francine: the morning after yesterday's coronavirus has driven a selloff, stocks are down again. united airlines withdraws its guidance. demand for iphones in china plunge 28%. fighting the infection, the white house asks congress for $2.5 billion to battle the virus and work toward a vaccine. good morning and welcome to "bloomberg surveillance." in london.ne lacqua

these are the markets, not as sharp as the selloff is yesterday, but markets seem on hooks accounting for new cases coronavirus, and what happens to quarantines and isolations, and what happens to the economy. european stoxx 600 flat. fell 6% if not more, now down 0.3%. the u.s. 10 year yield, a good litmus test when looking at risk, s&p futures up, they were lower a short while ago. at 10652. let's get to the first word news. >> we begin with u.k. prime minister boris johnson facing complaints of bad faith ahead of talks with the eu.

both sides are accusing the other of backing away from past promises. johnson says it will take priority over a trade deal. bernie sanders and michael bloomberg has escalated, mr. bloomberg criticizing bernie control record, and sanders suggesting bloomberg could not win a debate against donald trump. sanders is favored where bloomberg will be on the ballot for the first time. michael bloomberg is the owner and founder of the parent company of bloomberg news. in china, apple iphone sales dropping in january. the product falling 28% compared to the previous month. february's numbers are likely to be far worse. it is unusual decline. we gharvey weinstein is

convicted of rape, the verdict coming two years after the allegations sparked the metoo movement, but he was acquitted of the most serious charges. he is due to be sentenced on march 11. he plans to appeal. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. much.ne: thank you so let's get to our top stories, the spread of the coronavirus from italy to iran. the outbreak is sparking concerns of a pandemic. the world health organization calls the new cases deeply concerning but says it is not yet a pandemic. we are joined by simon french, chief economist, panmure gordon & co. and nathalie macdermott, academic clinical lecturer, king's college london she has had. significant response to

epidemics. let me start with you, it is unclear how much we understand, do we trust the numbers, and how difficult is it the contain something that is easily spread? nathalie: i think this last weekend things have gone up a notch, we are seeing transmission in countries we did not see transmission before. and we are seeing a change in not know,on, we do did someone travel and spread the virus, and how has it arrived in that country? are possiblyn iran an underestimate because the vast majority of people seem to disease, ite suggests we may be missing the people who have a more mild infection. francine: what do we know about whether this is curable or not? nathalie: for the vast majority

of people it is a relatively mild illness they will overcome easily. people were over the age of 60 and have medical problems can infection, and the mortality rate is about 1%. francine: is it that much higher than influenza? are we having a debate over whether this is a big deal, because authorities are struggling to contain it. nathalie: it is behaving like pandemic flu rather than standard seasonal influenza. the mortality rate is consistent for what you would expect to see with pandemic flu. francine: we think we are becoming virologists overnight, you are trying to figure out if we are looking at a recession. simon: it is very hard, this is why it is hard for experts in the medical sphere rather than economists. to translate that what it means for market reaction, like what

we saw yesterday in global equity markets, this became a multifaceted spread. we did not know if it originates from china or if there are new clusters, and the economic disruption may be more significant. might just be in china, it may be greater. irrationalso the aspect, the uncertainty that we do not know how big this will become, and it is a flight to safe haven assets while we sit it out so we can price it more accurately. francine: when do we have more data to understand what will work from the authorities pointed view? there is debate whether cases have gone wrong because the government did not do enough. you are used to dealing with these crises. we travel so much, how do you have people on lockdown? nathalie: that becomes

increasingly difficult when you have it spread to different countries. if you are focused on one or two countries, you can implement the seizures so that people traveling to an infected area need to isolate for 14 days. when you are dealing with a large number of countries, it becomes more difficult. they are taking good measures now to contain this in italy and prevent spread outside. francine: will people isolate if they think they should be ok? nathalie: people said isolate if they think there is a chance they have been exposed, if they come from an infected area or had contact with someone who could be a case. this virus potentially is transmitted before people develop symptoms. people might not know they are unwell to take measures to isolate. francine: we were asking if the market is complacent.

what happened yesterday? it hit italy, and the market finally did notice? simon: i think that is right. if there is potential disruption to the wider european economy, italy is where there is relatively -- as long as the rules on borders remain in existence -- there is relatively free movement of people, therefore the risk it spreads to other parts of europe and disrupts the industrial base starts to impact economic activity in that economic area was the thing that was new yesterday morning. seems to haveu.k. a good handle on this. is it because of a timeline, or are u.k. authorities doing something different? nathalie: i think u.k. authorities are doing some thing

different from italy. the u.k. authorities havethe u.n asking people to isolate for a significant time now. time will tell, at the moment everything appears under control, but it takes just one individual who does not know they are unwell to start a transmission that involves us chasing our tails. we are vigilant about that, and hopefully it will not become the scale that it is in italy. francine: this is such a new pathogen, it is hard to have proper data, but do we have data whouggest how many people are sick go on to infect? calculatione last we had was 2.5, but that is an average. you may have people infecting one person, but other people for whatever reason are infecting 10. the 2.5 is an average, and if individual, youan

could have a significant problem on your hands. that is something we need to be vigilant of. long way offare a from a vaccine, but do we have data to better understand what we are dealing with? nathalie: the chinese authorities were very quick to put out the sequence of the virus, and we already understand the structure of it and how it varies. actually there are plans in place to have a vaccine, and they are going through animal studies, and some may be beginning safety trials in humans, but those can take months to complete. francine: thank you so much simon french, chief economist, panmure gordon & co. and nathalie macdermott, academic clinical lecturer, king's college london. secures $500ntech million to expand in europe. this is bloomberg.

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francine: economics, finance, politics. this is "bloomberg surveillance ." i am francine lacqua in london. >> a plan for oil drilling off of australia's coast that follows and environmentalists campaign who says it is too big of a risk to the marines because system. the company says it will not drill there because it is not commercially competitive. prudential plans to push for changes to the company that separating its u.s. and

asian businesses. it also wants the firm to pivot strategy from growth to long-term value creation. resolute, part of a $500 billion round as $5.5 billion as one of europe's most valuable fintech startups. the company plans to use the cash for product development and increase banking operations across europe. that is your bloomberg business flash. francine: this get more on the economic and market impact from the coronavirus. three weeks after the world health organization declared a weeks ofergency, after headlines on the coronavirus, the u.s. had its biggest drop in two years. this year's gains were wiped out. ,oining us now is jane foley

head of fx strategy, rabobank. also nathalie macdermott, academic clinical lecturer, king's college london and simon french, chief economist, panmure gordon & co. i have seen a couple of banks putting out notes saying they are readjusting their forecast. and is thatjusting, a case of it gets worse? head of fx strategy, rabobank banks are of the adjusting their forecast. the dollar is a good safe haven for a lot of people. the swiss franc was the case, but the dollar has more yield for investors, and looking at the news flow last week, with respect to japan, that news was too close to home. the yen gave up some of its safe

haven. dollar strength will be there for as long as the coronavirus. regain some of its value, but not to the extent we have seen it. what happened yesterday in the markets, we are discussing it with simon, markets realize they cannot control it. are we seeing corporate issuance going down? are there secondary effects we have not realized? jane: markets have been complacent up until now. more corporate guidance. companies are abandoning their guidance or are providing profit warnings. toare seeing that come back the market narrative, and likely why we are not being a sharp rebound in markets today. it is a wait-and-see approach. francine: we are seeing

where we have struggles with the supply chain. apple is a case in point. what are the data points you would be looking at? simon: at the moment, if we wask yesterday's selloff predicated that this might come to europe, we will look for disruption to initially -- and in the last couple of days it has been strong. there was strong data out of france. we will start to see that in the coming weeks, and if the initial surge paradoxically in the data points, may stockpiling takes place as concerns come down the pipe. ,tocks translate into layoffs in terms of hours worked and reduction in supply capacity. it will start to impact earnings. francine: this is a function on the bloomberg terminal, and it

captures how much some of the share price has fallen. you basically see the price change since the outbreak. you have carnival down 25%. this is fairly obvious because leisure and, luxury. is there anything else to watch out for? laura: the deep selloff yesterday was driven by travel and leisure stocks, there is room to reprice. as well in europe we are seeing the mining stocks, automotive stocks under pressure. these markets are under pressure of china and the supply chain. whether we see any retracement in those sectors. francine: when you look at the peripheral european currencies, how problematic can they be? they are open like asian

economies and are reliant on europe. they are reliant on europe and germany. germany has seen how exposed the eurozone is. that takes the story back to china and data coming out of japan and south korea and southeast asia. .e see some nasty stories we saw in australian steel year.er down 70% on the a concern, and that is on the back of what they perceive to be a lack of trucks getting into the chinese plants. firstl seeing the bankruptcy because of lack of tourism. tourism is hit hard for new zealand, australia. we will see some bad stories in terms of revenue, earnings, and we can project that to europe.

francine: the swiss franc, will it become a more popular safe haven? it would be relatively popular, but i would prefer the dollar. they have a negative interest rate, and with the policies, a lot of investors will go back to the u.s. dollar. if we look at growth in china, and you assume growth in china -- thatw, it is natural would be a natural phenomena for hit.onomy that is we can expect the pace to slow. panic send off more signals, but it is inevitable that if you assume china will slow down that we will get some

weakening as well. francine: thank you jane foley, head of fx strategy, rabobank, laura cooper from our bloomberg team and simon french, chief economist, panmure gordon & co.. as europe's fashion week of coronavirus headline, we will focus on retail and luxury, how bad will they be hit in the coming months? this is bloomberg. ♪

francine: i am francine lacqua in london. let's talk commodities. simon french, chief economist, panmure gordon & co. asking, why kept on the market was going up, especially equities, and they said the fed is here, then we see the white house asking for $2.5 billion in funding. does that make a difference in dealing with a slowdown brought on by something like a pandemic? simon: it does not make a difference the actual economic activity, but it supports sentiment. it is a support a factor in markets holding their positions last week. what is interesting, and we are about to talk about commodities is the price reaction and

inflation environment central bank's will have to deal with. there is a good bit on the bloomberg terminal on the .otential deflationary impulse a stronger dollar pushing down u.s. inflation and giving the federal reserve room to maneuver to cut interest rates. the alternative story is surprise constraints on commodity movement, that will be inflationary, harder for the fed to respond. francine: simon french, chief economist, panmure gordon & co. stays with us. coming up, a fintech startup secures $500 million to expand in europe. we will speak to the cofounder later this hour. this is bloomberg. ♪ good morning!

oh no, here comes the neighbor probably to brag about how amazing his xfinity customer service is. i'm mike, i'm so busy. good thing xfinity has two-hour appointment windows. they have night and weekend appointments too. he's here. bill? karolyn? nope! no, just a couple of rocks.

download the my account app to manage your appointments making today's xfinity customer service simple, easy, awesome. i'll pass. francine: economics, finance, politics. ins is francine lacqua

london. european stocks are lower again. companies feel the hit -- united airlines withdraws its guidance, mastercard says revenue growth will slow, demand for iphones in china plunges 28%. and, fighting the infection -- the white house asks congress for $2.5 billion in extra funds to battle the virus, including working towards a vaccine. well, good morning, good afternoon, good evening, depending on where you are in the world. this is "bloomberg surveillance ." i'm francine lacqua in london let's check on european stock movers with annmarie hordern. annmarie: a lot of equities are under serious pressure, getting a breather today. .2%, travel leaders, one of the biggest sectors out of the gate this morning after having one of the worst days since brexit yesterday. pushing first -- for

some plans in asia. and than sag, down more than 12% as a supplier in london. and a supplier in london. the reason it is plunging so much, the cfo and ceo simultaneously resigned on the same day. withine: annmarie hordern your main stock movers let's get to first word news in new york city with viviana hurtado. viviana: we begin with the coronavirus pair the outbreak is not a pandemic yet, even though the spread is "a plea concerning," according to the world health organization -- " deeply concerning," according to the world both organization or the total number of cases worldwide tops 80,000. the south china morning post reporting hong kong is keeping at schools closed until the end of easter. the best bet to finding a treatment for the coronavirus, according to a senior world

health organization official, it may be a new experimental drug from gilead. it has been rush to clinical trials in china. the results could be available in weeks. in the united states, harvey weinstein has been convicted of rape and a criminal sexual act, the verdict coming more than two years after allegations against the former hollywood model -- hollywood mogul sparks the #metoo movement, but he was cleared of the most serious charges, including predatory sexual assault or he will be sentenced on march 11 and plans to appeal. mr. bloomberg criticized mr. sanders gun control record, and sanders suggesting that bloomberg could not win a debate against donald. sanders is a favorite against -- the favorite in many super tuesday states. igo uber is the founder and majority owner of bloomberg lp, the parent company of bloomberg news. 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. the trump administration has asked congress for $2.5 billion to battle the spread of coronavirus. the announcement came on the same day the same day that global financial markets were shaken over reports that the illness was spreading in italy and south korea. the u.s. stock benchmark fell, sincedex falling the most february 18. you are trying to figure out isther if this spreads, this inflationary, deflationary, and how the fed could react there and how problematic is it if it touches the market? given that it is difficult contain, how likely is it that we will see a recession? simon: it is very possible if

you see it spreading to areas where the infrastructure is less sophisticated peer you expect the infection rates to increase, the mortality rates to increase versus what we see at the moment in china, south korea, japan. we have very little data out of italy. if you look back at the previous efforts oaths -- previous youodes, sars, ebola, what saw it is a decline of those indices values for about 13 weeks in both currencies. terms with the risks for emerging markets, the spread, the economic impact, it starts to rebound. if you are looking for comfort after some real selloffs in the far or folio, the path thus since the who declared a public health emergency, matches those it to events -- matches those events. we have several weeks to go and you know that history never

repeats itself completely. time -- in thee last decade, china has contributed 38% to global gdp growth. its significance in the global growth story, we have not yet heard from the imf, suggesting maybe 10 basis points off the growth. that was probably lowballing where they will end up regarding this, so clearly even if some of the economic activity differs in two, and comes back in h it will hit china, emerging markets. when cinco what is your forecast on china at this point? is it impossible to see what happened? certainly discretionary

spending, you're not going to go -- you are not going to repeat it later in the year, but some of the industrial activity, you could imagine factories later in the year trying to work through supply shortages by picking up above-trend activity. consensus was around 6%. i think you're talking at least 150 basis points off that. at this point, we have to be honest with your viewers, we just don't have enough data about the persistence of this to make an accurate forecast you can hang your hat off. francine: do you kind of -- do you try and figure out what happens in factories, by looking at infected cases on a daily basis, or do you take a cool head and say i am going to reassess in a week? simon: there are two bits of data. you look at the industrial activity, the data, the close to

real-time data that we have about energy production and the opening of the porch infrastructure. there are suggestions that it is starting to pick up, but there is no way over the near term the next few weeks that you get anything back to full capacity. and therefore to play catch-up in the second half is a really big ask as it is. francine: simon french stays with us, from pam year gordhan. panmure gordhan. we will focus on retail and luxury. funding a banking revolution, syntax secures $500 million to expand in europe, and will speak to the company co-founder. that is coming up later this hour. this is bloomberg. ♪

francine: this is "bloomberg surveillance." extra market checks after the huge selloff we saw yesterday. today things a little bit better, but still a lot of market purchases are waking -- waiting for news of new infections and how authorities in europe are getting a handle on the virus. we are seeing a lot of fluctuation. european shares are fluctuating, so our u.s. equity futures. treasuries,oking at steady, and the dollar is slipping let's get to the bloomberg business with viviana hurtado. position inlding a u.k. with shares of prudential. its includes separating u.s. and asian businesses are the new york based fund also

wants the firm to pivot strategy from dividend growth to long-term value creation are to hp, it will return $15 billion to shareholders primarily through buybacks. it also plans to cut costs as it tries to rally against an unsolicited takeover bid from xerox. the hardware giant raising its profit forecast, but hp says for the current quarter, coronavirus-related disruptions will cost the company about .8 -- about eight cents per share. apple sales drop in january. demand for the product falling 28% compared with the previous month in february numbers are likely to be far worse. .t is a bigger decline it comes as the coronavirus has spread. that is the bloomberg business flash. francine: less focus on another sector for coronavirus, retail -- let's focus on another sector

for coronavirus, retail, specifically luxury. with aempt to continue degree of normality in the face of the barrage of negative headlines. in china, iphone demands plunged to 28% last month, and ubs critics february will be far worse. let's get to our reporter in paris, robert williams. first of all, how important are the fashion weeks for the industry, and if you don't have chinese buyers, does it automatically mean the collections a couple months down the line will get a hit? the chinese retailers are going to need to have stocks in the stores, and once things go back to normal. they are wondering what can they order from these -- from this fashion week's collections, the fall and winter season, by the time the products get produced and returned to stores. the issue is that when they are not here, it is harder to decide which ones are the items that can be real bestsellers and which ones are things that they

would rather just admire from afar. the fashion weeks are also very important for declaring a position on the image of a brand, deciding this is what we stand for, this is what we think next season,e chic and without the chinese press, celebrities come and models to post on social media and cover the event, they are getting a lot less eyeballs on what is going on in paris. last week in milan and london. francine: do we have any idea, robert, about how much less consumption of luxury products is overall? i don't know if chinese buyers because they are in quarantine, but also someone else that used to buy luxury but is feeling uneasy about what is going on in the world and stays at home instead of going and buying? the luxury companies got a very strong start to the year in early january, but once the coronavirus started to spread

and quarantine measures were put in place across china, sales ground to a halt. the chinese clients are making up for slightly more than a third of sales in the luxury industry, and two thirds of its growth. the luxury goods makers are indeed expecting a very black q1.ter from it seems to be getting worse now with the prospect of slowing down in other regions as well as we see a new outbreak of cases surrounding milan. , some of thean events in the periphery of milan fashion week were canceled. giorgio armani decided to show without anyone attending. has anything changed for paris fashion week? the moment, paris is planning to forge ahead as planned. today we will have shows in front of the eiffel tower, a show in the twill or gardens, and there will be thousands of

guests for these events. but i think everyone is monitoring the choices very closely. the organizers of fashion week are in close contact with health authorities, and they say they will keep everybody updated. ,ashion week last eight days and so we will have to see how things unfold. francine: thank you so much, robert williams in paris. -- sot know whether luxury doesn't make the economy go round, although a huge part of her earnings and some of these huge companies also do a lot of work with people, but in general, can you read what is happening and luxury as to the world propping up economy, seeing a downturn that could seriously put in jeopardy the forecast for gdp? simon: this is the fear if you think about the last 18 months, where the services sector divergence with manufacturing has been the dominant story, and

that services sector being prompted by the consumer. you are absolutely right, that luxury goods are the leading indicator here of a broad offense to the consumer will take a more cautious approach of going to leisure events, going to public spaces, where the potential risk of infection, even if that is not backed up by the signs, there is a shift based on the headlines, and the impact on financial markets. you get the self-fulfilling impact in terms of the broader consumer space. with manufacturing still very, very weak. it is not like manufacturing is going to be able to pick up to offset any protracted weakness in services. fromine: simon french panmure gordon, where he is the chief economist. one of the most valuable syntax startups, 500 million dollars to expand its banking operations. will speak to the company's co-founder. that is comparable next, and --

that is coming up next, and this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua in london. raising $500 million in a funding round which now values the business at $500 billion per the company plans to use the cash to extend banking operations across europe, including offering loans to retail and business customers. --aluation makes loss making i'm glad to be joined by the cofounder and chief executive. thank you and congratulations on this latest round of funding. when you look at all of your success but also some of the ,oncerns regarding revoluti some of it is how you continue

raising these levels -- what is your biggest concern over the next 12 months? is hiring the best people to make sure we deliver the best product for our customers. francine: which means what? do you need programmers? do you need -- >> we need everyone. francine: how many are you hiring in all? 1000 people. francine: how many will focus on concerns regarding regulation, money laundering, and things like that? will come as usual, we hire people for complaints. hire another 200 people there. francine: a lot of people use your product and they love it,

but everything is free. it is like a premium. how do you make money longer-term? are -- at the moment are you focusing on getting bigger and figuring out what happens next in terms of revenue? >> we make money on every single user. money when you upgrade, or by services. businessit insurance -- francine: so that is coming afterwards. make money on every account, or do you make money on ones that use it daily? >> we make money on every account? -- we make money on every account. do youe: how much bigger want to be? you have done very well in the u.k.. you want to be in europe. how much bigger will it be? at the moment we are

working on out of europe, and plus our huge focus moving into only accounts, rates stand creating features. francine: when you are looking at what you are focusing on, there is also a financial platform. are you looking at trading? it is payments, transfers, credits, even mortgages. francine: when you look at the are a powerful sin debt, -- sin tech company in the u.k. how many offers to buy it do you get? nikolay: we are not for sale, but there is a huge opportunity over banks, really on their own

issues relative to consumers. francine: do you actually want to rival the big ones, or -- nikolay: yes, we want to rival the big ones. sin tech up,ild --ch francine: with this latest round of funding, where are you focusing in europe? do you look for immature markets or mature markets? on bank we are focused operations across the whole of europe, across every single country. offering new products. able to create accounts, and then -- francine: you are rolling that out now? nikolay: we are rolling that out now. francine: will you have an ipo?

nikolay: in the future, possibly. francine: when you speak to someone who cofounded something and says this will be a success, i will not sale, -- i will not sell,, i want to become bigger, do you have target that says in 12 months i want to be here, in 24 months, i want to be here, or do you just see how it goes? once we get revenues, hopefully one day if we have good numbers, we will ipo and increase our relations. francine: do you worry about market volatility? do you think you will be more vulnerable if you are in the public? on myy: even now, based previous experience with the public markets, -- francine: thank you for coming

on "bloomberg surveillance ." he is nikolay storonsky of revolut. reported inve been -- unclear if there are more people tested so they find more, with who has been in contact with who we will have more on the coronavirus, plenty more of market share. "bloomberg surveillance" continues in the next hour. tom keene joins me from new york and we will talk about the democratic debate tomorrow night in south carolina. this is bloomberg. ♪ hi! we're glad you came in, what's on your mind?

can you help keep these guys protected online? easy, connect to the xfi gateway. what about internet speeds that keep up with my gaming? let's hook you up with the fastest internet from xfinity. what about wireless data options for the family? of course, you can customize and save. can you save me from this conversation?

that we can't do, but come in and see what we can do. we're here to make life simple. easy. awesome. ask. shop. discover. at your local xfinity store today. francine: this morning, after

yesterday's coronavirus fear-driven selloff, european stocks are down again. companies feel the hit -- united airlines withdraws its guidance, mastercard says revenue growth will slow, demand for iphones in china plunges 28%. and, fighting the infection -- the white house asks congress for $2.5 billion in extra funds to battle the virus, including working towards a vaccine. well, good morning, good afternoon, good evening, everyone. this is "bloomberg surveillance ." tom, we are on economics and virus watch. we look at individual stocks, when markets are doing. news is shifting. a massive selloff we saw yesterday. tom: i saw the italian headline you had moments ago, francine, of more virus infections in italy. but you really want a rate of change. what is clear here is whether it is good science or just all american, all global human panic

the markets are reacting to each headline that comes up this morning. francine: i think one region in italy will be quite significant will have moree news about the pathogen, how it develops, and how many people could the infected by one single person. we will have more on that throughout the program. let's get to first word news in new york city with viviana hurtado. viviana: we begin with president trump, who says progress is being made on a trade deal with india, but he doesn't have a timetable. today in new delhi, the president meeting with narendra modi. sometime the agreement has been under discussion and the president has suggested it may have to wait until after the presidential election. president trump holding a news conference at 6:30 new york time you can watch it here on bloomberg tv. now to the coronavirus outbreak. there is growing concern it will turn into a pandemic. the number of cases topping 80,000, and outside china, south

korea is now the worst affected country. almost 1000 cases have been reported there, nine people have died. in iran, at least 12 are dead, and kuwait confirms -- and kuwait and afghanistan confirmed their first cases. states, judy shelton has been nominated to the federal reserve. she has advocated a return to the gold standard. miss shelton was skeptical of the fed mandate to pursue maximum employment and stable prices. the senate banking committee has not yet scheduled a vote. atde talks between the u.k. the european union is where we end. next week they are expected to begin. boris johnson has been accused of -- his government saying gaining independence from the you legal system takes precedence over getting a trade deal done by the end of the year. 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? tom? tom: of let's do a data check today. to all of surveillance, more data checks. i'm thrilled to tell you, jon ferro has just entered the death star and will be with us today, coming back from vacation early. 71.futures up the euro, there is a real stasis here. let's go to the next screen. the 10-year yield shows the new set of low yield, which goes to central bank discussion. that will be a big theme today. francine, i put the italian stock market in there, 23,266, showing that unique fragility this morning. francine: yesterday it was off quite significantly. today it is off a touch. i am looking at japanese shares, down 3% because traders returned

after a holiday. if you look at the 10-year treasury deal, european bonds mixed, crude oil study after a 4% drop yesterday. but, tom, everything will depend on how many more virus cases we have in the rest of the world. we also understand that the uae has suspended flights to iran because of the coronavirus. if you look at some of the sectors of travel, cruise ships, airlines, and also luxury, they are being hit quite significantly. tom: one of the great rules of microbiology and virology is that you use logarithmic charts to plot epidemics. this is the first great chart i have seen. thank you to our bloomberg team are doing this. what you see there is the log deaths in red and the log cases in white globally of the virus. what is so critical here is the

slope or the rate of change. the rate of change early on was much steeper, and we really leveled out to remarkable stasis on valentine's day. what is important here, francine, is the slope here is a death slope than the slope. we need the death slope to flatten out to get any constructive view of this. have not seen that yet. thank you to bloomberg analytics for this world-class chart. --ncine: i have a simple actually, it is a bloomberg function, but it is quite useful to draw your attention to it. it goesrus go, and through a lot of the named companies that we are watching out for, some of the sectors, and this little thing is basically showing the percentage change in's the outbreak. for example, carnival -- they operate cruises. down 20% -- down 13%.

we look at it on a daily basis, but most on an hourly basis, just to have a look at, since the virus hit, what kind of impact we saw. out fromperb chart bloomberg showing the death rate, particularly for those over 80 years old, which has been a key story in the last 24 hours. we need to focus in and drill in on the markets, equities, bonds, currencies, commodities, where they had from here. we are thrilled to bring you bak.buckeye -- rick bakay.ick rick, let me start with you. what do you see at stage three, down 1000 points. on the dow sings -- on the dow, things seem to be more stable peer are they? >> i don't think things are more

stable. people are clutching to these data points. the data at the moment is dominated by china, and they have been in lockdown, so it would not be surprising if you had some sort of flattening. but i think the markets are concerned that it is already too late, and we have got outbreaks happening elsewhere. the key question for the markets is, is the cost of containment higher than the cost of an outbreak spreading more widely and less containment. at the moment, the actual damage caused by the virus is eclipsed by the actual efforts to contain it. so can that carry on forever? i don't think it can. the question is how reaction will be to politicians. does the market volatility change central-bank dialogue? >> i don't think it does because it is hard to estimate the real

impact and how long these negative consequences would be on the economy so at least from china's perspective, there is much needed stimulus, and that is what the government will aaron t. -- will guarantee. francine: president trump is speaking on his state visit to india. here he is. pres. trump: we are spending a tremendous amount of money on -- we just asked for $2.5 billion on getting everything ready in case something should happen, and also helping other nations that really are not equipped to do it. with that, it is an honor to be with you, and if you would like to ask questions and find out how much you should invest in the united states, i will tell you where to invest and how to invest. we did a lot of business with india where they are buying $3 billion worth of helicopters. we have great helicopters. we make the best military equipment in the world by far. the prime minister said if you were president 30 years ago, we

would have all your equipment, but they started buying many years ago from another nation ago from another nation and others, and now they are starting to buy from us. it is an honor. we are up to a pretty high number. we will be up quickly to a high number. and we do make by far the best. they want to have the best. that is what we do. thank you very much. if the president wants to -- if the press wants to stay for a couple of questions, we will have a news conference at 5:00. so you can go to that or you can stay and hear some of these questions from truly some of the greatest business leaders anywhere in the world. if you would like to come i could do this. i could read the book for you and we could have a nice, beautiful little speech and it will take five minutes and you will fall asleep, but they might find it interesting. i don't know about them, but you guys have heard it before. please come if you have any questions. anyone? ok, let's go home. we must have done a very good job. thecine: donald trump on

second day of his official visit to india. we saw pictures of him yesterday with the first lady lady at the taj mahal. today the president of the united states is holding a business roundtable, at the ambassador's residence. that is where he was alive, it is still live, answering questions about the -- that is still lives live, is come answering questions. lacail.ack to rick lik wel know that everybodye wants a vaccine, but if this virus were to turn worse with a number of affected cases going up, if it were to impact more countries, is there any amount, or any stimulus that would actually work if people are fearful? monetary stimulus, in a sense easing pressure on companies through the financial

system, and the other is fiscal. it is hard to make fiscal work when everybody is stuck at home. when an economy is in lockdown, you can extend credit and keep the machine moving to some extent, but you really have to wait until containment stops and really stimulate from a fiscal perspective. i think that is what china will do with the backdrop of this year. francine: when you look at china, what they are still going through, is containment working? are we near the end of it, or could it still escalate? the epidemic is concentrated in wuhan, so the epidemic, we should have a positive outlook for that. interestingly enough, in the eastern provinces, there has the been one death in shanghai region, so that is surprisingly small. i think the government is putting this as an absolute top priority as they have had secret meetings. so i think containment is relatively successful at this

point. i am more worried about what is going on outside china van inside china. tom: we see the president speaking in new delhi, and we will monitor for important headlines, talking about domestic issues in the united states, clearly addressing an indian audience. in a there is a scene magnificent book, a scene in a television show where two daughters died within days of each other. to 1551, and there is something called the sweating sickness. i don't want you to play virologist here, but what is the confidence of state street that we recover from this when the virus ends, as all viruses and? is this going to be a rapid recovery, or is this something that we look forward through? rick: at the end, it will be a rapid recovery, but we don't

know how long that will bp if you look at history -- sars is a misleading guide. but many episodes previously, i don't think any of them have had such an extreme reaction in terms of attempts at containment. that has accentuated the downward move. if it works, and our guests have clear guest has made it that it is positive in china at least. but the damage has spread. tom: the president with a "getting that china is it more under control." let's listen more to the president as we go to break. >> [question inaudible] pres. trump: i don't agree. ♪

pres. trump: looking like they are in the hunt i think drives our stock market down. and i think we will -- when we win, i think the market will be like their laura -- like a rocketship, like last time but i think even more so. the fact that the democrats are so radical, so out of control, they honestly don't know what they are doing. you see what is happening. they want to tell you about health care, yet they cannot count their own votes. now they are even saying if you look at nevada, that is all messed up with the vote count and some of them are questioning votes, but certainly iowa was -- i have never seen anything like it, and i have been watching politics for a long time, been involved in it now for a while, and i have never seen anything like it.

but i think the fact that there is an election coming up, i think a lot of people think we are going to win the election, i feel we are going to win because what we have done for jobs and for the military, for the vets, what we have done for health care, what we have done for health care is incredible, including giving options to obamacare at a far less cost, a cost that is much less. but if you look at all of the things that we have done, rebuilding our military, the biggest -- tom: the president of the united states may be talking to america, and of course to south carolina. kevin cirilli is in south carolina. he president of new delhi, at a business meeting. we will see if he becomes more visible during this press conference. i do want to show the bond market. our good guests -- i will let you pick it up. the bond market shows, is it just about the virus or are

there other things going on as well? this is the 10-year yield, and there was a very nice bounce off yesterday set below, the circle, and we have really given it back rapidly, francine, even with futures up six, the bond market deteriorates in the last hour. francine: there are two things we need to watch out for with the bond market. the first is issuance in corporate bonds, that may be quieter in the coming days, and there is italian bond options later today. it will be interesting to see how that goes. the spread of coronavirus outside china, including south korea, iran, and italy come has seen the number of cases worldwide top 80,000. but for now the world health organization is not calling the outbreak a pandemic. is ang us live via skype professor of international public health. thank you for joining us and what do we not know about the virus? >> sorry, what was that? francine: what do we not know

about the virus? what can you tell me of certainty that will help authorities isolate, treat, and limit the number of infected cases? is how we do know transmissible it is, and without strong public health messages, it does seem to be transmitting every case, pens mating to about two or three other people, which allows this to disseminate very rapidly. very robuste the public health measures that have been put in place in china have been pretty successful in controlling this. the reproduction number is hovering around one, meaning one person is affecting one other person, which means that we are with veryntain this robust public health measures. i think that is what has been noticed by other public health authorities around the world,

where they have had cases that they need to follow that kind of approach. as we spoke to peter hotez of baylor yesterday, let me ask you the same question -- is this a normal serious virus where we are dealing with global meeting -- global media, global logistics, or is this virus on the edge of pandemic truly different than the previous viruses over the decades and the centuries? ofmy: i think it is one constant sequence of viruses that come into the human population. sometimes they are novel, like this one. we have not seen this before, and that means that there is no immunity in the human population, and it means that we do not have any tools to either vaccinate against it or to treat it at the moment. that we are doing well with that. sometimes viruses come into human population that we have seen before, and then at least

we have a codebook book that we can return to to see what we might be able to use. what we have with this virus, i think, is a combination of pretty highly -- being pretty highly transmissible, but for the vast majority of people who are infected, they actually get -- they will get better from it. there is a substantial minority that gets a more severe illness, and one issue is that it does seem to last quite a long time, so on average, hospitalized patients are staying in their hospital bed for 10 to 14 days, which of course is a big issue for health systems. tom: professor whitworth, thank you for joining us. we look forward to speaking with you again. jimmy whitworth with the london school of hygiene and tropical medicine. your stockbroker just called in from new delhi, that would be the president. he said yesterday was "one bad

day. co. the president -- one bad day." is the debate in south carolina this evening. are inrump: but we statutory environments where we have to go. we have one where we have to wait six months -- ♪

."m: "bloomberg surveillance better markets, but in the last 20 minutes we have rolled over to yields down at new lows. that is very important.

i am watching yen stronger, 110.38. francine: the selloff yesterday wiped out this year's gains in global stocks. we are seeing signs of easing, but i would say that iran has reported a total of 15 deaths from coronavirus, the most fatalities outside china. if you look at italy, infections in the region rose to 206 from 172 yesterday. we are keeping an eye on it. tom: very good. the president is speaking in new delhi. there is are questions on indian business. stay with us. this is bloomberg. pres. trump: we hope to a lot, right? with the tariffs. ♪ awesome internet.

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to contain the coronavirus. the annualned religious session at the capital to check the disease spread. let's go back to our guest in london. over the last couple of weeks, we heard a lot of protests or people questioning the fact that authorities could have contained it better. is that a fair accusation? they seem to have done it with a heavy hand. >> there is fear, anxiety, the nation is in hysteria. if we look at australia, fire containment, same thing. even if they have open media. they still trust -- we should still trust the government and handling these episodes. beijing is symbolic, so that is why it is so important, but, among the major cities outside of wuhan, containment has been effective in the death rates

have been small. people were kind of in this anxious mood, and sentiment is low. people would rather quit their jobs than to be in touch with other people. it is a national effort. but,it's a national effort importantly here, can the government force people back to their jobs? a tough one but the chinese people are relatively compliant. some people still work remotely, and that is very common. there's a lot of anxiety, but we have to remember there are 200 million migrant workers and low-income households that are really in trouble. small businesses in particular. it is a big part of the economy. tom: is this the event -- is this event enough to you to create a further social safety net for china? is this a lesson from the communist party with their celebration of 70 years, etc., where they move forward after

the virus to a better social net -- social safety net? keyu: absolutely. i think the virus episode causes the government to reflect. it could be a reshipped mode. they're going to start questioning some of the things between local and central governments. president xi warned a virus episode was one of the major seven or eight risks that posed to the chinese economy. there will be major rethinking. reaction toeen, the help, especially small and medium-size businesses, the ones underwater the most right now, reflects that they have taken a different approach from the last time in 2009 financial crisis -- in the 2009 financial crisis in how to financial -- salvage the economy. francine: rick, you manage so much money. what data points do you look at to understand what happens next?

at handave a virologist for infections, is it data points in the economy? rick: i think it's a source of data points, but they are sometimes not very helpful. we saw the chart that showed the falloff. what it didn't show his unreported infections that might be spreading elsewhere. we have to maintain some degree of flexibility. safeed to invest in the havens but take a few points on how long this will and can last. i think we take the view that you can shut down the economy indefinitely area at some point, regardless of, to some extent the risk, there will be in opening up again of activity. tom: we are looking at the tea leaves this morning and let's focus away from the beautiful images of china to the beautiful images of the bloomberg terminal showing a record low yield in the benchmark 10 year yield. this is the actual series we use, not as pretty as i can

usually make it. here is yesterday intraday low. we just reached that in the last two minutes or so. they cue to robert brand of our cape town operations for helping me with this. this is an important symbol of an important benchmark. she wrote in bloomberg opinion, cut rates now, even if it is just symbolic. the 10 year is the litmus paper of that. how much 10 year pain do we need to see before we get a right -- rate cut? rick: i don't believe in symbolic cuts. i think the data unfolding would be enough to justify a cut in the coming months, but i don't think symbols are useful. i think the 10-year is overvalued. i think people are extrapolating the current way too much into the future. so yes, it could be forecasted a cut and we could need temporary

relief, but that valuation is down a step a fair value in the longer-term. tom: we have seen them bounce off that new load to the tenure -- 10 year yield. futures are up only two points. lacaille with0-- us. coming out, one of the graders -- one of the greatest honor condiments. york, withws in new first word news, here's viviana. >> we begin in germany with a leading democratic union politician plans to run for the pop -- top spot for angela merkel's p -- party. --ever becomes widel

now to harvey weinstein. he spent the night in custody in new york. weinstein will be held for raping one woman and sexually assaulting another. his lawyers plan to appeal. also to the widow of kobe bryant. she sued the owner of the helicopter that crashed last month. brian's, his 13-year-old daughter, and seven others decide out -- died outside of los angeles. we end with bernie sanders, gustoing his praise of over his literacy programs in -- and biden --berg global news, 24 hours a day and

on quick take on twitter. powered by more than 2700 journalists and analysts in over 120 countries. the the pageantry of president in india, we saw that yesterday. fine. today, a press conference, and later, a press conference of the president speaking to the american press. part of that is our just insane -- justin sink. thiseak to mr. sink morning. how distracted is the president by democratic party politics on tuesday? >> i think the president is sort of reveling in it. it right now, he sees bernie sanders emerging as the front runner in the democratic race, and he is somebody who donald trump has spent a lot of time

building a case against over the last year or so. he really thinks he can effectively message the contrast of a socialist democrat coming in india,, even today is making the argument that a sanders presidency or democratic presented see at all would mean a reversal -- presidency at all would be a reversal of some of the gains of this -- gains in the stock market. a fervent political bases and trump sees it similar to some of his own supporters, but the president has, time and again, expressed confidence he could beat bernie sanders. tom: the president's of the rug publican party. long ago, african-americans would say -- the republican party. it long ago, african-americans would say i am -- abouthe president care

the latino vote after what was observed in nevada? campaignou talk to azor the president, they think his economic record is going to make inroads with latino voters. they think states like new mexico are going to be in play in the selection in a way they weren't before. obviously, his hard-line immigration policies make it difficult, but the argument from the white house for latino voters who are already in the u.s. legally, they don't necessarily feel a kinship with those trying to come across the border without the proper documentation. it is an interesting theory of the case, and i'm not sure if it holds up. it certainly could have long-term revocable -- long-term ramifications for the republican party but donald trump has made clear his interests are not institutionally focused, they are focused, they are focus on what benefits donald trump.

if he thinks that will get him across the line in the line in november's election, i think that is the thing he cares about the most. thecine: do you see him as president travels, stay visits, and everything he just said -- says is for the voter back home? justin: i do think there is an element here of the president enjoying the pageantry of what he has been presented in india. there is some economic work being done, a trade deal that we thought might come as early as this visit, but seems to be pushed off until after the election. he is trying to encourage use business, which would be a benefit for his electoral record but also his part of the job of being president, so yeah, it is certainly, at this point, we are definitely in campaign season. i think it's fair to say that the president is thinking strategically about how everything he does can build the

case in november. francine: is the president banking on a strong economy and do we have any insight into how worried he is that the coronavirus spreads to the u.s., they are not prepared, he doesn't get reelected? brought up president the market dip we saw yesterday, sort of unprompted that this business event today. i think that portrays the nervousness within the white house. as a lot of republicans a lot of moderates willing to vote for donald trim, i think only because of his strong economic becess, who might not interested in his politics. we saw the president tried to downplay concerns over the coronavirus. he was making the case he believes the chinese have things under control. he noted the white house is asking, as of last night, for 2.5 billion dollars in additional supplemental funding,

which we viewed use to combat the u.s. but also assist foreign countries. u.s. butuse combat the also assist foreign countries. this could be an economic time -- downturn in the wrong time for the resident, but he is continuing to put out a positive message in hopes that he won't spook investors more about this coronavirus. in: justin, safe travels india. conference, is would say about 50 minutes. it would be something to see the debate tonight after what we saw in nevada. kevin cirilli will give us coverage along with david westin. look for balance of power at 12:00 noon today to kick off our politics through the afternoon and evening. charleston, afrom selected seven debating in south carolina. this is bloomberg.

♪

tom: "bloomberg surveillance" with more data checks. francine lacqua and tom keene, and what duty -- what you need to know after the overnight bounce, the dow is down 24 points. the s&p index is only off one point as well. was four digits on the 10 year yield. that is two basis points lower with what i believe was a record low about 15 minutes ago. what i'm watching most carefully are the other triangulation's of angst in the market. 37 -- 110 point 37. matt, bring up my temperature --

bring on my screen of the chart of oil coming above $51 per barrel. we bounce up on the good feeling overnight. you can see the distance here on oil as well. lacailleai -- rick with us right now. how correlated are we this morning? rick: i think were pretty correlated with classic risk off. i think gold had a good run even before this. i think some of the safe havens are pretty overvalued, especially in the fixed asian market. you have rich valuations out there and people are focusing on the short-term. the vix is telling you we are in moderate risk environment, maybe a little high. we look at a lot of risks -- risk measures that are normal to not toe high, but decide

panic. is the contagion amongst assets rather than people going to run all along -- run along a familiar path. -- pat? i think it is -- path? i think it is. tom: we saw yesterday with the vix above 25 from a lot of opinion makers that that is a big deal. we are 24.47. how important is this to you? rick: we don't like to look at one only. look at currency, we look at spreads, and we press them into a cocktail. if you look at one risk indicator, it could be misleading. if you go beyond 25, up to 30, that is telling you something. that will be all over financial markets, but it is really a symptom of anxiety. it doesn't cause financial market distress in and of itself. francine: what does financial

distress? rick: cash flow. cash flow is the issue. i think to the extent that high-yield markets, people actionon central-bank and anticipation and that helps that more -- those more in the risky part of the market. francine: what i was surprised, last week, as some bees were higher but then suddenly you saw a selloff of 6% or 7% worldwide. if this happens again because the case spreads, could you see a crunch similar to what we had in -- located -- liquidity crunch we saw in 2008? rick: not like 2008. it's true longer institutions have loaded up on liquid assets but it is private equity and real estate. if you look at capital and liquidity within the system, it is at very rich levels. much.ne: thank you so coming up, some of europe's

fresh and weeks continue despite facing a bride of coronavirus headlines. we talk about how difficult their head ahead will be. this is bloomberg. ♪

>> you're watching "bloomberg surveillance." let's get your bloomberg business flash. hp is trying to rally investors around xerox's hostile takeover bid. the company will return $60 billion to shareholders, most coming through buybacks. hp will increase cost cuts. executives say they have discussed possible combination on their own terms. we end with expedia. it will cost a thousand dollars -- thousand jobs. 12% ofs represent about the online travel company's workforce. since december, barry diller has been running expedia, and that is when the company's ceo and cfo were ousted. francine?

francine: the coronavirus outbreak is hitting the fashion industry. fashion week started to unravel. -- unravel onay undernal day, sunday, lockdown. tojust seemed to go from bad worse news, because when we were in london fashion week, you didn't have a lot of the chinese buyers. now, armani basically had a catwalk toward an empty room. >> exactly. these shows, you can get around -- buyers do come to the show to choose the items, but you can get around that through technology, and home sale is a much smaller part of what the brands do anyway. what the shows do, it is about uilding thed b

buzz. that's building the hype. that's what they are missing. francine: and those that would go to a burberry shop and think like that are just not coming over. >> that's fine. the traveling luxury consumer is which spending consumer, processes tax refinements, spending around $50,000 -- 50,000 per year. tom: is this the year for catalysts for mergers? in general, everybody starts to say we can't do it, we got to merge. >> exactly. we've already been seeing the strong become like stronger and like become harder for the perhaps smaller, single brand companies. i think this will exacerbate that situation.

, it could a meltdown be a good time to pounce, and i think we will see more consolidation, definitely. and from states street global and he says what is ross simmons going to do to bailout product? >> that's very, very interesting. if there is an, eventual succession, that has been denied, but that has got to be the speculation. francine: i love the way tom always gets the designer in. rick, how do you look at luxury? is it too risky to buy anything? rick: it has been a great long-term growth story. the heart of the successor some of those growth portfolios we are managing. surface, you are going from e-commerce and luxury, a strong trend.

the other thing to remember is that this is not forever. how deep is the v and where we are going to see the recovery is a critical thing, but this is not a forever story. from a luxury perspective, cash flows are distant because it is strong growth. >> this has been wonderful. andrea, thank you so much. aille, thank you for an hour. markets are decidedly still fragile this morning. coming up, an important conversation. stay with us. if more data checks, this is bloomberg. ♪

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

tom: this morning suddenly, the stock market is down 5.3%, and

equities bonds, currencies, and commodities, they are stable but fragile. win.tors gain a with the market collapse, was adjust the path from pandemic -- epidemic to possible pandemic. an italian doctor tested positive for the virus on vacation. from india to germany, he will travel home to washington on the long path to the white house. the president will be watching south carolina. good morning, everyone. "bloomberg surveillance" and the president's in a press conference, we believe in 30 minutes. francine is watching the markets. within the correlations, is yen -- correlations is yen down to new strengths, surpassing the low yields of yesterday. francine: the way i would put it

is stocks are fluctuating, quite a lot because they are looking at numbers cases. the authorities are really coming under scrutiny as to how this happened, why you see clusters of the virus elsewhere, and this is blossoming in a bad way. if you look at the markets, i would look at swiss franc, yen, corporate issuance, which really hasn't anything but dried up in the last 18 hours. depot, very clearly, they boosted their quarterly dividend by 10%, and the comp sales was a good first quarter -- fourth quarter statistic. know now, as you need to -- what you need to know as we go through the morning, futures were up. in 210 spread comes flattened, but all yields come down. crude oil, i'm watching it closely.

being -- the next screen with dollar weakness. yen is at 110.46. again,lian stockmarket, with different sets of news out of italy. further weaker today. francine i'm looking? at the francine: francine: in carmakers and banks -- francine? francine: i'm looking at stocks in carmakers and banks. heading toward a record low yield. 10-year i'm looking at crude oil. it adds pressure to the 4% drop we had yesterday. tom: an incredibly busy hour. we believe the president will have an impressive -- and important press conference in 30 minutes. right now, we will focus on the markets. gina market -- gina martin adams has been with us.

benjamin joins us, the chief executive officer. inn, can you be bold today this upset that is so different of 2014. us at this time if it is a time to acquire shares? ben: i don't think you can make that comparison in 2018, at least not yet. corrections have been. we are down 5% but your average 16%ection is down 15% to the last four months. we are down 5% in three days. this is not as quote -- not even close to a correction. the playbook to buy questions is when you have this wife out of sentiment. we had a huge move yesterday but that is the only sentiment flashing that color. bond flows really haven't moved

yet. individual investor sentiment is twice as bullish as it was at the end of 2018. the ratio is not even close to one at this point. i'm bullish on equities, but if you are looking for the sign where we pulled out -- pull back enough, that should indicate a volume close. first class math skills around our reporters. do we see any catharsis here? >> i don't think so. i think we have seen a strong spike in the first two days. usually we have a rollover and then we spike into the bottom. if you look at the evaluations in the aggregate, you get to a point where multiples were overly pricing negative real rates. we have come down to price where real rates are at this point but the one big thing missing is capitulation in bighead tech.

-- big cap tech stocks. they were trading at 45% premiums to the market. historically, they 20 -- traded at a 25% premium in the market. they have to get to a point of some kind of capitulation because the market gains were concentrated. they were concentrated in big cap tech and utility stocks. we have seen little capitulation on those two. i would watch for that as a trigger point. francine: ben, what happened to sentiment yesterday? is it just because you suddenly saw into the epicenter in europe, or more markets -- or were markets this complacent last week? ben: coronavirus is a big part but not the only part of this. we got shocking pmi data from the u.s. less night -- last night. that has normally been the

bulwark of economic strength so far. bernie sanders, over the weekend, really surprised someone. these running away from the democratic nomination. you run away -- you put those three things together and we look at the backdrop of 19 times 500y's, as we had the s&p valuation highest since 2000 two, volatility has been low for eight or nine months, and i think we were set up for something. francine: would you say that the coronavirus cases in europe accounts for 15% of the selloff yesterday? ben: i think it was most. i think there are other ingredients here. this all feeds into growth recently low globally, and there is not a lot of flexibility globally, so people worry if we are getting uncertainty on growth. ,om: i want to set this up gina, before we go to mr. reading on home depot. life goes on for corporations, doesn't it? gina: it does. i think you want to be careful

not to extrapolate coronavirus related concerns into the long-term outlook. i think that's one of the things the market has try to rationalize over the course of the last week's is that this is a short-term phenomenon. we don't know the duration of the coronavirus, the extent of the coronavirus, and that creates uncertainty. but it is short-term. life does go on, as you say. there might be too much optimism withded in prices respect to that, but growth is still growth and we are still growing. home depot is a good example of that. earnings are still growing. that is something we learn from the fourth quarter earnings season. tom: we now go to princeton, new jersey to our in stock expert on home depot, drew reading. use of cash, 10% dividend increase, they reaffirmed share purchases at $5 million. this is not a bleeding home

depot, is it? drew: no. the dividend repurchase is a core tenant of thesis for home depot. they return a lot of cash to shareholders. i think the number we saw today, 5%, was back in line with what census was expecting. i think it will provide relief to investors and they reaffirmed their outlook for 2020. if i came upw, with something ugly that points to a weaker consumer house price, could that be the first sign of a downturn in the u.s. economy? drew: certainly home depot provides a great read on the consumer. what you want to focus on is the macro backdrop for their business. it revolves around housing. over the last several months, we have seen a re-acceleration in the housing market. typically home depot and other home improvement retailers will benefit from that on a six-month

to nine-month leg. we expect -- tom: drew, thank you so much. we look forward to your complete report today. there on home depot. what am i looking at in the markets with ben and gina on equities? i'm looking at en as well. we have not broken down the new yen strength. it is genius you picked that out. 110.32,n and i need a really confirming any angst we would see today. we are not there yet. with our first word news in new york is viviana. >> we begin with donald trump, progress being made toward a trade deal with india. he does not have a timetable. today, the president's meeting with india's prime minister for time. a trade agreement has been under discussion. the president suggested it may

have to wait until after the presidential election. watch the president's news conference live here on bloomberg tv. to the outbreak of coronavirus. there is growing concern it will turn into a pandemic. the number of cases topping 80,000. outside of china, south korea is now the most affected country. 1000 cases have been reported and nine have died in iran. cases and confirming do some breaking news and zoo the newsroom. italian officials confirming an additional 64 cases, 40 in one area. senatetol hill where key republicans are undecided on a controversial nomination to the u.s. federal reserve. she is the former economic advisor to the trunk campaign and is advocating a return to the gold standard. she was also skeptical of the fed's mandate to receive maximum

employment and stable prices. a banking committee has not yet scheduled a vote. between thealks u.k. and european union, next week they begin. the two sides are at odds. orest johnson has been accused of bad faith. his government says review -- regaining independence from the presidentsesiden -- -- precedence. global news, 24 hours a day, on air and on quicktake on twitter, powered by more than 2700 journalists and analysts in over 120 countries. lots going on today. thank you so much. we will continue to look at equity markets with our guest and there are correlations in the markets as well. we will correlate the headlines. from the president's press conference, we look for that in 20-25 minutes. the president of the united states, before traveling home to washington. this is bloomberg. ♪

tom: if you are just joining us worldwide, francine lacqua and tom keene. what we have this morning is a good bounce off from yesterday. then, really fragility about an hour ago, and we have come back a little bit. right now, there are any number of things i use off of the bloomberg area i look at dollar-yen, 110.51. , gina, and we are thrilled to bring you a representative from asset management and has been at the fed for years. acclaimed on all sorts of economic themes.

prodigious medical -- a man with prodigious mathematical --lls said stocks tot is the efficacy of a fed assist given the five -- given the viral crisis? could the president relate to the number of basis points to temperature? i don't think that works. i think the biggest advantage the federal reserve has is the next cycle is 22 days away. tom: a lot of new cycles. what do they do at the fed? the research staff that you led for years, how do they advise chairman pile -- how about medical overall edgy. amateur.ody becomes an there's a lot of people good

with math. the they disinfect neo-keynesians but not the arch keynesians. >> federal reserve makes policy on the economic outlook and it is financial conditions that determine the outlook. they have to look at the whole set of financial conditions. equity prices are down but the tenure treasury yield are -- is touching lows. corporate spreads have come down with them and the dollar has been mixed, depending on which currency you are talking about. notncial conditions are actually tighter right now and that is what matters. this is a classic supply shock. chinese't just households not spending, it is chinese workers not being able to produce. and, it is spreading. more of the demand shock right now, but the supply shock means the federal reserve sees misses

on both sides of its goals, demand week, threatening maximum employment, but it also sees prices hires because of the cost -- ofbecause inflation inflation. francine: are we over analyzing it with complex economic works or is this fears? people in china fear to go out to work and buy things. they are fearful, so if this spreads, we don't really know the consequences if society kinds of stays at home if everyone decides to self isolate. that was exhibited on friday as well as yesterday. there was some degree of fear clearly embedded. you don't see 3% moves in stocks without fear getting embedded in prices. that said, the question still is, how long, how durable is this fear trade? i would suggest it is probably anyly limited, saying in

scenario this is not a permanent change in the long-term economic outcome. it creates a ton of volatility on supply, demand, and asset prices, creating this environment of uncertainty, which is obviously uncomfortable in the short run. investors at the long-term scope, eventually core -- scope sees eventually the coronavirus ends and we have robust order flow coming out of china as a result of trade negotiations earlier this year. i think there is a necessity to keep a longer-term perspective. you will have a lot of volatility, and that is what the markets trade on, the volatility and fear around where we go in the short run. if you think about the longer-term, it is unlikely this ultimately results in a long-term downgrade to economic growth. it does result in short-term destruction. ben, how long, --

can this volatility and uncertainty last before the world goes into -- ben:ben: there's not a lot of growth or policy flexibility, it is the fed. i agree with a lot of what gina said but i will pick up on something. i am a u.s. equity bull but i have been surprised on how resilient markets have been. if you look back to sars, markets fell 10% and this is a lot bigger than sars. markets were essentially flat. i've been surprised by the resilience, and i think the mistake the marks have made is selling off and re-downing 30% is definitely in people's minds. markets have been extraordinarily resilient until last thursday, and now we have a bit of weakness since then. i'm not too concerned about that. corrections happened and we are not even close to that at this point. tom: in all of the years you , do been doing this, vince

we have a fed that is becoming almost socially sensitive? inon't recall you and tremor greenspan -- chairman greenspan doing that. what is your thoughts on a more sensitive powell fed? >> a couple things. the reason i t en so resilient is that everyone has the faith that jerome powell can smooth enough bumps in the road. he may not have the resources and may have to look through that. -- anderal reserve is that follows an important rule. make sure you have somebody in between you and then attacker if you are being attacked. president trump has expressed a level of anger at the federal reserve that has not been done in a long time. so, what has chair powell decided? congress is his best friend. he has made more trips to capitol hill, been leaning over

backwards to express his support, and they have used the fed listens tour to hit the key constituencies of congresspeople. it wasn't mostly about finding research, it was about building the base. francine: thank you so much, vincent reinhart, gina martin adams, and then stay with us. later today, a conversation that the former fed reserve bank of inneapolis at 10:30 a.m. new york. it will be interesting to get his thoughts on some dynamic stored inflations. if the virus hits the u.s. will that be deflationary or important inflation? tom: we will see. vincent disagreed with the gentleman from rochester and minnesota. we all understand the president ash that president trump's comments will be at a press conference, we are awaiting that

-- conference. we are awaiting that. we will have this for you, we believe, in 10 to 20 minutes. somehow, south carolina will come up. let's listen to the president on the markets. pres. trump: our markets will jump thousands and thousands of point if i win. if i don't win, you will see a crash like you've never seen before. i really mean it.

tom: risk off, but i will say it state right now.

secondary indicators do not convey what you see in the bond market. curve flattening, features on 2nd street, and we have time. to news not go through strengths. sometimes a data check is not what happens -- is whatnot happens. we also await the u.s. press conference -- u.s. president's press conference. he talks about the coronavirus, saying beijing is getting it under control. live pictures of where the president is due to start his press conference shortly. we also understand that trump officials will ask for more money before congress. ore congress. tv just keeps getting better.

how you watch it does too. this is xfinity x1. featuring the emmy award-winning voice remote. streaming services without changing passwords and input. live sports - with real-time stats and scores. access to the most 4k content. and your movies and shows to go.

the best tv experience is the best tv value. xfinity x1. simple. easy. awesome. xfinity. the future of awesome. ♪ good morning. we way to the president's comments -- await the president's comments. we are seeing market stasis

after that day yesterday. francine: yesterday, we saw a huge selloff. i would point to a couple things on the markets. first, issuance of corporate debt, which is on the lower side of things. a lot of people have been asking what happens to havens such as yen. there is an auction of italian bonds. that will be interesting to see given the situation. tom: in charleston, south carolina, there is the battery, where they began the rattles of the confederacy in the civil war. selected democratic internet be in the battery tonight after this historic debate. kevin cirilli is in charleston. what are you going to watch for in body language through the day? i know senator clyburn is going to jump out after the debates. to get to the debate tonight, what has your attention? about senator all bernie sanders. he is on the cusp of becoming the democratic presidential nominee. last night, he said that even if

he was not to get the 1991 delegates that are needed to technically clinch the democratic nomination, that he would still, if you were to get a plurality of delegates, he would still feel he has enough to get the nominee. that number and that threshold is what we are going to be watching for. former vice president joe biden is anticipated to win the south ,arolina contest this weekend but sanders is really being fueled by the momentum of having won the nevada caucus. tom: there are too many people in. i think it was jennifer rubin in the washington post writing what is klobuchar going to do? do people drop out? kevin: no. why would they? i think there has been several campaigns that have tried to put on the other campaigns to drop out, but why would they? look at someone like bernie sanders.

those other candidates are going to be some key endorsement potentials for him. if you are senator amy klobuchar and you are campaigning on this, she has been running for president for months. from the standpoint of a the-term viability, this is fourth quarter. why get out now? francine: if bernie sanders gets the democratic nomination, can he win at a national level, november 3? put that question yesterday to a senior republican strategist who pretty much told me these are the same conversations republicans are having an the 2016 cycle about then canada 20 -- donald trump -- then candidate donald trump you're the establishment haven't trying to stop trump's candidacy for some time. we are seeing the same conversation play out with sanders. at the end of the day, the party has moved on from the old guard establishment, whether they like it or not. now it is sanders's opportunity

to say he can be a standardbearer and take the party in a derivative -- different direction. mayoret's summarize bloomberg. he appeared with al sharpton on msnbc and tried to drive forward from the debacle in nevada. the about moving on from old guard of the democratic party. how does michael bloomberg positioned himself in the debate to be the newgarden and to move forward -- new lard and move forward to super tuesday? kevin: he has his work cut out for him. that debate performance last panned byhand -- everyone. based on my reporting, look at the polls. super tuesday, you have so many contests coming up. california, he is not winning or leading. very difficult to see a path forward for michael bloomberg. tom: what is the latino lesson from nevada? sanders is doing

the debate tonight to get ready for super tuesday. is that what we are going to see? is he going to be speaking to the latino vote in california and texas? kevin: that is a good point. so much is made of the african-american voter turnout, particularly in south carolina. the question for the latino vote -- you saw bernie sanders be able to unify that and put together that coalition. would he be able to, that be a benefit to his campaign. francine: how does the coronavirus play into president trump's thinking? how worried is he about it? this could derail everything. great point.s a yesterday, kellyanne conway was asked about that. thisaid she wanted to do

as a world health concern. beyond that, hearing her speak in those terms is an illustration of how the white house views it as something that is going to be impacting on the market. we have seen the volatility globally. there are several hearings planned for this week on capitol hill. secretary of state mike pompeo will be testifying in the senate friday, likely going to get questions on it. you will see more bipartisanship as it relates to a response for how the united states is going to deal with the coronavirus and talks of a $1 billion congressional aid package. really, a lot of pressure being put on xi jinping and china as the world wants to see what he would be able to do when it comes to the coronavirus. tom: everybody's going to pile on senator sanders tonight. i know they are going to be watching on cuba vision in

havana. what is the baggage the senator has? onrybody is going to pile him with castro. forget about havana. how is it going to play in dallas or miami? great question on miami. he is running neck and neck in the polls with biden in texas. i am shocked by this. i will be blunt here and speak off-the-cuff. is it too little, too late? that is the biggest question i have. they had all summer. they had all last year to try to stop bernie sanders. it has not stuck. that ishis momentum really fueling him forward. we will find out. it is going to come down to biden and sanders. they are trying to price this.

you have biden poised to win big this weekend. if he does not, that is a major upset and everyone else might as well pack their bags. if he does, it is biden and bernie and a- showdown on super tuesday. tom: look for that debate coverage tonight. course, theg, of founder of this television and radio station. francine? francine: in about 21 minutes from now, we are expecting donald trump in new delhi to give a press conference. we have heard a number of times president trump address not only business leaders gathered in india but also some of the press corps that are traveling with him. about an hour and a half ago, president trump was in -- was saying beijing has it under control. it will be interesting to hear from the president of the united states what he thinks.

that is in 21 minutes from now. in the meantime, let's get to the bloomberg first word news. here's viviana hurtado. >> michael bloomberg is hoping for a do over into night deposit presidential democratic debate. in his first debate last week, the former mayor of new york was widely panned. he is making it clear he will turn his focus tonight to bernie sanders. bloomberg is the majority owner of bloomberg lp, the parent company of bloomberg news. now to the coronavirus outbreak. companies around the world issuing profit warnings because of the outbreak. mastercard cutting its revenue growth forecast. the american credit card network seeing a drop in travelers because of the spread of infections. united airlines scrapping is 2020 profit forecast. air new zealand cutting capacity or warning profits will be hit.

now to former hollywood mogul harvey weinstein. he spent the night in custody in new york city. he will be held for raping one woman and sexually assaulting another. his lawyers plan to appeal. we end with a former egyptian ruler. he has died. he ruled for 30 years before being forced out of office by the arab spring uprising in 2011. he went on trial for the killing of more than a hundred 50 protesters by his security forces -- 850 protesters by his security forces. he was only found guilty of fraud. this is bloomberg. ♪

♪ francine lacqua and tom

keene on an exceptionally busy morning. i want to bring up this chart again. i think it is so important. medicine.at in this is the number of cases of the virus. this is the deaths. the slope here is the cases is beginning to flatten out log rhythmically, even while the deaths move higher. it will be imported to see where go intrends go herein -- the next 24 hours. gina martin adams is with us. withmin wheeler -- laidler us and vincent reinhart as well. everyone is going to say this slowdown has to be because of the virus. there is more going on than that. have are going to presidential election at the end of the year. the number one to -- talking point for donald trump's

reelection is the economy is moving well. demand shock the virus represents threatens that narrative. some of what you have seen is concerns about the global economy. some of what you are seeing is concerns about political outcome. tom: you reaffirmed your bullishness on u.s. equities 25 minutes ago. we see home depot, dividend increase. are we going to see more headlines like that, where true multinationals and domestic giants like home depot say business is not all that bad? i think business is pretty good. earningcame off a season that posted numbers for the first time in three quarters. the earnings recession is over. if you delve into that, to the extent there was weakness, it was international from the energy sector. we know what has been going on there. domestic u.s. has been in decent shape.

that is above trend. outside australia, that is the strongest number in developed markets. i do nothing we should get too bearish. to tie this to the coronavirus, the u.s. is a very closed equity market. in relative terms, if you're looking for somewhere to hide, the u.s. is a good place. francine: what we understand about supply chains that maybe we do not understand so much? is exposure to china less than we thought? interestingan point, one we have made as well. because we just went through the trade war, supply chains are more flexible than they would have been without the trade war. they are not completely flexible. there is a lot of exposure in china. conductor space as a good example. given the rhetoric around where trade was going to go, especially where tech trade was going to go in the course of 2018, you did see migration of

production out of china over the course of 2018, 2019. these companies are now going to benefit. using a five year historical view of what the supply chain , it looks different as a result of the trade war. technology companies are resilient, partially because of what they just went through. one of the most undervalued stories in the equity market right now is we just had a massive inventory cycle occur in the tech space. we have reduced that inventory. companies are in a position where they will benefit incrementally from any improvement in growth. that is one of the things the market is trading on. many of us are suggesting it is going to be greater than it likely is as a result of the fact that we went through in 2018 and 2019. francine: do you think that supply chains will change more because of the virus? gina: i think they will continue

to change. we have seen this migration control --occur. it has been decelerating. you have seen company's costly migrating to new sources of production. they are always seeking the lowest risk place to do reduction -- production. that will continue over time. i think we underestimate the resilience of corporate america. we underestimate the resilience of corporations worldwide and finding the lowest cost sources for products. we have done this for years. it is not just china. the fact that the virus is spreading outside of china is an ongoing risk. that is the real story. it is not necessarily just in china anymore. when it spreads to the far east, it is going to impact some of that production. tom: we are seeing a better tape in the last 20 minutes. we are not doing more data checks.

with futures up, we are reverting back to about three hours ago. vincent reinhart, i want to switch gears. it ties into south carolina. he is with cornell law, writing on the labor economy of this nation. he talked about the labor share of the nation. we see it with the success of populism of president trump and senator sanders. with the better economy that we have had, and i hear about reach gains but i do not see it politically, how bad is the labor take of our economic growth? vincent: not as good as it used to be. the unemployment rate is 3.6%. that is benefiting americans. like theo not feel 1950's and 1960's. vincent: productivity growth is lowered. aging in aging -- an

population. ourelped our -- halved potential growth. tom: we will have seven nominees on the stage tonight in south carolina. if they are not arguing with each other, they have to come up with a plan to boost that growth. is the plan to return us to the glory day of our childhoods or to get america ready for something new and different? is we arehe problem identifying issues but nobody has offered and a solution thus far -- any solution thus far. we need higher productivity growth. we have to encourage people to enter the labor force. we have to be more flexible. if you look at average hourly earnings for production and non-supervisory workings, that has only been inching up.

its growth rate is off where it was. we are not generating income in the lower class. what you hear in the democratic debate is essentially people are tired of the market. we will adjust resources, we will be flexible, there will be winners and losers. thee grow fast enough, losers will feel compensated. we are not growing fast enough to compensate the losers. no.amin: yes and the relative strength of the u.s. economy is coming out of the consumer. it may not be enough politically, but it looks good relative to what is going on in manufacturing and in europe and japan. when you look at the longer-term consequences of this virus, how can we be sure it is temporary? there seems to be an assumption in the market that at some point

authorities will get a handle and go back to normal. benjamin: i think the debate on the markets is shifting a little bit. we can gete quarter, through it. that was the narrative until three or four days ago. scientists are becoming more global. it is testing the resilience of markets. then the related issue is -- does cutting interest rates really do very much to offset a pandemic? no, it probably does not. it is better than nothing. we do not have great tools here. that feeds into market nervousness. this is against the backdrop of markets that have done well. we are being set up for something potentially. tom: jon ferro says you have to ask gina martin adams a few questions. should we buy the dip? gina: i think you do.

i do not think this is the end of the correction. we do still see the potential for further downside weakness. i think there is a lot of uncertainty out there, but we are still constructive on u.s. equities. we are still constructive on global equities. there are opportunities outside the u.s., too. i have not seen enough capitulation yet to suggest this is definitely the bottom. it is a buying opportunity for some. i think we are going to churn in a period of weakness to absorb a permanent loss of income for some companies. tom: way too much optimism this morning. thank you. laidler, thank you for joining us again. let me do a data check here.

it is simple. equities, bonds, currencies, commodities, it is a little better today than i was an hour ago. -- then it was an hour ago. .e have a weaker yen we have a safe havens screen as well. we will get that up in a moment. gold, negative. in eight minutes, we are told the president of united states, more than anxious to get to a press conference and then back on air force one and back to america. south carolina debates tonight as well. much more to talk about. it is 7:00 a.m. this is bloomberg. ♪

♪ you're watching bloomberg surveillance. we begin with irish drugmaker reaching a $1.6 billion settlement in the opioid crisis. the company is placing its u.s. generic drug business into chapter 11 big rip city.

-- bankruptcy. they are trying to resolve claims stemming from the cost of fighting opioid addiction. we end with shares of exxon mobil hitting a 15 year low. disappointingrted growth. presents.o this is your bloomberg businessweek. francine: let's go straight to the president. >> you heard it for yourself. they are going to be investing billions of dollars in our country. that was the purpose of the trip also. we are set for $3 billion of helicopters. other equipment they are buying. they are buying a lot. they are going to be by a lot. there are also buying a lot of of ourrgy, all forms

energy. they need energy and we have more than anybody. we are number one in the world now with energy. i thought it was a great two days. i am going to be not at all controversial because i do not to blow the two days of travel on one little answer. john will ask me one simple question and you will blow it out and it will be the end of the trip. they will not even talk about the trip. i will be very conservative of my answers. we did. we had a great time. we had great meetings. you're going for a state dinner. after that, we get back onto the plane. we go back home. it is going to be about 19 hours. we look forward to it. country --tremendous this is a tremendous country. it is 1.4 billion at least. is a tremendous market and

they really like us. i think they like us more now than they have ever liked us. a really great relationship between the prime minister and myself. we are going to be doing a lot of things. it was really worth it. you may ask about the coronavirus, which is very well under control. we have very few people with it. are --ple that have it in all cases, i have not heard anything other. i have not been seeing much of that news. it has been very all-encompassing. we have accomplished a lot. we had a lot of meetings. people are getting better. they are all getting better. we brought in some americans from a ship because it was the right thing to do. they are in quarantine. we think they will be in very good shape very soon. of differenta lot

elements. we discussed the coronavirus. at this moment, india does not have much of a problem, they feel. it certainly was not expressed that they did come up which was great. the whole situation will start working out. a lot of talent, a lot of brain power is being put behind it. $2.5 million we are putting in. chuck schumer thought it should be more. if i give more, it should be less. these characters, it is not good for our country. i give more, he would say it should be less. that is what they do. they are not getting anything done. we have 70 things we can get done. we could so easily do prescription drugs. we could easily do prescription drugs. last year was the first year in 51 years where prescription prices went down. we have the democrat votes. we need additional votes.

we would really drive them down, know. with that, i think we will take some questions and go to a nice state dinner then we go home. go ahead. >> mr. president, you just addressed coronavirus. i will put that aside for a moment. you treated about justice yesterday, saying that she and justice ginsburg should recuse themselves from future cases in dealing with the administration. what is the basis for your opinion on that? >> very obvious, i always thought that frankly, justice ginsburg should do it, because she went wild during the campaign when i was running. i don't know who she was for, perhaps she was for hillary clinton, but she said some things that were obviously very inappropriate. she later sort of apologized, i would not say it was an apology, but she sort of