"bloombergome to markets." i am emily chang in san inncisco with paul allen sydney. coming up, it is not a question of if but when. the u.s. centers for disease control say americans should prepare for significant disruption if the coronavirus spreads in the united states. stocks tumble. the spread of the coronavirus has rattled investors in both the stock and bond market. but is the black overblown -- is

the pullback overblown? a change at disney. bob chapek becomes ceo immediately. bob iger will remain chair and continue to direct creative endeavors. another bloody day in the markets on the back of more bad news on the coronavirus. watching the edge of another cliff. no surprises for how we are set up for this wednesday trading day. new zealand already off by almost 2% futures. here in sydney, poised for another drop. asx off this week. a couple of things to watch out for when we do get going, virgin australia announced a first-half loss of $97 million. we are also expecting rio tinto

earnings after the close. nikkei futures off about 1/5 of 1%. a quick look at the currencies. the aussie dollar did briefly dip below $.66. it is just holding on above that level them. the yen continuing to strengthen. a little bit of a rebound but not much in the 10 year as well. the u.s. centers for disease control and prevention is warning americans to prepare for the coronavirus outbreak at home. >> it is not really a question of if this will happen anymore, but when, and how many people will become infected and of those, how many will develop a more severe or complicated disease. we had been preparing for this threat and to limit the impact on the community for years. emily: to tell us more, abigail

doolittle in new york. abigail: another brutal day for the markets. it is a four-day market selloff. it intensified on friday when there was a market pmi services miss. showing that the coronavirus in china was already impacted economic data in the u.s. yesterday, the cdc warning. today, another big down day. the dow transports down more officiallythe day, in a correction. thistors want all of before we even had this tragedy, this coronavirus in the u.s.. not if, but according to the cec, when it does hit here in the u.s., that is why we have stocks tumbling.

earningsw trade-off of so there is reason to think that the earnings picture will be cut. how long will it happen, that is the unknown. scaringwhat is probably investors. 10 year yield hitting a record low as investors are piling in. 1%,ave bonds confirmed for a number that many folks last year were calling for. since the start of the outbreak of the coronavirus, it is risk off, risk off, and risk off. 14%,llow, crude oil down nower down 10%, the s&p 500 down 6%. what a reversal.

on top, you can see bonds doing the best, of 3%. some of the big names being hit, not surprisingon top, you can, s apple and microsoft. american airlines in a bear market. down 20%. over the past five days, down 18%. it appears global travel will really be stymied by this. wynn resorts, their operations are really being heard. i think it is the unknown factor sending stock orchids tumbling so much and sending investors into haven assets. emily: top health officials have described a range of measures that the u.s. government could take if the outbreak spreads widely here. include disruptions to daily life, school closures, conferences.

cdchis stage, why is the giving these kind of warnings when a local outbreak has not happened yet? >> i think it is from the notion that it is better to be over that underprepared. the fact that we are starting to see these outbreaks that are not connected to a visible chain of transmission from china. the sooner you start to prepare the population for the potential need of health measures for those cancellations, for this dental quarantines, -- potential quarantines, the faster they will go. and you can start talking to people about the actions they can take. it is better to think about that ahead of time as opposed to panic once we actually see an

outbreak, if that happens. paul: what should americans make of this apparent contrast between what the cdc is saying and what they are hearing from president trump and larry kudlow? >> if they go with one authority here, i think it will be the cdc. people looking at the data every day and not necessarily focused on what might be best for the stock market or their reelection prospects. it is not time to panic. it is time to think about how to pair should you actually see transmission in your local area. what might he do about childcare, medicines. it is not time for people to start rushing to the store but you should have a plan in place should there be an outbreak in your area. paul: let's turn to the

situation in europe and asia, where more cases continue to be discovered. yvonne man is in hong kong. guests in spain now has on lockdown. yvonne: about 1000 workers and guests at a seaside hotel on a canary island. this is after a couple from italy who stayed at the hotel tested positive for the disease. they said this is more of a preventative isolation. switzerland, austria. seems like the cases are spreading across europe and all cases had links to italy. at least 322 infections. meanwhile, in the middle east, it seems like this virus is spiraling out of control in iran.

the deputy health minister himself contracted the disease. cases in theber of middle east, about 140. the death toll in iran, 15. in japan, with the tokyo olympics just five months away. forcing the japan football league to cancel. they are saying they have full confidence in japan and china, that they will address the necessary measures. emily: the hong kong government has announced more minutes of measures. schools will remain closed for longer. taken?all of this being yvonne: not well. parents know that their kids will be out of school for weeks. first it was protest related,

now it is the virus. people are asking for refunds. hong kong tuition when it comes to international and private schools, not cheap. impact the virus could have on the economy here. that is why, all eyes on the reserves tohe cash stimulate the economy. paul: thanks very much for that update. still to come, the s&p is on pace for its biggest four-day slump since september of 2018. the impact coronavirus is having both in the u.s. and globally. this is bloomberg. ♪

to "bloombergback markets." let's get the first word news. asu.s. markets plunged again

investors considered the possibility of a coronavirus outbreak at home. the centers for disease control warning americans to prepare for disruptions to their daily lives including the cancellation of public events and business meetings. the cdc said it is not a better matterbut when -- not a of if, but when the virus becomes widespread in the u.s. the tokyo olympics are more likely to be canceled and postponed if the virus worsens. months to have 2-3 decide, adding that the scale of the event means it cannot be delayed or moved. violence has erupted for a second day in new delhi with

rival groups clashing with themselves and police. more than 180 were injured in the two-days of violence. parliament approved a law which fast tracked the rationalization for some foreign-born religious minorities. which excludes muslims. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. group -- because emily: rising concerns about the spread of the coronavirus. for more, riverfront investment group senior portfolio manager rebecca felton. there has been a lot of news today about coronavirus cases around the world. have any of these new developments evolved your theory about what impact this will have on the market? rebecca: yes and no.

the headlines are so difficult in terms of how you quantify that sort of thing. orchids were at a roughly 14 earnings. we do not like to react to headlines. we had levels where we would take risk off short horizon portfolios. headlines, we are not reacting to. market levels, we are watching those. emily: talk to us then about what you think is the most likely scenario and believe you will be operating under as you continue day-to-day business. atecca: the things we look are the things that we know we can measure. u.s. data, consumer related, given that consumer is 70% of gdp.

houses are strong. the number of young people under 35 who own homes has popped up to 35%. says they want to own homes. we want to focus on the fundamental drivers. stops said, draw eight particularly in the shorter horizon portfolios. even today, the trend is still rising. last week, we had investor sentiment and extreme optimism levels. now we are back down into neutral. we do have this chart on the bloomberg terminal that shows the s&p has fallen for 50 and 100 day moving averages. a continuum. at one end, the initial reaction was all complacent and now the reckoning is here. through to,main --

pass, lookthis will for buying opportunities. rebecca: we are probably in the stay calm. we don't have any reason at this point to change your thinking on that. paul: so when you are looking for buying opportunities, where are you looking? we have seen some hefty declines in blue-chip stocks like apple. right now, we are heavier on the software side. we are also looking at some dividends, stocks, utility. selective inpretty terms of where we have been looking inside the u.s. we have some emerging markets. obviously, we are watching that

closely. emily: obviously you have apple and other tech companies with big footholds in china. byn you have under scrutiny governments around the world. iily: i am going --rebecca: am going to ask you to repeat. we are asking about regulatory scrutiny or coronavirus scrutiny? tech: your thoughts on big market performance, apple, which obviously has production lines in china, and buddies like google and facebook who are under scrutiny by governments not just in the u.s., but in europe and beyond. got throughn we fourth-quarter earnings, about a third of the companies on the s&p 500 mentioned growth implications of what is going on overseas company production

slowdown. we still were not able to see anybody truly quantify what their impact would be. again, it bears watching. were think about where we last week -- i think we just have to keep our eyes on the fundamentals. we are now down to wait 17 forward multiple. that is not necessarily rich if you think about the growth prospects in the back half of the year. emily: what would have to happen in order for you to change course dramatically? rebecca: our tactical rules would have to change. basically still being accommodative. the trend is still rising at about 80%. investor sentiment has fallen back into neutral. our shorter-term moves will be predicated on those three rules.

that is still positive. if we were to start seeing ,arger, more than one month retail sales, consumer confidence, both the conference board as well as the university of michigan, if we were to start to see lower readings, i think that would be cause for us to reevaluate. felton,ebecca riverfront investment group senior portfolio manager, thank you. emily: coming up, disney just got a new ceo and it is a company veteran. that is next. this is bloomberg. ♪

emily: disney names bob chapek has its new ceo after years of speculation about who would succeed bob iger. company's theme

parks and products. iger becomes chair. this is a surprise announcement, though there is some speculation regarding -- though there has been speculation regarding succession plans for years. contract was by the end of 2021. who were expecting to hear something, just not today. chapek is officially ceo now. iger is still around as executive chairman. iger will handle the creative responsibilities while chapek sort of gets up to speed on the tv side of the business. it is a little strange. previous heir a apparent, who eventually left the company, tom's tax, he was named coo.

this is a little bit of a different approach. emily: tell us more about bob chapek, who he is and what he brings to the role? >> he has been very successful for what he has done, running the parks business, for many years the biggest business and disney and most profitable. they have been rolling out new land andcluding avatar a couple of star wars lands. star wars land was a little bit slow to start. attendance has been picking up. there was the introduction of disneyland and shanghai. it has been struggling lately because of the clone -- because of the coronavirus. he has been viewed as an official operator, a good

divisional chief. whether he has the strategic vision that iger has brought to the company, that is still to be determined. see disney shares move a bit lower after this move. why is the market reacting negatively? was it the surprise factor or something else? is our initial impression. this was a jolt to the market. there is a little bit of just, you have to clear the area little bit. .ger and chapek arnie conference call immediately -- iger and chapek immediately got on a conference call after. also leaves the parks division without a ceo.

's i guess that will be chapek order of duty. that is a very important role to fill. they have realigned those over the years. parks was initially separate from consumer products. there was another executive who a lot of people thought would be the next ceo, kevin mayor, still a very important executive, overseeing disney plus. what will they do to keep him happy and keep him in the fold? emily: you have to wonder, does this have anything to do with the current political climate. obviously, bob iger has been asked many times if he has political ambitions. obviously, a lot of macroeconomic issues. what could be some outside factors that may have precipitated this? >> i think you are asking all the right questions.

so far, what we know is what chapek and iger have said in response, that this is very much about the division of labor. knowing that iger would be heading out the door at the end of 2021 anyway. he is still committed to that date, which probably leaves him out of the presidential election. but you do have to wonder about his ambitions for the future. hasust put out a book, he sort of a tour around that. it is hard to imagine him staying out of the limelight forever after 2021. are there other reasons? i think it is a great question. you have to wonder if maybe someone else was knocking on chapek's door. i am purely speculating now. we will have to do more reporting and figure it out for you. emily: we will ask him directly. we will be interviewing him

momentarily. i will be speaking with iger and bob chapek in the next hour. this is bloomberg. ♪

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paul: welcome back to "bloomberg markets." i am paul allen in sydney with emily chang in san francisco. it's get back to the coronavirus story and focus on markets with david.e lists -- is there anything in particular you are watching? levels,ome key support especially in japan at 200 moving day average. i think what is worth noting as we have another day of risk aversion's, it's the type of negatives we are seeing in the selloff of the u.s.

extremely heavy volumes as well. in case some of our viewers missed it, the s&p 500 is a bad day away from entering a technical correction. we will give pressure across equities early. ae u.s. 10 year yield touched record low overnight. closed above 1.33. we continue to check these lows today. i the looks of it right now, it or nineack for a section of decline in the last nine or 10 days. the u.s. 10ntioned year touching that record low. but yields have been falling around the world as we see risk aversion to have spread. coincidence that a lot of the superlatives and statistics that we come out

with, worst day since august, japanese yen, best today since august, it's almost like we are moving back to the situation in markets and conditions when you had yields pushing down. the value of negative yield in trillion.t 16 or 17 it feels like we are pushing towards those conditions. i do want to bring up that very recently, there is a chart that shows you this, the yield have come down. ,he yields, your high yields your asian dollar bonds in the u.s., brent has been widening. it answers your question that we are seeing risk aversion spread into the credit markets. yields are not exactly falling all over the world. you are starting to see early cracks. david, there have been so many headlines about the potential cancellation for the

olympics. what are you following closely in china and hong kong? david: hong kong will be a confirmation of what we know already. we have gdp coming out today. it will likely show a confirmation third-quarter of contraction. the budget will be much more important as well. muchudgets of how firepower the government is actually prepared to spend. in china, we could talk about this later on, but turnover has been on the up. we have the highest levels in turnover in both exchanges going at or around the time the market selloff. a lot to watch. emily: bloomberg markets anchor david ingles in hong kong with the view from asia. let's get back to the coronavirus epidemic, cases in italy continuing to rise.

up past 320 cases and 11 deaths. growing fears have turn the usually packed venice into a ghost town during carnival celebrations. switzerland has its first confirmed case from a man who visited milan. we are join on the phone from alessandro. what is the latest? the latest is that the number of cases has gone up, but there are slow signs of stabilization. [inaudible] which was quarantined off. on the other hand, the economy is down. alessandro, thank you for

your reporting, we are having trouble with your line, we will work on that and come back to you. i want to talk about u.s. national security. the trump administration is tackling major data thefts by the chinese government. charging for members of china's liberation army for the 2017 hack of equifax and bringing racketeering invite minutes -- indictments against huawei. the assistant attorney general joins us now. i have to ask you, given the coronavirus, i am curious what theimpact of that is on already tense relationship between the u.s. and china on a security perspective? to that issue, despite our many differences, which is an issue we have in terms of pulling in the same direction and having that virus be contained, and has not

impacted our security relationship at this point, but we will wait and see. emily: how would you describe the u.s.-china relationship in cyberspace? john: cyberspace is still a challenge. we're seeing hacks of personnel data, the equifax data breach is the one we announce. that builds on personnel and management records. marriott.on hacks of it is an ongoing effort by the quantitiestake vast of personal data of americans and use them to develop artificial intelligence tools and develop intelligence perspective targeting profiles of individuals of whom they have an interest. paul: you mention concerns for what are those

overshadowed by those national security concerns you described? john: when you have a nationstate pack, the concerns or less for consumers is it's very unusual for a nationstate to use it and open up a credit card with your information and charge a new car to it. the threat is more from a national security perspective, especially with respect to those individuals in whom the chinese intelligence services and chinese military has particular interest. paul: do you feel the united states has enough resources available to counter the sorts of hacks? yes. although, this is not just the u.s. government resource question. a lot of the hacks are of the private sector where the data is held. that is something where we have seen a lot of focus in the cybersecurity.on

and a lot of resources placed in cybersecurity and a lot more collaboration between the private and public sectors. that is what it will mean moving forward. it is a constantly evolving thread. the defenses to the thread have to evolve with the threat itself. as the chinese actors get more in thet -- sophisticated hacks and in trying to hide their hacks. emily: the u.s. decided to add charges against huawei. allegations of racketeering. why add those charges in a case that will already be difficult to prove. john: i think the allegations are meant to get at that the intellectual properties by , that is, according to the indictment, out of the way which they do business. lome have a rogue employee be does something what the company does something wrong once, this is a way that they have done business, it's a way

that they have gotten their intellectual property in a way that they have been held to fund their research and development by monetizing this. in some ways you could say other governments have not taken huawei as as much of a threat as the u.s. seems to believe that they are. how much progress do you think the u.s. is making unconvincing other countries of its position? john: that is an ongoing effort for us. there are countries who have taken the same position as we have, whether it is australia, japan and others. other countries like the u.k. have decided that they can mitigate that threat while having equipment on their networks. that is something we disagree with, and is something we will continue to work with like-minded countries around the world, in order to demonstrate that threat to them and explain how difficult it is to mitigate it want to explain the networks.

paul: is there a case of a double edged sword? that you might actually end up deterring some of china's best and brightest coming to the u.s.? we want to be clear that we are open for collaboration, we are open for students to come here, we are open for researchers and employees of various companies to come here, the limit come he had need to act aboveboard. they cannot come here for jenny to be one thing and then be something else. they cannot comfort to any network at one school and work to another school and different lab at the same school. it is a balance that we have to strike, but our message is that our universities and businesses remain open, that when you come here we expect you to act openly and honestly. emily: thank you for joining us here in the studio. now to an update to a story we

have been following closely. a major contract has been scored with the department of defense. provide software to the pentagon. trying to have been crack into it for years as a company is exploring an ipo and listing at an effort to go public. peter thiel is a cofounder and close supporter of president trump. howng up, the rise of -- influences are helping political candidates get around the rules. that is next. this is bloomberg. ♪

paul: welcome back to "bloomberg markets." let's check in on the first word news. spanish authorities have isolated 1000 deaths at the seaside hotel on the canary island.

italian man and his wife were staying there and tested positive for the coronavirus. they may have been infected during a recent trip to italy. a second test later on tuesday will confirm the diagnosis and whether the group needs to be formally quarantined. consideringump is an official response to china's expulsion of 3 wall st journal reported. piece, which beijing viewed as discriminatory because it mentioned china. it is believed one of trump's responses could be a tit-for-tat expulsion of the chinese journalism from the u.s. the former egyptian president has died. he was 91. years -- he 30 ruled for 30 years be fee -- before being forced out of office. he killed more than 850 protesters by his security forces. he was only found guilty of fraud.

news, 24 hours a day, and on quick take, powered by more than 2400 journalists and analysts in more than 120 countries. this is bloomberg. the u.s. presidential candidates continue to spend big online. a quick check of facebook's library shows michael bloomberg, the founder and majority shareholder, far outspending network, but he is followed closely by president trump and tom steyer. these kinds of spending numbers don't tell the whole story. at the rise of sponsored content has given consumers loopholes in political advertising. schmidt is the founder of dovetail. thank you for joining us. we are in the run-up to the south carolina debate tonight, and the primary there. has the weekend, what surprised you about the new tactics online and traditional

that the candidates have taken? mike: it is not new to me. i see tons of activity on sponsored content. we have been preparing for it and we have been thinking about intensely as a team at dovetail. we have to be nimble and pick about these things more intrinsically and we have to be careful about how we position ourselves in the space he does we are a neutral third party. it is becoming a big opportunities on for us and a big area of interest for us, we also ask ourselves what are our responsibilities as a neutral third party data company and workflow company that treats this ecosystem equally. where do you draw the line? where should the candidates draw the line if they are fighting loopholes and are abide by company policies? mike: the answer to sponsored

content, there is two reasons. one is the rising cost and customer acquisition mike facebook and instagram, and the diversity of advertising content. people want more places to advertise. at the end of the day, our strategy is to inform and educate. at the end of the day, people would do whatever makes sense for their campaign. it is hard to stop these things at a company like ours, but what the platforms like facebook, they have more responsibilities to crack down on content that is either fake, or misinformation or fake news. specifically there are government agencies that need to crack down on these issues as well. a thing thation is comes up when discussing these matters. do you believe there should be more, and which parts of sponsored content should it focus on? platforms are advertisers ? mike: i think advertisers need to be held to a higher standard.

orthey are sending fake news lying to on purpose, there needs to be more ramification for those types of customers, specifically on facebook and instagram. we see more and more of these things come to fruition, we think about the responsibilities for instagram and facebook to collaborate with governments around the world. you see activity in singapore, the u.s., and i think zuckerberg making his opinion in the wall street journal, it is looking to me like he is becoming more in tune with some of these regulations. over time this is the tip of the iceberg and we will have more and more regulations as we think about the future of this particular advertisement. some people say it is not enough, some people think it is on pace to change the industry.

we can always do more. i am a innovator, i have to think that way. when i think about improvements to the flat -- platforms, how can we change the narrative's for election cycles? how can lehman to these platforms? i want to make sure we are helping be ecosystem. we are china make sure we can be thought leaders and how can we get to the right solution because this is a tricky subject. combating the fake news? mike: machine learning is a core piece of our pitch here at dovetale. i think about how everyone is scared about the situations we are in with machine learning in artificial intelligence. i think it is, do you learning and artificial intelligence and make these things harder, easier, or do you think we will have an easy way to collaborate in the future?

sometimes i cannot tell the difference. data systems, privacy, more and more of these data systems, how can we be more educated as a society, and how can we understand the systems more? in general, people don't know how machine learning works or how data scraping works or how obtaining data works. of course data is a huge part of our business at dovetale. making sure they can use and but all work into the fold, in general, what we find in our surveys is most people don't know how this data is obtained, nor do they know that facebook is the same company as instagram. there is a lot of education happening in the markets, specifically around machine learning. it should be introduced at younger ages. people should know how the systems work, and specifically how social networks make money. ofly: there is a possibility

the democratic field consolidating significantly over the next couple of weeks. some people are hoping that happens, but it will be bloody until then. which tactics are you watching for? mike: i am keeping an eye out for bot networks. specifically in countries like indonesia where there is a high pocket of bots surfacing through elections and fake news cycles. i am looking for fake news specifically. an article specifically mentions fake news as it pertains to the bolivian government. we don't get paid for this stuff. we just look for it. our business model is specifically with brands and agencies. this is all interesting things for us to look at. at the end of the day we are really concerned with how instagram, twitter, tictoc, all of these networks are cracking down on fake news, bot networks.

a good they are doing job. we can always do a better job. it is a tough thing to do. i think what we need to focus on is working together on these problems because they are vast. facebook has billions of users. twitter has hundreds of millions of active users. we have to work together as a country to figure out these things. machine learning can only go so far. isly: president trump looking ahead while the democratic candidates battle it out. he already bought the you tube head for election day. how much of an advantage does the president have, and will the democratic candidates be up to the task of taking him on online? is a significant amount of spend through the trump campaign. him and his team know the strategies. we see it clearly. when someone follows a specific account on twitter or instagram,

they are pushed more content from those relative positions. we think about how much advantage other elections -- or how other candidates have. you are hitting a huge portion of the eyeballs in america by buying the head on youtube. equaleed to be more across all the different candidates. there is a bid -- there is a bid spread with advertising, but there could be more regulations from government agencies to tackle problems like that. it is too big of a problem for us to tackle. worried about sponsored content, that we see the data as a third party and we are not bias on that data. paul: mike schmidt of dovetale, thank you for joining us. another executive departure today. mike is now the company's lawn

dipss his counterpart down. that story is next. this is bloomberg. ♪

the ceos stepped down, leaving the founder as the company sole ceo. to discuss this we are joined by bloomberg tech's nico. i felt like i talked about this transition and how it would work and why mark any off wanted a co-ceo. what happened? block years ago keith became co-ceo. it was august of 2018 or so. now the company is saying that he will step down from that role. he will remain a special advisor. it seems to be on amicable terms with mark and the company. mark said on the earnings call with analysts that he looks forward to partnering with keith

on his next chapter, which is undisclosed. to do aif you are venture of his ow. n. he also said that keith block was responsible for so much growth, but no longer wanted to run the sales organization. he really wanted to deemphasize that. some are going to be lower-level executives that will be overseeing the sales organization in the short term. and bret taylor, an executive close with marc benioff and ceo salesforce will be at the top of the company. emily: he wanted to start his own company. what does this mean for the business? nico: for the business it could mean that some of the old-school things that he brought would be lost. he was someone i was always thinking about the market opportunities.

onesforce started to soak us selling to individual industries and now they are going up by a that is itt emily: for this hour of "bloomberg markets." ♪ when you move homes, you move more than just yourself.

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>> very good morning. markets have just come online. open in and south korea an hour. welcome to "bloomberg markets: asia." haidi: health officials warn of ther disruption to lives in u.s. the centers for disease control says it's not a matter of if, but when the virus becomes widespread in the u.s. asian markets prepare for

another tough day, following a big selloff in the u.s., stocks tumbled to a 12 week you will -- 12 week low. disney chief bob iger talked to bloomberg on the day he is replaced. that interview was coming up. lookinglooking forward to that conversation, let's look at our markets trading in in the early part of the midweek session. this after a horrible leap from wall street. therefore it selloff. the s&p 500 is now the worst fell off we have seen since december of 2018. we are approaching losses close to 8%. downside when it comes to trading in australia, 4/10 of 1% as we get into the staggered part of the open. .ew zealand off by close to 2% it is looking like a muddled picture when it comes to the future session. nikkei futures up a 10th of 1%. we still saw yen strength and out over the continued u.s.

futures looking like it might have a modest recovery after the loss in the previous session. losses due to nerves as u.s. health officials are warning americans to prepare for a coronavirus outbreak, saying a pandemic is likely. >> it is not so much a question of if it will happen, but rather more a question of exactly when this will happen, and how many people in this country will become infected, and how many will develop severe or more complicated disease? tohave been preparing address this type of threat and limit the impact on our communities for many years. let's cross over to tom mackenzie in beijing. his is a pretty stark warning from the cdc. marketsdlow said, should not panic, we have this under control, but the cdc says

it is not a matter of if, but when. m: divergent communication from the cdc on one side and the white house on the other, what the health officials from the center of disease control say they do have an emergency plan is they succumb to pandemic. they say that a pandemic is likely. the u.s.of cases in remain relatively low, but this emergency plan is put in place, and if you do get the pickup of human to human transmission, this of plan would cause disruption. closing of schools, sporting events, and business meetings. in terms of the messing zheng -- messaging, president trump says the virus is well under control. larry kudlow is saying that we have is contained. that was the line from him. he said you need to look at this calmly at the steps we put in

place so far and it has done a good job at containing the virus. gettingd messages are repairs. a couple of challenges from the u.s. they have 30 million and they need 300 million health workers. the other challenge for officials is the u.s. looking at this disease is the question of how they implement these measures. switching focus to europe. you see continuing number of cases. deaths so far in italy. 283 confirmed cases. in spain you have 1000 people locked down and a hotel after one of the guest was confirmed to contract the virus. in switzerland. additional cases in austria and cases in croatia. europeans will not stop or close borders and will not stop the free movement of people, but they will step--

up information sharing. u.s. officials are downplaying this outbreak, but a similar rhetoric is coming out of china as they continued his to the line that the impact will be limited. tom: we are hearing from president xi jinping reiterating with the ethiopian trimester that the steps china has taken has curbed the threat of the virus. they will continue to meet their economic and social targets for the year 2020. what we are hearing from the state council's new measures to support businesses, particularly small and private enterprises. including 71 billion u.s. dollars of free lending facilities, commercial banks cameron on. it will also cut vat for all companies in the province of hubei, which is the center for this virus.

it will become cut for other companies across china from 3% to 1%. additional measures being rolled out by the state council. investors are expecting that in the future you make that cut for reserve ratios for the banks and the cut for the benchmark deposit rates. shery: tom mackenzie in beijing, our china correspondent. let's turn to the situation in the rest of asia where more situations continue to spread. the hong kong government has announced more measures preventing schools from we opening. how is that being taken? yvonne: not very well. this is not the first time they have had to push back that resumption of school to now after easter. this is another month were kids will be out of school and parents say, i am up to my neck china homeschool my kids because they are expecting at least 13 weeks that kids will not be back in school due to these

government mandated shutdowns of the school. that is a lot to take in. was protest related issues, now it is the coronavirus. now it seems like people are asking for refunds of tuition. hong kong, private schools, international schools are not cheap. upwards of $20,000 a year. this goes to show how prolonged the virus impact could have on the economy. that is why all eyes will be on the financial secretary when he delivers his budget today. the city expected its first budget deficit -- deficit in 15 years. we will see how he taps into the cash reserves. $144 billion worth in the city right now to try to stimulate the economy that is facing back-to-back recessions. over in japan are growing questions about what will happen to the tokyo summer olympics. what do we know? yvonne: we continue to hear from

the olympic committee continuing as planned. this was after we heard from japan's football club that has basically put their games on hold. they follow the likes of south korea's k league and south korea super league. in terms of the summer olympics, which is five months away, they do say they have full confidence in japan and china that they will take the necessary measures to adjust the situation and countermeasures against this virus. it is certainly going to be a key focus as they look ahead to that summer games event happening. but it is still going on, they say. with theonne man latest in hong kong as we track the spread of coronavirus. there is an uptick in fallen angels in companies like macy's get downgraded. up next, hsbc tells us

the bond market opportunities as the coronavirus spreads. this is bloomberg. ♪

boby: disney has named chapek the new ceo. he is replacing bob iger who will remain chairman. ours handed over to bloomberg technology anchor, emily chang. like to welcome our bloomberg television and radio audience. fromger is joining us disney studios in burbank, california. thank you for joining us. this announcements happening moments ago. this ending years of speculation about who might succeed you. why now and why is bob chapek the right person for the job? mr. iger: it is a great time to

begin this transition. i was going to be leaving the company and leaving my role as ceo at the end of 2021 harry the board has been in the process for some time considering who best to succeed me. bob chapek not only knows the company very well, having run of few of our important businesses, that he is also someone that we know. we cannot think of a better candidate to take over the company at this time. in terms of why now? we recently completed the acquisition with 21st century fox and have been engaged in assimilating those businesses. we deployed a brand-new strategy, our direct to consumer strategy with his me plus netanyahu blue and hot start. assetthe fact that our base and our new strategy is in place, i next priority was really making sure that our greatest pipeline was as vibrant and rich as possible at the company, particularly given the

new strategy. concentrate me to on those pursuits of the company, i needed to turn over the reins to bob, to someone else, so that they could essentially run the company day-to-day and do what i think should be the priority at this point. it made perfect sense and creates a really smooth transition, given the fact that i will be around to advise bob when he needs it, and bring bob heo some of the business;' has not been familiar with. that gives me the opportunity to spend the time really working on our creative side. bob chapek, day one for you today -- is today. talking about the streaming strategy, you had to hit sequels to toy story and frozen. you have opened the star wars person of -- portion of that the park, where do you intend to double down?

mr. chapek: i intend to double, the same strategies bob has established 15 years ago that served us so well. at the core of everything, the center of our brand is creative storytelling. if the creative storytelling is right, then everything else is right, no matter where you put it. whether you put it in theatrical channel, disney + or the theme parks. the thing i have taken away from bob geiger's legacy is getting the content right. emily: can you give us an things he will be focused on, television, star wars. mr. iger: creativity abounds the company, whether it is a television channel or our various movie studios, or all of the places that we create globally. there is a lot of creation outside the united states.

at all have any specific priority, but fueling the pipeline of our new direct to consumer business is very important to us. role they will a play in the future of the company. there is a lot to do. a lot of creative activity. it makes it exciting and separates his company from so many others in the business. it is a global business, bob chapek, you'll have to get used to being in the hot seat in answering a host of questions. the coronavirus's front and center. you have seen parks in china. can you give us an update on the status of the parks there and what life is like for employees? mr. chapek: we are not prepared to give an update on the impact of the coronavirus on our business. but i will say that when you have a brand as strong as us with tremendous franchises and built in consumer demand, we know that when we are able to reopen, we will come back better and stronger than everemily: --

ever. emily: bob iger, are there any jobs that are of interest of you? your political interest have been speculated. what else might we see you do if not a disney? mr. iger: i have not made any decisions about what comes after disney. i will have to use my imagination. i am concentrating on priorities we have talked about. i will not take my eye off the ball until i retire at the end of 2021. emily: you are leaving at a time when the coronavirus has markets in upheaval, a very competitive election in the united states, bob iger, what is your outlook on the macroeconomic picture in 2020? bob said, iain, as will not comment specifically about the impacts of the

coronavirus. obviously it is very unfortunate and we feel for all of the people affected by it. overall, we thought that the world was quite a hospitable place for our company. as bob mentioned, our stories and storytelling are enjoyed the world over. our businesses are doing well. the long-term process for our brands, franchises and businesses are looking quite good. we are obviously experiencing some very, very challenging times now, whether you are looking at the stock markets or just the global business environment due to this virus, but we view this as a serious situation. we also know it is not permanent. ans country has always shown ability to rebound from some of the biggest challenges that it has faced, and this is one of them. emily: certainly the changing of the guard. , thankr and bob chapek you very much. thank you to our bloomberg

television and radio audience. back to you. haidi: emily chang with a great interview. you can get that story of changing of the guard at disney and a roundup of other stories to get your day going in today's addition of daybreak. bloomberg subscribers can go to dayb on your bloomberg. can customize the settings where you just get the news on the indices and assets that matter to you. this is bloomberg. ♪

>> i don't think that this is nearly as bad as what the markets are saying. >> the virus will pass. >> we are at the end of 12 years of market run. the risk to the upside. we are focusing on monetary policy. trends.ve shifted >> it opens up a pass for the

fed to come back to an even stance. >> it is not a fundamental change in the economic environment. >> a kind of black swan we have not seen for a wild. >> this will be a delayed theme. some of our earlier guests on the pandemic fears. the risk is that a potential recovery could be shower for many. joining us is our hsbc strategists, max. this gtv chart on the bloomberg shows how the dow jones in just euro transport average has -- dow jones industrial transport average has close. it leads to concerns of what could happen economic growth. why do you think the v-shaped recovery could be shower then a lot of people are assuming? max: what we have so far as what

the sequencing was before the coronavirus outbreak, people were saying that we had this enormous easing of financial conditions and 2019, and that will help to drive actively -- activity globally higher. if you look at new orders minus inventories, if you look at those lagging indicator, you put them into one and combine it into a cycle indicator for the u.s. all we have seen so far is trough thing in the green shoots. before the outbreak, probably the most mentioned words with the reports of green shoots that were bottoming. it was the first good sign, but it was not a v-shaped recovery. it was not what people were buying in 2019 because they were saying, we have this great easing globally going on, and this will go to much better activity. this will go through activity of

pmi wil myers of 52, perhaps the d3 in h one and 2020. we did not see that. trusting was very much confused with recovery. peoples said, we will see this v-shaped recovery. we saw it bottoming out. shery: and on top of that we are getting the virus outbreak. we have seen a 10 year yield and 30 year yield hit record lows. what does your vision then assume for yields going forward? is it just down from now on? max: no. i don't think there is just a downward's. at the -- downward paz. stocks. downward for if you look at the data for asset managers, you have had an enormous buildup of speculative conditions. something like multi-assets as we look at risk assets, that was

extremely shallow. .t does tell that positioning running into this was very long. there are a couple of people being caught off guard. think about the iran issue. that got solve pretty quickly by the market. a week later we made up all of this. we ran to another all-time high in the s&p and people said, if these two things don't bring to market, i will have another choice, even if i want to be bearish, i don't have another choice. shery: it was just a few months ago we talked about 2% yields. has this virus outbreak and the uncertainty put that off the table for 2020? max: we have a 150 handle for the end of the year. the problem is, i think a lot of people that we were talking to, they are a year ahead for 2020. what you are hearing the most is, we only expect yields to rise a little bit. a single guyd saying, i am long-duration.

what you heard was people saying, yields probably not going to rise in awful line 2020 there is not -- and awful lot in 2020. your trade is still short duration. your trade is still higher yield. that still caught a lot of people off guard. i think the one dynamic that has changed extremely in the last couple of months in the last 14 to 15 months, as at the downpour sensitivity of treasury towards risk assets is much more higher. meaning, when risk assets fell off a tiny bit, you see treasuries. you see the back and rallying big-time. why not put it on duration? why not even on the long end of duration even at these levels? haidi: i think even until yesterday, everyone i spoke to this american

exceptionalism story is here to stay and is where you can find shelter while the coronavirus story blows over. does that still hold after that warning from the cdc, and if we see that viral impact across the u.s.? max: as counterintuitive as it sounds, i think it does from a relative perspective. if you think about the e.m. versus e.m. complex, and the environment way, the worst is probably still to come. activitiesve these and uncertainty factors coming through. and asia will be affected a most. em equities will be affected the most. , equity markets that are more affect sensitive and more prone to the cycle that are much more sensitive than u.s. equities.

in in environment, even with the cdc, you and you said supply chain for tech could be severely affected, yes, but what about supply chains for the eurozone? you have a lot of industries example,, for suffering from a structural design, now you have a cyclical shock. that does not smell good. what about balance when it comes to looking at high-yield in this environment? are you opportunistic. are you opportunistic. are you fearful when you look at energy high-yield? max: i am concerned about the dollar high-yield part and energy. i think there is more risk sitting there that people have not panic yet. i want to see the panic first before i get back into the markets. have really stuck to our under ways in u.s. dollar over the last couple of months. where i am more opportunistic is on the euro high-yield front,

particularly the front end. if you look at the front end, you have a lot of good stuff going on. haidi: thank you for joining us. market strategist. much more to come. this is bloomberg. ♪

>> this is "bloomberg markets: asia." again asets plunged investors consider the possibility of a coronavirus outbreak at home. the cdc is warning americans that it could cause disruption to their daily lives, including cancellation of schools, public events and business meetings. the cdc says it's not a matter when thet a matter of virus becomes widespread in the u.s., which has reported over 50 cases. --it is not a question of is of if this will happen, the

question of when this will happen, and how many people in the country will become infected and how many of those will develop severe or more complicated disease? we have been preparing to adjust this type of threat and limit the impact on our communities for many years. the 2020 olympics in tokyo are in doubt, with organizer staying there are more likely to be canceled been postponed if the coronavirus outbreak worsens. the senior member of the olympic committee says organizers have 2-3 months to decide, on -- adding that it cannot be delayed or move. put almost $13 billion in preparation twice its budget. spanish authorities have isolated 1000 guests and workers at a seaside hotel. that is after an italian man and his wife staying there tested positive for the coronavirus. they may have been infected during a recent trip to italy.

a second test will confirm the diagnosis and whether the group needs to be formally quarantined. the former egyptian president has died. he was 91. 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 protesters by50 his security forces. but in the end, he was only found guilty of fraud. global news, 24 hours a day or day, and onrs a quick take, this is bloomberg. ofry: of get a quick check the asian markets. the asx 200 is falling for a fourth consecutive session. every sector on the australian stock market is being led lower by utilities and communications stocks. it is at the lowest level since early january. kiwi stocks falling for a third

station. nikkei futures pointing higher. the japanese yen is under pressure, this is after three sessions of gains against the u.s. dollar. u.s. futures also pointing higher. this after stocks in the u.s. plunged to a 12 week low. let's bring in david ingles. stocks in asia are bracing for another selloff today. david: it is hard to see otherwise. maybe to the point on the futures you are mentioning. u.s. futures yesterday were putting on what happened overnight with the u.s. dow basically a bad day away from record low. you are mentioning the chicago futures up 115, that that is after the cut off, it looks like we will open up closer to 22,000. i am being generous. we were 20 26. it looks like we will hold it

right at or right below the 200 moving day average. i do want to note, you kind of asia --at -- looking at we're at eight or nine decline in the last nine or 10 days. you have to think at some point when will buyers swoop in? it is interesting see -- interesting to see how that flows have been. nothing goes up in a strange line up or down, but then again, no indication right now that there is a massive amount of money waiting to get back in at this point in time, especially since the macro data continues to just be revised lower, as well as the forecasts. haidi: such a lack of predictability or certainty as to what a rebound might look like. we got the latest export numbers for hong kong. we were expecting them to be bad, but they were so bad, particularly as they don't

reflect the virus related shutdown. david: i am glad you brought that up. more common commentary seen recently is, how do you price this type of risk? case in point or the export numbers. we were expecting a single digit drop, but we got exports for january at 22%. underscores the difficulty and the possibility of trying to determine what the virus impact is. there is a seasonal affect their. last week of january we had forced closures across china. the last few days bloomberg economics was affecting those numbers. we are getting gdp numbers today. confirming a third straight contraction. i know you guys talked about this with yvonne, the budget

coming out and the graphic that shows you this. hong kong has been saving up for a rainy day. guess what, rainy day is here. deluge.hat a david, speak to you soon. we will have plenty more ahead on the hong kong budget throughout the day, including analysis from hong kong legislative council member. don't miss those conversations. the ongoing coronavirus outbreak is no testing the limits of china's surveillance system, which has been used to track citizens whereabouts, their interactions, etc. shelley joins us now. how has the dutch how has this affected china's state? a lot of people say this is been a test of how some of the measures and technology in play are creating the containment of

quarantine and enforcing these measures. building up and investing in all sorts of surveillance and infrastructure, cameras, to tracking devices. you would think, at this point in time, the coronavirus bid the -- would be something that china would have an upper hand in being able to track people and their whereabouts. what this is showing is that this is much harder to track people and to actually help contain the virus. even with all these tools. tell us how they are using the gps in phones to track people through mobile phone companies in china? in china you have to have a national id card in order to buy a mobile phone. all the state run mobile telecom providers can track you and they can connect your phone directly

to your national id. so, they actually can track where you are and where you have been going. we spoke to one guy who studied in will on and traveled 300 traveledin wuhan and 300 miles away from his home and got a call from the plea saying, we know you have come to our city and we know you have come to wuhan, how are you feeling, do you have the virus? big tech area is like companies like alibaba and tencent have helped the government develop a rating system. you could input your health and travel history. it gives you a rating or a badge to tell you whether or not you might be at risk for the virus. now buildings, malls and subway stations are requiring people to hold up their badge and say, i should be able to enter this office building because there is little risk of me having the

virus. so what are the big tech names doing? shelly: main companies like , that is oneencent of the biggest initiatives i have happened so far. also, all of the telecom providers have been apt to join this fight. then you have folks like the virtual doctors that are playing a role in the coronavirus fight, as well as facial recognition companies and scanners that can try to scan people to see if they might have the virus. shery: our bloomberg technology reporter, thank you for that. coming up next, after the downgrade of macy's, ubs is predicting $90 billion of u.s. investment grade debt could be cut this year. details ahead. this is bloomberg. ♪

shery: this is "bloomberg markets: asia." the recent downgrades of macy's and brainerd are continuing the rise of fallen angels. companies that have seen your credit ratings reduced from investment grade. by this year, the volume of fallen angels is likely to fall. let's bring in the banks of head of credit xiao jie. matthew, it is very tempting to the fineness as what has been going on more broadly around the world, which is this massive risk of the coronavirus and what that means for corporate earnings and economic growth. just tell us just a whether these risks were building even before these latest headwinds. matthew: thank you for having me. i think the answer is there are unique and common factors associated with the downgrades.

the bottom line is it has been building for years. if you look at the downgrades of kraft heinz, it is really averaging through acquisition. execution challenges. the change of consumer preferences for what they purchased and what they consumed. lack ofe company's willingness to commit to further debt reduction -- reduction. , therecase of renault was execution risks coupled with environmental regulation and esd or climate change concerns. in the case of macy's, really getting more of the change in consumer preferences. more of a shift in this context , away fromd-mortar brick-and-mortar into online retailer. -- company also struck structuring plans in the face of those challenges. kraft heinz is the other one you had. beyond these names you are looking at, are you keeping a

watchful eye on anything else at the moment? matthew: the announcements that --published recently showed let's call it $80 billion to 90 billion dollars in fallen angel debt. most of that we think will come from the consumer discretionary space. that is leverage in the corporate sector that is at a record level. 47% of u.s. debt to gdp. december percent increase this cycle, which has exceeded the last two cycles. we think this cycle is fairly long in the tooth. as earnings moderate and you have earnings growth, it is essentially evolving around zero. you are going to see more pressure on companies. there is more vulnerability, there is less room for error. most of the analysis we do on shocks to market taste leverage, different levels of measures

discussed the consumer discretionary area will be a continued area of focus. i think if your viewers, in the context of downside risk, we did with -- we did deal with a comprehensive scenario analysis. it assumes and no recession, low but stable growth in equity markets that essentially moved sideways this year. in the downside case, what we assume is the 25% drawdown in the s&p 500. a 20% decline, and essentially a recessionary shock. in that environment what you see is the consumer discretionary area comes under a substantial amount of pressure. the that weakness really spreads out across other sectors. in particular, industrial and energy. you also see it spreading to what is less cyclical sectors, things like health care and telecommunications. honestly in the context of the recent risk off environment, the substantial u.s. equities, we are getting more questions in

the context really of the downside scenario and where the vulnerabilities lie. shery: markets are positioning with that. this gtv chart on the bloomberg showing that koppers gold ratio falling. we saw at the 10 year yield and the 30 year yield falling to record lows. you mentioned the downside risks that you guys are factoring in in your different scenarios. if, given the uncertain environment right now, do you think the credit rating agencies are doing a good job at following all of these latest developments, or are they falling behind the curve when it comes to assessing these risks for these corporations? say the ratingd indices have a different job. they are intended to rates are the cycle. those ratings are supposed to be somewhat stable. in the context of the shock that many clientsates,

we speak with our stepping back, trying to assess the situation and not really taking much action. at least on the credit investor side. i think the bottom line is, if this does result in a material shift in the macroeconomic backdrop and really shift us tomorrow the downside scenario, the rating agencies are behind the curve. i think they are in a wait and see mode right now. we are seeing, as we talked about at the top, two or three large instances of rating downgrades. we are not seeing a substantial pickup and rating activity over the last few weeks. shery: great having you with us. ubs head of credit strategy joining us from chicago. don't forget our interactive tv function, tv . you can watch it live and die been any of the securities or bloomberg functions we talk about. become part of the conversation by setting is instant messages during the show. this is for bloomberg subscribers only at tv . ♪ this is bloomberg.

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haidi: this is "bloomberg markets: asia." southeast asia's biggest developer has reported net incomes for the fourth quarter of 927 million singapore dollars. it says it is well-positioned to address any challenges from the coronavirus. us by phone from singapore. great to have you with us. give us an overview of your latest results, and also give us the reason behind you freezing the wages of your management. i think the results, thankfully speak to our ability combinationost the with them in 2019. we have been focused and making sure that the integration of the two companies is successful. and we have been very

disciplined and focused in our strategy of making sure we were cycle capital affectively and build up our recurring income. i think that speaks to the results that we have been able to deliver for the year. in terms of the measures taking -- taken by senior management i think this is a statement of solidarity and and poor students at this -- and period of at this time. it is important that we all stand together and whether the storm. shery: the storm including the outbreak of the coronavirus. what has been the impact so far on your performance and business? we are diversified and a resilient company as our results test. retail and hospitality are two of our core sectors. their motto -- among the hardest hit in the first wave of the virus.

i think you will see an impact in our trading and operating results, particularly in the first quarter. whether that extends beyond quarter number one, we are very much dependent on how long the situation persists. haidi: to the extent that you are seeing an impact in projects and construction delays, are you seeing anything there? ,ndrew: i think the challenge as many observers have noted, is in the supply chain in china. that extends to things like construction and project development. i think we will see a little bit of a delay in the first quarter as workers get back to where gradually. hopefully then normalizes as the year plays out. haidi: the government seems reluctant to ease the government sector. this is something you would encourage them to do? think we areina i

adopting a wait and see approach. ourave built-in projections, as well as our plans for our development business, the fact that measures were not expected to be lifted anytime soon, if it comes i think we will take that as a welcome measure and a signal and the government stakeholders are pulling together. not expecting any changes to be implemented. shery: we saw the five-year loan prime rate being lowered. much not being lowered as as the one your lpr. in termsyou expecting of policy maker measures and coming from the fiscal side of impact on youran business positive or negative? andrew: i think it will be positive. it is an indication of a discipline and discipled approach in supporting different sectors of the economy.

decrease in interest rates, for willle, will help us, as referring credit of a better standing. no changerting to see in appetite to help provide us with capital to fund our growth. we would welcome further stimulus on the fiscal and monetary front. anry: can you give us overview of your properties in china? havef your shops in wuhan been closed, some outside of the city were operating was shorter hours. what is happening to your office properties? andrew: similar to the other businesses who have a presence in wuhan, being the epicenter of the virus, our properties are effectively closed in wuhan. they only constitute less than

2% of our overall china business. tieryou further out to the one cities, properties remain open. some of them are on shorter operating hours. we put out a target of dealing with strains and so on and so forth. haidi: would you consider extending or expanding from a systems in support to your retail partners if the situation gets worse? andrew: indeed. we calibrated a response to make sure was proportionate to the level of assistance we believe is needed. we are doing it in a targeted way. recognizing that not all tenants are affected in the same way. i think it is important to measure that response and respond in a very proportionate way. i think the government has also reacted in the same way. if we do end up in a scenario where this plays out on a

prolonged basis, i think we have the resilience and the resources to render further assistance when needed. thank you for joining us. the capitaland group cfo joining us. some of the weakest names on wall street defended cio amid questions of risk hires to china. the overseer of the $400 billion state pension has been accused of being a pond for the chinese government by lawmakers. stephen schwarzman are among those pushing back against the allegations, calling them unwarranted. investigators are blaming tesla's autopilot system and a driver distracted by his mobile device for the fatal accident in 2018. the national transportation safety board heavily criticized tesla for not doing enough to keep drivers attention on the

road, and calls for more research on driver assist technology. it calls on apple and other cell phone makers to do more to keep motorists from being distracted either mobile devices. branson is taking aim at barclays, pushing to end a cycle of disruption as the ceo faces another regulatory probe. he says the board should take the probe into ties with jeffrey epstein, seriously. he says it is just another example of weak governance that has plagued the bank. the criticism is the question over the futures of the resources. he could be the bank as soon as next year. ♪ in on how asian markets are faring. a hard double selloff with the worst day since 2018. we see a decline in new zealand, over 1%. aussie stocks seeing its biggest

three-day decline since 2015 when we had the shock evaluation. the s&p asx 200 off by close to 2%. a little positivity as we head into the start of trading in japan. shery: plenty more to come in and next hour of "daybreak asia." ♪ good morning!

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haidi: the major market just opened for trade. yousef: -- shery: welcome to bloomberg markets: asia. haidi: health officials warned of major disruptions. if butot a matter of when the virus will become widespread in the u.s. fellow on wall street.

treasury yields plunging. new investments and cash handouts. preparing to deliver a budget. japan and south korea coming online. let's get to the action. after theng declines holiday session. more than 3% for the nikkei 225. they are falling more than 1% at the moment. we do look at the japanese and we see it weaker against the dollar. this comes after three days of gains. the movements are relatively modest. -10 basis points.

yieldsl bond rally said lower. 1.3%. a nice rebound of more than 1%. 2% in australia. very close to wiping out all the gains. the kiwi dollar off more than 1%. more than .5% at the moment. this after falling more than 3% for a second straight day. we witnessed the second-worst period since august 2015 in the midst of the yuan devaluation. quite the dramatic fall that we have seen in the past two days. chart.look at this

are watching the moving day average. yellow dotted line. it will act as some sort of support. we are trading at the lowest levels. the selloff -- haidi: the selloff continues. david joins us. i think at this point, in of four tof stretch five days, it is probably worth asking, at some point, the narrative is repositioning.

the reason i bring it up is japan is exhibiting the same time. it is very hard to see how this turns around. measures of expected volatility across pretty much holistic markets. korea and china exhibiting the same thing, if nothing changes. expectingle are still -- howy: you have to love officials are trying to spin this around. larry kudlow said that the stock market is now cheaper and long-term investors should consider buying stock.

>> value emerges. value under normal circumstances, we had that s&p 500. 7.5% over three or four days. drop thisthat same time last month, when you had the virus and economic fallout, we have a chart that shows that ,n terms of any expectation shared constituents between those three. we have not seen as much downgrade on a headline basis. then again, because you're getting downgrades encyclical industries.

is it the right time to jump in and make that conclusion when part of that equation is moving very fluid at the moment? shery: great point. fearsrkets pandemic stoked by officials. warning americans to prepare for the coronavirus outbreak at home. if itis not a question of will happen, but a question of when it will happen. how many people in the country will become infected? how many of those will develop severe or more complicated disease? we have been preparing to address this threat and limit the impact on our community for years. get to ours correspondent, tom mackenzie. , especially at a

time where you have health officials saying this is largely contained outside the u.s. >> absolutely. mixed messages from the white house and the cdc. they say they have this emergency plan. they say it is essentially inevitable. is, weber of cases expect that to pick up. you could be looking at schools closing and sporting events stopped as well. a number of measures they are looking at. president trump says the virus is well under control.

>> so far as containment is concerned, we have tightly contained this, so it is an early success for our side. tom: larry kudlow saying that the virus is contained. a couple of challenges for health officials is the lack of masks. the other challenge that they face are testing kits around the country have proven inconclusive. haidi: in the meantime, we are not see slow down. in spain, that is the next problems by because we have and then 1000 workers

canary island that are put in isolation. not an official quarantine, but this is after an italian couple fored and tested positive the coronavirus. we are learning about new cases in croatia and austria also confirming two more. the cases are spreading across europe and the eu says they will maintain their borders to remain open. hotbed.rtainly a we reported at least 11 deaths there and at least re-hundred or more infections. in iran, this virus is spiraling out of control after the health minister also contracted it. toll is at least 15,

still the biggest number of fatalities outside of china in the middle east. a question of what will happen in japan as well, when it comes to the tokyo olympics five months away. we learned about this virus impact canceling the football league. the olympic committee so far saying that things are continuing as planned. they have plans to address the situation. haidi: continuing to stick to the line that the impact will be limited? --: president xioami believes that they will reach their target for 2020. we also heard from the state council, outlining measures, willding lending that they

pass on to commercial banks. for have also announced hubei.perating in 3% to 1%. they will be leaning on the banks to increase their lending. clearly, this is an area account for 60% of gdp. that is the priority for policymakers. we want to get more details on hong kong contending on the pressure on the coronavirus. just about two or three hours time. rallying for both

measures to stop the blow to the economy. back-to-back recessions and back-to-back budget deficits. in 15rst budget deficit years and potentially a record facet for the coming fiscal year. extra funding, more than half coming in the form of one-off subsidies like retail, tourism. the rest will go into fighting the virus, boosting production of surgical masks, which we have seen a shortage of. they certainly have the ample reserves deployed. will it be in the way of cash

handouts? the big question is, will it be good policy? will they spend it or save it? haidi: tom mackenzie in beijing. let's get you to first word news. saysesident trump tremendous progress is being made for a trade deal with india. speaking on his second day in the country, he suggested any before itave to wait could be signed. american officials have been working to open india up in forrn for restoration export. rival groups clashing with

police over a new law. injured in80 were the two days of violence. widespread demonstrations since december which fast tracked the naturalization for some religiousrn minorities. president trump said he is considering an official response . over ars were expelled piece because it mentioned china. could be a tit-for-tat expulsion of generalists from the u.s. move to step down from the biggest entertainment company. he has been at the company for 20 years. he takes over the top job immediately.

executive chairman through 2021. >> the board has been engaged in the process for quite some time. not only does he know the , but he isy well and hemeone that we know could not be a better candidate to take over the company at this time. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. we are continuing to watch asian markets struggled to recover, but we are seeing many stocks outperforming the broader markets in japan. newsort from the nikkei that the medical systems unit announced that it is beginning

to develop a new coronavirus testing system. number.ng the we are seeing that stock jumping the most in three weeks amidst a downmarket in japan. out.e keeping one eye we will be speaking to the hong kong legislative council. expect in thet to spending plan. the virus and fallout in 2019. this is bloomberg. ♪

will halt its work in relation to the bill. government will formally withdraw the bill. >> we do not agree with the

decision. >> affecting citizens going out and i have noticed a lot of shopping malls have had to close. hong kong has slipped into recession. i have every confidence that hong kong can bounceback. mainland travelers make up about 50% of all inbound travelers. mainland tour groups 40%. sectors andifferent to ensure that we can continue to undertake control measures. shery: he wants what he calls a bold response. we will find out what that means when he delivers his budget in

the coming hours. joining us from hong kong, samuel. give us a preview of what you are expecting from this budget and what needs to be included in order to be supported. have downgraded the forecast to negative .9%. we assume that the situation can be improved. that we will see a technical .ebound but then, the impact of the virus on retail and export. our forecast that cannot be contained. as far as the budget is

, it will be announced in two hours time. year andimulus last the virus announced last week. it is around 2% right now. we expect it to be announced later today. the stimulus measure will be targeted. now we are expecting them to post their first deficit in years. the is showing how strong fiscal position is. up to supporting the economy right now and ensure

that the economy does not worsen from here on out? that thed say situation has always been very good. that is thanks to the capital inflow. this, we should assume there is more liquidity in the have seencause we that the retail sector are taking a hard hit. have --, so ily would assume. are getting the final meeting on gdp later today.

kong is in recession and it is looking like another slump. we are expecting a third straight quarter. is, even if you subtract the impact of the coronavirus, this is an economy that was in trouble. what kind of policy changes need to take place to give it some hope of a stable rebound? >> the hong kong economy or is a small government . in terms of fiscal policy, there is some subsidy.

implement for corporate. policy, the thing , some sort of in october of last year. the other thing the government can do is limited. longer-term change. side of this is contrary -- constrained. give long-term in the future. good invery could be

the short-term and long-term. thank you so much for joining us. there in hong kong. we will have more on the hong kong spending plan. joining us in just about 20 minutes time. ♪

check hey could take -- -- a quick check of the latest headlines. looking aggressively at acquisitions. the bank is looking at targets across business lines and could buy anything that is not another u.s. bank. jp morgan has a greater appetite for deals. rallying some of the

biggest names on wall street. he oversees the state pension fund and has repeatedly been accused of being a tool for the chinese government. this is bloomberg. ♪ hi! we're glad you came in, what's on your mind?

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>> this is the first word headlines. plunged again as investors continue with the possibility of a coronavirus outbreak at home. to paintmericans disruptions to their daily lives. matter says it is not a of if but when the virus becomes widespread in the u.s. it has reported just over 50 cases. of when more a question it will happen and how many people in this country will

become infected? how many of those will develop severe or more complicated disease? we have been preparing to address this type of threat and limit the impact on our community for many years. isolating over 1000 guests and workers on the canary island. that afternoon italian man and his wife staying there tested positive for the coronavirus. they may have been infected during a recent trip to italy. they will later confirm the diagnosis on whether they need to be formally quarantined. organizers saying they are more than likely to postpone the coronavirus outbreak. organizers have two to three months to decide, adding that the scale of the event means

that it cannot be delayed or moved. and former egyptian president has died. office byced out of the arab uprising in 2011. end, he was only found guilty of fraud. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. the global selloff continues across asia as we get more news on the coronavirus out make. banning foreigners. battle of the largest outbreak with nearly 1000 infections.

let's get to a market check. after a 3% down day. equities changing near record lows. down more than 1%. up korean kospi has given all of its games that we saw yesterday, as it attempted to rebound. keeping investors on edge. let's get you a picture. the aussie dollar falling again. we do see the japanese yen weakening. three days of gains. at the same time, the offshore yuan trading on the weaker side for a seventh straight session. now trading at 135 after hitting record lows overnight.

let's take a bite -- let's take another look. record lows in the u.s. trading session, falling as low as 1.305%. in 2016ious record low was around 132. outlook as it relates to the global markets. haidi: thank you. we will start with markets. outperforming. david is in hong kong, taking a look at this. littles it is working a too well. is this history repeating again? we were all in hong kong when it happened. certainly, we are getting close -- we are the closest we have

been to those times, but we are still far off in those terms. debt. look at margin in 2015, wet back were so close. they have not been shy about wanting to support sentiment in the market and here we are now. a turnover back to 2015 levels. david: that is also coming back as well. we had exceeded for three or four days. turnover has exceeded on the

stock market. brokers are going to cash in. that those same symptoms are starting to show themselves early on. haidi: what are the latest indicators that are showing up? it crunches numbers. we have come up with this demographic. imports, so we to recentlynuary and what we noted is the second or third week, imports have basically collapsed. it is really starting to show up. it as a factor in

the equation. it will really show some strain. what you will notice here, goldman sachs most recently, 2.5%. ist you will notice quickly the more recent the forecast, the lower the forecast. a pattern where economy is are lowering their projections for productivity. haidi: thank you. we stay with the impact of the china slowdown. forecast to lift it dividend by a record. questions are being raised about mounting troubles. let's bring our senior reporter

with us. what is the outlook for the iron ore business this year, given that all we are talking about is the slowdown in china? >> iron ore is the key for profit in china, the key market for that export. been a have heard has small fortune, but no real expectations. from bhp about a week ago. a robust talking about amount and talking about expectations for a fairly quick recovery. in of those things can really get up to full speed by next

quarter. something webly will see later today. it will be interesting to see the extent to which they are more or less cautious. they are looking at how quickly activity can resume and what impact is on-demand. we have already heard they are having some difficulties with copper from mongolia and restrictions. the key driver will be iron ore. shery: iron ore futures are taking a hit and steel inventories have surged. how much can china rely on iron ore to lift their profits? >> that is absolutely right.

aty are closely looking those indicators. appears so far that china is continuing to produce an enormous amount of deal but right now does not have anywhere to go. investors are certainly looking at portside stock levels for an indicator there. what the company is saying so far is that demand continues to be robust. scenario for the second half, likely to be more infrastructure intensive. a potential upside scenario. thank you very much. senior commodity reporter joining us from melbourne. we will be speaking exclusively to our next guest.

6:35 a.m. in new york. about what the city needs to handle with the coronavirus. this is bloomberg. ♪

haidi: set to present the anymore budget after month of social unrest and the coronavirus. claudia, great to have you. fromwould you like to see the budget presentation and what measures could possibly help in the longer term? i am not talking about 10,000 hong kong dollars to go out and spend. kong's troubles began long

before the virus hit the city. >> this is the most political has passed kong since 1977. spend.ed to they need to splurge. i do not know if they are going to succeed. it may be a bit less. is about politics. the city leader, carrie lam is a stands from the

pro-democracy protests last year to the current virus fight. ar stance has always been political configuration. let's not offend china. she would didn't -- she would not do as much as she should for includingpeople, order closure between hong kong and mainland. haidi: i want to talk about this chart. they have the money. year after year, hong kong shows that they have a mountain of fiscal reserves at their disposal. budget be and the is it possible to restore political confidence? -- we know that the

slowdown is there and political sensitivities will not delay. herself has been involved in quite a few domestic scandals. popularity rating has gone quite debt gone down quite a bit. as you are saying, our fiscal onerves now numbers around trillion hong kong dollars. it is about 700 billion. on the moneyg fine front. they can afford it. they need to spend. they have been spending a large amount.

building new quarantine projects. direct to mainland chinese bypassing the elected council at the same time. they are spending to the benefit of mainland china, and that is very wrong. they need to answer that question. is the pro-democracy movement still alive? will it gather momentum after the outbreak peaks? >> i would think so. it is quite wrong.

they have become deeply rooted. completely unfair and workable system. capable ofrrie lam performing like some leader of an authoritarian regime and she can basically do whatever she wants under the hong kong system . it is basically a sham. shery: given the experience but this virus outbreak, how important is it for the economy to diversify its business away from the mainland? difficult.be very integration is so vital for

survival. suffering a slow down. what will happen to hong kong? been relying on tourism haveand if we do not tourism, what will we do? us government keeps morning to stay home and not go out. how will it revive is anybody's guests. things are getting really bad in hong kong. shery: thank you very much for your insight. the latest on hong kong. for more on the budget, we will be speaking to pro-establishment lawmaker and founder a little

later. up next, a change at the top for disney. why she is handing over the keys to the magic kingdom. this is bloomberg. ♪

shery: breaking news out of brazil. saying they had their first preliminary coronavirus positive test. we have not seen any cases out

of brazil yet, but the health ministry is saying they have their first preliminary coronavirus positive test. we have seen more than 80,000 global cases already with south korea being the largest outside of china. corporate changes at the very top of disney. iger, who will remain as chairman. emily chang sat down earlier and asked why they decided to make the change now. >> is a great time to begin this transition. i was going to be leaving the company at the end of 2021. the board has been engaged in a private -- in a process for some time about who would succeed me.

he is someone that we know very well and we could not think of a better candidate to take over the company at this time. in terms of why now, we completed the acquisition of 21st century fox. we deployed brand-new strategies hulu and, disney plus, given the fact that our asset base is in place, my next priority is to ensure that the creative pipeline is as vibrant and rich as possible. concentrate me to on creative pursuits or endeavors, i needed to turn over the reins to someone else, so that they could essentially run the company day-to-day, to do

what i think should be the priority. it creates a smooth transition, given the fact that i will be around to advise bob when he needs it. opportunity to spend the time during this period of time, working on our creative side. shery: this is effective immediately. equals toad two hits toy story and frozen. where do you intend to double down? double down on the exact same strategies bob established years ago that served us so well.

if the creative storytelling is right, everything else is right. in the you put it theatrical channel, disney plus or theme parks. the thing i have taken away from his legacy is, get the content right and everything else will follow suit. with: both former ceos emily chang. let's get you a check on the latest news headlines. a driver distracted by his mobile device. the national transportation for notiticizing tesla doing enough to keep driver attention on the road. also calling on other celfin makers to keep drivers from getting distracted by mobile devices. barklay forcizing what he caused a cycle of destruction.

scrutiny of jeffrey epstein has led to public embarrassment and is calling on the board to take the matter seriously. hesources telling bloomberg could leave the bank as soon next year. jamie dimon says they are looking at acquisitions. the bank is looking at targets across and could buy anything that is not another u.s. bank. they had a greater appetite for deals. are looking and we will be more aggressive with acquisitions across the board. you can get payments and marketplaces.

that is the world. we should be very creative. we are seeing broad pressure across markets, all following more than 1%. falling 2% at the moment. the lowest level since early january. the nikkei also down 1.3%. that is it for this hour. our coverage continues as we look ahead to trade in shanghai. haidi: bloomberg china open is next. this is bloomberg. ♪ awesome internet.

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shery: 9:00 a.m. wednesday in beijing. 8:00 p.m. in new york. welcome to "bloomberg markets: china open." i'm shery ahn. haidi: i'm haidi stroud-watts. we are counting down the open of trade. our top stories. investors back and down the hatches. equities continue to fall on fears of the spread of the coronavirus into europe and could cross into the atlantic. shery: the virus could spread in the u.s., but the fed's vice chair said it is too early to speculate on the outbreak's economic impact. haidi: a new investments in cash handouts. i hong kong prepares to delive