take $73 billion in charges and pivot more to asia. apple ensnared by the virus. the company cutting outlook as coronavirus hurts demand and production. and investors bank on stimulus and a sharp recovery in china, while they expect economy to grow just 4% in the first quarter. welcome to "bloomberg daybreak" on this tuesday, february 18. a heavy trading day as apple weighs on sentiment. also had investor sentiment coming in weak. euro-dollar also down by 0.1%. no surprise, you're seeing a bid into the bond market. crude taking a hit as well, with all of the risk off fears. we also want to point out that walmart is down in premarket trading. that is after the company's fourth-quarter results and forecast came up short of estimates.

going to me on the phone is chuck grom, gordon haskett retail analyst. joining me in new york is lauren goodwin, new york life multi-asset per folio strategist, and brooke sutherland of bloomberg opinion. give us a rundown of where walmart fell short. brooke: it was not great all the way around. the fourth-quarter came in weaker than expected, and they called out unexpected softness in the weeks leading up to christmas, which is not what you want to hear from a major retailer. that is in line with what we've heard from a number of different companies that are not named amazon, which raises a lot of interesting questions about what the competitive landscape actually looks like. also weighing on investors' is the 2021 fiscal outlook, which was also weaker than expected on sales and profits. alix: the stock rating is heavy here in premarket. the bad news baked in. is that is why -- is that why

you have a buy rating here? chuck: we've had a buy rating for a while, not just here on the fourth-quarter. the comp was no worse than 2020,, and the eps guide if you back out the miss in the quarter, implies low to mid-single digit roast, basically in line with -- mid single-digit growth, basically in line with what investors expected. their e-commerce business grew 35% year-over-year, better than we were expecting. when we look ahead to next year, walmart is expecting e-commerce losses to be flat or lower, so the coverture and their operating margin structure for their digital business is going to start to improve. certainly, i think the way to frame it is looking back, probably not the best quarter. looking ahead, the prospects still remain bright. alix: do we still need a superstrong consumer in the u.s. for walmart to deliver? chuck: not necessarily.

walmart is more of a defensive play, but they have skewed higher in recent years. i think they can play in really any environment if it were to get weaker or stay strong. alix: what is your take on these kind of stocks? lauren: retail as a whole is not a strategic priority for us. this late in the economic cycle, everyone is looking for indications that the consumer is weakening. i the time those signs are clear, it is too late to reposition from a structural perspective. we are focused on defensive's for the year, and retail isn't part of that story for us. alix: is there another part of the consumer you can play defensive? lauren: typically, we are looking for the stocks paying dividends, less on prices moving toward their target and more on adding value in your portfolio through other means. alix: if we break down the other issue when it comes to exposure to china, apple front and center

with that, did we learn anything in terms of walmart? brooke: they said they are monitoring the coronavirus. they have not picked any of that into the guidance asked they have not baked any of that into their guidance -- they have not baked any of that into their guidance, so expect that on the call. they will probably see some sort of hit their. i want to come back to this competitive question around amazon, especially given that the fdic is looking into some of the acquisitions this company has made. there's been a lot of questions about the dominance these tech companies have. if it turns out a lot of these last-minute shoppers went to amazon, what does that say about their dominance in the market and the tactics they have to draw customers in? are you able to compete with somebody like that? alix: chuck, what do using about that? chuck: i think the shorter holiday period skewed more people to buying things online.

this whole thing about the six fewer days, it has weighed on just about everybody. walmart commented that their results in november were strong all the way through cyber monday , that results were strong in january, and even to february. if we are going to be frustrated with walmart's comp, that is definitely backward looking. it is a healthy result. is it great? no come but they weren't expecting a great comp. alix: how do you factor in the coronavirus? i think they get 6% of merchandise from china. how do you start modeling the sin? -- modeling this in? a lot of-chuck: welcome back to the factories right now, so understanding the delays over the next two to

three weeks is really going to dictate a lot of that. i don't think anybody really knows at this point in time. it depends on how quickly these factories can get back up and running, and to your colleague's point, that will be a question for walmart today at the meeting. alix: what is your other big question on the call today? chuck: i think stemming the losses on e-commerce and getting those to be improved over the next year are really where we are going to be focused. i think that is the key thing. getting a bigger picture cents for the consumer, how much of the shortfall was because of the shorter holiday is really what we are trying to understand. i think those are the two factors i will be focused on. alix: if we broaden this out to earnings season in general for this year, and you take a look at the revisions we have seen, i don't feel like that is even factoring in the coronavirus. there's heavy expectation of a back half earnings recovery. how do you take that? lauren: i am not convinced on

the prevailing story of earnings for 2020. i think you have a deteriorating profit margin circumstance where even missing expectations, costs are rising. you have 2019 earnings growth looking at about 0%. revisions coming down really quickly this year. that means equity markets are pricing in his perfect concoction of political stability, economic reflation in the second half of the year, and that isn't what the second half of the year looks like for me. we are pretty defensive from a positioning perspective. brooke: it feels like anything you throw at it in terms of uncertainty just is not getting to stick. lauren: frankly, the fundamentals look weaker and weaker with every passing earnings season, but at the same time, markets aren't really driven by that right now. it is a very liquidity and sentiment driven market, specifically for equities. i don't see where you're getting paid for risk right now, which means you can keep having this

pile into equities as long as the fed is in control. from an asset allocation perspective, that means you are looking at a defensive portfolio, but trying to build flex ability to drug advantage of that in the short term. it is tough because we are not seeing that fundamental reaction. alix: great conversation, guys. chuck grom of gordon haskett, thank you. brooke sutherland, always a play there. -- always a pleasure. lauren goodwin of new york life investment will be sticking with me. this is bloomberg. ♪

alix: time now for global

exchange. we will bring you today's market moving news from all around the world. our bloomberg voices are on the ground with all of this morning's top stories. we begin in asia, where the coronavirus continues to spread, with the number of confirmed cases climbing above 73,000. joining me from hong kong is rishaad salamat. give us the latest on the response in china, the fallout, as well as the rest of asia. rishaad: we are looking at 1783 people having lost their lives to this pathogen. could there be an end in sight? we have an expert in respiratory disease saying that it should , butin the next 10 days the world health organization not so convinced. meanwhile, apple is feeling it. we also heard from nintendo and mattel. production being hit, sales outlook being slashed, and countries are suffering, too.

south korea saying it will have a huge economic impact on them. germany seeing investor sentiment falling off a cliff. ism lowering its forecast for oil.sumption of that is all to do with trying to underpin growth in the face of what is going on globally speaking. a bit of a bright spot, macau casinos will be opening thursday night. we do on top of that have some things are getting back to normal in other parts of the region. aviationthe chinese industry is really feeling it. it is hammering capacity, cuts have taken place, and it has less capacity now than portugal,

and 20 fifth place. used to be in third. alix: staggering stuff there. now we go to brussels, where the year area finance ministers are gathering to discuss their thest can i forecast and ai, facial recognition, and data management. joining me is maria tadeo. maria: mark zuckerberg has been in brussels, his first meeting in the european capital in almost two years. he's now the one telling european regulators that he wants to see more regulation being put in place. that was really his message. he is saying that social media companies like facebook and european governments should work together to deal with issues such as hate speech, election meddling, and free speech. some of these decisions should not come down just to companies. it should be something they did together. this is striking because until

now, facebook has always said that regulation could be a problem for the web. you could look at this as a pr operation for facebook. the past two years have been very difficult for the company in europe. you could look at this is a charm offensive, but also mark zuckerberg really trying to bring out action from the regulators in europe because what is clear as they do want to see tax reform on the digital services space, and also see data and privacy on the web treated differently. alix: thank you very much. now we had to london, were hsbc is planning a major restructuring. 15% ofk plans to slash its workforce and take $73 billion worth of charges. bloomberg spoke to the cfo following the release. >> we are going to be quite surgical and ruthless in terms of targeting those parts of the business where we are not generating except of all returns. alix: going to me from london is harry wilson, bloomberg finance reporter.

it felt a little bit like ripping off a band-aid. what was your take away? hsbc's thirdas major restructuring since the financial crisis. the share price is down more than 6% in the london market, and it seems investors are basically giving this a bit of a cold shoulder at the moment. the bank is hopeful that maybe would investors have had more time to take in the details of what they've announced, what they've been talking about is 35,000 job cuts, about 10% of .he bank's workforce being cut you also look at major restructuring of operations, looking at europe, the u.s., the investment bank all being cut back substantially. what they are really talking about is a major reallocation of losses from the liking markets in europe and the u.s. into asia, which is where the majority of the bank's earnings are now coming from. alix: thank you very much.

's earnings surged in iron ore prices, allowing them to big returns to investors. they warned that the coverlet arrived us -- that the coronavirus could hit prices. >> as long as things are contained within this quarter, we think they will hold up for the financial year. if not, we would have to revise our forecast. , we remain reasonably confident about the outlook for the remainder of the calendar year. london ising me from the leader of the team on emea. reporter: i think the big take away is how much iron ore is benefiting bhp. you side and the glencore results today, sharply down because they don't have a big iron ore business like bhp.

you see a real division between b.a.t. and glencore, one benefiting from iron ore, and one not. alix: doubling forward, what does that mean, especially as the energy transitions are taking hold within the commodity market? reporter: that is one really interesting thing to look at. everyone in the industry is talking about carbon free emissions. targetinglking about more. ishink the big question now how much of this is just good pr, and how much of it is ceos making hard decisions on how they want to change their business. alix: thank you very much. the coronavirus outbreak not hitting all companies equally. bhp seeing the virus impact minimal for now, but apple warning it won't eat its quarterly target. the company issued a statement saying "work is starting to resume across the country, but we are experiencing a slower

return to normal conditions they'd we anticipated. therefore, we do not forecast guidance for the quarter." it is like a double way me when it comes to apple. reporter: people are not ultimately able to go out and do the shopping they have not done, so the crucial chinese new year period, not as many devices sold as apple expected, but also ramping up production for a cheaper handset, likely to be unveiled next month. the workers makers handsets come from all over the country now, given the quarantine effect, they are not able to do that. they are not able to hire as many people as they might have otherwise expected. throughvenue target march was a wider target then apple normally issues, and that was supposed to take into account the effects of the coronavirus. now they are saying it won't even make that range.

that thenews is underlying demand is probably still there. it is just being pushed back a few quarters. so the reaction in premarket was not too extreme, down about 4%, but none the brill us -- but nonetheless, a painful court of time around. alix: thank you very much. staying on the coronavirus impact, the $14 trillion question is how much of the country is back to work, and how quickly and how much is it still trapped in a shut down? bloomberg economics crunched the numbers and found a big drop-off in the interbank foreign exchange market. it captures the activity of companies that engage in external trades. that is one to look at. volume is really weak. plus, daily transport nubbers of also collapsed. that leads analysts to estimate that business is may be running at 50% of capacity only. you can also look at things like copper and steel capacity to get a sense of where gdp numbers

are. just how bad it will be and how quickly they get back to work is key. coming up, we will break down off inckerberg facing what george soros thinks about all of this. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." franklin resources close to an all-cash deal to buy a rival money manager. the transaction is set to valueclick mason at 23% -- to 22% overgg mason at friday's close. dell reportedly is close to a

deal to sell its rfa security to a private equity firm. stg partners would pay more than $2 billion. rsa is perhaps best known for -- tokens. mark zuckerberg says to interest, facebook needs regulation. yesterday, zuckerberg was in brussels, the home of the eu agencies that have crafted some of the toughest rules. that is your bloomberg business flash. alix: thanks so much. lauren goodwin of new york like investments -- new york life investment is still with me. how do you buy tech? lauren: you have to buy tech. nobody is investing in themselves the way tech is, and he companies that are, we have and expectations

fall, but spending in technology capabilities are the only way that companies are investing in themselves. this is the area where real economic value is being created. alix: how does that square with your value and more defensive thesis? lauren: one of the really interesting things since the financial crisis, some of the definitions around value versus growth don't make as much sense anymore. what you are really looking for when it comes to a value company is something that provides value to your portfolio, where prices will likely go up in the future. where we look for that isn't necessarily on just value and gross lines. you're looking at companies really investing in themselves, and a future with more value being created, rather than just value meaning cheap. look at when you take a any potential black swans, you can't not own something like apple because it is such a huge part of it.

but then you have potentially breaking up big tech, you have mark zuckerberg saying plead rate -- saying please regulate us. i mean, it is contentious. lauren: there's a lot going on, and what this comes down to is having good managers to look at the way these things are changing over time. regulation is one of the real things we look for for the technology sector being a major risk, but if that comes two, thr ee, four years from now, you've missed out on that timing. so you need to be taking a really close look at when those signals are coming, but until then, this is where value is being created. alix: do you have confidence that these kind of companies can continue to grow profit margins, or at least stabilize them? lauren: what we are talking about there is less about technology then where we are in the cycle. profit margins are under a lot of pressure from economic risks, rising costs. that is true across sectors.

these are the companies that are investing indicate ability to improve those margins in the future. that doesn't mean they won't be impacted by those risks. alix: lauren goodwin of new york life investments will be sticking with me. coming up, today's first take, as you are looking at some softness and weakness in the equity market. most, andures off the that is down to apple. no surprise, you are seeing a rush into some safety like the yen, the dollar, and pretty much across the board when it comes to the treasury market. . yields down by about 45 basis points. this is bloomberg. ♪

alix: this is "bloomberg daybreak." it is a risk off fillon this tuesday. take a look at -- risk off feel on this tuesday. take a look at markets.

technology stocks taking a hit, as well as autos. terrible eu car registration not helping matters at all. in other asset classes a russian to safety. dollar-yen down by 0.1%. euro-dollar also weaker. german sentiment data was not great. now at 14ry market is basis points on the 2-10. joining me from our in-house team of wall street veterans and insiders, vincent cignarella, voice of bloomberg's macro squawk, and with us still is lauren goodwin of new york life investments. it is great to see you guys again. you come in today, how much risk do you take off? vincent: to be honest, we see this shift everyday. one day it is risk on, one day it is risk off, and back and forth. 'its is a trader market. -- it is a trader's market.

you get in when the markets are risk off and get out when the markets are risk on, and you just trade it. it is not a place to be putting on exceptionally long-term plays unless you see something radical , like a move today in apple. if you like apple long-term, you pick it up and hold it for a while. otherwise come from a currency standpoint, rates standpoint, we are range bound. you just have to play the outside of the market. reporter: i have to agree, but i think we have reached a bit of an inflection point. what was missing? a trigger point for the fed to ease. apple is probably that trigger point. markets are starting to slow down. bond yields have been telling us this for a while. i look at the treasury yield at 1.9 and percent. the last time it bounced -- at 1.99%. the last time it bounced. this time it looks like it is going to go through. maybe it is time to break below.

be if the stock market rolls over a little bit. it is not really cheap at these levels. it is still pretty much well above its moving average. lauren: i've got to agree. this is a market not really trading on pure fundamentals, so when you see the markets move in the direction you want, you trade it. generally speaking, any market -- generallyhis speaking, in a market that looks this weak, you just have to play it a by day. alix: is this really enough to make the fed move? vincent: i don't think so. i think the fed made a really good statement when they said is steamuation elevated, most likely because of lower rates. to me, that is a major

capitulation, saying we may be overshot the runway a little bit. we are really not comfortable with asset prices at the levels. we can't come out and say it. you don't want to do the irrational exuberance alan greenspan thing and because a twin a person crash in the market. but they don't want to be seen as being the fuel to equity prices. i think they would sit back and say it really needs to be in earnings story. the last 10 years of the market have been a federal reserve or central bank fueled growth to asset valuations. the next 10 years needs to be show me the money. it's got to be real. it can't just be the fed or central banks. but we are seeing now is pboc fueling. they need to. but they will take it back straightaway. as soon this situation tears, they will take that money straight out of the market again, and we will be back to square one. mike: once the futures market what isricing these,

going to make that happen? that is when i look over at the equity market. just a little normalization could be the excuse. if we don't get that cut, that is a problem. look at what is going to happen to gold. gold is already starting to price that in, at a seven-year high today. alix: that is where we start to get the letter battle. what type of growth will we see out of coronavirus? a w, if not a series of w's, would be a different story than a v that everyone is now anticipating. lauren: we are talking about ,hese fiscal, monetary stimuli that is why you get some of that w type reaction in the market because the bad economic news like coronavirus, like trade war's last year, is offset by the stimulus.

i agree with vinson when it comes to stimulus and the uptick vincent w's. -- with when it comes to the stimulus and the uptick in those w's. i don't think the fed is looking to cut rates. i do think that the communication about the shift in strategic review suggests that to acould now be more open risk being a reason, if inflation is going to be low on the downturn of a crisis. they are happy to stimulate further and have higher inflation for the remainder of this cycle. we haven't seen any inflation, so you can see reasons for a cut coming in. alix: are you laughing? smiling? vincent: smiling. alix: you're very grumpy. [laughter] vincent: it's early in the morning. i honestly think inflation is going to come, and it is going to surprise people. i think that is going to put the fed in a box, and inflation is

going to come up, the political situation with the elections are going to come up, gross isn't going to slow enough. -- growth isn't going to slow enough for the fed to capitulate with this rate cut. they are going to see themselves sitting on their hands. all the equity guys are saying enjoy 20/20 because 2021 is going to be ugly -- enjoy 2020 because 2021 is going to be ugly . lauren: the fed governor's all over this because they have so much risk with any tightening of financial conditions, so is the fed not already in a box where this is concerned? watching the consumer environment, consumer confidence, so susceptible to a downturn in the markets. they are already a bit in a box where balancing financial stability and the recovery just gets more and more precarious as the cycle continues. mike: one thing i see from

commodities is the fed can risk running hot. we have the strongest currency in the world, we are a net , we are of crude oil seeing deflation in terms of commodities. i look at it as they can run it hot and not get inflation. we haven't had it for 10 years. to me, that would be the dream in terms of commodities. the first place you could see it is bond market. vincent: well, the bond market i think is reacting more towards the risk off situation. we've got 10 year at 1.54%. i don't want to own a 10 year near 1.5%. opportunities to look for other risks or not risk at all. you don't have to own something simply because you have to be somewhere. if nothing looks pretty, just stay out. it just isn't worth it. [laughter]

lauren: one of the reasons why we are a little early on the call, but being defensive, really looking for areas in a portfolio where you are getting consistent dividend yield, getting stability, it is expensive. but where else do you go if you are waiting for a downturn and valuations are high? that is still the best call. vincent: you could get a three month cd at a better yield than you get a 10 year. why would i want to be in a 10 year at 1.54%? where is your capital appreciation, 1.25%? where it is, it is not going to go much lower than it is. alix: the story at the end of the folioast year was returns we saw, never going to happen again.

so how is 2021 going to be the bad year and not this year? vincent: you're going to either have a republican president and see substantial fiscal stimulus at a time when the federal deficit is at $22 trillion. or you are going to see a democratic president where they come back and clamp down on the retrenchd corporates, the corporate tax rates, the tax cuts, probably play hold on the economy. either way, economic growth is going to be subjected to a downturn in 2021. that goes back to the story of earnings. you may or may not see monetary stimulus from the fed, but what is it going to do? absolutely nothing. , thepart of the situation

banking demand concept, has run its course. it needs to be coming from somewhere else. if you don't have smart fiscal policy, it is going to fall over. lauren: i have to agree. alix: no one ever agrees with him. [laughter] lauren: that's not true. i agree more than i would like to come a properly -- would like to, probably. the longer this goes, the higher the stakes become for the downturn. it is just the way that the market looks. as long as we keep this party going, the worse our hangover is going to be when it is over. alix: right, and you just keep on drinking. i see how this ends. vincent: credit is key. if you can't get any more of it, where is it going to come from? mike: with everything we described, maybe not a hangover, but look at bond yields ratcheting lower. what is 2% now on the 30 year should be 1.5% on the 10 year note. what is going to change that?

we have the election coming up. i don't see anything to change that. goodwin, vincent mcglone, thanke you. remember, go to gtv under terminal to check out all of the charts. viviana hurtado is here with first word news. viviana: hsbc is planning a major restructuring that will lead to tens of thousands of job cuts. since the financial crisis, it attempt to's latest revive. operations will roughly be cut in half. the ceo telling bloomberg 35,000 jobs may be eliminated, 50% of the total. for the first time come on michael bloomberg appears to have qualified to take part in a democratic presidential debate.

in the latest npr/pbs newshour poll, stir bloomberg reaching 19% support. that means the democratic national committee threshold. mr. bloomberg is the founder and majority shareholder of bloomberg lp, the parent company of bloomberg news. and the boy scouts of america filing for bankruptcy, trying to protect itself from a rising tide of claims tied to sexual abuse of children. it is setting up a trust fund to compensate victims. the boy scouts are the latest nonprofit group to go bankrupt. this over claims they turned a blind eye to allegation of sexual assault. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix: thanks so much. coming up, frankel templeton will create a $1.5 trillion giant of active management as

the industry continues to shrink. we will learn more in wall street beat. this is bloomberg. ♪

♪ viviana: you are watching "bloomberg daybreak." tollng prices are taking a on the world's largest commodities trader. glencore telling investors it won't buy back shares, also writing down $2.5 billion in assets. glencore reporting its lowest profit in three years, plus debt has risen above its own target. now to french train maker alstom. it will almost double in size. it's agreed to buy the rail unit of canada's bombardier for as much as $6.7 billion. it will make alstom the world's

number two in rail equipment. bump a deer has been selling assets following a costly expansion -- bombardier has been selling assets following a costly expansion. jeff bezos says he will commit $10 billion to fight climate change. the founder of amazon has been under pressure. mr. bezos is trying to balance the company's need to deliver goods quickly with the environmental consequences of online shopping. i'm viviana hurtado. that is your bloomberg business flash. alix: we turn to wall street beat, were recovered three things wall street is buzzing about this morning. jobs up, hsbc plans to cut and 4.5 billion dollars in cost from underperforming units. then, wework's new management takes charge. a new ceo officially takes reins at the company. giant.ew investing

sonali basak joins me now. let's talk hsbc. we talked about the idea of changing, how quickly come a restructuring. this is their third restructuring. sonali: and before they start cutting costs, they are going to be taking a lot of costs, suspending their buybacks. one investor told bloomberg they weren't owning h is b-shares this morning -- weren't owning hsbc shares this morning. the interim ceo is trying to make his mark and appease investors come about from the stock, they are not liking what they are hearing so far. alix: the second story is wework. we have a new ceo starting today. what are you hearing? sonali: he is not like adam neumann, but he's not as boring as a traditional real estate investor.

executive, estate known as a turnaround guy. theteered ggp out of one of biggest real estate bankruptcies in america. remember, though, he has a lot ahead of him. they want to hit free cash flow positive by 2022. let's see if he can make that possible. alix: the other interesting have theu basically hedge fund head trying to raise more. sonali: they want to do a hedge by a formerun deutsche bank executive who worked with misra. he led the wirecard investment. there's really mixed reaction. on one hand, you have abu dhabi and because asked on government

-- and the kazakhstan government pledging billions of dollars over time. no assurance this will work out. whatt is different from masayoshi son has traditionally done with his fund. alix: but interesting to see when they have all of the bad yo --like wework and all and oil. sonali: but again, it is a departure. alix: let's wrap up with legg mason and frankel templeton merging. walk us through why. sonali: asset managers around the world have been having a lot of trouble. mason has had pushing for changes come apart of that being consolidation. this is a nice premium and all cash. now the question, can they pull this all off?

when we see mergers of this type, we often see a bit of attrition because there is uncertainty when it comes to integrating the two. alix: 2.5 trillion dollars in assets under management. is there any other player out there to compete with a size like that? sonali: think about it, goldman is above that. $1 trillion, there's not a lot of money managers that size and scale, but there are a lot better above them. blackrock, taa. this will be an interesting mix of institutional and retail clients. can they do both well? it is to be seen. alix: what would prevent them from doing both of them well? sonali: typically, both clients want different types of products. if you are an institutional client, you probably have a lot to accessand harder things.

a retail client is probably known for more low fee products. are these people going to be able to compete with the likes of blackrock, which is offering that wide array of products to their institutional clients? alix: interesting. huge merger, though. thank you so much. in today's off the beaten street, battle of the billionaires. elon musk has never had a problem putting down his fellow billionaires and has now targeted though gates. gates spoke to a youtube influencer about reducing emissions to slow climate change. the chat went well at first. tesla has that musk's helped point the auto industry in the right direction. but then gates talked about his electric car, not a tesla, a porsche that is also electric, but super pricey. when musk learned about that, he said, "my conversations with gates have been underwhelming

tbh," to be honest. i had to look that up. coming up, we finally get some clues on whether this could be a good week for risk. if you are jumping into your car, tune into bloomberg radio on sirius xm channel 119 and only bloomberg business app. this is bloomberg. ♪

♪ alix:alix: time now for trader's take. joining me is vincent cignarella, voice of the bloomberg audio sqawk. you can listen to vincent on the bloomberg if you type in squa . here's a gtd preview. -- a g tv preview. vincent: yes, here's an economic indicator that leads the chicago fed, and the chicago fed leads gdp. in a couple of days, we get

leading economic index, which is expected to pop higher. a couple of days later, these cargo fed. -- later, the chicago fed. if things followthrough through, potentially a better gdp read, setting us up for thursday. going forward come of better risk on week. alix: does a risk on we could then just mean a stronger dollar,. ? fullan a stronger dollar, stop stop?l vincent: probably buy the dollar, buy equities, sell fixed income. that is probably the best way to play it if you are looking at the haven dollar. should be a better week for risk. alix: do traders like this

market? vincent: it is interesting you say that. some do, some don't. traders like trimmed. you just get on board with something and stay with it. i used to like this type of market, where every day you come in and it is something different. you are looking for fades. just trading against the trend is more fun for me. alix: he doesn't do that anymore. but still, it was fun at one point. lou --up, lale help glow lale topcuoglo of jail habre will be joining us. this is bloomberg. ♪ when it comes to using data,

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february 18. i'm alix steel. let's take it from the top. >> we do not make projections. we operate with scenarios. we are still hoping that the most likely scenario would be relatively rapid containment. alix: still clinging to a v-shaped recovery as singapore cuts its growth forecast. people having lost their lives to this pathogen. could there be an end in sight? that is the question everyone is asking. we had a respiratory disease expert in china saying it should be within the next 10 days, but the who not convinced. alix: china may also push back theannual meeting of communist party for the first time in decades. >> in terms of targeting those types of business. alix: hsbc makes it even

stronger pivot to asia. third major hsbc's restructuring since the financial crisis. it hasn't gone down particularly well. the share price today is down more than 6% in the market. investors are giving this a bit of a cold shoulder at the moment. announcedbank also $73 billion in charges. house speaker nancy pelosi takes on huawei, calling it a threat to western countries as they prefer to develop 5g networks. rep. pelosi: i do believe that if we were to let huawei have the information highway dominance, it would be like putting the state police in the pocket of every person who uses that highway. warns countries not to be seduced by competitive pricing. as theuts its outlook

coronavirus hurts chinese demand and manufacturing capabilities. >> over the crucial chinese new year period, not as many iphones are lesser to have been sold as apple expected, but also, apple is ramping up production for a cheaper handset. workers to make those come from all over the country, and because of the quarantine, they are not able to do that. from fourth quarter to theible sales -- from fourth quarter, terrible sales were weaker than expected. alix: walmart could not meet expectations for the current year. >> certainly, i think the way to frame it is looking back, probably not the best quarter. looking ahead, i think the prospects still remain bright for walmart. shares fell in premarket trading. let's go to the markets here.

it is the apple shockwaves, s&p futures down. german sentiment also pretty terrible, so euro-dollar is weaker, down 0.2%. debate into treasuries, no surprise there. commodities also rolling over. going with the hour is lale topcuoglo, jo hambro fund manager. you just got back. i am super curious what they are all talking about. vincent: i love europe. when there are no efficient ideas to invest in, everyone just goes back to loving their own asset class. i was in one of those macro dinners. , high yield guys love high yield, and everybody is kerry, carrie -- is carry, carry.

it is amazing to me that people the strategyhing of selling vol. to me, it sounds like picking up pennies in front of a steamroller. so far i've been wrong, so kudos to them, but i don't think i can handle it. alix: what a great entry. with us is mark connors, credit suisse head of risk advisory. what do you think? mark: that was the high yield prerecession call. i think if we want to look at the news where it might come into your area of being right, that steamroller might appear because central banks have said to the fed, we are not going to be involved in a structurally permanent repo facility. we thought when the december news came out, we are basically here to support everything, they are now trying to let the markets play. we will see if they do that.

and i wereie -- you talking offset about do banks do wholesale risk, or is there a development of shadow banking? lale: he said repo. i didn't. [laughter] wex: she comes on and says have to talk about plumbing. mark: to the tables turn when you say repo? alix: it is hard to say. lale: here's the thing, it is quite amazing to me, where people are arguing whether fed is doing qe. i don't think it is because they are buying front-end. and i think if this number gets turned around, they extended the repo,e sheet, but the because it is not permanent, shouldn't be part of the balance sheet equation. the whole point of repo, whether you do it one day or seven days, at the end of that term, you get your collateral back and it is gone.

the whole expansion of the balance sheet i really think is misstated. that's number one. then we can talk all day long about shadow banking. mark: i have a colleague who can talk about that. i will channel them. [laughter] alix: i guess the question we are trying to understand, how are you measuring risk? you have the macro of the coronavirus, etc. how do you measure it in a market where you have liquidity that people don't even know how to label and look at it? is that what we are talking about? mark: as a risk practitioner, you identify it, measure it, and then make a decision. we are seeing that on fed regulated banks. they are no longer the warehouses of risks like they were prior to 2008. it is regulatory, and you are not paid to do it because you don't have enough balance sheets to make enough arbitrage

opportunities worthwhile. so people are stepping up who aren't regulated. you don't know what you are doing. of loans out of the banks have gone to cap a market oriented shadow banking -- 25% loans have now gone to middle-market lending or shadow banking. what people forget is in a time of crisis, some of this incremental lending may not be there. as a result, it has to revert back into the banking system. that is where the risk is going to have to be repriced. alix: but if we are never going to see a crisis, they might as a matter? in the last three months, you have every black swan you could think of that happens, and you still by the -- you still buy the dip.

we had all the bad news and we are still going to buy the dip. why does it matter? mark: it doesn't matter. that is why my observation that the fed is doing this is not qe, walk away, it is temporary, if they didn't do this, it would be more curious. so there's going to be more volatility. news,is is the biggest not the other consolidation in our industry. it is what the fed is doing. that is number one. watch the front end, watch the overnight rates to see if they change. that is really the news. if those start to move and get a little surface area, then you're going to have the ability to have volatility. my risk appetite is lower and you can see some selling going on.

i think the problem with the fed being so involved, and i think they had to be because there's no other option on letting the whole thing unravel, we really forgot how to price risk. guys jump makes risk really hard because everything is so suppressed, but it is the baseline where everything else you price come of will have just -- you price, people have just forgotten how to price risk. the rates are so depressed so artificially. we will pay for it down the road. i just don't know when. mark: we will get in the weeds here on protection of stuff -- here on practitioner stuff. if a ccc is not that different basis,b loan on a spread

in the majority of risk schools, that is going to be the same thing. well, there's no difference here. i will just buy the one that has 10 basis points more yield. price of losing my money because it has been so long, what it really feels like. only people in the energy sector really know what that feels like. alix: and now they are all out of it. lale: that's true. i think people have also focused on these artificial differences between rating categories. one of the things goldman high-yieldghlighted, everyone says is distracted. energy contributions are at net --h yields and they are at

when you subtract those 2, 80 points gone out of the index. reality 12.3, so the with high-yield is probably with mid-threes, which is ridiculous. alix: so what do you do? out?old and hide lale: i think gold is a good insurance policy. we always have gold as a percentage of the fund. think literally, cash is not trash. i think you look at trash as a temporary placeholder that will save you something. to the extent that you can scrub the bottom of the barrel a little bit and find higher-quality companies, you don't get paid a whole lot, but you can sleep easy at night, and i would rather take that than trying to reach in here. we do hit an air pocket as we saw in 2008, if you are in

a fixed income vehicle that has interest rate exposure, you did pretty well as opposed to high-yield. what people are doing are buying tech. they are basically saying they generates much cash flow -- yeah, i know. [laughter] lale: you want to talk about high-yield tech? mark: on our positioning, it is bifurcated in commodities. gold is at a multiyear high, and all of the growth sensitive commodities are all sold. that is the positioning i think is indicative of what people think about growth. alix: really fun conversation. both of you are sticking with me. we are going to have more on what you do with risk as well as forecast from the coronavirus, and yes, we will be talking tech. this is bloomberg. ♪

[laughter] outbreak coronavirus could slow the chinese economy to its slowest pace since 1990. citigroup warning that a recovery may not be v-shaped. "far more likely is a longer u-shaped recovery in the real physical markets, a w in financial markets for bonds, equities and commodities." joining us is our connors, credit suisse global head of risk advisory, and -- is mark connors, credit suisse global head of risk advisory, and lola topcuoglo, jo hambro fund manager. and: that is a unique distinct from the economic. it is hard to separate. we heard today some people saying there's going to be av recovery, a w recovery.

i go back and say let's look at 2008. people said, once we have the stimulus, we are all going to be moving higher. recovery. be a v we didn't have it. we didn't have it because there was a seizure and the banking system. with a transfer mechanism broken, the transfer mechanism, whatever we want to do, we can't get it done. they are doing whatever they are still doing. differently?g it if we don't see currency crisis or a credit crisis, you have more likelihood. it's hard to tell. lale: none of us are experts on any of the viruses, so we are not going to take a call and be 50% right. the way i think about markets in this regard, if you push it from one quarter to the other one, it doesn't make a whole lot of

difference. but if you look at the rates market, that pushes some sort of tail risk. the other market that is important to watch is the commodities. what are you going to pay today based on what you see? that is obviously noting stress. then you can watch the bulk transport rates and all of that stuff to give you an indicator, but these are all what they are, just an indicator, and i don't pick anybody have the right answer. alix: when we see apple warning, bhp, is that a transmission mechanism where it needs to be in the rates and affects market? lale: even if people --mark: even if people wanted to get back involved, they couldn't because the banks were seized. so the animal spirits were public of the consumer. affect its reacted -- if that gets reactivated, they will be able to.

despite the current come of the , they are saying earnings are going to be lower for this quarter. stocks are not really reacting. the people are looking through it, and we do have a risk if that changes, and it has not. expectations are still for a differentiation with the tactic of secular growers going like this, but industrials and some other interest sensitive ones are not doing as well. lale: 2020 has been an interesting year. let's set the stage. we start off the year with u.s. taking out a big general in iran. iran bombs u.s. bases. then a jetliner crashed. then we go to the u.s. impeachment. all of these headlines where normally, you would have been like, oh my goodness. the market was like, eh. alix: totally. lale and mark will be sticking

with me. we are going to break down tech. mark zuckerberg reverses his tone in pushing for more internet regulation. more on that next. this is bloomberg. ♪

♪ viviana: this is "bloomberg daybreak." we begin with franklin resources agreeing to buy rival at a 23% premium to friday's closing price. together come of the companies have $1.5 trillion in assets under management. now to walmart. keyame up short in two categories, posting comparable store sales for the holiday period that missed estimates. --s, profit this fiscal year

plus, outlook for profit this fiscal year was lower than expected. we end with a switch for mark zuckerberg. . he says facebook needs regulation in order to win user trust. lobbieds, facebook has against being regulated, but spokeday, mark zuckerberg to the eu agencies that are crafting some of the toughest rules. alix: for more on tech regulation, lale topcuoglo of jo hambro and mark connors of credit suisse are still with me. , you'rere not in apple --d of friendly, but mark: when we looked at our books in credit suisse and saw volatility, it was usually around geopolitical events. it wasn't really about market events. as long as there is central-bank engagement.

but if you look at the wildcards , the treatment of companies, equities, that is where the free cash flow is. bonds are around zero. the u.s. ten-year in's urban -- the u.s. ten-year is collapsing to the tightest spread in four years. if you are seeing a chance for regulation, it is going to cap how they behave. that is going to be an issue. pricing that for us would be a big deal. alix: can you do that? you have, like, two and its -- like, two minutes. mark: it is a bit binary. we are trying to get parameters to figure out how to price policy risk a stone each candidate as it rolls along. -- policy risk faced on each candidate as it rolls along. there's just no data to address it.

that might be a little bit of a crimp on investment. lale: you are also solving for something you don't know. it depends. it is not only what they promise on the campaign trail. they may not actually be doable. so i think the market gets worked up about all these things, but until it all happens, i think you are better off focusing on the fundamentals and perhaps stress testing upside, downside. alix: but don't you feel like tech regulation is inevitable regardless of who wins? when you have mark zuckerberg calling for it, that means to me he is trying to get ahead of it before something more onerous comes out from government. lale: you have to know what that is. the spectrum is really wide. mark: i just think about being a parent with four kids. a kid knows they messed up, a say i will do

chores. they don't want to hear what the parent says is the chore of the day. there's also industry policing. there's standards that we have in risk management in banks, asset management. other areas we say it is best practices. so that is the sort of dirt road before you get to concrete regulation. isx: my daughter's favorite "don't say no, mommy" when she wants to get a toy. but you can't price in a different type of company, no? lale: maybe alternatively, on the positive side, it may not be as bad as people fear and may remove risk from the stock. you kind of don't know. mark: i think, first of all, in risk worlds, there's no information.

that is such a jump. maylooking at how companies the allocating their business analystsat may be when will start looking at more valuations. alix: really fun half-hour. thanks a lot. mark connors of credit suisse, thanks. i knew you all would get along. ali top lou be staying with me -- lale topcuoglo will be staying with me. we will talk with david giordano, blackrock head every noble power. where is the real -- head of renewable power. ,here is the real opportunity and what type of returns can you expect? this is bloomberg. ♪

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every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. alix: this is "bloomberg daybreak." i am alix steel. risk off mode developing within the market. s&p futures down .5%. part of that is apple, other parts will be walmart.

nasdaq trading the heaviest. also risk off when it comes to european equities, in particular technology. autos, terrible eu car registration numbers. if you look at the v-shaped recovery in china, that will weigh on the automakers. you are also taking a look at the safety trait. euro-dollar off .2%. the german investor sentiment survey was terrible. the210 spread coming in -- 2-10 spread coming in. in the market when you're trying to make returns for the future and looking at headlines that do not have a lot of sway, where does esg investing it in? tockrock raised $1.2 billion invest in wind, solar, and battery storage products. how are they performing? we talk with david giordano, blackrock head of renewable power. since 2011, the renewable power platform has invested into

hundred 50 wind and solar projects. lale topcuoglu is still with me as well. wind and solar projects. where is the best place to make money? david: we are seeing a lot more activity in the space, a lot more activity. that raises awareness and gets investors more in tune with what the risks are and where the opportunity set is. it also means you have some investors into the space that may be overaggressive and trying to make a mark in driving overall returns. it us as we think about it, is the risk-adjusted returns we try to stay focused on and pivot to the areas where we think there is opportunity to get an attractive risk-adjusted return. lale: the growth in the industry has been phenomenal. if you look at the money managed by these socially responsible investing funds, it is about $1 trillion. it has grown in our rapid

fashion. you are seeing more bond shortage, whether it is corporate, the sovereigns, and that market it is around $400 billion in the corporate bond market. there is issuance. there are issues. it -- what does the tone imply? you do not believe in green sovereign bonds? lale: you have to define what is green. i think the definition is not uniform. that way i think it originally originally you raised funds and then generally there is reporting requirements associated with that, which means extra expenses for corporate issuers. there has been new issuance that has come out because there is so much demand where now there are companies that have issued bonds

that are not linked -- they are linked to achieving certain .argets you can spend it on coal powered power plants but you are seeing over time you will get to where you want to come and if you do not the penalty is only a step up in the coupon, which i do not think is efficient. david: the only thing i would say is that that is something that speaks to the newness of the space. the whole esg reporting space. it is one of the places where blackrock across all of our businesses it is becoming important we come up with common vocabulary words and common definitions that we agreed to and then we start creating quantitative metrics by which to measure this. lale: especially if you define indices, you have to define what

happens if you do not meet the targets. as it stands right now, you do not. there is no incentive. the spirit is right. do not get me wrong. in spirit i totally get it. the enforcement mechanism has to be more forceful than what we have. alix: which is also when you talk about the harder assets and wind and solar investment, can they generate the kind of returns you get another areas? natural gas prices are so cheap and i wonder if that will -- why will i buy solar when wind and gases under two dollars? david: there are two pieces to that. corporate buying renewable power directly at they want access to clean power and that hits some other targets for them. it also gives them a known cause for power over a long time. we have projects that have google off takes and what is

attractive for them is not just the sustainability and the green power component, but it is also fixed costs for power over a long period of time. while natural gas is cheap, it still has volatility in the price. without a stock deal you get the opportunity to take one of your costs and have it be known for a long time. lale: what kind of return can you get with that? david: it depends where you are. in places like europe where there is a lot more capital focused on the industry, we see returns pushed down. in many cases it is a fixed income replacement for investors. they are just looking for an uncorrelated guilt over a long period of time. if you start to look to other parts of the world, the aipac region, there you are still seeing opportunities for dislocation and you can make investments in project and see attractive returns for investors. lale: on the uncorrelated part, i think the jury is out.

if the proceeds are not ranked in, it is hard to tell because it is still a fixed income instrument and capital is chasing the same issues. if the credit deteriorates because the fundamentals of the company deteriorate, you are bound to see it. just because it is a green bond do not mean all of the fundamental analysis goes out the door. sometimes people look at it simplistically. the fundamental analysis at the credit or the equity, whichever instrument you are looking, it still applies. you overlay the green analysis on top of it. that is where there are two types of investing. the green bonds are one area where it is tied to corporate. for us we are making private investments directly into projects. it is just the asset. i do think that is a fundamental

difference. it does not take away the broader esg component. as this gets incorporated, as blackrock has been talking about quite a bit, we are going into a phase of investing where investors will pay much more andntion to the e, the s, the g. we will need to have documentable metrics. lale: i cannot agree more. alix: to wrap this up with a neat bow, where you want to be investing the most? what region and what kind of projects? david: in the united states we will look at the distribution level. distributed solar, distributed solar plus storage, that is where we will see a lot of opportunities. i think in the aipac region as the other area we will see interesting opportunities. alix: have to get you back. david giordano. of blackrock. lale will stick with me.

now viviana hurtado is here with first word news. viviana: china says the coronavirus has infected more than 72,000 people. the death toll is approaching 1900. one of the fatalities is a senior doctor in wuhan. the u.k. and south korea preparing to evacuate their citizens on the cruise ship that has been quarantined. does play planes filled with americans have been flown back to the u.s. -- two planes filled with americans have been flown back to the u.s.. for the first time michael bloomberg appears to have qualified to taken part in the democratic residential debate. mr. bloomberg reaching 19% support. it beats the democratic national committee's threshold. mr. bloomberg is the founder and majority older of bloomberg lp, the owner of bloomberg news. tesla plans to build a factory in germany hitting a legal roadblock. the court says clearing of forest must stop immediately.

environmental activists had filed a challenge. by the middle of next year, tesla hopes to have the factory running. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. let's stay with tesla and brought them out to electric vehicle. joining us is new streets technology infrastructure analyst. he has a neutral rating on tesla. when you take a look at tesla's dominance in the market in the u.s. as well as elsewhere, how long does that stay? pierre: that is a very good question. if you look at the last seven improved thehas efficiency by 40%. that is what you find in the car when you drive it. to cars first model s being produced today, you have a

40% improvement. it took tesla six years to do that. i think in the next three to five years tesla will deliver another 25% to 30% improvement in the powertrain. in the meantime, all of the car manufacturers competition is still at the level where the is.t model s we need to see all competitors catching up. madeat time, tesla will of another 25% to 75%. -- that is five years of a safe environment for tesla where they will not have a real competitor in the ev market. alix: can they do it profitably? obviously scale is important and the problem u.s. and european automakers have had is it is so hard to turn a profit that they have to invest. can they do it profitably? it is what we have seen

in the last six months. that is the reason why tesla did so well in recent months. what we have seen is it is still relatively small-scale, manufacturing more than 100,000 cars. there is a small skip -- despite a small scale, tesla is on gross margins the best practice in the industry. they are about 20%, which is an aspirational level for other premium brands. the reason why they get there is because of their superiority in the powertrain performance. if you have an efficient powertrain, you have cost-efficient electric powered trains. they are linked. that ability to sell the product with margin power because nobody else can do things as cost

efficiently as you do is what is going to protect tesla going forward. one last thing. in q4, tesla generated $1 billion of free cash flow. it is a lot of cash. they could demonstrate they could finance the expansion of their manufacturing capacity with the cash they generate already. alix: can they be as dominant in china as they have been in the u.s. and that the top-selling ev's in china are homegrown and there is a ton more competition, particularly in the tech startup space. what do you think? pierre: it is a good point. the chinese market and the american market are going to be different. in china, the government is strongly supporting small, inexpensive, non-premium electric cars to limit emissions in large cities. that is the positioning that is different from tesla. tesla is a premium brand. there will not be

local premium brands competing efficiently with the model three for quite some time. if you look at the broader easing market in china, there is a nonpremium smaller car that will be a much larger market. what you see is tesla is already adapting to that and started working in china on the version of the model three to adapt to the market. this is more competition in china, but very different competition. prices, -- alix: i am curious how you see the space and auto companies, utilities, having to transition and smaller startups doing well. how do see that the evolving? lale: i think if you bring us

back to the funding markets, this is where green bonds can support companies in the right direction. you will see the benefits of green bonds over time if the rates ever go up. 8%, if youissuing at can issue green bonds at 4%, that will make a difference from a positive capital point of view. , thereerything is zero is technical support at zero it does not make a difference. i think this is the way the industry is moving. it will take time but to the extent it will bring back to our prior compensation, we need esg to be standardized. then everybody can apply the same methodology. that will make the markets a lot more efficient. then you can compare companies. our industry is brilliant at figuring these things out and i am sure we will because there is now $1 trillion in the market.

ferragu, thank you, and lale topcuoglu, thank you for joining me for most of the hour. you did not bring up repo, it is a good thing. tune in friday night for my special ev's on the brink of change friday at 9:00 eastern. we'll be tackling all of these issues. coming up, it is the virus affect. apple saying it will missed sales targets for this quarter. that is coming up in today's bottom line. bloomberg users, interact with the charts shown at gtv . this is bloomberg. ♪

viviana: you're watching "bloomberg daybreak." i'm viviana hurtado with your bloomberg business flash. taking a toll are

on the world's largest commodities trader. glencore telling investors it will not buy back shares and it is writing in -- writing down 2.8 million dollars in: copper assets. reporting its lowest profit in three years. china trying to show it will keep its side of the trade deal with the trump administration. u.s. companies will be allowed to apply for tariff waivers. beijing publishing a list of 696 american products that will be eligible for relief. among them, soybeans, pork, crude oil, and liquefied natural gas. that is your bloomberg business flash. alix: time for bottom line. it will look at companies worth watching this morning. we want to dissect apple. the company shares dropping after virus warnings rattled tech investors. john butler of bloomberg intelligence joins me now. what was your point of view from apple's ambiguous we may not reach our target because of china? john: one thing to remember with

china is 75% more sales go through the retail store channel. with people staying at home, the traffic wasstore dropping before apple closed all of the stores in china. now they are all closed. the impact is even worse. on the supplier side, a lot of the factories are having trouble getting back to full staff. i was talking to our supply chain analyst who said foxconn is probably around 40% right now. the issue for apple is supply of finished product and getting them in stores around the world. you have two things at work. alix: what gives you the confidence that once you are up and running everything will be smooth? john: i think they're in for a good year. the iphone 11 has been selling well. they have a new lower-cost iphone coming out on schedule in march, at least that is the

story according to bloomberg. i think the coronavirus is impactful, but it is not permanently impactful. it is a temporary blip. on the demand side, longer-term for apple i do not see any issues. that gives me confidence we will see a rebound when this is over. alix: john butler bloomberg intelligence, thank you very much. next we are taking a look at walmart. joining me is brooke sutherland of bloomberg opinion. you have had the time to look through more details. the biggest take away? brooke: the biggest take away is how many people turn to amazon for their holiday shopping. this was the shortest season since 2013. we were worried about whether logistics companies would be able to handle it. of pressure on the companies. in hindsight we should have been more concerned about the retailers because we have now seen softness from walmart and target which is the bulwark of traditional retail's response to

amazon and also the department stores coming in weaker than expected. this shift is interesting. the way people thought about the last minute holiday shopping was i am going to get that on amazon. how to the traditional retailers compete with that? alix: we were talking earlier with the retail analyst basically saying prices have stopped -- what is wrong about that? brooke: i think expectations are down on the back of targets soft holiday sales and walmart announced leadership sales toward the end of january which gets investors shackles up a bit. if you look longer-term and think about e-commerce growth, walmart is talking about 30% growth for 2021, which sounds great until you think it was stronger than that in 2020. what has been driving that is online grocery pickup. they have now rolled that out to a number of stores. they're only so many stores they have to roll that out.

what will be the next pillar? how do you drive that strength? how do you do that without doing total damage to your profit margins. walmart did say e-commerce will be flat to down in 2020. thanks a lot. appreciate it. brooke sutherland of bloomberg opinion. coming up you have golden bit point retracing in bear markets. more in today's technically speaking. radio heardoomberg on sirius xm channel 119 and the bloomberg business app. this is bloomberg. ♪

alix: time for technically speaking. ,oining me is mike mcglone bloomberg intelligence commodity strategist. we talked about the risk on, risk off environment. crew rolling over again. a nice bounce was not able to deliver. when you look at the chart, what you see?

walk me through what you see in the crude market? mike: the trend is down and it has good reasons to be down. bond yields are declining. we know there will be declining demand out of china. in this chart the key thing that matters is the trend is down and thing look at -- the key is this is the s&p 500 relative to the 50 day moving average. if you look at the right hand side, that is bond yields. what you have to decide is what you follow bond yields. the big risk is if this rolls over, if the s&p 500 rolls over, there is little hope for crude oil at 50. it should break below the 50. we held the support last year. that to me is the risk and the reward. it needs some kind of good reason to go up and i think it is more likely to follow the path of least resistance.

you've been saying by gold, sell crude for a while. let's take a look at the bitcoin gold chart. if you look at a safe haven, many look at gold. you talk about how you want to look at bitcoin is a safe haven field. what do you see? gold.bitcoin is following gold is that a seven-year high. bitcoin is becoming more like gold, which matters. bitcoin gold. bitcoin, coming back to key support. go to the seven-year high, bitcoin should continue to rally. alix: there you go. mike mcglone of bloomberg intelligence. that wraps it up for me. this is "bloomberg daybreak: americas." sometimes your small screen is your big screen.

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download the xfinity stream app and watch all the shows you love. jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: global stocks drop with apple delivering a revenue warning. sendingation in china german investor confidence plunging as the world's largest economies flirt with recession. 30 minutes until the opening bell. here is your tuesday morning price action. equity futures -.4%. we are down 13 points. in the bond market, yields lower three basis points. with allar very briefly 1.07 handle. euro-dollar 1.0801. let's begin with the big issue. america's biggest company warning it will not hit revenue targets this quarter, facing issues in china hurting supply and demand. the risks around apple have been clear. it has not stop the stock from trading at earlier all-time highs. investors looking past it, putting faith in a v-shaped recovery, quick job in q1 -- a