic view of the j.p. morgan company? what is your confidence we extract ourselves from this original central banking theory? bruce: i am not sure exactly what you are asking. , a massivee qe balance we escape ourselves from this? bruce: i think that depends on macro performance. the good thing from our point of view is the prospect for expansion that continues for a while and continuing to tighten labor markets. the prospects are reasonably good, but the dynamic about nextg a recession in the few years, the dynamic about balance sheets never getting

down to normal levels, that will be likely to stay with us a long time. balance sheets are a change in the way the debt is being held. it is not a revolution, a change in the wealth of the public, it is that management when you take out the issues around what central banks do with it on guidance. talking about emerging markets, i am not sure how we should view emerging markets. they are hidden by the coronavirus. at the same time, there has been structural of reforms. are you bullish or is it a wait and see? bruce: if we leave china to the side as the largest emerging ma as a group has come through the slowdown of the last year very well. they have been able to ease with the fed. they did not experience the terms of trade affect. they are falling somewhat now.

they are poised for growth, but you have to recognize what they have been experiencing is some issuesosyncratic domestically whether you look at turkey, brazil, mexico, india, they have been hit by domestic dynamics. i don't think you can call the outlook without being specific about how individual country stories play out. in thets to talk about american economy and how it folds into this market. southcirilli with us, carolina shaping up to be most interesting particularly for the former vice president. super tuesday, i love this map, it is bigger every year and the major states boasting the huge importance of

california. texas, florida not involved in super tuesday. this is bloomberg. ♪ ♪

is "bloomberg surveillance." according to the financial times, deutsche telecom once a lower-priced because shares have fallen. they have not started talks

about new terms. -- ceo is pushing back his target for sales growth. the outbreak of the coronavirus disrupted production in the company's second largest market. >> for those people who correctly inc., we came in as in.ey -- exactly as we got we are saying we will need another year or so to get to the 4% to 6% range we are targeting. stepping back a year early on delivering improvement, we will be a year late or so when it comes to organic growth improvement. viviana: nestle plans to unveil a new strategy for its bottled water business. nissan cut the full year outlook. also scrapping the year end

investors. the top shareholder is renault. that is the splash. tom: we have seen some deterioration in the last two hours. futures down 27. your are gives way, oil gives way fractionally. the bond market is extraordinary. the bond market extraordinary. francine? francine: up next, we hear from two banking chief executives, probably not either of them having a great day. obably not either of them having a great day.

francine: this is "bloomberg surveillance." andand francine from zurich new york today. aside fromts -- earnings, what investors really wanted to hear worthy circumstances behind the departure.

i spoke to him a little bit about that. we came from a board that transferred leadership. i am perfectly ok with it. francine: have you spoken to the new executive and has he told you he will continue and use your strategy? >> we have been very close. i appointed him ceo when i created swiss bank. it is somebody i have worked closely with five years whom i know very well and i have every confidence i leave the company in good hands, that is important to me. the true legacy comes after you leave. i have been fortunate enough to run two companies. well.tial is working very it is my ambition to create durable success. -- one of our4

best quarters ever and this is continuing and that is what you want. francine: it is highly unusual to say executives to say the strategy is working great. >> the situation of the company was much worse than anybody new -- knew. you have to look at the share price. from 2015 to 2018, we took $15 billion in losses. there was no way we were going to increase the sale price. of the one best-performing stocks in 2019 and 2020 so far. we had to recapitalize.

11% is better than u.s. banks. that.ne: given all of why has the board asked you to leave? >> that is a question for the board. fundamentally, we agreed there would be a change in leadership. francine: you are not expecting any more spying scandals to crop up? i know i asked last time, but i have to ask again. >> i don't know the answer to that. francine: that was the outgoing credit suisse chief executive. i have to say, it is highly unusual and outgoing people executive leaving tomorrow speaks to the press like that. he held back and said this was by mutual agreement. he did not say anything really against the board other than saying he did fix the bank when he came on board years ago.

tom: it sounds like a bad american soap opera. the plant behind you look like it was going to die. were there cardboard boxes with him packing up things? surreal. lastine: this happened thursday. thursday night and we found out friday morning he was leaving. a lot of people said this was probably coming because there were a lot of press reports that chief executive did not get along with the chairman. this arrived very abruptly and came very quickly. tom: what would david haro have thought of this interview? he was a huge supporter. you can say it is a non-interview or interview or ballet one day before he goes out the door, i have never seen this. what with the lead american investor say? francine: i don't know what he would say. he spoke to us after the ousting

last friday and he went to bat for the chief executive of credit suisse. he said he did a fantastic turnaround job and wanted him to stay. david haro asked the chairman to resign. in this tussle, i don't know what was agreed between the chairman and chief executive, but it is clear he says we do not have regret and when i asked him why were you ousted and he said speak to the board. tom: we look forward to the first interview with the ceo of credit suisse. you will see that entire interview on bloomberg digital. there are other challenges as well. this in the case of united kingdom banking. mr. staley distracted by the late mr. epstein in new york city, but there is also jes staley on earnings. s: we are maintaining our target 10% and we strive to achieve that.

recognizing the new interest rate environment we are under, interest rates are lower, that does put a headwind in terms of our performance. i have been very transparent with the banks and open and willing to discuss the relationship i had with him. the board has done its own review and they have looked back at my transparency and they concluded i have been transparent and open with the bank and the board all along this process. tom: mr. staley. now joining us measuring the soap opera known as the city, jonathan tyce. nice talk fromof mr. staley, what is the relationship of the american -- the gentleman from bowdoin to the british board of barclays?

would suspect it is getting more strained. if you go back to the whistleblowing incident, he was exonerated. that drag barclays through the grass and i think this is completely unhelpful. if i was on the board looking at the share price and looked at performance, what if this is not about those numbers? activist share stepped away. it is not working. the market is not rating the stock. something needs to change. tom: it sounds like what we heard 90 days ago or 200 days ago. let's call the barclays book value .54 better than the beleaguered german banks. much better than the superb performance of american banks. can barclays aspire to be american-like or will they be

stuck in the middle between the continental disaster and the american success? jonathan: the first thing i read this morning in the react was i think this camp is entrenched. even if he gets to 10% and i don't know why they are sticking to it this year. i don't think they will get there next year. you have to stop this returning 9% on capital. even the banks, which were trending more cheaply, they managed to turn it around. if i was sitting on the board, i would look even at credit and think they build capital and managed to stop revenue falling and the share price is being rewarded. why aren't we? francine: what should barclays do now? if you are jes staley, how do

you get the metrics up? -- isa little too little it a little too little, too late? jonathan: it is a great business, but there is no growth. you look at mortgages, it is a horrible place to be because it is competitive. the only way he can grow revenue is swinging the bat or changing revenues. swinging the bat means trading. they had three or four good quarters in a row. they missed on equities. i think most people expected a much bigger beat. if the trick was investment banking will deliver, we are questioning whether -- why are they so far behind u.s. banks this quarter? unfortunately, what can we do? i struggle. tom: thank you so much. greatly appreciate that. in new york city, here is

viviana hurtado. viviana: we begin with the chinese province at the center of the coronavirus outbreak. it reports the number of cases soaring to almost 50,000, raising questions about the scale of the crisis. there was hope the epidemic was easing. the death toll has risen above 1300. oil industry leaders privately telling the trump administration the trade deal with china is unrealistic and they say the u.s. will struggle to produce oil, gas, and other energy companies. the deal will strain shipping infrastructure and production capacity. we end with the bull market creating millionaires. there is a record number of people with $1 million or more in their 401(k). the total as of december 31, 431,000. that is up 17%.

global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. francine: thank you so much. set out chief executive the boldest plan to tackle climate change. chieflooney has been executive for a week and committed bp to eliminating emissions by 2050. he spoke to alix steel. rna: in 2021, we will drive the breakeven to $40. we believe that is a resilient price that enables office -- us to withstand a variety of environments. there is a concentration of oil and gas in our portfolio. over time, shareholders will be well served by a diversified bp. a bp that has a high quality oil

and gas business. a business that over time is likely to get smaller and an oil and gas business that overtime is likely to be the carbonized -- decarbonized.

tom: it is the western dam of the holland cruise lines not looking over the caribbean or mediterranean. an exhausted crew and passengers at the north of the golf in thailand. north of singapore and directly west of saigon, ho chi minh city , and it is the sunset of an .xhausted crew

much bigger numbers in china with the markets affected. .utures at -24 chairman powell knows this. high service sector inflation, 3% and good deflation. i get more mail on this than anything else. how can bankers or fancy guys like you and michael for only tell me inflation is under 2%? it is not in my household. >> inflation is measured in many different ways. it is fair to say whatever measure of inflation you are using, we have not seen the lifting coming with a tight labor market. we have seen expectations show very little comfort the fed will get it higher and i think what is thertant about this

fed is telling us they are changing and moving toward a -- it will be higher than their target. tom: i want to go to barry -- barry ludlow from years ago. shifted to an inflation-adjusted analysis. are we shifting back to a economyanalysis of real and inflation or non-inflation on top of it? >> there is always that and the nominal anchor is a crucial thing. i want to come back to the point there is two things happening at the fed. they are telling us they want to encourage inflation higher. they see the zero bound on interest rates. it is something we have to recognize, regardless of the fact service price inflation is 3%, it has not responded to tighter labor markets.

we are not seeing the phillips curve relationship. they will not use a growing economy as a forecast to set policy. tom: what is your call on the fed? are you modeling in two rate cuts? >> we have one rate cut in the second quarter as they validate inflation averaging target and the u.s. and global economy go through this disruptive event. when the fed has successfully ensured the economy in the past, it has returned policy to where it was quickly and they are not going to do that now. they will hold the line even though we think the unemployment rate will continue to fall. very -- tom: very good. francine? francine: we are getting some alibaba figures. third quarter adjusted earnings per share coming at 18.1 billion yuan. we were.

a 15.2 billion figure. what we really want to know is any comment related to the coronavirus outbreak. significant. quite we don't have that yet. one thing we are watching out for. if you get e-commerce, growth should be around 24%. we will see how they see coronavirus impacting logistics and delivery service and sales. tom: it will be interesting to see how alibaba does in domestic and the banking and energy shares do in china as well. coming up in the next hour on the european commission, the -- speak tont will us about an interesting forecast. this is bloomberg. ♪ omberg. ♪

viviana: you are watching "bloomberg surveillance." we begin with airbus. theaised its stake in jetline to 22%.

the company is struggling with its debt load. airbus will play -- pay $521 million to bombard year -- bomb mbardier. bo takeover was cleared -- date -- they joined regulators in declining to open an in-depth review. the deal is not likely to weaken rivals. we end with facebook. removing three separate online operations it says were run by foreign government or related entities. as a largest was linked to russian intelligence groups. the site tried to hide their true identity and mislead users. that is your bloomberg business flash. francine: we are getting breaking news.

chancellor of -- in the u.k. has resigned according to the tabloid newspaper the sun. boris johnson fired a clutch of senior ministers including business secretary and the attorney general, environment secretary, and northern island secretary -- ireland secretary. we are trying to get to speak to the treasury to get this confirmed or not. according to the sun newspaper, the chancellor of the u.k. has resigned. we have been covering differences between him and the prime minister in the past. this would be a big resignation that would take a lot of markets by surprise. what is happening in china, alibaba third quarter financial results coming out a bit earlier than expected. also a bit better than expected. they came in beating analyst

asked about -- analyst estimates. we will get that later on. how they see the coronavirus developing. we are keeping track of all of that. the european commission saying coronavirus will have an impact on their economy. nestle has pushed back the target for sales growth as revenue from china slowed even before the outbreak of the coronavirus. bloomberg's annmarie hordern spoke to mark schneider. mark: we are super pleased with the organic growth exactly in line with what we guided and confirmed in previous quarters. it was always clear the first half would be stronger than the second half. .usiness grew close to 10% of that growth contribution was missing in the latter part of the year. for those people who

incorporated that, we came in exactly as we got it. we are optimistic about organic growth continuing to grow over and above the 3.5% levels. we are saying we will need another year or so to get to the 4% to 6% range we are targeting. stepping back a year early on delivering martial improvement. we will be a year late or so. annmarie: you will get there, it will just be delayed. i want to ask about the coronavirus. you spoke a little bit about it with reporters, you have 31 factories in china and said some of them are reopening. how many are closed at the moment? majority ofrge these plants have reopened last week. nutrition products are essential. safety for employees is important and we want to be in full compliance in -- with rules

to restrict the outbreak. transportation capacity is lower than usual and not everyone was able to return from their home province to their workplace. we have key products where everyone is working hard to maintain supply. annmarie: so far, you have seen pact on financials. is there anything you can say about how this will hurt your business? mark: it is too early to quantify. january was the low part of the year anyway because of chinese new year. it is from now on we need to see where it goes. annmarie: you marked this january three years at the helm, exceeding your track of this 10% trading portfolio target. what can we see you possibly offload in one to two years? mark: we had a portfolio transformation of 12% of sales.

trade overificant and products more on trend. what we are saying today is going forward, expect similar levels of activity for the next three years. very busy on the portfolio transformation front going forward. francine: that was the nestle chief. the chancellor has reportedly resigned on condition he fired advisors. this is bloomberg. ♪

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the new ceo prepares to take the reins. barclays in the hot seat. regulators probe jes staley's relationship with jeffrey epstein, overshadowing earnings. jay powell and company's warnings and risk assets are shaken. welcome to "bloomberg daybreak" 13this thursday, the very -- thursday, february 13. i'm alix steel in london. are off.s euro-dollar breaking below another key level. the yen and the dollar really benefit from the safe haven story, as well