taylor: welcome to "bloomberg markets." i am taylor riggs, with paul allen in sydney. ♪ coming up, beijing buys the -- the world health organization says quarantine measures gave the rest of the world several weeks to prepare for the coronavirus. u.s. stocks fall after apple cut its outlook for the second time in two years.

we will look at the reports across the global supply chain. hsbc puts 35,000 jobs on the chopping block. we will find out what the bank is doing to graphs to grapple with the outbreak. today, you had a drop in the major averages like the s&p 500. the chipmakers getting hit the hardest. this is an art -- this is after apple of course said they would miss quarterly revenue numbers. means is a flight to quality, you are now down about 2-3 basis points or so, very curious. where they think value is for the 10 year. . as around day 180 or so. yield on the long end, that three-month 10 year now inverted

. the most inverted we have seen it since the beginning of the month. a fairlyis going to be busy day in this part of the world. his hollande -- new zealand trading already. futures looking flat in australia as well. metals, one of the big iron ore minors is reporting earnings. also crown casino. gold is priced in -- gold priced in australian dollars is a record. currencies, the u.s. dollar performing fairly strong. we have got the aussie back below $.67. the kiwi comedy worst-performing of the -- the kiwi, the worst of the g10 currencies. the world health organization says china's strict quarantine measures likely allowed the

world a couple of weeks to prepare for the outbreak. let's cross to our china correspondent tom mackenzie in beijing. as you say, the world health organization offering praise to the way that china has handled the outbreak of coronavirus, saying these controlled measures being put in place in hubei province, where families are not allowed to leave their homes unless there is an emergency. that those measures have delayed the spread of the virus within china by about to be three days, according to the world health organization. outside of china, between 2-3 weeks. the world health organization's praise of china's handling of this has not been without controversy.

many say that china badly handled the outbreak at the beginning, shutting down for example those whistleblower doctors. experts remain on the ground here, traveling across china, meeting with patients. going through the data. in terms of additional steps china has been taking, particularly in hubei province, they will try to track down any additional people who have not been alerted to health officials yet by going to pharmacies, checking anyone who has bought drugs for colds, fevers. they are really trying to get on top of the spread of the disease. we are also hearing as well from one of the lead experts, an advisor to the government, by thethey could peak end of february.

1700 health workers infected, about six deaths. a prominent doctor has sadly passed away. toll onation of the these health workers as they battle the virus in the epicenter, wuhan. paul: beijing does continue to promise it will meet the 2020 economic goals. tom: it does. we heard president xi jinping on a phone call with boris johnson of the u.k. xi jinping saying there was resilience and they would meet those economic and social targets. they look forward to cooperation with countries like the u.k.. we also heard from the commerce minister, saying they would step up support for foreign invested

businesses. they want to see more imports of things like agricultural products, medical and health devices. they will speed up the licensing, the approvals for businesses to restart. that is key because we know capacity is still well away from being at max. officials here are trying to get businesses open and employees back into the factory. that is proving a challenge but the commerce ministry saying they will provide additional support. taylor: thanks for joining. i want to go to hong kong. the unemployment rate rose for the fourth straight. if it is rising for a fourth straight month, it unemployment figures were rising well before the coronavirus and. thehis is more about political, the outbreak started to hit toward the end of

january. things could be getting worse, that 3.4% jobless rate. bloomberg economics says that jobless rate could meet -- could hit 5% by mid-2020. they say, given the travel restrictions in china and hong kong, that could further decimate the tourist industry. also it looks like it is heading for its first back to back recession on record. they now point to a contraction of more than 1% for 2020, followed by a decline of 1.2% that we saw in 2019. see all eyes on the budget next week, more than $3.5 billion in fresh funding. it will be a tough balancing act for her in terms of providing support to the services sector

and the increasingly strained health care system. whether she does address issues like housing shortages here. man andoomberg's yvonne hong kong. thank you. some breaking news. fortescue metals first half earnings. first half revenue, $6.49 billion, an increase of 83%, but still a mess. the market was expecting more. the first net income almost quadrupling. underlying ebit. -- fontew being driven askew metals being driven along by the iron or. commentse watching for about the outlook due to the

slowing economy in china around the coronavirus. you will be able to catch our ceorview with the fortascue elizabeth gains. this is bloomberg. ♪

paul: "bloomberg markets "bloomberg markets you are watching -- you are watching "bloomberg markets. a president trump announced set of clemency's and pardons tuesday including one for former illinois governor rod blag ojevich, and milkin, dubbed the junk bond king in the 1980's. president trump has issued more than two dozen pardons since taking office. president trump is set to stop

his own administration's plans to block the sale of ge made jet engines to china. he said the "national security excuse" should not always be used. the u.s. has imposed restrictions on five chinese state media outlets, designating them as foreign missions because they are not seen as independent. it includes the publisher of the people's daily. officials say president xi jinping and the communist party are imposing more direct control over media and stifling independence. afghanistan's incumbent ghani has wonraf the election to stay in office. the election took place in

september but final results were delayed amid accusations of misconduct and technical problems with counting ballots. global news 24 hours a day on air and by quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. paul: thanks very much. u.s. stocks slumped on tuesday after apple's warnings that sales will miss forecast. that may still be the case. our next guest is to expect more volatility as forecasts continue to change. for joining us today. a lot of news flow obviously around the virus. havease numbers seem to plateaued. what is your sense of the crisis now? does the news flow inform your decision-making?

>> if you do a basic google trend search, you will see a big drop in the public frenzy. but you look at the progression rate in terms of numbers, they are clearly down. --ry rate is clearly up recovery rate is clearly up. infant mortality rate is stable. obviously, the effect of disruptions is what the market is waiting to hear. we're going to see lots of forecast changes. paul: how do you find your way through all the noise? with itsinute ago, bhp warnings. fortescue with great numbers right now but you have to wonder what the future holds there. er: in situations like this, it is best to take a step back and look at what you know.

what we know, the authorities in china, they are going on a level three kind of stimulus. maintaindetermined to their growth target which was before the outbreak. you look at what is happening in singapore. fiscal spending. you look at what is happening in europe, we are seeing a stealth move toward the correlation between the ecb and european commission and parliament. significant changes have taken place. taylor: curious if you think that china has done enough to step in and do enough fiscal stimulus to uphold some of the 2020 growth projections? nader: they have not done enough yet when you look at, for

example, part of chinese economy , exposed to the disruptions, changed the loan requirement for banks. some of the loans going to mortgages are now going to developers. when it comes to fiscal stimulus , there is a lot of talk, the fact that they are maintaining the 6% growth target. they don't know what they are planning on doing. expectations are for more infrastructure spending. we are watching that quite closely. u.s.,: here in the valuations look full. u.s. equities trading near record highs. our markets responding rationally or reasonably to some

of the fear and panic in the headlines over the coronavirus? at u.s.ou look equities, mark -- part of the market has totally ignored what has happened. you saw the apple warning, which had a big impact on the share price. the rest of the world, for the past five years, u.s. equities, three out of five years, has been negative. outsidens in the world the u.s. is not that expensive. the had the leadership of 10 year bull market. goinghe possibility of through a recession. more fiscal, less monetary, there is a lot of room toward areas that have underperformed for the past five years. paul: we have seen chinese

markets recover almost all their losses. in is recovery all priced there more to come? nader: that is why there is room for short term. the manufacturing sector was on the way to recovery before the virus outbreak. now there is a strong possibility of double-dip. from here, there is a strong possibility. china,k at small caps in a big run. there is that volatility possibility in the markets. outbreaks inby the the past, this time, more specifically, central banks are out of ammunition. the recovery, if anything, is likely to be stronger and more durable. in the short-term, you are right, markets have preempted

that. paul: the point you make about central banks running low on ammunition, we have had a huge black swan event. what if there is another one? paul: it is a wake -- nader: it is a wake-up call. we had a lot of conversations around modern monetary policy last year. there is acknowledgment that cutting rates any lower from this level will have a counter effect. see, thehy, what you , the revolution in europe green party has a majority vote, now you have a correlation between central banks and the european commission in parliament. a just needed a little bit of black swan to bring that homeland that we have that.

taylor: are you still short tenure bonds? -- 10 year bonds? nader: we are. if you make one guess, if markets are bullish or frightened, you look at what is happening with bond yields, there is a massive capitulation -- capitulation toward risk havens. less monetaryere, policy, more fiscal policy, it is bond negative. i am not saying that inflation will come all of a sudden and bond yields will spike, but you look at the flows, it has been intense. it is a bond bubble. but yes, we are short bonds. naeimi, thank you for joining us.

slashes isme, hsbc 35,000 jobs. we will have more from the ceo of europe's biggest bank, next. this is bloomberg. ♪

taylor: hsbc you says they will be letting 35,000 employees go over the next few years. the ceo spoke to bloomberg about the job losses. >> we are going to be quite surgical and ruthless in terms of targeting those parts of the business we are not generating successful returns. taylor: he also spoke about the impact of the coronavirus. >> the coronavirus, it is obviously evolving. at the moment, as you can see in our fourth quarter results, we had a resilient performance in hong kong. profits were up on the year

before. we are continuing to actively monitor the impact. i do think we'll have to take some additional provisions this quarter. us anyyou give indication of this slow down in lending, the reaction in china and hong kong in this first month of 2020? make coronavirus come alive in terms of the actual business and market. the crossover businesses, we have had to put in a lot of contingency planning. a lot of our colleagues are able to work at home. for our customers, when you look at the january numbers, they continue to be robust. but i think we are seeing some customers obviously struggling at the moment, particularly

those in the retail sector, some of the real estate sectors, anything dependent on tourism into hong kong. be -- was was a just hsbc ceo ewan stevenson. bhp warneds top miner that the outbreak could hit commodity prices. >> demand is holding up. we are shipping all of our product. prices have held up. we have not seen any issues with receiving payment. as long as things are contained within this quarter, we think they will hold up. if not, then we have to revise our forecast. so far, we remain reasonably confident about the outlook for the remaining part of the year.

to iron ore.get i am throwing up this chart for the benefit of our viewers. in ports to a record low, at least as far back as when this data set begin. given that 15% of your revenue in the first half was thanks to iron ore, is there a concern for deterioration in pricing and output? oreo if we look at iron inventories in china, they are not that unreasonable or unhealthy levels currently. there is capacities of aiken absorb more. we have seen some weakness, but we have had other supply-side disruptions. through cyclone come western australia. we always have to keep in mind that the coronavirus is impacting the mystic supply of iron ore.

that helps to give some strength and resilience through this period of disruption and uncertainty. that you willeve have support for, say, multibillion and man days in terms of these assets -- a's in termsm and of these assets? >> my strong first preference is to be securing some of these options. securing these options through exploration and early-stage entry. we have had some past success. area ofertainly been an success for our petroleum business. paul: that was mike henry, ceo of nhp. i want to get you a correction

on the fortescue numbers. revenue, 83% higher, that was a beat. net income, 2.4 5 billion. you can catch hour in -- our interview with fortescue ceo. this is bloomberg. ♪

paul: this is bloomberg markets. i'm paul allen with taylor riggs. set forrkets are again a tepid start with caution still prevalent. david ingles is with us now. you are watching currencies. david: yes, that's really where we are starting to see -- equities have obviously gone up and held there, it is really in the dollar space where you see a lot of demand. overnight, the dollar index has crept back to the highest level

since 2017. the e.m. rally which started late last year is actually under threat right now. have a look at this bloomer chart. as the dollar strengthens, that puts a lot of into the yen, inverse relationship. the other thing i want to point out in terms of caution, watching gold today. last i checked, 16.04. it will bode well. gold has gone up a dollar. we talked about two days ago, the dollar has gone up but it is negative correlation now at eight year lows. those two things going up together does show you as well that caution is very much prevalent. paul: david, let's stick with china. the expectations for more policy showing up in many parts of the market now. what can you tell us about that? david: simply look at the one china.nd yield in

short-term rates in china have basically collapsed. on the back of expectations they will do more located in e liquidity injections. of move in recent days policymakers in china to drive down rates, by tinkering here and there 5, 10 basis points. that guarantees we will get a drop. there is still debate. the other thing i want to point out is the yield curve in china. i think we have a chart that shows you. short-term has actually gone down so much. it has not steepened to four year highs which tells you perhaps the market is betting on more easing to come. the other thing is risk premiums in the credit space. your average bond yield in asia

is 3.8%. back to you. paul: bloomberg's david ingles in hong kong. thank you for joining us. some breaking news now. we have the latest numbers out of hubei province on the coronavirus. on3 new cases reported february 18. 132 deaths. china's total coronavirus death toll has now topped 2000. that 1693 new cases, that is actually fewer than the day before. however, the death toll has risen. a total now of 2000 casualties, a little more, coronavirus cases in china have died. we will bring you more on those numbers as we receive them. let's move on to one of the big corporate stories of the past 24 hours. apple shares which did fall on

tuesday when u.s. markets resumed after the long holiday weekend. that follows a cut in revenue guidance for the march quarter. analysts have mixed outlooks about how the company could continue to be impacted by the coronavirus. impactful,navirus is but it's not permanently impactful. in other words, it is sort of a temporary blip. on the demand side, longer-term for apple, i don't see any issues so that gives me a lot of confidence we will see a rebound when this is over. >> the bad news is apple has put a big bet on china. a huge part of the supply chain. if the virus is not contained, this will continue to be a problem. longer-term, china and the u.s. likely to be a loggerhead. i think the virus could be a problem longer than the market thanks. tothere is no better ceo handle the current challenges for apple than tim cook. while it is very concerning the

virus and impact on human lives, having him at the helm is very reassuring. >> a matter of weeks. paul: for more on this, let's bring in senior research analyst at cohen to discuss what he things the supply chain disruption will translate into demand destruction for apple. you obviously think this will be short-lived. >> we actually do believe that. what we are seeing today and since apple's announcement yesterday was the fact that a lot of it is demand. it is really supply chain disruption. it has taken a while for the supply chain to ramp up. it seems like it is beginning to open in china which is a positive. at the same time, the virus is still a threat that people are made cautious.

it will play out over the next month or so. it will takeain -- end of march, which is end of march quarter to get the rates. that adds the double whammy from the fact there is some slowdown intimate, but more supply impacted. taylor: we got some revenue guidance from apple, that they would miss on the top line. on your estimates on the bottom line, what has changed for you? krish: that's a good question. so, first and foremost, apple did not give guidance on what the march quarter will be. we took a cut based on the biggest impact on the iphone because people do end up buying the product unlike services downloaded in the app store. that is the big reason for a cut.

it does impact growth margin a bit, but more conservative on side because apple said it would invest in the mode of business. they will also be investing in tv plus. the march quarter numbers, the but almost down to 25% to $2.24. mainly because i think it is going to stay hot because they will invest in future opportunities, despite being impacted because of the virus. taylor: other analysts have pointed out it is basically impossible for apple to diversify their supply chain. does this highlight how independent china is? over indexed to china on the supply side. they have been trying to diversify, and foxconn, they are

ramping up. these things take a long time. it is very easy for us to talk butt it and figure it out, the practicality is moving the supply chain, moving the logistics and trying to do that takes a long time. it is not overnight. it takes a year or two or so. i can see them working overtime but it will not change the dynamic in the near term. taylor: thank you for joining us. for more on apple, as well as the broader impact of the coronavirus on global markets, we are joined by mark lehman, president of jnp securities. does apple highlight how much more revenue guidance and uncertainty we could really start to see from a lot of these companies? mark: they are ahead of the game. they are the big tech companies that have impacted by corona and

i don't expect them to be the last. it is amazing how resilient the market was today. you would have guessed because we got along preview at the market close yesterday, a lot of speculation on how bad the market would be today and look what happened, the nasdaq was up today. it shows you the amount of liquidity in the marketplace. frankly, there must be a lot of people shorting the stock because no one was expected the stock market to be slightly up today. taylor: what is driving the resiliency of these tech markets? numbersu clearly have that have been as good as people expected, if not better. you've got rates really dipping this year. you look at the 10 year from january 1 to today, it has been enormous ascent in terms of the bond. conversely, yield has gone down. i think there's a lot of liquidity in the marketplace. these type of liquidity bubbles -- i don't want to use the word bubbles -- there's a lot of people that have been waiting

for a correction and waiting for a correction and we just have not seen that. we sought at the end of 2018. we just have not seen a big correction. peoplet more and more have capitulated into this year, despite some news like apple. obviously negative to the market. paul: mark, these supply chains are so huge and interconnected that all the bad news around the supply chain out of the way. as the saying goes, there is never just one cockroach. mark: you are right. my guess is -- all the news is behind us. i think there will be more news ahead of us because everybody has been anticipating the numbers you mentioned earlier, the number of deaths and number of new cases to go down precipitously at some point. that has not happened. the longer this goes on where we are highlighting the lead story on your show is how many new cases are, the longer the virus goes on and the longer supply

chains are inflicted. it is a seasonal slope period. we have the chinese new year at the same time. it is a seasonally weaker period for tech. like a good engine, it takes a long time to wrap up. i'm expecting more announcements over time. paul: before the virus outbreak, there was a trade war as well. are the argument started to pileup for more diversification and supply chains for major tech companies? mark: they clearly our peter you will read about those -- they clearly are. you will hear about those on hindsight. vietnam, malaysia, other places that will clearly explode. they have the workforce, less of the trade war worry we talked about. there is a more level playing field that some of the companies will have to pay attention to. i think you will see that theme play out over the next few years. they keep put more reasons to do so, i think we were ahead of this. the virus is another reason. as a reminder, this is a

terrible affliction globally, especially in china. but the flu season always starts in china. we read this every year, it starts in china. everyone knows that. in certain years, gets worse than others. this happens to be one of those. i would expect that to be a big theme going forward and it takes a long time to play out. taylor: you mentioned the 10 year yield earlier. does the wall of money coming from overseas push the bond yield down, price higher above the value? mark: i have been a bond bull for very long time. i have been quoted on the show many times. when there were worries the rate would go to 3% come i been very optimistic that the bond yield would stay low, particular because the global rates are lower than ours. i think there's a lot of liquidity. we have seen the dollar strength against the you're euro the lasx months. i would expect that quality, the 10 year of the u.s. economy, what is going on here to continue to put more money in the marketplace.

taylor: another tech stock that has brushed off all of these concerns, especially around the demand in shanghai has been that of tesla. can they meet those expectations and deliver the half-million cars with the shanghai production facility? mark: my guess is this year is going to be tough when you have basically china shut for the year. i think investors are looking past the half a million number going into the rest of 2020. they are already pricing in 21. for all those tesla bears -- you have subscribed to the on twitter. to read what they have been writing over the last six months and year and watching the way the stock has reacted, it has weathered so much. agoously some news a year about the demand for the model three and elon musk own machinations. we're looking at 2021 beyond for that stock. god bless them, they have done a

great job. taylor: mark always does a great job for us. thank you for joining us. coming up, the cruise industry's coronavirus crisis. we will discuss how significant an impact the outbreak is having on the typically resilient sector. that's next. as we go to break, recapping the numbers we are getting out of the hubei province regarding coronavirus cases. 1693 neworting coronavirus cases. china's coronavirus now hitting 2000. this is bloomberg. ♪

paul: this is bloomberg markets. let's check in on the first word news now. ritika: the corruption trial of israeli prime minister benjamin

netanyahu will begin march 17, two weeks after national elections. netanyahu is being charged with bribery and fraud, accused of accepting lavish gifts from wealthy friends and scheming with media moguls to trade regulatory fame as positive news coverage. he failed to secure victory in a pair of deadlocked elections last year. failing to form a government. the world health organization says china's aggressive quarantine measures probably bought the rest of the world several weeks to prepare for the coronavirus. beijing ordered the shutdown of at the center of the outbreak on january 23. the who says that may have delayed the spread of the virus by two or three days in china and two or three weeks outside the country. it will take time to know for certain. singapore's finance minister pledged around $4.5 billion to boost the economy as it gets hit by the coronavirus outbreak. that means the city will post

its biggest budget deficit in more than two decades with the gap widening to 2.1% of gdp in 2020. singapore will set aside $430 million to fight the virus outbreak and provide two packages worth $4.2 billion to assist businesses and consumers. passengers aboard the cruise ship quarantine in yokohama will be allowed to leave today, but arantine whenqu they return home. all passengers will be off the ship by friday, with those sharing rooms with infected passengers facing further quarantine time at medical facilities. global news 24 hours a day on air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: thanks very much. now, speaking of the cruise

industry, popular liners including royal caribbean warned the virus could hurt their financial performance. for more insight, let's bring it brian, senior vice president of cruise lines international association maritime policy. thank you for joining us. your organization has 340 members. what advice are you giving them? brian: we have about 50 cruise numbers, plus a number of executive partners. the number in the hundreds as you mentioned. what we are saying is we are placing our passengers as our number one priority. that is true not just in this emergency, but all the time. our industry is a number of things. it's part of the hospitality industry. trade and travel and tourism. we are also a maritime industry. the common element is you have to take care of your passengers, your customers so that they have the experience that they want to repeat and tell their friends about.

putting people first is our top priority. as we have dealt with this crisis, or this emergency, what we have done is enhance our screening procedures to limit the likelihood, reduce the risk of this virus being introduced onto any one of our ships. that has taken the form of looking at travel history, looking at contact with people who may have been affected and also symptoms. all backed up by the middl medical team on each of our ships. paul: is it enough though? is this advice being heeded? i will give you the example of the 83-year-old woman who got off in cambodia, flew to malaysia and, once there, she went to the hospital with coronavirus. can you say with confidence these measures are enough? brian: the measures as rigorous

as we can make them right now. ship,omebody arrives at a we look at whether or not they have been in china, including hong kong and macau, within 14 days prior to presentation at the ship. if they have been, that is an automatic denial of entry. if they have been in contact with someone who has been in those areas and have symptoms, that is a denial of entry. and if they have symptoms, they would be asked to undergo more rigorous screening with the medical team on board. that's what we can do right now to limit the transmission of this virus on board anymore ships. so far, that has been successful. there has only been one ship that has had confirmed cases on board. that is the ship in japan. and the72 ships

associated fleet. to keep that in perspective, one out of 272. the case you mentioned of the passenger that disembarked the ship without symptoms and subsequently developed symptoms is still being investigated. we don't know where the person contacted -- or contracted those symptoms, whether it was on board the ship or subsequent to that. no one else on that ship that we know of has any symptoms and certainly, no one has them as of the time they disembarked. about lessonss learned from previous outbreaks, previous pandemics. sars circuit 2003. lessons learned from that that you can apply permanent changes and policy, medical, you name it. brian: we did undergo established procedures in the past when we've had medical or

health emergencies on a global scale. what we do is work very closely with international and regional health authorities such as the world health organization. certainly within the united states, we work closely with the cdc. we follow their advice. every case like this is going to be a little bit different but the cruise lines are well practiced in dealing with passengers who may come down with illnesses that we want to make sure do not get transmitted to others. so, there are procedures for isolation. there's procedures for working with health authorities and making sure that we limit to the maximum extent possible the exposure to any other guests on board. taylor: what are your members finally saying about real business impacts now to 2020 from this? brian: there are effects, obviously. in asia in particular, there are

some cruises that have had to have been canceled. some ships have been repositioned. our ships do repositioned on a regular basis. that's part of the way the business operates. a lot of the work is seasonal. associates have repositioned outside of the area. some have been dedicated to other routes. clearly, there is an effect in asia. it has really curtailed our operations there. we will be back when the situation has resolved. asia is an important market for us. a growing market. we are not abandoning it but we have to get through this coronavirus first. paul: all right, brian, of cruise rolling international association of maritime policy. thank you for joining us. 20 more to come. this is bloomberg. ♪

taylor: let's get a quick check of the latest business flash headlines. pioneer asset management in the 20th century but in a sign of the times, franklin has bought legg mason. resources, combining they will be in a better position to compete against the low-cost index funds which have disrupted their industry. the deal is valued at nearly $4.5 billion. the new firm will oversee around $1.5 trillion in assets. elon musk's spacex is paving the way for flight into space with it's craft. customers can buy seeds through a booking agent that has an agreement with spacex. the company previously arranged several flights for customers on russia's soyuz spacecraft. no word on how much it will cost. those were your business flash headlines. that does it for this hour.

plenty more still ahead, including our interview with elizabeth gaines. 12:40 hong kong time. this is bloomberg. ♪ everyone uses their phone differently.

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can you save me from this conversation? that we can't do, but come in and see what we can do. we're here to make life simple. easy. awesome. ask. shop. discover. at your local xfinity store today. haidi: good morning. i am haidi stroud-watts in sydney where markets have come online. shery: japan and south korea open in one hour. welcome to bloomberg markets: asia. ♪ shery: our top story -- the coronavirus death toll in china hit 2000 as the world health organization praises beijing's response. it says quarantine measures bought the rest of the world several weeks to prepare. giant aussie mining

reports a surge in half-year profit. the world's fourth biggest exporter of iron ore rides the wave of higher prices. shery: we will get the latest health check on japan's economy this hour with export and machine orders falling. haidi: let's take a look at markets as australia trickles online with the staggered open. a bit of a mixed picture as u.s. stocks slip following the warning on revenue missing from apple. this is what we are seeing at the moment. flat stock trading in new zealand. about 1/10 of 1%. when it comes to the broader markets going into the tokyo open, we are seeing a bit of positivity when it comes to trading chicago nikkei futures and watching u.s. futures looking a little bit more positive. we also had offshore yuan breaking seven to the dollar. increasing concerns about the economic implications of the coronavirus even as we continue to get stimulus from chinese authorities. singapore out with that bumper

budget package. we are getting some breaking news crossing the bloomberg when it comes to the m&a space in australia. caltex being offered a purchase agreement from eg group, offering to buy in cash and share proposal. ample'sconsiders 10% of added cash. the board is considering that proposal. we have known a couple of days ago, due diligence is taking place when it comes to canada. the canadians raising the buyer offered to 1.8 billion aussie dollar's last week. we have been looking at interest from e.g. group. that offer has just come through. we are getting more details. eg group offering to buy caltex australia, subject to a number of conditions. we will get you more details on that deal as they become available. let's get the first word news. ritika: thanks.

president trump announced pardons tuesday, including one millikencier michael and former illinois governor rob . he was dubbed the junk-bond king. vichlso released blagoje from prison, commuting his prison sentence for public corruption. president trump offered more than two dozen pardons since taking office. he has stepped in to stop his own administration's plan to stop the sale of ge made jet engines to china. he tweeted that the u.s. should not be a difficult place for foreign countries to do business. should not always be used. the intervention represents a rare public rebuke of some of his administration's hardliners on china. the u.s. has imposed restrictions on five chinese state media outlets, designated them as foreign missions because

they are not seen as independent. the list includes china's global television network and the publisher of the people daily. president xi jinping and the communist party are imposing more direct control over china's media and stifling their independence. passengers aboard the cruise ship quarantined in yokohama will be allowed to leave today but many face farther quarantine when they return home. diamond princess passengers who have returned negative test result will be allowed to disembark. all passengers will be off the ship by friday. though sharing rooms with infected passengers facing further quarantine time that medical facilities. global news 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts. this is bloomberg. shery: thank you. let's get straight to hong kong because we just had unemployment rates with the numbers rising for a fourth straight month in

january. hong kong has been hit not only by the spread of the coronavirus, but also by months and months of ongoing protests. let's turn to yvonne man in the city for the details. we really have not seen such high levels of unemployment in about three years or so. yvonne: four-year highs, close to that when it comes to un-implement rate. keep in mind, this is sort of not really reflecting what we saw with the outbreak of the coronavirus because the hit to businesses from this virus didn't quite happen until the end of january. so, this may still be from the protests related impact. it seems like it is painting a grim picture for the outlook for 2020 as well. uber economics saying the unemployment rate could reach 5% by mid-2020. they are not exciting the economy to bounce out of this recession in the first half. they are saying the restrictions on travel in hong kong as well as mainland china will only decimate further the tourism

industry. when it comes to the outlook, it seems like hong kong could be heading for its first back-to-back recession ever. you take a look at the economist estimates right now, they have been flashing their forecast since the start of february. now pointing to a contraction of more than 1% in 2020, following the 1.2% decline we saw back in 2019. that would project essentially a much slower recovery and a bigger impact from the coronavirus that we saw back in 2003 during the sars epidemic. certainly, all eyes on that budget that will be announced next week from carrie lam. she's proposing $3.5 billion or more in fresh funding. a tough balancing act in terms of supporting the services sector and increasingly strained health care system, as well as maybe she will address the structural issues as well in hong kong like housing. shery: what are some of the

business impact we have seen in the city? we have continued to see not only the coronavirus but the protests ongoing, isolated demonstrations as well. yvonne: it is pretty much broad-based. people like the financial secretary have warned about this. what we have seen so far in terms of the outbreak from this coronavirus goes far beyond what you see in your traditional virus-hit sectors like retail, like tourism related sectors. you certainly see that. on the flipside, you do see that buying when it comes to essential food and supply goods like toilet paper. that is still going on as well. but, you continue to see that the government is trying to find ways to really try to contain the virus and impact from this because we have been stuck in a recession for two quarters now from these political protests. this virus seems to suggest that the bounce back is going to be very different from what we saw during the sars epidemic when we

saw output roar back really quickly when we got the all clear. in large part, that was due to tourism spending in the booming chinese economy where we had a lot of tourists buying luxury goods and buying properties, for example. a very different picture now given the political protests we have seen and the anti-china sentiment we have had for some time. haidi: so many pressures for hong kong. i want to bring in tom mackenzie who joins us out of beijing. great to have you. what is the latest you have seen? we just got the latest numbers from hubei province today. is this reflecting what xi jinping calls yielding results when it comes to these virus containment measures? all, we have this grim marker which is the death toll of 2000. it was sadly almost inevitable. what we are seeing in terms of

the additional infections out of 1693province of hubei, is additional infections. smaller number than yesterday. that suggests the slow down of additional infections out of hubei does continue and that will be seen as a positive, and go some way to supporting what president xi was saying and other officials. we heard from a health expert who has been advising the government. he thinks they's maybe peak in mid-to-late february for the southern part of china. of course, we did have those comments saying these very robust quarantine measures in the province of hubei affecting over 60 million people have gone some way to halting the spread of the virus within china, or at least slowing it by two to three days in china, two to three weeks for the rest of the world. the world health organization has been criticized for some by being very supportive of china's approach to many would argue that china fundamentally mishandled the virus,

particularly in the early stages. others say it needed to be, the world health organization, supportive of china as they come forward with the data they need. in terms of additional steps being taken, we are seeing officials are trying to track members of the public there who may not have gone into the health system and tried to treat themselves at home by going to pharmacies and using and leveraging china's surveillance to track the purchase of drugs there. to attract up anyone who, may not have again, been monitored by the health services as they try to really round up the last few people who do have this virus and continue to try to contain it. again, we talked about the death toll of 2000. another grim reminder it is the health workers really suffering as well. 1700 infections at least from health workers. six deaths. the most prominent doctor to have died since the whistleblower doctor, a director

of a hospital sadly passing away in the last 24 hours. shery: beijing continuing to promise it will hit this 2020 economic goal. the commerce ministry saying they will try to stabilize foreign trade as well. what are some of the measures they are taking? commerce ministry saying they will be supporting foreign investors. they want to see more imports of medical equipment, also agricultural products as well. they will speed up the approval of licensing for the businesses to reopen their doors. that has been a key challenge amid this virus as well. supportive comments from the commerce ministry but particular for the foreign investing business is. in terms of the impact, we are seeing according to official data, that really there has been a 25% to 50% slowdown across industrial sectors like coal, steel production and oil

refining as well. the really is a need to ensure that the output is increased and the capacity is increased as well. that is a key challenge for officials. supply chains, employees and getting the capacity backup as well. haidi: tom mackenzie in beijing. our china correspondent in hong kong with the latest on the coronavirus. we are watching precious metals trading in sydney. one of the top gainers jumping about 4.5%, which is the highest or the most we have seen since this time last month. potential to lift investor returns even further. this after underlying earnings $2.5 billion. we also saw lifting the interim dividend payout by 153%. the company spending about 2.5 billion on new projects. we are seeing that stock trading off the session highs.

the strong demand for iron ore and strong pricing we have seen propelled results from the last report as well as mixed miners like bhp could be coming to an end with analysts warning the pain across china still as effective the coronavirus outbreak is starting to begin. we got a report with a number of analysts in the steel industry saying the pain has yet to peak when it comes to the china slowdown. we will be speaking to the company ceo elizabeth gaines in person later on. don't miss that conversation at 12:40 in hong kong. 3:40 p.m. in sydney. still ahead, we will be joined to discuss the outlook for markets. she says the apple story is just the tip of the iceberg when it comes to earnings downgrades from the virus. plus, president trump publicly rebuked some of his administration's hardliners on china, criticizing the use of national security as a reason to

limit trade. we will discuss next. shery: stay with bloomberg for a lot more on singapore. we will be talking to the country's deputy prime minister later this morning. this is bloomberg. ♪

shery: this is bloomberg markets: asia. i am shery ahn. haidi: i am haidi stroud-watts. as global economies continue to grapple with the impacts of the coronavirus, apple is the latest company to feel the pain. the iphone maker cutting it sales outlook and our next guest says this is the tip of the iceberg when it comes to earnings downgrade. joining us now is eleanor. great to see you. the good side is apple is getting ahead of this and being transparent, but is it really the issue? with so many economists trying to grapple the growth

expectations for china, we really don't know at this point. eleanor: you are right. equities have been extremely resilient to this point and really not reflecting the true state of the demand destruction that i think is going on in china at the moment. they have chosen to focus on this dual cocktail of fiscal and monetary stimulus that they are expected to come through. if you think about it, when it comes to fiscal stimulus, if you are stuck at home were quarantined or your factor is still shut, no amount of personal tax cuts will be able to be spent within the economy. in that sense, it is somewhat complacent how the equity markets are reflecting the state of affairs at the moment. i think when it comes to the data that is going to fold out over february, japan q4 gdp, apple's warning -- it is the tip of the iceberg and we will see this ongoing downgrade to forecasts and earnings. there are certainly the for

volatility to pick up throughout equity markets as we get that ongoing reaction. as always, this is going to be countered by the central bank liquidity backstop. that means it is very hard for investors to find this upside momentum and it is hard to find that liquidity. 2019 has proven that all to us. it was a very costly year for investors. the s&p returned more than 30% last year, despite a host of gdp downgrades. economists forecast downgrades. i think that means you will need to maintain optionality at this point. you need to make sure your portfolio are hedged against the tail risks that will become more and more apparent as this hard data catches down to the economic reality that this virus outbreak is going to produce. hedging is key. haidi: what are your preferred hedges? eleanor: you certainly want to be overweight u.s. treasuries, especially if you are aussie

dollar denominated investor. that is a great portfolio buffer, particularly as we see this continued down your -- downward pressure on the aussie dollar and continued strength in the u.s. dollar. the u.s. remains the relative growth outperform or. we also have the rba moving to more further easing stance throughout the rest of the -- we see that virus outbreak potentially impinge on the labor market. really tied to the outcomes of policy on the labor market and we are exacting unemployment to pick up over the next couple of quarters. i think we will see further easing from the rba. u.s. treasuries will remain in that respect. shery: should we be hedging the u.s. markets as well because we got the latest results from walmart and the holiday sales were not that great. it was not just walmart, we are seeing target and other peers. eleanor: yeah, i think you raise

a great point, but if you are an investor, you've got to be invested somewhere. when we look at the u.s. markets, they do remain more insulated, i guess, from everything that is going on in the rest of the world. the u.s. remains relative growth outperformer, there is that all of the of earnings stream and return on equity premium from the u.s. markets as well. that is going to lead to the u.s. exceptionalism bias continuing. i think in that sense, we do see that continuing. it's really very much a sector waiting story as well. when we look at, the u.s. markets there is a much higher sector weighting towards technology, growth stocks, quality names which is where this ample liquidity we are seeing throughout markets is flowing. you really need to see a significant u.s. dollar depreciation or a significant picked up in the inflation throughout the rest of the world before we see u.s. markets underperform.

shery: what about taking this opportunity to buy into some of those sectors that could actually benefit from this change in dynamics in the market? this chart that we showed you guys earlier showing one supermarket store actually gaining tons of ground and outperforming because of these online noncontact deliveries. are there any parts of the asian market that could actually be benefiting from all of this? think that chart you have shown, there are potentially parts of the market that will be benefiting. there are always opportunities. analysts have pointed to potentially jd as being a beneficiary as people sit at home and online shop more given the quarantines going on in china. i think really, the key is as we see these continued forecast downgrades and we don't have enough reliable data at the moment, which means there is so

much uncertainty still rife. within any forecast outcome, there has to be a huge margin of error. that means we can certainly see another leg down in asian markets before we buy into those names that could potentially present opportunities. shery: always great talking to you. saxo bank market strategist for you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to your terminal. it is also available on mobile on the bloomberg anywhere app. customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪

shery: this is bloomberg markets: asia. i am shery ahn. haidi: i am haidi stroud-watts. president trump tweeted a rare rebuke of his own administration of china hardliners. the move comes as an intervention ticks cut new curbs

made by general election to china. in his tweets, he said national security is being used to often to limit american companies ability to transact with china. for more, i am joined by -- this is interesting, isn't it? clearly, it is a narrative of what he is trying to say at the moment but what does it tell us about the state of trade friendliness between the two nations? >> it is extremely interesting. on the surface, it adds to the data of truth going on at the moment which focuses on cementing the trade agreement. it focuses on the trade balance that president trump wants to sell more goods to china. we don't know what the background is. we don't know if there were telephone conversations rated last time, president trump talked about zte, it talked followed a conversation with xi jinping. he specifically said national

security is being used too often. the point he has been using threats for trade war. day, itt the end of the seems to be very self-interested. he must've sell $200 billion of goods to china. the question now given the outbreak, content actually afford to buy all of that? enda: these are all the questions that people are asking, no doubt about it. i think there is some commentary going around that the numbers in terms of infections are trending in the right direction, so that might lend itself towards industry outputs beginning faster. at economy is running half the moment according to bloomberg economics estimates. in that scenario, they would start buying u.s. goods which they are amended to. they are under pressure. they were going to be under pressure to meet those targets anyway. now with the supply-side shock, it will certainly make it harder

for them to meet the trade agreement. haidi: we are seeing the start of what looks like a pretty coordinated response from the region. -- helpful would actually be it actually be? enda: interesting question because we are talking about the supply-side shocks. it does not matter how much you spent, it is not going to get factories running. moneybt, spending underground to support aggregate demand. it is not necessarily going to be a game changer. i think that's a lo why a lot of people are looking at outputs in china. if that gets up and running sooner, the rest of the economy starts functioning it will take pressure off the rest of the region. that is why the bulk of the damage has been done. haidi: indicators in china worked this out. thank you for that, enda. coming up next on bloomberg

markets, it is looking like another tepid start to trading in asia. the outlook ahead of the market open in japan and korea, next. this is bloomberg. ♪

ritika: this is bloomberg markets: asia. the death toll from the coronavirus has now hit 2000 people in china after the province at the center of the epidemic reported 132 new deaths. hubei province also saw nearly 1700 new infections on tuesday, the lowest number of additional cases in a single day since the province changed the method for counting infections last week. that brings the total number of coronavirus cases to more than 75,000 people globally. well for think it is asian says china's aggressive -- world health organization says china's

aggressive measures bought the world more time to deal with the coronavirus. china sucked down wuhan on january 23. the who says that may have delayed the spread of the virus by two or three days in china and two or three weeks outside the country. although it will take time to know for certain. singapore's finance minister has pledged around 4.5 million dollars as it gets hit by the coronavirus outbreak. that means the city will post its biggest budget deficit in more than two decades. gap widening to 2.1% of gdp in 2020. singapore will set aside $430 million to fight the virus outbreak and provide two packages for businesses and consumers. know singapore is very concerned about the impact on our businesses and jobs. i will introduce two special

packages with a total budget of $5.6 billion. ritika: we will be speaking to singapore's finance minister later this morning. afghanistan's incumbent president has won a second term in office. the election commission says he got over 50% of the vote. his challenger received 39%. the election took place in september. the final results were delayed amid accusations of misconduct and technical problems with counting ballots. the corruption trial of israeli prime minister benjamin netanyahu will begin march 17, two weeks after national elections. netanyahu is being charged with bribery and fraud, accused of accepting lavish gifts from wealthy friends and scheming with media moguls to trade for positive news coverage. netanyahu failed to secure victory and a pair of elections last year. polls show him failing to form a

government. global news 24 hours a day on air and on quicktake,, by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: let's get a quick check of how the markets are shaping up. we are seeing a little bit of pressure across markets with the asx 200 down. we are seeing tech and financials weighing on the market despite the fact that is rising. also hadsurged and we with them lifting the interim dividend payout. kiwi stocks unchanged at the moment. this coming after two sessions of gains in the kiwi dollar holding steady after it led commodity currencies down. nikkei futures higher but this after force essence of losses and coming from a two-week low. we do get the japan trade machine orders later today. u.s. futures higher at the moment after the s&p 500 fell from record highs. we look ahead to the open around

asia. david ingles is with us. you are watching currencies for what are we seeing in terms of safe havens and commodity currencies that really fell with oil? david: it's interesting because it brings us back -- i was looking over some of these prices -- it brings us back to what happened in 2018 when the dollar started to go up. back then, it was u.s. exceptionalism, now the u.s. economy outperformed. i bring that up because the dollar index is actually now back to levels of 2017. 99.4, roughly speaking. what that has actually done, it has showed a preference for the dollar for various reasons. problems with sterling and problems with your a has well -- euro as well. the negative correlation to gold is also at eight year low. there is a preference of caution of the dollar moving up and gold $1604 at $1600 an ounce,

last i checked, one of the most active contracts. given that backdrop, emerging markets stocks which entered a bull market a couple of weeks back might now be at risk because of those flows going back into the dollar. something to watch moving forward. haidi: something to watch when it comes to expectations for more policies. we are expecting the prime rate see another cut tomorrow. you are watching particular spread between china. david: it is not a four year high. we talk about the 10 year yield in china and how that sort of collapsed. what collapsed perhaps more short-term rates. a couple of more basis points more than the 10 year, that has driven up the yield as well on expectations that short-term rates are being pushed lower. it sets us up nicely for what we might get more prime rate as

well. something to watch because liquidity solves a lot of the problem short-term. the asianing up in dollar bond markets, with a lot of these chinese issues. the average yield had not been driven close to 3.8%. analysts are warning because those yields are pushing lower, it might mask the risk of default, especially on the chinese side now that there is a liquidity crunch going on something to watch. the bond space is very exciting. haidi: david ingles in hong kong. making gains in the city sessions after the company posted a surge in earnings. let's get more from bloomberg's energies reporter david stringer in melbourne. great to have you. looking beyond the numbers we are seeing and the dividend payout, it is fair to assume we

are going to see a period of difficulty when it comes to demand out of china. take us through the numbers and what the outlook potentially looks like. david: good morning. yetone thing we don't know and hopefully we will hear more from them during the day, the seceo due to speak to bloomberg television later, we are not clear on what they see as the outlook. they have not told is very much today so far about any impact they are seeing from coronavirus. they addressed that a little last month and we are pretty confident for them, the iron ore market was not going to see too much of a hit to demand and that certainly sits with the commentary we heard in the past couple of days from the likes of sounded a little more optimistic around the impact of the virus. and also overnight who said they are seeing some markets manage

ok and others not so well. in the short-term, fortescue this morning announced underlying earnings that almost quadrupled. they jumped more than 280% on the back of that enormous surge we saw in 2019 and iron ore prices. whether that is something that is sustainable in 2020 is going to be considered unlikely by banks and analysts. the company itself not saying too much about its outlook for prices. one thing, it did say it expect to continue to pay out good investor returns. andifts the dividend, up, the focus going forward is to carry on paying out to investors. billionit spends $2.5 on capex this fiscal year. this: i want to throw up chart we have been looking at in terms of the flashing warning signs about iron ore demand out

of china. this is a chart on the bloomberg terminal. we are saying it is a record low but that is because the data goes back to 2015. the weekly chinese iron ore imports have plunged to at least the lowest it has been in five years. you could imagine this will continue as long as factories and industrial activity and construction activity remains subdued or entirely shut down in china. you might have mentioned it gets 90% of its revenues from china. what is the best best we can make as to what demand disruptions, as well as supply-side disruptions they might see going forward? we are hearing at the moment from the iron ore producers who are completely dependent, almost entirely dependent on china, what they are saying is there are two elements that play. one, in the early part of this year, there were disruptions on the supply-side. cyclones in australia disrupted some operations.

rio tinto suffering perhaps the most. there has been some balancing out of that supply-demand equation. also, they are focused very much on chinese ports. the iron ore stockpiles in china. they say those inventories so far not hitting the kind of peaks we saw in the middle of 2018. that they suggested is an indication that at least demand is kind of steady and remains resilient. don't forget these companies all affected in the usual sort of slow down over china's lunar new year. i guess for many of them, they are still working out what the medium-term ramifications may be. shery: you also mentioned the results from glencore, falling after they reported. what didn't investors like, because we didn't get blockbuster oil trading here? that: i think, absolutely,

was one of the few bright spots. the fantastic year for them in oil trading. that does not mask some of the downsides and that result. and write down particularly on coil assets -- coal assets. they were flagging the minds supply. a lot of the european markets, demand is falling. they are facing competition from cheaper natural gas and the outlook looks pretty bad. also took a write-down on an oil business in chad and the drc. beyond that, there's a real sense of transition, a sense of uncertainty around glencore. there will be big changes to the leadership there. they are also grappling with the same kind of china -- climate change conundrum many of their peers are also facing. questions around glencore, coupled with that stumble in

earnings, i think there is plenty to leave investors a little bit pessimistic at the moment. shery: glencore has been a staunch defender of their coal business. could we see some changes given all the pressure you mentioned related to climate? david: look, we started to hear from glencore a little more about their long-term thinking around that coal unit. defender,bsolutely a critically of thermal coal. they say in their opinion, many economies will continue to need coal as a source of cheap power. that is at odds with peers like rio tinto. also people like bhp. they're looking to exit. what glencore did say yesterday is they are setting ambitions, setting some goals around emission targets. the key thing is going to tackle the coal business. they see over the longer-term,

some of the minds are going to reach the end of their lives and not be replaced. they are certainly seeing a diminished future role for coal. in the meantime, absolutely, they see it as a good business in one they will continue to support. haidi: it is an interesting crossroads. i don't know whether it is really just reporting around it where we have -- given we have had so much scrutiny over the environmental sustainability butct of coal operations, have you heard much in the way of forward thinking and how you transition beyond it? david: i guess -- it is a really good question. we are starting to hear from some of the very biggest mining companies, at least the recognition that businesses, portfolios, the mix of commodities they produce will need to change over the long-term. the fact that happens is

unclear. many of them have yet to really set out some specific detail on how they will extend and accelerate those cuts to carbon dioxide emissions. and for the most part, many of these companies seem to be suggesting that the things they produce today will also be the raw materials the world needs tomorrow. bhp, we heard from yesterday talking about the importance in the future for materials like coal which they already produce and nickel. the company with a huge potential project. kind of talking their own a little. what we have not yet seen is any of those very big commodity producers come out and rip up the rulebook and say, you know what, we need to completely change the mix and we are going to find a new commodity that there really is benefit and a d carbonized world. we have not heard any radical shifts yet, but there is

certainly a recognition that changes are needed and starting to sketch out some of that detail. shery: and lot of focus in terms of the debate and the conversation ongoing. david stringer, thank you for that. senior energy and commodities reporter. we will be speaking to fortescue's ceo later. don't miss that interview at 12:40 in hong kong. 3:40 p.m. in sydney. next, japan's latest trait and machine order numbers due in a few minutes. underlying fears of an impending recession. more on that ahead. this is bloomberg. ♪

haidi: this is bloomberg markets: asia. data expectedest

to show japan's trade deficit expanded in january while machine orders are leading indicators of investment and forecast the drop sharply. the numbers are out in a few minutes. let's go to nicholas smith, japan strategist in tokyo. great to have you with us. we just had japan's fourth-quarter gdp numbers coming in at the slowest pace since 2014. when can we expect the fiscal measures -- $120 billion to start to kick in? nicholas: obviously, the government is going ahead with the hikes. you've got pre-buying and then a drop off afterwards. probably not that much to get worried about. the government prime minister came in on the fifth of december 4.7%nnounced ¥26 trillion,

gdp in fiscal stimulus. only half of that is government money, although chances there are likely to spend more than they say they will spend. i think it is important to remember it is almost certainly going to be in election year. the prime minister wants to push through its constitutional reforms. particularly the problems we are having with the coronavirus, i think the chances are the government spending will come right on the high end of expectations. that will kick in within a month or two. haidi: how detrimental do you think is even the optics of the fact japan has almost 60% of the coronavirus cases outside of china, thanks largely to that cruise ship? nicholas: sure. so, a lot of countries are refusing to take these cruise ship's. japan took in the cruise ship and gave it its best shot. this virus is proving a lot harder to deal with than previous coronaviruses.

it seems the virus sticks around on surfaces much longer. it is much more difficult to test for. i think for the country as a whole, 55 people with the virus, 154 on the ship. sure, it does not look good. i just lead people back and say in the first years i have been in japan, i have been through everything from nerve attacks on the tokyo subway through mega quakes. generally, it bounces back. shery: we have breaking news at the moment coming from japan. the export numbers are out. a decline of 2.6% for the month of january which is a much smaller decline we expected, 7% year on year. when it comes to the trade balance coming in at 1.3 trillion yen of a deficit which is also a smaller deficit that was expected. we were expecting some weak export numbers.

we have seen 13 months already of declining export numbers, but it seems given the decline was smaller than expected and imports declining more than expected, 3.6% in the month of january year on year, we are seeing the seasonally adjusted trade deficit coming in at a billion.224 this is a bigger deficit than the previous month still smaller than expected. machine orders and leading indicator of investment peter falling in the double digits, 12.5% month on month. ins is after growth of 18% the month of november. november was a bit strange because we had one demand for railway it would commit -- equipment, still come of the month of december that looking great, january month on month plunging 12.5%. year on year, the figure is

smaller, 3.5% but so much larger than expected. nick, the export numbers seem better. we are getting a sense not only in japan but also singapore, south korea. the external demand was starting to stabilizing january. however, with the coronavirus outbreak, how big of an impact could this have on the trade environment for japan and how detrimental could it be for the economy? yeah, the coronavirus is going to hit japan particularly through consumption. trillion worth5 of spending by tourists, 4.8% of gdp. that knocks about 25 basis points off gdp. look back to 2003 with sars. andthe tourists slumped actually chinese tourists were

up throug 13% on the year so it rebounded after that. you can get yourself panicking. panicking is optional on this one. i don't think it really helps. i think the chances are it will bounce back quicker than you think. nicholas smith, thank you for joining us. there are machine orders pretty ugly. a contraction of 12.5% month on month in december. don't forget, you can use our interactive tv function. you can watch us live and catch up on past interviews as well as dive into any of the securities on the bloomberg function we talk about. become part of the conversation by sending us into the messages during our shows. this is for bloomberg subscribers only. this is bloomberg. ♪

haidi: this is bloomberg markets: asia. i am haidi stroud-watts. shery: i am shery ahn. let's get a quick check of the latest business flash headlines. the sec's latest probe of tesla may be related to the financing arrangements in china, according to analysts. in a recent report, ever course as the $1.6 billion in financing tesla received to pay for a shanghai plant may have helped delay the capital expenditures. the report says the dock also could he slay why tesla spent just $1.3 billion on last year. to liftotential investor returns further after surging iron ore prices, and allow the exporter to burst the dividend to 76 aussie per share. underlying earnings jumped to $2.5 billion. the company immediately offered details of any disruption seen from the coronavirus outbreak.

shipment targeted to be at the upper end of the forecast range. fortescue one of the top trading stocks in sydney despite the concern of what the outlook looks like. we have analysts speaking to bloomberg saying the pain when it comes to the slowdown in the chinese steel sector is yet to peak. , harboring the earlier gains. one of the gold miners are doing well today after gold prices topped $1600. we do have that level at the highest in seven years. its haven demand continues to create upward price pressure. just coming online after being suspended on the early part of the session. we have ag group the british retailer,, making a nonbinding proposal for an acquisition of caltex. putting their hat in the ring given we already have -- in canada and gold trading pretty flat but holding above $1600.

let's take a look at the asian markets broadly. a pretty flat start to trading in sydney. new zealand pretty flat at the moment as well. nikkei futures seeing some cautious optimism. this is bloomberg. ♪ when it comes to using data,

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>> good morning. i am haidi stress more -- haidi in sydney. shery: i am shery ahn. welcome to bloomberg markets: asia. >> our top story this hour, the coronavirus death toll in china hits 2000. the world health organization raises beijing's response. they say that they bought the rest of the road time to prepare. singapore gives a booster shot

help fendesses to off the virus. >> enough is enough. first the protest, now the coronavirus. we will tell you why so many ex-pats are fleeing hong kong. >> some of asia's markets have just opened up for trading including japan and south korea. we could see south korea ejecting some liquidity. those affected by the virus. >> we are seeing a more risk on tone then yesterday. the nikkei 225 housing off of its 100 day moving average after four days of losses. moving higher after seven days of losses. that was the longest losing streak not just of the year but since may. both are up by .5% at the moment. we see the japanese yen moderating at the moment but both weaker versus the u.s. dollar.

this after two weeks of weakness for the japanese yen against of the u.s. dollar. we see 10 year jgb yields yielding. yesterday, it was a really rough day because south korea is home to a lot of apple suppliers. we saw the likes of samsung weighing in on this. we are seeing a rebound for the korean. they are up .7%. ozzie stocks are moving to the upside after some fluctuation. kiwi stocks are holding flat. still at those record highs. just slightly off at the moment. s&p futures are seeing a bit of a rebound. we saw some modest weakness during the trading day. the s&p 500 did close lower. this was even with the weakness that we saw with apple. the dollar spot index has been moving to its highest level since 2017.

a lot of this has to do with the euro. when you look at the dollar spot index, a lot of the way, 50% is to the euro. the euro is pulling even further pass those levels in 2017. it did not help that we had week numbers out of germany. we see the aussie dollar moving to the upside after some weakness. look at the offshore yuan trading on the weaker side of treasury yields at 157. back to you. just getting an updated set of numbers on the coronavirus data from china. the coronavirus death toll has risen to 2000 for people. there is also a report of 136 new coronavirus deaths on february 18. is trend that we are seeing generally a higher rate of fatalities and lower case is

being reported. that does make sense if we are talking about the stabilization narrative. total coronavirus cases confirmed in china rising to 74,100. casey -- tomtommy mackenzie. talk us through these latest numbers and what we can extrapolate from them. you are spot on. the infection rate, the additional numbers continue to slow but the death rate, 130 six is higher. the numbers out of hubei province, the epicenter of the coronavirus is just under 1700 additional infections. that was a slower number than yesterday. that trend it does continue. we see that as positive. world working that -- the world health organization is on the ground. globally, you're looking at 75

thousand infections now. talking to the who, they set these very aggressive quarantine measures in place. they have gone along with to slowing the spread of the virus. globally, they say they may have given other countries a 2-3 week forstart to get prepared this virus. it is a more positive word from the world health organization. it should be noted that those comments from the who have been treated by some as rather controversial given that china is seen by many to have mishandled the coronavirus in the early stages. officials are putting other measures in place to control the virus. in hubei, they are trying to track people who may not have come to the attention of the health authorities who may have treated themselves at home by using surveillance measures here

in china and hubei province to see who has been going to the pharmacy to dry -- buy drugs. tracking them to their homes and making sure they get the treatment they need. additional measures have been put in place as the fight continues. total global effects are 75,000. the death toll is a grim number, just over 2000. >> what are we seeing in terms of economic measures? we continue to see beijing, saying it will hit 2020 targets. beijing promising it will hit 2020 targets. >> the president of china said that there was resilience in the chinese economy, they reiterated that they would meet those economic and social targets and said that the efforts to contain the virus were proving successful. reiterating that line. we also have the commerce ministry saying they would do more to support foreign invested

business. they want to see more imports of medical equipment. they would speed up the approvals for businesses to start operating. just a reminder of the economic toll. if you look at travel in china, 1.4 billion fewer trips from the start of this chinese new year, lunar new year compared to 2019. 1.4 billion fewer trips. if you look at the industrial sector, oil, coal, mining, steel, that is all down. there is still more work to be done to get businesses and factories up and running to unclog the supply chains and get employees and get them back into factories and offices. said to leto passengers off of the quarantined cruise ship today. >> the end of the quarantine is over. it seems like until friday, all passengers will be able to leave that diamond princess cruise

ship. that ends a nightmare that has going on for weeks now. people contracted this infection and disease on this vessel. 540 two cases overall. japan try to ensure the public that it has done everything it can to contain this virus. what we are there new so far is 500 people will be able to disembark today. no preference on nationalities. those who tested negative and passed a final medical check will be able to get off the ship. health officials are still warning that these measures are not enough to stop this outbreak. from 50 people coming countries on this cruise ship. now they are returning home. it now raises the risk that the vessel could be the source of a fresh wave of global infections. that is why they say quarantines

are significant. they are essential and we have seen that with several governments as well. the u.s., australia and hong kong where they have a 14 day quarantine ahead of them. >> yvonne in hong kong. entirely blame this on the coronavirus. jobless rate, it was protest related. this is the longest uptick in the jobless rate in a decade now. it could get worse. bloomberg economic predicting the jobless rate could hit 5% by mid-2020. they don't foresee the economy bouncing out of this recession in the first half. essentially, that means hong kong could be headed for his first back-to-back recession ever. we have seen economists since the start of february flash their forecasts and point to a contraction of more than 1% for 2020, following that 1.2% contraction we saw in 29.

all eyes are on that budget to, next week. out next week. be sure to keep up-to-date on this coronavirus story by running the function on your bloomberg. you will find our quick take landing page with the latest andres from the global cdc go. is vrs >> the finance minister has pledged 4.5 billion dollars to boost the economy. they will post their biggest budget deficit in more than two decades with the gap seen widening to 2.1% gdp in 2020. singapore will set aside or hundred $30 million to fight the

virus outbreak and provide packages to businesses and consumers. -- 430 million to fight the virus outbreak and provide packages to businesses and consumers. of $5.6al budget billion. >> president trump has stepped into to stop his own administration's plans to stop the sales of ge made jet engines to china. -- he does notty want to use the national security excuse. some in his administration are hardliners on china. president trump announced a set onlimits and pardons tuesday. one for michael milken and a former iowa governor -- illinois governor.

released the governor from prison, commuting his 14 year prison sentence for public corruption. president trump has issued more than two dozen pardons since taking office. global news, 24 hours a day on air and on click take -- quick take by bloomberg. powered by more than 2700 journalists in 120 countries. this is bloomberg. >> still ahead, the virus fleeing has ex-pats hong kong. we will discuss the outlook for the city with robert chipman later this hour. guestnext, we have a coming up with thoughts on the bond outlook. don't miss the interview with the deputy minister of singapore. kong time, that is 10:15 p.m. in new york.

bloomberg. ♪

is bloomberg markets: asia. i am shery ahn in new york. haidi in sydney. let's get perspective on the impact that the virus is having on the australian economy. korea iseing south having multiple suspected cases. that country has 31 cases. one of the least affected across asia. the problem is trying to model the impact. we don't know how long it will last four. the comparison -- it will last for. the comparison to sars is helpful. >> china's economy is significantly larger. as a baseline, it is clearly

somewhat more challenging to short-term growth to model. have been a number of cuts to the chinese growth by two and 3%. -- two or 3%. are expecting more easing from the pboc and the loan prime rate to be cut on thursday. what would you be watching? anne: i think that the yields in china will glide lower. --have seen the 10 years for fall relatively sharply. they cut to 3%. over time, i would expect those yields would continue to fall for liquidity. regard to the bounce back in growth that is expected, i think there will be good to

reining -- trading opportunities. china'se seeing steepest yield curve since 2013. this after expectations of more easing and policy support. what are you expecting in those terms? >> over time, i think there will be incremental policy support and clearly, the abundance of liquidity will be somewhat targeted. once again, not necessarily targeted in the property sector. very much targeted at the sma's and their particular sectors that have been adversely tourism by the drop in etc.. >> will that upset some of the comingat we could see china's way in terms of high-yield issuers? it should ameliorate some

of it. i think the authorities are very mindful of maintaining the air of stability. equally, the smaller issue is i imagine there will be some defaults that inevitably happen. i think the abundance of liquidity and the focus on financial stability and confidence will mean that the larger issue will navigate through this overtime. >> will that mean upside for the treasury market if it is seen as a preferred way to shelve this since we don't know the extent of the crisis? anne: yes, that is basically what has happened, notwithstanding that the fed will is soon. -- ease soon. some of theelds are highest outside of the emerging

markets in china. the people have been buying treasuries to get the duration into their portfolio. >> we have seen across the region a consistent reaction with the singapore blowout budget. additional, japan, spending as well as the pboc. china is doing what they can. the bank of thailand is easing. dovish?alia being impactu talk about the or tourists not being able to come here, it is dramatic. anne: it is but i think the rba is tracking with its provided three easing. that has gone through the financial system. from the government perspective, the bushfires are double trouble. now, the virus. the government has selectively

been providing support. i think that is important. over time, the budget that we have in may, i expect some initiatives and in particular, focusing on some of the more strategic policy issues around climate change etc.. 's is it worrisome that the rb later forecasted not include these disruptions? anne: it is not a direct impact to australia. the expectation is that it will largely be transient. industriales to exports, we think it will bounce back. the more problematic area is the area of tourism. also, hospitality where some of that has been lost forever as it were. won'tmount of growth necessarily come back. issue with regards to

tourism numbers. we think it will be relatively short-term. it haser factor is that had an alleviating impact on the aussie dollar. we have seen that we can. that makes exports more attractive and provides some stimulus broadly to the economy. haidi just alluded to the singapore budget. we are also seeing south korea hinting at more fiscal stimulus measures. right now, they are hinting that there are multiple cases of corona viruses confirmed. there are more suspected cases that we already know about. how much dry powder do these governments across asia have in playing the fiscal card and trying to combat this outbreak? south korea is well poised, as is singapore. they have good access.

the debt will be increasing but interest rates are low and generally speaking, their credit metrics are sound. geticket is appropriate to in front of this at a time when there is a high degree of uncertainty. i think it is important to contextualize the impact of the virus. we are not expecting a permanent cut in global growth. there might be a marginal decline. combination of the fiscal, monetary and the belief that we will tread through this in the coming months means we are on 13 or 14 in asia but the global. >> thank you. that was anne.

for asiants ahead vc's. this is bloomberg. ♪

we will be >> quite surgical and ruthless in terms of targeting those parts of the business where we are not generating a sensible returns. but he spoke to us about the impact of the coronavirus. take a listen. >> on the coronavirus, it is evolving. there is a big call on how long it takes for the virus to be contained. at the moment, you can see that we had a very resilient performance in hong kong.

profits were up 3% over the year before. torall, we are continuing actively monitor the impact of the coronavirus. i think we will have to take additional provisions this quarter. you give us any indication on this slowdown in lending, the reaction in china and hong kong in this first month of 2020? alive innavirus come terms of the business? -- may coronavirus, live in terms of the business? many of our colleagues are going to our offcenters. when you look at the customers, when you look at the january numbers, they appear robust. i think we are seeing some customers struggling at the

moment. particularly those the pendant on the retail sector, some of the real estate sectors. anything that is dependent on tourism in hong kong, so far, credit matrix appears to be robust. let's get you a quick check of the latest business flash headlines. prices.iron ore this allowed the experts to boost dividends. 283% to $2.5ed billion. the company did not immediately offer details of any disruptions seen of the coronavirus. shipments are specter to be at the upper end of the forecast range. after this carmaker posted its first annual loss in a decade, they indicated margins are set to shrink.

renaultrd to know when can extend. bloomberg. ♪

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let's get you some breaking news when it comes to the australian economy. wage inflation data is crossing the bloomberg. the fourth quarter wage index is rising 2%. .5% is an increase of quarter over quarter. no surprises there. we did have the rba minutes out just ever so slightly more dovish. the coronavirus threatens australian tourism and exports as well. we are seeing some gains equity

wise across asia after the biggest daily decline we saw in almost three weeks. investors are taking a pretty cautious outlook in assessing the impact of the spreading coronavirus in regional economies as well as china. that's look at the asian markets. we are joined by sarah in new york. in bothve seen equities japan and south korea fade a little bit over the last .5 hours. still very much friendly and positive territory. you can see the nikkei 225 up .5%. the topics are moving higher after seven days of losses. about japanoncerns after that big with we saw on gdp. we saw on gdp. the losers are leading gains today. that is a lot of your apple suppliers and samsung is moving to the upside.

let's look at the commodities, how commodities are trading across the spectrum. we have seen a lot of resiliency when we comes -- when it comes to oil. it is interesting how calmly oil has been. you see wti crude oil trading at 52.16 per barrel. continuing the upward trend. proper futures are moving higher. gold is roughly steady but this after a deep dive. by 1.3ay, gold rebounded percent, closing above $1600 per ounce. highest since 2013. you can see that strong upward trend right here. we did at one point move higher than $1600 earlier in the year. that is when we were dealing with tensions between the u.s.

and iran. we will likely have to move higher than that intraday level to really get a true leg higher. he says no doubt in his mind that the quote we saw above $1600 per ounce is clearly a positive signal. more flights to these numbersee out of the coronavirus outbreak. the who is confirming about 10 more coronavirus cases. we have seen 31 confirmed cases. we could see about 10 more cases being confirmed in south korea according to local media. opens in less than an hour. let's turn to david ingles for a check of what to expect at the open. we have seen investors pretty convinced that beijing is fully committed to supporting the economy. we have seen that play out in the equity markets.

how is this showing up in the bond markets? lower andform of lower rates, especially on the short end. i want to bounce off what they were pointing out with gold closing at 1600. brought down the cost of holding gold as well. that is one iteration of it. the other is when you look at the spread between one and 10 year chinese government bonds, that is at the steepest level in four years. the one year yield in china has gone 50 basis points lower. it has been a very steep drop. it shows you expectations in the market. we could argue about whether it would work or not but expectations are that a lot of us did not see this coming. it is also showing up in your asian dollar bond markets where you have risk payments.

it is counterintuitive because the economy is going through a tough time at the moment. >> as beijing is trying to give some work -- some support to the economy, they are caught in the crossfire. you could inject the economy with liquidity, if you're stuck at home, there is not a great deal of transmission that would necessarily take effect, what else could they possibly do? >> what they are doing is interesting. theften talk about how chinese banks are used as one of the transmission mechanisms for policy as well. what has happened recently is because they are looking to backstop and provide liquidity to parts of the economy where it is needed and bringing the cost of doing business. certain groups of companies

backed -- some are higher operators. the stocks show that plays have come down quite a bit. the other part is when you look at the great operators in energy, they're asking the grit companies to -- grit copper eight or -- grit operators in energy, they are asking the grit --rators s&p is the latest to comment on the liquidity front. those companies will face them short-term. it is zero cash mode from last monday. in hong kong.vid let's head to singapore where the city is planning for the biggest budget deficit in more than two decades. the government is stepping up

support for the economy amidst the virus outbreak, outlining a massive fiscal passage -- package to businesses and consumers. michelle joins us. how did singapore address the coronavirus in the budget? we heard from them saying this is what they have been doing, saving for a rainy day. now they are going to address this head on. they're going to try to get ahead of the slowdown. >> that is right. it would be one of the biggest budget deficits since 1997. also, one of the biggest back budget deficits since 2004. they are applying as much fiscal stimulus as they can. they have thrown the kitchen sink at these problems in the budget. looking at the top line numbers, we were looking for the coronavirus package if they had one. -- number if they had one. gone toward has

virus impact mitigation. a lot of that has gone toward health but separate from funding what that industry would normally get in the annual budget. they also outlined to special packages, he billed it as an economic stabilization package. dealing with virus impact issues but also the threats to the economy from last year like the trade war and the broader original demand slowing down. that package is $5.6 billion in total. they have divvied that up among businesses and consumers and households. there is help for wage costs for businesses and getting more directly to the cost of living for the lower income. in terms of sectors, the tourism , aviation and food industries will get some special attention given that they are exposed in times of the virus impact. outside of that, away from the virus, things we may have expected, there is a delay in the good and services -- goods

and services part. seng -- hang consumers inist the transition. there is a bit more on the labor market. we could go on forever but there were some measures to bolster the domestic workers in the economy, especially for certain sectors that are seeing tighter regulations in terms of hiring locals. >> this could not have come at a worse time. we were seeing some stabilization not only in singapore with the rest of the asian region. this chart on the bloomberg showing how experts have started to stabilize. now,ve south korea, japan, because of the coronavirus outbreak, we could see some downside. what does this mean for policymakers? start of thethe

year, we were worried about the electronics rebound that was supposed to carry this region into a rebound this year. we got some clues earlier this week about how the government is thinking about growth. they did knocked down their growth forecast to 0.5%. barely growing. that is before they rolled out this big stimulus package. it remains to be seen how that will change things in the growth picture. it is certainly a depressed atmosphere. there is a lot of uncertainty. they are continuing to stress the degree of uncertainty because of the virus impact and how long this could be a. we have not seen a definitive peak in the spread. we need to look on all fronts right now. they wanted to make a statement yesterday that they are doing everything they can. that was the message that came out of it. we will have to see what others do in the rest of the region. one of the points being made is ist singapore is saying this

what we saved four, this is why we are so fiscally prudent. we will use those resources as we can. other economies don't have as much luxury to do that in the region. the reserves aren't as stable or they don't have the financing or the policymaking acumen as singapore has been able to put forth. we should see in the coming weeks similar moves in terms of .racing -- embracing a deficit we heard from malaysia cost deputy earlier this week. he said that if singapore was willing to spend, it would make things easier for others in the region to follow without getting markets to jittery. we will see how that goes as singapore does this. >> stay with bloomberg for a lot more on singapore.

we will be speaking to the finance minister later this morning. let's turn to the first word headlines. >> the death toll from the coronavirus is now past 2000. aging reports another 136 new deaths nationwide. ringing the total to 2004. one hundred 32 of those new -- 132 ofe in hubei, those new deaths were in hubei. the world health organization says china's aggressive quarantine measures probably brought the rest of the world -- bought the world several more weeks to prepare for the coronavirus. 11 million people were at the center of the outbreak on january 23.

it will take time to know for certain. passengers aboard that cruise ship quarantined in yokohama are being allowed to leave today. many face further quarantine times when they go home. princess diamond -- diamond princess passengers who have a negative test result will be allowed to disembark. some passengers are facing further quarantine time at medical facilities. after more than half a year of political and best comedy album of the coronavirus is helping hong kong's economy. the jobless rate is at 4%. its first annual recession in a decade, economist decline inting a 1% gdp this year. that would be hong kong possum

first back-to-back recession in gdp. ism ritika guba, this bloomberg. >> the coronavirus is already impacting relocation trades with ex-pats biting the bullet and leaving hong kong. robert chipman joins us next. this is bloomberg. ♪

>> this is bloomberg markets: asia. i am shery ahn in new york. haidi: i am haidi. ex-pats are leaving hong kong the the double whammy of coronavirus and protest. there is rising unemployment. there are forecasts of its first ever back-to-back annual

recessions. this is not something you can entirely blame on the coronavirus. and for been months some people, years in the making. >> many people have been from theabout this first time it started. for some people, this is the final straw. we have seen that hong kong schools still had not opened because of the coronavirus outbreak. they have been affected because of the protests as well. for those people leaving hong kong, will they be returning if there are no schools for their children? some people are living temporarily. thailand.gone to

some have gone to the u.k., some have gone to australia temporarily. family had a different situation. are concerned. >> that was bruce einhorn in hong kong. joining us now from hong kong is robert chipman. this is one of the biggest relocation companies in the city. give us a look at how your business is going right now. are you guys seeing a material uptick in those people trying to leave hong kong? robert: definitely. business ishat our very seasonal. this is the slow season of the year. usually, we are waiting for jobs to come in and it is very slow in february.

this february is one of the busiest months we have ever had. it is unheard of and unprecedented. i believe it started with the ongoing trade war and negotiations between u.s. and china. that had a small dent. started withwe civil unrest and then it picks up. in october, that started to affect our business in october and november. october, november, december and then coronavirus sets in in january. by that time, it was the straw that broke the camels back in many cases. people looking to get out of hong kong and looking to get out in a hurry. that is another thing, not only is it busy but people are making quick decisions and want to get out quickly. it is very unusual times for us. >> are these moves temporary? permanent? where are they going?

robert: it is not temporary, it is permanent. that is interesting. in our business, we have traffic , popularrtain channels channels. singapore, new york, london, these are where we see most of the business going. we are seeing a lot of that but we are also seeing it going to places that i would have to like are hometowns adelaide or naples, florida or barcelona. these are different destinations -- fromnormally see what we normally see. if people can't get a transfer back to their head office, they are retiring or may be going home were taking some time off and going back into the workforce later. that is another interesting facet that we are observing. of whether these inquiries are in danger of

reaction or being spur of the moment, i am wondering if you have had it inquiries? -- head data inquiries? -- had data inquiries? keep great track of that. we are doing 25 surveys a day. 12 or 15 jobs a day. that is a lot. that is quite a bit. tell me, inevitably of the other side, are you seeing a decline in incoming jobs? robert: it has complete lead dried up. very few.ing i won't say none but it is close to none. it is not a good time to be executives or a family or a family with kids to be relocating to hong kong.

>> especially with those shows being shut down. international schools are bracing for these exit this is of family. what are people telling you as they leave the city? what are the key reasons for not staying in hong kong? robert: school is the most impactful one. ofit is the virus, a lot people say this will come and go, we will get past it, there have been viruses in the past. in terms of trade frictions with china, that comes and goes. the one people can't get around is school. that is where you hear people argue or discuss with real concern. they don't like the idea of their kids not being in school. i think the schools have done a good job of trying to work remotely with videos and things like that. it is not the same as being in school. there is no substitute for it.

people are really concerned about it. >> i am wondering what this means for future planning and strategies for your business then? in the short-term, people moving out. do you see any change in the strategy or focus on different parts of the asian markets? robert: yes. we are in 18 cities, 14 countries. hong kong is a big market and an important market for us but not the only one. other markets are faring better than hong kong, relatively. that will be part of it. in the hong kong market itself, it will be very challenging. you don't have incoming people who will eventually turn into outbound people. never faced -- i have been in this position for 19 years and i have never seen anything like this. >> thank you so much for joining us with that really interesting

perspective from the ground. that was robert chipman from asian tigers group hong kong, he is the ceo. and watch watch us past interviews. you can become part of the conversation as well. on our instant messages shows. this is for bloomberg subscribers only. check it out on tv . this is bloomberg. ♪

the latestcheck of business flash headlines. the u.s. has ramped up pressure on venezuela targeting a subsidiary of the russian state oil giant for allegedly maintaining ties with the maduro government. there are sanctions on trading. they have labeled the penalties as illegal. an impact on the business of selling global -- russian oil on the global market is unclear. >> in a sign of the times, franklin has bought live nation. they are hoping that they will be in a better position to compete against the low-cost index funds. $4.5 million.d at

the new firm will see over 1.5 trillion in assets. >> elon musk's space x is paving the way for tourist flights into space. up to four pain -- paying totomers will be able arrange a flight. much it will cost to get you up there. sophia jablonski will join us to talk about the when it comes to the virus outbreak on markets. ♪

>> at 9:00 a.m. wednesday in beijing, eight :00 p.m. tuesday in new york. welcome to bloomberg markets. haidi: we are counting down to your open of trade in the chinese mainland and in hong kong. story -- coronavirus deaths pass two thousand in china. >> the virus forces economic booster shots. hong kong faces back-to-back recessions with the first time.