francine: equity markets plunge has risk assets are roiled and havens jump on virus concerns. china postponed its meeting. cases of coronavirus in italy top 120. stimulus measures. the u.s. president meets modi on a state visit to india. in the u.s., bernie sanders takes a closer step two frontrunner status in the democratic primary race. welcome to "bloomberg: surveillance." i'm francine lacqua in london.

definitely running away from risky assets on virus fears over the weekend. we have a number of cases initially climbing, putting extra pressure on the ftse made. -- mib. down 4%. travel and leisure down significantly so the fact the epicenter has moved from china, korea, and some of the asian economies in europe, it is freaking out investors, saying the spread may come to europe. but, two .3% higher, 1682, outside to quality italia and markets. italian sovereign bonds, dropping quite a lot as italy is the epicenter for the coronavirus in europe. plenty more on that throughout the day but let's get to first word news in new york city with viviana hurtado. viviana: president donald trump in india.

moments ago, he said he is countries can reach a "great trade deal," as he announced they are to sign a deal worth $3 billion in military sales. it also comes during his official status visit. mp spoke at a namaste tru event and will visit the taj mahal. reforms.s want sweeping boats in iran and other key cities, conservatives were likely to win amid the instability u.s. sanctions are triggering. expectation is president rouhani will largely be sidelined. now to the state of nevada in u.s. bernie sanders seizing a lead in the democratic race to take on president trump. the vermont senator did well with latinos and black voters. this undercuts criticism his support is mostly young, white, and this expect did voters -- disaffected voters.

it sets him up well on super tuesday. in south africa, this week, its budget is unlikely to convince moody's it can rein in debt. most expect the agency to downgrade the country to junk. bailouts have made it harder for the nation to take control of its debt pile. south africa is growing at less than 1% a year. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm viviana hurtado. this is bloomberg. francine: thank you so much. italy has canceled public events in the north of the country after coronavirus infections rose to 150. the jump in new cases was linked where a man who saw treatment last week is believed to have infected dozens of patients and medical staff. events have been canceled. is bloomberg rome

bureau chief. the big question i imagine authorities across the globe are trying to figure out is why has italy become the epicenter of the virus in europe? >> well, that's what the authorities are trying to figure out here. one of the reasons that has been pointed out is italy was the to haltuntry in europe all flights from china and this has an adverse effect because people coming back from china had to take a roundabout way via moscow or dubai, so they couldn't be tracked. for now, it still hasn't been possible to find the next possible of this now than more than 200 cases for northern italy. francine: is this a political crisis, which i imagine it will become if authorities don't get a hold on it.

milan'sro: indeed, stock market opened down more than 4% this morning, spreads are spiking, and italy was already in a fragile economic situation. the economy contracted in 2019 and was headed for a recession at the beginning of 2020, and the government is fragile and under attack. need definitely going to relief measures and we have published on the terminal details of the draft document government starting to prop up the government in different areas. francine: thank you so much. he is our bloomberg rome bureau chief. joining us, the managing director of asset allocations at goldman sachs. the concern is this seemed to come out almost out of nowhere. i don't know whether complacency is the right word, but markets thought it was getting better and now it is touching another

country, another region, and they don't like it. >> you are right. it was becoming uneasy in the sense that you've had equities and credits shrugging off most of the virus with a view it andd be a v-shaped recovery you can look through it. you had a few warning signals from the bond market, commodities, and even e.m. assets that the market has taken the view that it is not something which for a long period of time will with stain but now you have the next leg of that virus. francine: the concern is we have little to understand of this pathogen, so we don't know how it will behave. as a market participant or economist, how do you model it? been, for this has us, and for most people, difficult and the best you can do is look at historic parallels and there will never be inexact parallel because the countries have changed in size and importance. the virus is hitting in different ways.

you contract the pace of progression. what we and other people have done is look at high frequency data with regards to virus cases, with regard to activity patterns in china, the authority has been cleat area and on that front, you've seen enforcement in the past few days, so it is interesting now that you have the next leg that introduces a new problem. francine: what does it mean for how you look at assets? do you get out of equities because it will hurt earnings going forward? a lot of companies have come out and say it is difficult to forecast how their revenue will look like. christian: the problem was, throughout the year, the key driver of markets has been in risk appetite in search for yield. it can only go that far. eventually, bond yields aren't going down enough anymore to yield goingrch for and people look at treasury yields being at the site below,

and tips yields being at -93 pips and they wonder how much further down they can go and the short becomes large enough to push down expectations and push up real yields. our fear would be we have reached that point and that was our fear even before italy. we got to a point when the search for yield cannot support markets anymore, and the next few weeks would always have been bumpy because he worked through the data. francine: what does that mean, we will see a massive selloff? christian: we are seeing a massive selloff already to some extent. the problem is, it comes from lofty levels so we have indicators that tell us when to p based on valuation, momentum, volatility. none of them are at a level we could go into this without having much more information because as you were saying, uncertainty is still building and if you have uncertainty building come you have to be cautious to buy the dip unless

measures are positioning that you are willing to go against that. if you look at s&p futures positioning, they are at a one-year high. risk appetite indicator, you find it is pretty much neutral. from that perspective, this correction could go deeper. francine: but the markets believe central banks believe in stimulus. christian: i think they have already had a lot of that they can, no? you've seen market pricing cuts for the fed. to -23e yields fall pips. fedou do get a cut from the in the near-term, that will have some relief affect. i think in the near-term. , you won't get much news flow on that. central banks have addressed the virus in the relatively cautious way in terms of it impacting policy. my fear would be in the near term, the growth news will

dominate and there is already a lot of stimulus being baked in on the monetary policy side and that won't support markets. francine: fixed income is slightly different, right? are they just pricing things better? christian: it has been a bit like that, last year as well where rates markets were relatively before equity markets with growth concerns, pricing monetary policy and i think people have taken that template this year that rate markets are signaling something and it seems the rate market was right in the sense we are seeing that now. francine: christian mueller-glissmann from goldman sachs stays with us. plenty more coming up, including how is europe's biggest economy facing the challenge of coronavirus? we will also focus on germany and get the latest from the institutes economist. a win for bernie sanders in nevada. we will bring you the latest on the race for the white house later this hour. this is bloomberg. ♪

francine: this is "bloomberg: surveillance." i'm francine lacqua in london. increasing corona cases outside of china. the yield on the 10 year, a risk off mood. the 10-year falling to as low as 2016. also, the italian 10 year yield, the sovereign bond dropping as the country is becoming the center, the epicenter of europe for virus cases over the weekend. that is having an impact on brent oil. we will have more on that through the day. let's get to the bloomberg business flash in new york city with viviana hurtado.

viviana: barclays ceo jes staley expects to leave by the end of next year. the u.k. lender is searching for a replacement. jes staley is currently under investigation over his ties to the late disgraced financier and sex offender jeffrey epstein. from another distraction barclays as it faces challenges to meet its profit goals. to warren buffett, he spent a record $2.2 billion buying back shares in berkshire hathaway. he's looking to repurchase even more and spent a portion of his annual letter reassuring shareholders about the future of the company. he says berkshire's 100% prepared for the departure of buffett and his business partner charlie munger. jump your boost e.a. has pulled out of the running for the top job adding uncertainty the u.k. lender as it embarks on its third major overhaul in a decade. he decided to remain that unicredit. hsbc, saying it could take until

july to name a new ceo. that's 12 months after the insider was named interim chief. francine: thank you so much. let's focus on coronavirus and europe's biggest economy. stocks and risk assets plunging on fears of more cases outside of china. is the us from munich senior economist and head of business cycle and a less -- analysis. still with us, christian mueller-glissmann from goldman sachs. is it to know the impact on the economy because of the coronavirus? so far, people were expecting a v-shaped recovery. what if we don't see a v-shaped recovery? what if more numbers grow like we saw over the weekend in italy? i think we are having some

concerns about our guest hearing us. these things sometimes happen through a satellite, so let's get back to our guest in london. christian mueller-glissmann. if you look at germany, export oriented, and you look at italy even before the virus, how does the china lockdown or quarantine impact? do we understand the supply-chain clerks? christian: there are several ways it is impacting. other parts actual consumption from china, then the impact of chinese tourism falling, then you have the impact of goods from china being sold in retail all over the world, and then the supply chain disruptions. all of those are incredibly uncertain. willow the first quarter -- these parts of the supply-chain.

we are peak uncertainty, i would say. the important thing is even before that hit, we were looking in europe at relatively low export already because we have been late in the cycle, struggling to generate growth, and as a result of that, the key risk you are facing is the a lot ofus via unwanted disruptions will lead to negative earnings growth and potentially scare investors considering revaluations are. francine: is there any part of the earnings that will be impacted? are there companies that are fairly immune? christian: the market has been focused on defensive parts in the last few weeks already. lower yields make you want to own even more risky assets. so yous no alternative, have people being forced to own something inequities and where people have gone is -- gone is growth stocks, secular stocks trading at highest valuation

preening in history that premium in history. some of those are exposed. think of the big faang names. in the near term, this will create volatility so there is nothing completely safe. andcould argue utilities places that are linked to nondiscretionary consumption are somewhat safe but on the flipside, they all have an equity risk premium, so they will ball -- be volatile. francine: what do you do with something like the swiss franc? is there a brie -- breaking point for the havens? you will see central banks defending them. christian: gold as a safe haven has decoupled from most of the others. the yen has not really been a good protection in the last few weeks, and part of that is due to technicals. related to purchases of u.s.

m&a but it doesn't appear fx has done as good a job protecting in the near term. i think what has done a good job is the u.s. that is interesting. the u.s. has been able to , there have been few cases in the u.s. with regards to coronavirus. it is a relatively closed economy so people see the dollar to be the safe even right now. francine: we will get back to christian shortly of goldman sachs. in the meantime, coronavirus for newcoronavirus, four cases among the evacuees of the tested forhave now the coronavirus, bringing the total number of cases in the u.k. to 13. we will have more with our guest christian mueller-glissmann from goldman sachs. there is a clear risk off mood. a lot of the focus is on italy. at the epicenter of the virus in

europe. this is bloomberg. ♪

francine: good evening, everyone. this is "bloomberg: surveillance ." i'm francine lacqua in london. amidar risk off mood fears of coronavirus over the weekend.

new cases in italy, but i would point to four new cases in the u.k. infections are spiking in south korea and iran while kuwait reported their first cases. markets, i guess not knowing what to do with this information. it is difficult for markets. with us, christian mueller-glissmann from goldman sachs. we are trying to figure out if there are pockets of the market that are fairly immune to this, but what is your base case for china? forget, bute don't what a lot of people forget is if you look at china compared to is an economythis that is eight times bigger, but also much more globalized. the links between us and china is so much bigger. what is your base case for china? christian: there will be significant shock to growth in the first quarter, possibly the second, but what is critical about china relative to the rest of the world's they are likely

to respond with a significant policy stimulus and they have the space to do that. we heard this morning several voices coming out of the politburo. it does feel like we are going to get much more supportive growth. lookingwhy it is scary at europe, where we know the policy is more constrained on the monetary and and fiscal side, so clearly it feels like china, having been at the front and center and the first pricedd, has already risk premium and has the ability to react and that makes china at the margin a less risky. is there a danger they react with the wrong policy tools? liquidity because a lot of companies were on the brink of failure. what does a policy mistake look like in china? christian: it is very possible always policy is not appropriate and fills bubbles further. there have been concerns that if they loosen policy too much, it

will lead to leverage buildups, housing crisis -- prices increasing. at this point, stimulus is required and good and at the margin, you might further down the line get negative side effects but at this point, any type of stimulus that can help growth and consumption is positive. my sense is the market will react positively. francine: christian mueller-glissmann from goldman sachs stays with us. in the meantime, this is what you're markets are doing. a clear selloff among equity markets. italy is the epicenter of the virus in europe. gold, bid 1688. s&p down 2.6%. this is bloomberg. ♪

francine: global selloff. equity markets plunge, risks assets are roiled, and havens jump on virus concerns. china postpones its annual legislative meeting.

coronavirus hits italy. cases in the country top 150 as the nation becomes europe's epicenter for the outbreak. authorities mull stimulus measures. plus, namaste trump. the u.s. president meets modi on a state visit to india. back in the u.s., bernie sanders takes a step closer to front runner status in the democratic primary race. well, good morning, good afternoon, good evening. this is "bloomberg surveillance ," and i'm francine lacqua in london. this talk festers down 3.4%, the most it has fallen's mid-2016. -- fallen since mid-2016. now, over 1.5 hours into the trading day, let's chicken on european main stock worries with annmarie hordern. on europeanck in main stock movers with annmarie hordern. notarie: coronavirus has

that has spread not just to beijing but to the lawn. 50,000 people are outside milan. also rising concerns in the u.k., airlines and anything to do with travel getting hit hard. another sector also getting hit hard today as well is luxury. ridgemont down within 5%. kering, they are getting hit hard as well. it is not just about what is happening in asia, but of course also now more of the story moving into europe, and that is putting the stoxx 600 and all these companies -- only a few in the green this morning. francine: annmarie hordern with main stock movers. let's get to first word news in new york city with viviana hurtado. viviana: we begin of president trump, who says he is optimistic that the u.s. and india can reach a "great trade deal," as he announced the two countries are ready to sign a deal on

military sales. namaste trump event. later he is sent to -- set to visit the taj mahal. angela merkel's cdu hitting a election low in hamburg. -- it upended her secession plans. the social democrats securing the clear victory, but the biggest gainer, the green party, with its share of the vote doubling. now to south africa, where the budget this week is unlikely to convince moody's that can eight -- that it can rein in government debt. most expecting that the country will downgrade to junk this year. nation takeke the control of it that pile, south africa going less than 1% per year. we end your first word in malaysia, the prime minister

resigning. the controversy -- he wanted to oust a man who was expected to succeed him. but in 2018 the tw joined forces to win the election. global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries, viviana hurtado. this is bloomberg. francine? francine: thank you so much. let's get the latest on the coronavirus threat. china has retracted an earlier orienting easing order in wuhan as the virus adds further in asia and the middle east. kuwait, bahrain have also had cases. from theto the science epidemic with paul hunter, professor of medicine. professor, thank you. i know you spoke two weeks ago, with us your you told me watch

out, because we are going to see more cases than two weeks which is where we are seeing the new cases. so why -- >> i wish i had not incorrect. francine: we all wish you were not correct. epicenter?y now the is it because they did something wrong, or is it impossible to control? because the level of how you are infected -- it could be a sneeze or a handshake, very easy. paul: i don't know why the cases have gone up in italy. i'm not aware of any results that have actually shown how the virus has gone ultimately from china into that population italy. hope lee that hopefully over the course of the next few days we will know a little bit more about that. i think it is probably as much a matter of luck than anything else that people are moving around in a way that the disease would be able to get a hold. it is quite as

infectious as you suggested it it certainly is spread by droplets read, which sort of his coughing and sneezing, and also touching surfaces that people have coughed on, and then spreading that. that is certainly a risk. what happens now is very difficult to be absolutely sure. i suspect we will see quite a next twocases over the or three days. whether the italians will manage to constrain the out rake to the area of italy, or whether it is theonstrain the outbreak to area of italy, or whether it goes to the rest of europe. francine: how difficult is it to contain something like this, where you can have very little symptoms. you can feel like you're having the common cold, but you have the coronavirus and you spread it to others.

and also you have symptoms but not necessarily a fever. paul: yes, that is part of the problem really, because with were infectious when they were quite ill, most infectious when they were quite ill. by then, most of these patients had been identified and hospitalized. in this, there is evidence to suggest that people are more infectious a lot earlier in their illness, and that is causing a big problem. you know what it is like when you are starting at home, maybe i am not going to be so bad, i will carry on going into work. and then by lunch time are feeling really wrong. this is almost certainly the case here, and that is going to toe life much more difficult probe, especially in areas where the disease is already spreading. francine: i know we have very

little data, but can you describe the virus through your words? people are saying it is not that much more of a concern than a really strong influenza. and other people who say this is probably the worst thing that hit us in 100 years. how would you describe it? paul: i think both of those extremes are not totally true. if you look as an individual case, it is not necessarily that much more severe than you would , probablyeasonal flu more like pandemic flu. but the problem is that at the moment, the immunity to this virus around the world is virtually nonexistent, so that the potential for it to spread at very high attack rates is there. you areou get it and

ill and you are over 70 or if you have pre-existing disease, then the mortality rates have been quite high. at the moment, the death rate is running us around 3%. that is almost certainly going isrise as the outbreak brought under control. but against that is the issue about this, there are probably more people out there who do not actually get to hear about. that it is estimated at about 1%, and that is right. that is actually quite a bit higher then we get with influenza. the death rate. it is more lethal. worstether it is the thing to have happened, i think -- i don't think it is going to totallysarily catastrophic. francine: thank you so much, paul hunter, professor of

medicine in norwich medical school. still with us, christian mueller-glissmann from goldman sachs. president trump in india gave a $3 billionech saying in terms of a defense deal. i want to talk to you about the u.s. and also emerging markets. how where emerging markets doing before the virus? christian: you did get some interest in the emerging markets because you sensually had headwind from the u.s. -- you essentially had headwind from the u.s. china trade tensions. you finally got people interested in emerging markets again, and then this virus hit. francine: does that mean you would selloff emerging markets right now? i guess they concern is also, if the virus touch is one of the emerging markets that is not china, you could question the firepower of the health service. emerging markets is

one of the most procyclical points of the market. you see korea this morning being under significant pressure. in the near term, to go against that is quite difficult for investors because you have a new uncertainty factor. if you step back from the virus, you have a significantly low yield, and a lot of places in emerging markets helping you carry. it feels like now opportunities to kind of buy dip eventually. in the near term, as the uncertainty builds and you have spill over from china to the rest, it is difficult to find the core bottom. along equity but touch with europe where you are focused on one area where you are having significant negative impact. what do you do with the u.s. economy right now? christian: the data out of the

u.s. looks good the u.s. has been completely insulated from the virus. i think that is probably a data lag. hintsam do expect some via supply chain -- some hits via supply chain, via consumption. but on the economic side, with regard to the currency, what would be critical to me will be the combination of the u.s. political risk, which is eldin, and people have not been focused on that because of the virus. but also how the fed will react. if there is a risk of disappointment. francine: we were talking about emergency economies, and the tide benchmark -- the tie benchmark drops. is there anything that you would buy if it would fold up too much? emerging markets and structural reforms, if he looks cheap, do you hold on longer term?

china seems to be the market at the epicenter, was another former -- under performer last year. the longer-term story, which you want to look at if it sells office much and because of the virus. outside that, if there are cyclical parts of emerging markets which are selling off because of the global concerns, but also have significant virus impact, we would look at that as well. calling the bottom on any of those would be difficult near term. francine: thank you so much, christian mueller-glissmann, managing director of strategy allocation at goldman sachs. fromll hear the latest italy. that is coming up next, and this is bloomberg. ♪

francine: good morning, everyone very good afternoon, everyone. extra market checks as the markets are really on a tear. if you look at the markets, concerns about coronavirus, now that italy is the epicenter in europe, with many more cases outside china. the stocks are being pummeled. havens jumping. the fears surrounding the virus are mounting. i am looking at treasuries. they are jumping with gold. if you look at stocks, they are pretty much down globally. i am looking at the nasdaq futures, down 3%. the ftse in italy, at the epicenter of the virus, down 4.2%. we will have extra market checks every 10 minutes. let's get to the bloomberg this flesh with viviana hurtado. viviana: we begin with warren buffett, who spent a record $2.2

billion buying back shares in berkshire hathaway. he is looking to repurchase even more. he spent a portion of his letter reassuring shareholders about the future of the company. he says berkshire is "100% prepared" for the departure of mr. buffett and his business partner, charlie monk her. he says markets are under the risk of the coronavirus on the global economy. by his estimates, global growth with expanse a massive drop from 3.5% to just 0.5%. we also spoke about the announcement of a new ceo at ubs. >> investment and wealth management are changing as much as retail banking, moving from mortgage to markets. that is where you have the expertise. you might have seen some of our competitors have just moved into more digital and asset management services. that is where we need to go. viviana: that is your bloomberg

business flash. francine: let's get more on italy and the coronavirus. italy is studying tax relief and financial support in the area, as it has become the upper except a european epicenter. the government is locking down an area of around 50,000 people near milan. joining us on the phone from milan, the chief economist and founder of italy's economics. thank you for joining us. how much of this is going to be a blame game? how much of this will lead to italian politicians bickering and not doing enough in terms of the and stimulus? >> good morning. it is going to be bickering, but actually the problem is that the measures that are taken are very significant, and although quarantine is recommended, one has to take into consideration

that it is going to paralyze the core part of the country, so you are looking at already a very significant hindrance to growth. probably nothout much else in terms of stimulus for the economy, part of it due to domestic politics, apart due to european politics. government imposed a lockdown on an area in milan of 15,000 people. how would that work out, and what does it mean for that region economically? actually, it is much bigger than the 11 towns that are in lockdown because three key regions have closed down schools, all types of gatherings, so carnivals, sport events, everything is pretty much shut. so you are looking at an area that usually contributes more than a third of italian gdp, for

only a week. if it is only a week, the impact will be minor. but if if it does not go away by next monday, then i think a contraction of 1% of gdp in italy this year is plausible. francine: how bad is that for a already fragile administration? raffaella: italian politics is always very active, crisis it finds order. they may come down and we may not see early elections this year, but i would say in any case, it is highly unlikely to survive beyond 2021. francine: what is the stimulus that would actually be most effective most quickly? well, i mean, ideally, people would like to see something like china, although that is not completely

viable. you would want to see fiscal stimulus for companies and a significant credit easing as well, especially for s&e's but we are talking about things that are highly unlikely in this situation. that being said, what perhaps could be more likely, more feasible but still fairly unlikely is that the european debate about the physical strategy or europe, where to focus more about genuine , bigercyclical stimulus enough for the structural challenges, as well as valuing advancement -- valuing investment in human, as in public health care in this situation. francine: thank you. fromis raffaella tenconi medline. stocks plummeting around the world. the stoxx 600 in europe dropping the most the brexit result in

mid-2016. we will bring you all the andst, live from asia next, this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance ." stocks plunging around the world. president xi jinping has urged cash to bear no effort to to spare no effort to curb the to spareus outbreak -- no effort to curb the coronavirus outbreak. first of all, how big a deal was the proponent -- of the literature? >> this would be the first delay in decades, but this would, as expected -- we don't know yet when the new date will be. it had been planned for march 5. this is china's largest political event, i china unveils its economic target, defense spending projections, and other key policy decisions. it is also when they announce major policy changes. given all the travel

restrictions across china, transporting thousands of officials to beijing and putting them all in this him area poses significant transmission risks -- in the same area poses significant transmission risks are this decision does come just days after beijing quarantine 69 people in the west area of beijing. this is where the central government is headquartered. those people had come into contact with officials who had tested positive for coronavirus, so no problem -- no surprise we are seeing this delay. francine: when you look at the strategy that president xi has put in place to make sure people are quarantined, is it working, or does he need to double down on efforts? selina: you did have xi telling moreeds of thousands of -- than 100,000 government officials on a conference call there is no effort to contain the outbreak. but you have seen the local governments try to balance how to slightly loosen them of the quarantine and travel

restrictions in order to boost the local economy, so you have heard the central government urging local governments to do that. so now the economy is running at about 50% to 60% capacity. to get moret migrant workers into the factories, in terms of overall healthy travel restriction quarantine has been working, it delayed the spread in china by two to three days, and around the world by two to three weeks. there in selina wang beijing. "bloomberg surveillance" in the next hour. tom keene joins me in new york. we will have a full round up of the markets and the impact of the virus. ♪

francine: global selloff. equity markets plunge, risk assets are roiled, and havens jump on virus concerns. china postpones its annual

legislative meeting. coronavirus hits italy. cases in the country top 150 as the nation becomes europe's epicenter for the outbreak. authorities mull stimulus measures. plus, namaste trump. the u.s. president meets modi on a state visit to india. back in the u.s., bernie sanders takes a step closer to front runner status in the democratic primary race. well, good morning, good afternoon, good evening, everyone. this is "bloomberg surveillance ." -- sodays after selling many cases in italy, 150, two deaths, the markets are really falling out of bed. if you look at the ftse, they are down 4.2%, and we are speaking about extra measures. tomko you have been covering it up -- : you have been covering it all day.

we will do a lot of makeup charts today as we do extra data checks as well. this is dow futures, and basically, it is a 1000 point drop in the dow futures in two trading sessions. francine: i have a great chart looking at the vix. the vix is something like 38% higher today because of all of these unknowns. we will have plenty more market checks throughout the day. let's get to first word news in new york city with viviana hurtado. with presidentin trump, who began a 36 hour trip to india with talk of billions and weapons deals. an estimated crowd of 100,000 people heard the president speak alongside prime minister narendra modi. resident from saying -- the president saying the u.s. will find deals with india of $300 billion. china risking a renewed spread of coronavirus, trying to get people to go back to work. central and local governments

loosening the criteria. for factories to resume operations, president xi jinping urging the country to spare no efforts to contain the outbreak in beijing. beenegislative session has postponed. south korea is warning its nation is under threat from coronavirus, with a drop in exports and consumption with china. in the past week, they have gone from just over 30 two more than 760. at least 700 people have died. we end your first word in iran, with a big victory for hardliners. a semi-official news agency saying they won a majority in parliamentary elections. rebuke toen as a president rouhani's engagement with the west. .ran has been battered tha global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i'm than 120 countries,

viviana hurtado? -- i'm viviana hurtado. this is bloomberg. to data, equities, bonds, bonds, bonds, and bonds. negativefutures are 720. oil does not move that much, 5143. i would have thought it would be 51.23.- the curve flattening as well. here's where you see the movement. the vix exploded. that is six big figures on the is thet to a 22, floated right word there. deals come in with a two year chairman t call to powell yield. call to chairman powell yield. gold elevated to say the least. francine: that is your havens,

tom. we are looking at where the markets are. tom: yeah, reality. italian 10his is the year yield, so that is 0.75. 4.2%, andid is down the european stocks overall are down 3.3%. so really, nations seem to be struggling to keep the coronavirus epidemic from spreading further beyond china. tom: we will link to all of this not only with market reaction, talk about central banks, financing, investment in this, but also try to give you a briefing on these movable parts. peter hotez is scheduled to join us from baylor university at the top of the next hour. right now, our chief virologist us,hina, selina wang joins i make light of it, but these are very serious issues as we go week after week of this.

what is the estimation bloomberg news has of the efficacy of the quarantine in china? we are facing that in korea, we are facing it right now in italy. does the quarantine, has a method been of benefit in wuhan? selina: you did have the world health organization say a few days ago that it was delaying the threat. the massive quarantine in hubei province -- the massive quarantine in hubei province. you are starting to see continued stabilization in hubei province, but the cases continue to rise around the world, raising the alarm that this could transform into a global pandemic. italy recently imposing a lockdown on an area of 50,000 people near milan, closing several universities as the cases there rise to 130 from just a handful a week ago. european authorities are struggling to understand where exactly the outbreak had started and originated from. in south korea, you had a 20

fold increase in five days to more than 600 cases. that country has put the alert on the highest level. now 14 countries have placed stronger entry restrictions into that country, and you have more cases emerging in other parts of east asia, as well as new cases emerging in afghanistan, bahrain, and kuwait. francine: selena, what are saying of that what are people saying about international spreads? -- what are people saying about international spreads? with the high level, the reform the government has been building hospitals in record time, as well as state criticism that china needs to bolster and increase its medical spending as well as this delay of the

people's congress, which we had reported earlier. this does not come as a surprise because we have seen an increase in terms of the outbreak in beijing in the capital, around 400 cases. you have a local government official here who is infected, so this is centered in the west side of beijing, where the central government is headquartered. so no surprise here that the country is delaying this meeting. tom: that goes to a very good point, in that within a given city as large as beijing or milan, there seems to be an effort to quarantine a section of the city. is that working? is that identified as a constructive path to a better outcome? selina: it has been really interesting because of course china, from the top down, has issued that there is a need for the lockdown. but when you see the execution, it can be quite fragmented. you see the types of community lockdowns in beijing really vary

area to area. some areas are much looser and relaxed. other areas, especially on the west side, because of the outbreaks, it is very strict in terms of how many can leave it is ames, so really bit haphazard in some ways. it is more effective in some areas than others, and there has been speculation for analysts that a lot of these efforts from china is more to show the people that the government has things under control, that they have the best safety in mind to show these great grand gestures of lockdown. francine: selina wang in beijing. joining is now in london, kim .raff, and kit juckes there is a lot going on with the markets because of this virus fear. what does the market actually not look at? a lot could argue that the day before yesterday, or last week,

they were complacent, that fundamentally this was the end of the world. >> i think there was this creeping suspicion that this could get worse, but first of all, until last week it was largely contained in terms of growth and new cases and growth in totality is to china. and then there was also a belief that whatever policy response might come, it would be forceful enough that it would result in some v or u shaped recovery. today we are starting to see that that might be more complicated. you are seeing exponential growth take place in places outside china. we had a number of virologists who came on bloomberg who said you have to wait two weeks because it could spread. how unexpected is this? kit: it is not completely unexpected in the sense that most of the people that you talk to, that i talk to, understand

that idea that we all travel a lot. you meet somebody people in so many airports. so it cannot be a complete surprise, but it is true that we have sold off asian assets pretty hard all along. sold off the current one and we understood why the equity markets underperformed. but we have not sold off western equity markets anything like the u.s. equity market. the chart does not look scary to anybody yet. we have definitely not even begun to price in the idea that this is going to seriously effect economic activity on the side of the world. tom: i want to bring in a chart that kit juckes notes here -- the equity chart, correction in bear market. i just got the correction bar up this morning. this is logged where the distance of the yellow line matters. we rolled over to here on friday, and on monday morning we are only down here -- i will call it one third of a path to a

10% correction. has theyour world, why foreign exchange moved? i have gold moving, yield coming in with a vengeance. even equities start to move, and i don't see that much moving foreign-exchange. why not? kit: not much yet. most haven currencies correlate better with the vix than they do with general fear, and that is one driver, that the yen has been held back by the lack of volatility, but also by the fact that we're worried about japanese growth. -- it tells you when you don't like haven currencies but you don't like the world, gold is the nonprofessional gold trading expected. if it is a general global economic weakness story, and a lot of the traditional havens don't come out of this looking terribly good. what people have done, and may continue, they will go on buying the u.s. dollar until they worry

about u.s. growth enough to get shaken out of it. you cannot buy the euro this morning with sort of enthusiasm on the back of the story. this is not a viable trade. so, yeah, currencies are relative, and if we are all relative, we will suffer together. it is not going to be about the foreign-exchange market. but gold tells you a story. the officialt does state v-shaped recovery meter look like this morning? how v-shaped are we right now? tim: i am suspecting it will not be v-shaped or u-shaped. the way i think about it, you take a square root sign and flip it around. you will get a recovery, but there will be a deadweight loss. he will not be able to go back and reschedule lunar new year and all the economic activity around that. have lost output. but how high we get back is --

we don't know the nature of policy response per we don't even know where the bottom of the v or the u or the square root sign really is. i suspect we are not talking about a 100% retracement. francine: thank you both, tim graf of state street global. and kit juckes. they stay with us. let's take a look at your market. there is a risk-off move. -- a risk-off mood. virus, which is why we are seeing a global selloff in stocks, u.s. futures also down. nations seem to be struggling to keep up with the coronavirus epidemic from spreading further beyond china. gold up. this is bloomberg. ♪

tom: "bloomberg surveillance," worldwide. francine lacqua and london, i'm tom keene in new york. the markets are on the move. great correlation between gold, the ultimate safe haven, equity markets, bond yields are lower with prices higher. right now you will get more beta checks -- more data checks. dow futures down 737 points. ther hotez will join us in next hour from baylor university, we hope. the vix well out over 22 right now. tim graf with us with state street, kit juckes come with society general. kit, let me go to the equity markets with you. we are beginning to see the announcements come out, revenue,

one company on friday, revenue growth shortfall as well. what percentage of companies are visible right now? do you feel like we are getting a lot of messages, micro information, on an equity slowdown, or is there more to come? tim: the high-profile last week was apple, but apple is hardly the only company that will have supply chains that will be affected and stretched as a consequence of this, especially now as we talked about in the last segment, where you are seeing exponential growth in cases in europe. we have no idea what is to come, more in western countries, so i fear this is probably a foretaste of what is to come. this is already looking to be a challenging year for global growth, and therefore for equity earnings growth as a consequence of what we have already seen. if this extends. and i think that is the real risk, it is a staying longer then investors are getting comfortable with.

as we try to rationalize this -- and it is one big rationalization event, as one big role -- as every rollover is. 4%, near anear official correction of 10%. do you reallocate? do you raise cash? do you deploy cash and go in as you go down? latter, my guess, would be no. i don't know if it is time for reallocation go because fixed allocation has rallied. aggressive fiscal response -- even out of europe, i think the proof will be in the booting -- in the pudding. cautiousstill of a reallocation. what you're considering is whether it is a good idea to hold it, or barbell be portfolio because we will be in a low growth world. there are pockets of growth if

this does begin to settle down, where growth will return. we can debate over the nature and the shape of that, but that barb elling i think is the right -- that bar bellying is the right approach. francine: does the right -- those the fed have the resources to be able to deal with whatever the virus throws at it? kit: know, we have some central banks where making rates evermore negative, i know that the ecb thinks that can help, but i'm not clear that the evidence is that strong that that is the case. i don't think we can turn an economy around, a crisis, very easily of this kind. francine: even if the virus cases don't go up that much, if people are fearful, they don't spend. so the consumer that has been propping up a world economy, will they be more cautious? or a lot more cautious?

kit: the problem in the united states is here is this really long economic cycle, kept alive through policy in two previous many downturns per try saw that previous many downturns. inio previous man downturns. it does not take an enormous amount to tip the economy over. the fed does have more room to react than any other major central bank, but i think that tim is right, whatever -- we are not at a point in a cycle where global economic cycle is in great shape going into this. tom: kit juckes with us with socgen, tim graf with state street as we look at the market moves. we are thrilled to bring you in the next hour, peter hotez, head of tropical medicine at baylor's national school. he has been with us numerous

times through this crisis. peter hotez, absolutely nailed the failure of the medieval quarantine, as he put it, a few days ago. we will get an update on the efficacy with dr. hotels. this is bloomberg. ♪

viviana: this is "bloomberg surveillance." let skate your bloomberg business flash.

-- ceo's wills not be going to -- he has been leading a turnaround effort at unicredit. uncertainty at hsbc is trying to decide whether to replace the interim ceo. now to barclays -- it is reportedly ready to search for a replacement for ceo jes staley. he expects to leave next year. he has had two run-ins with british regulars since joining barclays in 2015. he is now under investigation for ties to the late disgraced financier and sex offender jeff epstein. to buying credit car might -- the maker of turbotax will pay about $7 billion in cash and stock. credit karma gives users assets -- access to credit scores. they also recommend products such as personal and car loans.

tom: a quick data check. we're looking at equities, bonds, and fx really doesn't move, is really the headline for today. we have not seen equities for late into equities or bond movements. 1.0817.oticed there is euro has not moved. that is the biggest drop since 2016. investors definitely staying away from travel stocks, definitely staying away from luxury shares. if you look at the ftse, it is down even more, down 4.5% rate plenty more market checks coming your way. this is bloomberg. ♪

tom: good morning. the markets are really on the move. futures are down -85.

in new york city, our "first word news." viviana: we begin in china where the nation is adding to the confusion over the coronavirus. earlier today it announced the quarantine over the city of wuhan had been eased and now it says that statement had been issued without approval. since been sealed off january 23. almost 80,000 cases of coronavirus are confirmed. more than 2600 people have died. italy appears to be in panic mode over the coronavirus. it has been stunned by europe's biggest surge of the disease. it canceled the remaining days of the venice carnival. several universities are closed. there are more than 130 cases of coronavirus in italy. in the united states, bernie sanders breaking away in the

race for the democratic nomination. he scored a decisive win in the vada. he did well among black and latino voters. it also undercut criticism that most of his supporters were young white voters. in malaysia, the prime minister under -- on excitedly tendered his resignation. it all has to do with a fight over who will defeat him. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you so much. we are transfixed by the virus, by this epidemic to a presumed future pandemic. peter hotez will be here in about 25 minutes. we didn't look at the fixation of america which is on politics.

pulling all of this together. over the weekend, i never know what i am going to have to read up on and what i really read up on this weekend was a changing dynamic latino vote. with a vengeance they voted for bernie sanders in nevada. >> that was the real significance of the nevada outcome which is that he unlike in 2016 was able to win the latino vote. i think that sets him up for a strong showing on super tuesday, where states like california are also voting. it looks like he's got unstoppable momentum at this point. democratic voters go to the polls on saturday in south carolina where joe biden is ahead in the polls but bernie sanders is catching up. unless some of those candidates drop out, candidates who have

done not as well, it seems hard to see how bernie sanders can be stopped. tom: texas is not the texas of johnson or george bush the younger. does senator sanders go to charleston on tuesday and do a debate for texas? >> i think the outcome of that andte will be very crucial all the firepower will be focused on bernie sanders because of the momentum. i expect the attacks on him from all other candidates to intensify during that debate and that people will continue to question whether or not his plans and up. up -- his plans add up. even if joe biden does well in south carolina i think bernie sanders will be so far ahead in terms of the delegate count and set up well for super tuesday

that it looks hard to stop him. -- right before the last election but if you look at the polls now, would he beat president trump on a national level? >> many of the polls do show him beating trump nationally and some polls show him beating trump even in those crucial swing states. i would argue it is early days yet. there are some crucial swing states where i think it will be very hard for democrats to win with bernie sanders at the top of the ticket. francine: this is something the markets have been looking at. the policies bernie sanders have been talking about are not necessarily market friendly. is there a chance the centrists make a comeback? is,he real question here even if bernie sanders continues to do well, will he win a

majority of the delegates coming into the july convention or does he just win a plurality of delegates in which case you have a contested convention, and i think that is really where the howtion marks remain and does he win a contested convention and how long do some of those other candidates stay in? they have been able to stay in longer because of how fundraising has worked this cycle. look at how much elizabeth warren was able to raise based on her debate performance last week. tom: why are these people doing single digits? why are they still in the race? mr. stier, the senator from minnesota, even warren. at this point, is it unusual for you to see single digit people staying in the race? carolina, it will

be very difficult for some of those candidates to stay in the race. i thick it is just the nature of the race this cycle which is that many have been able to raise money from individual donors to stay competitive or to try and stay competitive in those races but i think the pressure will be intense for some of them to drop out if they failed to do well on saturday in south carolina and i think for sure after super tuesday they will be forced to drop out. out atephanie had phenomenal essay this weekend comparing democratic-socialist's with social democrats, comparing withe sanders americans the nordic model, with the swedish model as well but from how far is the senator from vermont from a scandinavian socialism? >> what he is trying to do is

unprecedented in the united states, pushing his medicare for all proposal, banning private health insurance. even in some of those european countries which have socialized medicine you have private health insurance that operates in tandem. the u.k. is a prime example. hass curious that he pursued this label which is politically unpopular instead of pushing ahead with the plan itself which does seem to carry the support of voters. people are concerned about the state of health care in the united states and they do support a widening of the state's role in providing health care, so the packaging is pursue that he would this democratic-socialist mantle that he has been doing that for decades -- but he has been doing that for decades.

i come from vermont where he is from. he has been pushing that profile for years. francine: every time the past couple of months we have had to come on and say how would you model bernie sanders, they would say it is too early and now you need to start modeling it. >> there is still this mindset that says he is less likely to win in a runoff against president trump but the more he leads, the less likely it is to change things. there has been a downplaying in markets and the polls are very close. we are just going to have an awakening worrying about political risk. this could change u.s. policy in quite a big way. -- foreign exchange market the combination of easing fiscal policy and the other trade wars.

change would change that. francine: tim? >> i would say it is still too early but as kitt said, there will be an awakening and he has a chance. a lot can change between now and november and i still suspect even in november there is going to be repricing. so much of what he needs to accomplish will go back to congress and we don't have a clear set of guidelines as to what that will look like. you will need to flip the senate. inasmuch as you need to price in the risk, there are still other effect you need to think about as well. tom: another pull out. -- poll out. carolina,ot on south not even on super tuesday but looking at new york. this is siena college of new york. a new york pole and the

adjacency with the mayor of new goinggoing out to 20 -- out to 18%, bernie sanders still winning in new york on this poll and the former vice president marginally behind as well but the flavor of new york, we will see many more of these polls in the coming days. mayor bloomberg is the founder of bloomberg lp and the television and radio property as well. there is a poll that speaks to the adjacency. the senator of south carolina is going to do the adjacency for south carolina. do you presume the senator from south carolina will go with his good colleague and friend, vice president biden? >> reports indicate he will endorse joe biden. they have been close for many years and whether or not that helps joe biden really break into the lead in south carolina and give him momentum remains to

be seen. i still think he is now facing much more competition as a result of how well bernie sanders has done. tom: very good. stephanie baker, thank you so much. with our two other debt -- our two other guests as well. futures deteriorating. we are down almost to new weakness and part of that is gold on a 1700 watch but a nice bump up in gold and weaker japanese yen. stay with us. with more data checks through the morning on bloomberg radio -- radio and bloomberg television, this is bloomberg surveillance. ♪

francine: this is bloomberg surveillance. tom and francine from london and new york. angela merkel's party suffering a defeat in hamburg over the weekend. we learned moments ago that the cdu will hold a party meeting on its april 20 -- on april 25. the cdu will meet to choose a leader and that is according to an official. us, with this -- still with our guests. what would you do with germany at the moment? we are thinking about what kind of impact this virus will have on the economy and what kind of impact tariffs from the trump administration will have on carmakers. is as fast astics

anywhere else, so it leaves this clinical vacuum. one thing going for them, the ,ermans have the fiscal easing they should be easing fiscal policy and blindingly clear to some people running the country that they shouldn't. problem,o have a big that is how it will get solved. in the meantime, the country is hoarding cash at the personal and corporate level at at -- at an astonishing scale. the cdu has done so badly and i don't know if that it isack to -- or if something more structural or systematic. >> we were talking about bernie sanders in the previous segment,

in the election over the weekend, frein did really well. also moving away from the center which the cdu has represented, not just at the german level but as its leadership to the rest of europe and that is breaking apart, and fragmentation is .appening in germany coalition building has been part and parcel to german politics are recent years but it is looking like that is going to no longer be the case. and how close is germany for that matter all of europe to a recession? venice shutilan and down in the last 48 hours, maybe they will reopen but what is the meter on europe and recession? things were marginally -- they were picking up a little bit.

there was a little bit of rate is but the growth sufficiently weak if you're going around -- if you're going around about 1%. if you have a central bank, there is nothing you can do with fiscal leadership that does not want to do much and it is quite easy to sort of lose momentum, just dribble away to nothing and we can almost slide into a recession without noticing if nothing happens. faded away over two sessions and we are down 4% on a blended basis. in equities as well, do you see catharsis or do we just fade away on the economy of europe? >> it is unfortunate but we will have to spend as much time watching virus numbers for europe as we did for asia. the honest answer is i'm not sure because we now have to think about this in the context

of western markets where the ability to control borders or the willingness to control borders is less. underneath it all, you will have some response to this and whether that is fiscally in europe or even more strongly in asia, i suspect that is to come but there is still lost output in this convention. the ability to enter a recession and the hurdle you have to get above is much lower and therefore the disappointment is greater. francine: thank you very much for joining us. whatin the meantime is your markets are doing, a very clear risk off move. losing 7%. south korea down 4%. treasuries are up. crude oil is slipping. we are clearly in haven jumping

and fears growing about the virus. this is bloomberg. ♪

viviana: you are watching

bloomberg surveillance. jp morgan reportedly will enter the british consumer banking market in the next few months according to sky news. they will offer a range of savings-and-loan products after they change brands. that could pitch jp morgan against goldman sachs. in a shakeup for italian fashion house product, the company star design are has been named as the cocreator. product returning to growth but political protests in hong kong and the coronavirus are hurting the fashion brand. warren buffett gave berkshire hathaway investors a preview of the future. in his annual letter, he said he will be hearing more from his top executives. they are seen as top contenders to eventually replace buffett. he is 89 but he has given no indication he will step away anytime soon and that is your

bloomberg business flash. tom: i have been thrilled at the coverage of catherine of berkshire hathaway. bloomberg has tried to do careful analysis of the finance. year for the last 10 years, pretty good but just pretty good. in omaha, why aren't you at the lovefest? >> i am in new york to analyze the letter we wanted to get to the numbers of how berkshire hathaway did last year. it was not a stellar year for them. tom: did apple bail them out? not a preferred share kind of transaction. did apple save the day for mr. buffett? >> apple definitely helped. what berkshire is facing is this problem of buffett has too much cash on hand and he can't find good ways to deploy it in higher

returning assets. apple is the biggest bet of his in recent years. francine: why is it so difficult to deploy cash? >> he is looking for well priced deals and that is hard to do when you see the s&p at this level. he is really careful and that is why many shareholders really appreciate buffett, saying that is fine and let him wait until the markets reconcile. for others, i think the weighting has been a bit too long. it has been a decade of shares underperforming. francine: do we have any idea of what kind of company he would be interested in? is there a place in the market that is unloved where he could get those kinds of deals? >> interestingly enough he bid for tech data core at the end of last year and i think it is a perfect company for him. and theon technology ecosystem around it and he

actually failed to win that deal because of private equity. 500 byderperformed s&p 283 basis points. as he stuck by that? >> i'm sure it doesn't make him sleep particularly well. we will hear more from him today and the main question is going to be, is he able to find the ability to increase that. tom: thank you for the direct reporting on berkshire hathaway. francine? francine: i am looking at markets and the markets are down. gold is up and treasuries are up and futures are down 2.7%. the biggest loser when you look at the various indices in europe, it is not surprising that italy has become the epicenter of the virus in the markets seem to realize that authorities around the world of struggling to keep the virus from spreading further beyond chinatown. we break new lower.

this is hard to see, the actual chart we use. that is the dow jones industrial futures breaking down a thousand points. we are going to do much more on the markets today but i wanted to tell you without question, our interview of the day that we asl have here on the virus it passes from epidemic to a presumed pandemic. peter hotez is scheduled to join us from baylor university. don't forget the president in india. this is bloomberg. ♪

[ fast-paced drumming ] [ fast-paced drumming ]

italyhis morning, milan,

is 5000 miles from wuhan, china. austria suspends train travel across the alps. a packed show while at armani, they walk to an empty house. in moments, peter hotez of baylor university. how close are we to a pandemic? lowsow just making futures moments ago and on the road to south carolina, the senator from vermont, simply he leads. francine it is without question, a chained -- a changed italy this morning. how did you respond when you saw the -- francine: it was during milan fashion week. a lot of those shows went ahead.

the icons of italian fashion decided they would close the doors. that was yesterday afternoon but surprising i think to london markets is how quickly this escalated. we left work on friday and the virus seemed to be in control and then actually you had 450 cases in milan that almost came out of nowhere. there is a lot of blame and italy about this person did this , and there is also a school of thought that thinks they are testing people more than other european countries. a tv readys not chart. this is what we look at what we monitor the markets. we are down a solid thousand points on equity yields. herell do the data check in a moment and right now, your "first word news" in new york. viviana: president donald trump

with talksp to india of billions of dollars in weapons deals. 100,000 hearing the president speak alongside the prime minister. president trump saying the u.s. will sign military deals worth more than $3 billion. china is trying to get people to go back to work. looseningment is criteria for factories. urging the country to spare no effort to contain the outbreak in beijing. korea, a warning as fragile economic recovery is under threat from the coronavirus. the number of confirmed cases in south korea soaring in the past week. diedast seven people have and in iran, the government confirming 12 people have died

from the coronavirus and now there are 64 confirmed cases. it was a big victory for hardliners in iran. they won a majority in parliamentary elections and that is seen as a rebuke to the president's engagement with the west. iraq has been battered by u.s. economic sanctions and the instability is empowering conservatives. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thanks so much. a quick data check as we get to dr. hotel is in a moment. equities, bonds, currencies, a little bit of a sameness and flatness. all yields come down with screen, oilhe next really beginning to show some movement. , a 30s a two year yield

year bond. gold elevates. francine: gold is indeed elevated, looking at treasuries, there is also jumping, if you look at european stocks, there is a clear selloff in luxury and the travel sector and italy under quite a lot of pressure. the ftse down because it has become the epicenter in europe. tom: we have had the joy of speaking to virologists to bring you clear conversation on this virus. pedigree ofhas a yale and rockefeller university and drives for the national theussion on virology at national school of tropical medicine. we are thrilled to get an update from dr. hotez this morning. you absolutely nailed the failure of quarantine and you told us a week ago that

quarantine was medieval. have we failed that quarantine? dr. hotez: it looks that way. it looks like we are seeing significant levels of transmission in multiple parts of the world. as you pointed out, we've got it in northern italy. it is in iran and they're talking about 12 deaths in iran. means we are upwards around 1000 cases in iran. it is in afghanistan. a big game -- a big epidemic underway in korea. the world health organization has not declared this a pandemic yet but i would imagine that could easily happen in the coming weeks, and so we have to prepare and this is going to be pandemiccant epidemic,

and something we are going to have to figure out how to get our arms around it. tom: so many listening and watching in the middle of nowhere. milan, italy is not in the middle of nowhere. do you envision today and in the coming days, can stain -- constrained travel in italy, across continental europe and for that matter, in seoul, korea? dr. hotez: people are struggling with how to respond. yesterday the border with austria, the train between northern italy and austria was closed for a while and then was opened. there were discussions about whether to do this in france, switzerland, so i could easily envision that. i don't know that it would have much of an impact in terms of preventing the spread of the epidemic you can imagine the level of instability that will cause and i think it is why we declines in to see

some of the european markets this morning so i am very worried, not only from a health perspective but from a global stability and economic perspective as well. francine: if we focus on the virology of this, what do you know, how do you stop this? because we are very limited in terms of data and we know that you can spread it without having any symptoms, how do we deal with it? dr. hotez: the only way we deal with it right now is we don't have a lot of good technologies for this we can discuss why. we still don't have a vaccine ready to go. the level of diagnostics is not where we want to be where we can get a highly sensitive point-of-care diagnostic in order to diagnose cases. you have to do things the ancient way which is now that we

will have transmission in multiple areas, closing of borders may not be adequate. it means limiting congregating in crowded places. it means frequent handwashing. wherens avoiding areas you think there might be high levels of transmission. that is easier said than done because that may mean decreasing the amount of contact we have with people at the workweek -- at the workplace and encouraging people to work from home. if you are making stuff, if you are manufacturing, you can't do that. this is going to have to be looked at on a country by even a countyand basis. francine: let me cut you off there because civil protections might be used in response to the coronavirus and have now said

there have been five coronavirus deaths in italy. dr. hotez, i am hearing a lot of what is not working but if there is one thing you would put in place right now that you think would work. use having machines which take your temperature. what would you do? dr. hotez: the most important thing right now is every country in the world right now and in most localities have to have emergency preparedness plans. you have to assume that there was a likelihood there will be transmission and i think the most important thing right now is protecting the two most vulnerable populations in this epidemic. the first are health-care workers. we have seen tragic deaths of young health-care workers around the front lines who are exposed to this virus. we have to get them ready in terms of having adequate protections.

ensuring the safety of our health-care care workers on the front lines and second are those , there at greatest risk greatest risk of dying which is individuals over the age of 64 those with underlying chronic conditions. looking at those in nursing homes, we have seen terrible stories in china, large numbers of deaths in nursing homes and they have to be protected as well. also, hospital emergency preparedness, getting ready to have large areas where we can accommodate isolation rooms, that is going to be critical. tom: a briefing right now in italy. , one more question. what would be your advice to the cdc and their advice to the president of the united states?

dr. hotez: i think we need to team-- first of all -- the that we have in place right now is pretty good, if you look at the leadership at the department of health and human services. -- pretty good about warning us about what is happening. the problem that we face is if and when we have a significant level of transmission in the u.s., we have a lot of what i call -- in our county level public health response, so we have -- new york city has one of the belts -- one of the best health departments in the world in the same is true of harris and houston as well, but we've got some counties especially in some of the less populated

districts and counties of new york state, texas, you name it that just don't have the staff or the expertise to respond to that. creating that network is going to be a number one priority and what is interesting about our vaccine, have a vaccine we have developed. we are not seeing anybody knocking down the door to get our vaccine into clinical trials, so that we still have to accelerate that. there is a possibility we could have a vaccine ready. we are still in discussions with some of the big international organizations about applying and revising our grant proposals for our vaccine. this is not the time to be doing this. we should be in clinical trials now. tom: thank you so much. peter hotez of baylor university. a great day to speak to mr.

manus. so much to talk about. you can see the deterioration in futures and they did move on the deathslian line of five in italy as well. how we are, explain to us you execute investment opportunities here. this is terrible news. people dying and we see the market reaction. how do you prosecute the opportunity given the fear that is out there? you just have to keep your eye on the ball which in this case, you are investing in a low rate environment and that is something we are quite skilled at and unfortunately have gotten used to. i think what we are seeing, and you see it every friday is people don't want to take the risk because they don't know what the risk is and i think this is a recurrent theme.

many things out there in the world today in the virus is the key one right now, which no one on wall street is really an expert on. we are relying on other people, we are getting conflicting advice, we don't know what the range of outcomes are and even if we did know what the range were -- range of outcomes were, we are left with a scenario where economists are taking down their growth outlooks and we have had to take down our growth outlook for china, for japan. as every new bit of information comes out, you have to revisit those forecasts again and again in the range of outcomes is so wide and the inability to assign probability is such a problem. when you think about how to invest, you tend to think in terms of block risk on, risk off

so every friday, people are like i don't want to go home over the weekend because i don't know what is going to happen. tom: that is an important chart. dollar-yen is one of the great global -- right now. drew has been more than patient and we will dive in to the markets in a bit. more data checks with futures at -93. more. up, we will do much mr. sanders leads out of las vegas, out of nevada and onto south carolina. he may be can paint -- he may be campaigning for texas. looking at texas as well. much more coming up. this is bloomberg. ♪

francine: this is bloomberg surveillance. tom and francine from new york and london. let's talk politics. read, anmorning must absolutely superb essay out of the massachusetts institute of technology. it clinic on the flipped phrases of socialist democracy beats democratic socialism. ,he senator's momentum democratic socialism has been completed with social democracy. social democracy refers to the policy framework of nordic countries of many years ago. the u.s. needs effective regulation to rein in concentrated market power. workers need a greater voice in the market must be readily did, not sidelined. that is a wonderful essay on the

theories of senator sanders. lester is a principle of government relations and has dealt with republican politics, particularly of the illinois flavor over the years and is part of the faculty at john hopkins university. managing superly tuesday and the latino vote in texas. delver me with a republican view, the democratic socialism of the gentleman from vermont to the latinos of texas. >> i think a big part of this is bernie has momentum. he's got excitement. people like him. he is a charismatic guy and he has a simple message that resonates and he has blown away the moderates in the democratic field and i think that is resonating with white voters and increasingly with african-american voters and now with hispanic americans as we saw. tom: how do you respond to the

idea that he is a democratic party trump and that the president ran around and sideways to the many gathered in 2016 and mr. sanders is doing the same thing this time? >> i think that is exactly right. the parties themselves have been a little too close to the middle for their bases. that was true for trump in the republicans in 2016 and it seems evident that is what is going on with the democrats now. the middle is not holding. what will be interesting as we go forward, assuming sanders ends up rolling toward the nomination is can he move to the middle? trump did not move to the middle. he kept appealing to his base. will sanders keep with that trump strategy of appealing to the base or will he try to move to the middle to pick up those independents that could bring him victory? francine: a number of poles saying president trump has a net

approval rating that has climbed to around 49%. disapproval at 48%. is it because people don't like the democratic candidates or is it because they like the president or his economic policies? >> ethic it is the success of the economy. the economy has never been better. unemployment is low. people feel secure about their job prospects and their futures. that translates to support for the incumbent. those numbers are startlingly good for the president. it helps him that the democrats came adam with impeachment and failed -- came at him with impeachment and failed. that makes him look better. tom: we've got to continue this conversation. there is too much more to speak of. i will run out of time here with lester munson but i want to speak to him about the realities of senator sanders and what we are seeing in the democratic policies at the

house and senate levels as well. news out of malaysia. resigned minister has and they have now appointed an interim prime minister. futures right now, -86. this is bloomberg. ♪

tom: bloomberg surveillance. we do data on days and we need to do data. you will see that across

bloomberg television and radio all day. the vix up six big figures. 20 is the long-term average. is seven basis points as well. francine: the market is realizing that authorities have little handle on the coronavirus situation. italy's richest areas are in lockdown as the virus seems to be spreading to hospitals which is why we are seeing a big move on the ftse. down 4.7%. it is a clear risk off mood. we are seeing havens. this is bloomberg. ♪

>> the big forecasting had a great now isn't the virus but the base case wherein the first weeks and months of 2020, this

does not particularly have implications for the key element of our forecast which is what drives our monetary policy. tom: the largest challenge the european central bank and their wonderful economist philip lane -- on friday, what is extraordinary is how much news flow has changed since that friday, trying to keep up is drew matus of metlife strategy. chairman powell has to deal with all of this. he is going to have to get out the posturing,th what is going to be the actual central-bank response to the supply-side disruptions within the equilibrium of the world economy? >> he have to ask yourself two questions. the first is kind of where are you and they are relatively easy

monetary policy. they thought they had a problem with the money market system. they have been working on that and getting to a point where they are comfortable. the second thing is in the environment we are talking about, given the nature of the problem, can you solve it with interest rates? that is yet another unknown in the world right now. my guess would be you can't solve it with interest rates. if people are worried about their families or their health, 25 basis points doesn't do it in terms of encouraging people to go out there and spend. if i was the fed right now, i would think about keeping my powder dry and letting everything play out as much as they can, aching sure the system itself continues to function, and then hitting when you need to hit as opposed to when you want to hit. tom: you and i remember chairman greenspan and everything was we are in control and we are measured up or measured down.

why can't chairman powell come we're going tok, go in 25 basis points on an emergency basis but everybody needs to be ready for us to give see 25 points back when we the v-shaped recovery in the virus. why can't they be more nimble? >> it is not about being nimble, it is about what do you get for spending 25 basis points? i am not comforted by the fed spending 25 basis points and i am not waiting for somebody to declare something a pandemic. tom: chairman powell has to step up here. but 25 basis point is not going to make anybody feel better. francine: is it basically that people stop spending? i am a little bit fearful and my neighbor is fearful and we are not sure so we don't go and spend.

if the consumer lets us down in the you are -- in europe and the u.s., what does 25 basis points from the fed actually do? >> exactly. you wait until you can actually encourage people to buy things. wait right now, given the fact that the fed is on a pretty easy monetary stance. they actually bought some time by remaining so stimulative for such a long time. they bought some time to wait and respond at the appropriate time when they think they can get the biggest bank for the 25 basis points -- biggest bang for their 25 basis points. francine: here is president trump with the first lady of the united states. he gave a rousing speech talking about defense spending. i believe the president is about to talk again? i know we were following the speech earlier, calling it trump

namaste. everything from a 3 billion-dollar defense deal to bali would as well. wood as well.lly is: the taj mahal 17th-century. think after the pilgrims and the english civil war. there is a model liam. -- a mausoleum. worldthe one place in the where everybody of every walk of life simply falls apart in the sunset. it is supposed to be extraordinary. francine: it is absolutely beautiful but if you look at the relationship between the u.s. and china, you can see that president trump managed to to go atpresident modi one of his rallies in the south

of the u.s. and today what was very telling is that president trump talked about deals. he said he will sign military deals worth more than $3 billion with india and this is just the start of a two day state visit to the south asian nation. across water as well and to the west of india towards the persian gulf, so there is a military interest for the united states as well. we will continue to monitor the president and the first lady. with our "first word news," here is vienna hurtado. viviana: china is adding to the confusion over the coronavirus. earlier today and announced a quarantine in the city of wuhan had been eased but now they say that announcement had been issued without approval. wuhan is the center of the epidemic.

it has been sealed off since january 23. almost 80,000 cases of coronavirus are confirmed. more than 2600 people have died. move to to italy -- we italy, that nation appears to be in panic mode. with theen stunned government imposing lockdowns near milan. they canceled the remaining days of the venice carnival. there are 219 cases of coronavirus in italy and five people confirmed dead. in the united states, bernie is breaking away in the race for the democratic presidential nomination. in the nevada caucuses he scored a decisive win. mr. sanders did well among black and latino voters. that could set him up well for super tuesday voting. it undercuts criticism that his support is mostly white young disaffected voters. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by over 2700 journalists and analysts in more than 120 countries.

francine: italian stocks and bonds tumbling under threats the coronavirus may push the italian economy into a recession. the government stepped up efforts to contain europe's biggest surge of the disease. joining us now from rome is our bureau chief. ist is unclear at the moment why this is happening in italy and not france. where there different measures taken that other nations had a better handle on? >> that is one of the many puzzles. one hypothesis that has been put forward by the world health is -- all flights blocked from china to italy very early on. out where exactly they

were coming from and where they would be going and this has spread ining the italy difficult to trace and track. francine: we are just getting some breaking news out of china. this is the pboc saying they will offer new measures to hedge the virus impact at a proper time. they are not doing anything yet but they will keep an ion monetary policy and remain -- keep an eye on monetary policy and remain flexible. what can the italian authorities do to prop up the economy? >> not much because italy is already in a not good economical and fiscal position. italy's economy was already heading toward a recession before this shock and as we know, money is tight because italy is running at a large debt to finance.

the suspension of mortgage payments to people in the affected areas but so far there is no figure attached to these measures so they should be decided soon. tom: italy runs out of trains. i look at the other train sites and it seems to be business as usual at our reporting across italy out of our rome bureau, are the trains running on time in italy or are they beginning to slow down amid this epidemic? >> at this point it seems everything is fine. are closing in milan, museums and universities. milan itself is not as lot -- is not in lockdown, only some areas. for now, this only affects

50,000 people about 15,000 -- about 15 kilometers from milan. francine: thank you very much. in the meantime we are looking at treasuries advancing. yen and gold is up. s&p futures are down. if you look at the european stocks, they are all falling as investors try to figure out how authorities can keep the coronavirus from spreading beyond china. the ftse down 4.6%. we are tracking what the president is doing in india. ♪

tom: bloomberg surveillance. good morning everyone. the president in india right now. down futures at negative 740. drew matus is with us from metlife looking into investment. much of this is the guesstimate of recession. i am pretty certain america is not in recession but what level of buoyancy is this economy right now? there has been a drop in job openings but there were still more job openings than there are unemployed. very low levels of layoffs. and you don'tjob have to worry about being laid off, you tend not to save money

so you are spending. the u.s. consumer is driving the bus and what we will have to see is whether corporations join up and start investing and spending more money or whether at some point they decide to pull back doinvestment hiring and we that long slow path toward recession. tom: right now the path of the politicians is tuesday for the debate in south carolina and onto that vote and onto super tuesday as well. is the backdrop for super tuesday and america that is actually pretty happy with the economy? don't tell senator sanders that. >> a lot of the data shows consumers are in a very good mood. if you go back and look at the all-time high and consumer confidence, we are right near the all-time highs of consumer confidence. how are things right now? also from an expectation standpoint.

unless the job data turns, it seems like consumer confidence numbers will hold up. francine: what are you looking forward -- looking for? are we creating quality jobs in the u.s.? labor numbers can hold but if people are unhappy in their jobs, it is not that great. >> that is true. there is always the job quality story but it is a labor market so we are trying to match people and you do want people being happy in their jobs but at the same point and i will take a step back. that is one of the reasons why the low level of layoffs is viewed by some including myself as being a little bit of a negative. you want people who are quitting their jobs or being laid off because they can migrate into jobs that might be better fits for them where they end up getting paid more and doing better and have better prospects. inre is a hint of stagnation

the labor market where people are afraid to quit their jobs and as the expansion continues, everyone keeps talking about a recession because of how long the expansion has been, that is not going to get better. in the meantime we are seeing a lot of job openings and we are seeing a lot of people being hired every month which would suggest people are getting jobs that they are if not thrilled with at least willing to work at. like a bar game on monday morning. drew matus in this absolutely historic shout out. the president of the united states and first lady looking at the original design for his casino in atlantic city. that is the extraordinary taj mahal with the sunset. it is absolutely extraordinary. francine, you have been there. comment on the walk for the present did -- for the president -- comment on the walk with the president is to the original

17th-century building. princess diana has walked that walk and this is one of the wonders of the world. it is important and i think interesting to see president -- i'mctually advancing sure this will speak to the indian communities in the u.s. that is a move that he is doing because of the election coming year. there is such a big community over in the u.s.. tom: very good. the president and the first lady on their trip to india. expected.ntry this is of course at the 5:00 p.m. level. morninggoing on this beside the president's visit to india. markets on the move. drew matus with us, thank you so much. this is bloomberg. ♪

francine: this is bloomberg surveillance. i am francine lacqua in london. we are looking at the presidential visit of the president of the united states with first lady melania trump looking at the taj mahal. the camera pans so we also see his first daughter with jared kushner. ivanka trump and jared kushner being briefed on -- i'm sure they both looking at the taj mahal. we are waiting for confirmation to see what they are looking at. you can see the president together with his wife doing that walk which is familiar to most people that have walked to the taj mahal. the walk from when you arrive to the actual muzzle liam -- the actual muzzle liam -- the actual leum. liam -- mauso

aswill be interesting to see the president and first lady walk to see exactly what they make of it. we understand that president trump may or may not give a press conference a little later on. he gave a rousing speech when it came to defense spending and contracts being signed with india. joining us is our executive editor. thank you both for joining us. let me kick off with you. how is the president being welcomed in india? is he liked i the indian community? >> a route -- is he liked by the indian community? >> a rousing welcome. the drive from the airport to the big cricket stadiums, the world's largest cricket stadium. 100,000 people turned up to listen to the president and prime minister.

it was a captivating speech. president trump spoke about it -- spoke about friendship with india. --y close pretty to partner very close strategic partner. tomorrow. his visit they intend to sign a defense agreement. far it has been welcomed and there was a huge turnout and now as we speak, the president and the first lady are at the taj mahal. francine: what does president trump hope to achieve with this state visit? has knownnister modi

how to put on a good show. importantionship is to donald trump for a number of reasons. side is moving very slowly because in india there are no votes in trade, no incentive to get a trade deal so trump will have to push them along. voters, indian voters in the u.s. tend to be relatively economically conservative and socially conservative and quite supportive of donald trump. this is an opportunity for him to play to that base. warm words from modi could be a good endorsement for him. knowine: we know the -- we the leaders like each other and that modi actually showed up at a rally in texas. >> yes they do. there seems to be quite a mutual

admiration between donald trump, he likes strong leaders and modi certainly takes a hard line at home on certain things. there is the kind of friendly rapport. they do generally seem to like each other. that said, modi is going to take a hard line on trade. he knows himself that he faces risk at home unless he does so. francine: what can you tell us about the popularity of modi back home? off a massivee election in may 2019. veryeadings remain popular. -- the country has solid moves to the right. controversial a citizenship tos

persecuted minorities, except muslims from three countries. that has been a v -- that has been a bit of a damper. he remains quite popular in india. francine: thank you both for joining us. in the meantime, the coronavirus outbreak is spreading further outside china. we have five deaths in italy. italy is the virus epicenter in europe. we are seeing a huge selloff when it comes to the equity markets. there is a clear risk off mood with havens including gold being bid. this is bloomberg. ♪ tv just keeps getting better.

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the virus spreads outside of china. fall, goldnk, yields soars. and world leaders at the g20 in crete. their cry for fiscal stimulus to combat slowing growth. welcome to "bloomberg daybreak" on this monday, february 24. it is a very difficult trading day if you are long equities and short treasuries. you had the s&p down by over 2%. if we stay on this track, you are looking at the 10th largest point loss for the s&p ever. we had also seeing lows not seen in treasuries since 2016, down eight basis points, looking for potentially an all-time low. we would keep you updated. i should point out, we were holding around the lows of the