>> the coronavirus spreads. the u.s. identifies the first patient with no ties to the outbreak. the president assures the face little risk. europe plunges deeper into the red. and warnings abound. but make her ab inbev forecasts its worst quarter in a decade. maker ab inbev forecast its worst quarter in a decade. ♪ nejra: let's check in on the markets.

more than 2% on the stoxx 600 great s&p futures point to another day of decline in the u.s.. on track for six days of declines and heading for lowest close since october and global stocks for the 10 year yield hitting a fresh record low. yields are dropping across the u.s. curve. the two year yield sitting around 112. to the euro missed the risk off memo? three out of the past four days. 10947. it could be down to the broad dollar weakness. the yen has been big today along with gold. saying we could get 1800 on gold. wti extending its slide beyond a 13 month low. let's get the bloomberg first word news. >> we begin with italian opposition leader matteo salvini who accuses the government of underestimating the threat of

coronavirus. he is urging them to earmark at least 10 billion euros for emergency measures. >> i think it will be the -- composed of factions the don't like each other. it's already the weakest in terms of growth. after the virus, which will evidently slide us into a recession, a government that has been disagreeing on everything for the past six months could not be the one to give answers. >> the bank of korea has decided against cutting rates and is providing loan support for coronavirus hit companies. two board members dissenting, calling for a reduction. the central banks as it's still too soon to gain the full impact of the viral outbreak. for the year the bank also downgrading its growth forecast and it says it's possible the economy will contract. ab inbev of, the company

forecasting the worst decline in quarterly profit in at least a decade. it sees first-quarter earnings dropping about 10% that after the coronavirus outbreak dented its business. the world's largest brewer says it's disappointed in its performance. we end with saudi aramco, it is starting early preparations for an international listing. we've learned the world's largest public the traded company is in discussions with wall street banks. they are looking to draw up scenarios for the secondary listing. -- apo if you months ago few months ago ended up being very domestic. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. nejra: thank you so much. to give you the headlines from .he top of the show

coronavirusck to and that's our top story. more coronavirus cases reported in countries other than china for the first time. significant develop in highlighting the spread of the epidemic around the world. president trump tried to ease fears around the virus. because of all we've done, the risks of the american people remains very low. we are ready to adapt and do whatever we have to. this one is different, this is like a flu. i think the stock market will recover. the economy is very strong. we are totally ready, willing and able. nejra: the president said the stock market should recover but markets are still lower this morning. strategists from goldman sachs warned against the dip and on the company front, microsoft and --

joining us now is managing director joining us now. great to have you with us on the show. citi saying it's just getting started and what they point to is the uncertainty from coronavirus but also around the fed and the constraints on the fed. is now the right time to actually be getting in and buying any dip on u.s. stocks with the drop we've seen? >> i don't think so. but more broadly for quite a while now we said it simply time to buy overall. when you look at the polarizations of performances across sector, for quite a long time what we are buying and more -- was more important than what -- whether you are buying or not. early to buytoo anything that would be exposed to the supply chain. conversely --

those are getting hammered where is medium-term growth spot is in changed and if you have them already you keep them. if you don't you can find entry points. nejra: are you thinking about reducing your exposure to equities overall as a result of coronavirus or have you just been making little tweaks in terms of not doing it through indices but through specific sectors. even this crisis isn't happening in a vacuum. the context matches -- matters hugely. what we had until say two months ago. it was a market that had been really driven by these big , thedity supply last year non-qe qe. the markets have been very high so we had to reduce our exposure the beginning of this year on the back of this. clearly what is happening now is

encouraging us. where the crisis started, therefore in this kind of typical trajectory of infection, things are starting to slowdown in china and probably a few weeks. things will be looking much better. some names a strange look interesting. nejra: is your next step likely to be further reducing equity exposure or looking for those opportunities in certain areas like china? >> it will depend on date of course. i don't know what we will have -- what will happen in europe. if investors will be spooked further by all these headlines, so we have to be data-dependent. ourundamentals surely analyst right now are trying to -- ifose names on which

they are starting to reach impactful level. that's the spirit right now. --what the 10 year yield a two-year yield around 112 in the u.s., what is that due to your portfolio? to reallyficulty is understand what drives those levels. is recession feels and those may be excessive right now. but conversely part of it is due to simply risk management. byple like us have managed increasing the duration of our portfolios. today don't provide huge value to be honest unless you don't trust at all the fed and you think it would miss their inflation target and therefore those ways it's

attractive. the willingness of the fed to really pursue higher inflation levels. we would not be really buying at these levels anymore. didier stays with us for the hour. the u.k. says the virus passed on in italy and canneries. they saying they are not 15 after two new positive tests. coronavirus cases in the u.k. now 15 after two new positive tests. that was passed on a daily. also coming up headlines from malaysia saying the coronavirus outbreak led to a drop in aurism and they set up similar packet for the virus. they said it will beef up its offering of premium brands.

we talk to the company cfo next pray this is bloomberg. ♪

nejra: economic, finance, politics. let's get the bloomberg business flash. falling as the ad group expects a fourth with no sales growth. it severs and fears, for -- competition and after years of cuts, the consumer brand are getting to spend more. the crowbars will hurt this year's results.

it will also delay its ability to achieve a return on equity targets of 10% by 2021. the fully year profit coming into -- that slightly below estimates. the lender also announced a buyback of half $1 billion. coronavirus, we have actually seen the first couple months, if performed very well though clearly the impact of that will probably come through in march. the uncertain future the moment is in which markets it will take in. >> microsoft cutting its outlook due to the coronavirus. the outbreak slowing production of computers and hitting sales. it doesn't expect to beat earlier guidance. it's returning to normal in a much slower pace than expected. apple and hp costing estimate -- cutting estimates because of those disruptions. that's your bloomberg business flash. retail ands talk

shares in europe's largest on -- online retailer zalando are falling. joining us now is the chief financial officer of zalando. delighted to have you with us. thank you for joining. talk to me about the potential coronavirus impact that you are seeing on your business at the moment. how would you characterize and quantify it? >> good morning. exciting to be on the show. so far we haven't seen any material impact from the coronavirus on our business. obviously the situation we are closely monitoring what happens and also preparing for any type of scenario. it's important to find out that we are in a better position than any other businesses in the industry with regards to supply. also the inventory we need to have a successful spring and summer season is that our warehouses. on -- obviously pendant

than many other players. frome can offer our powers the safety of their home. we expect to continue on a strong growth creature -- increasey and also an of around 10%. in the range of two hundred 25 million to 275 million euros. anticipating any increase in demand from people staying at home and spending at home online? far that would be speculation. we feel well-prepared and obviously we are happy to supply all those customers that want to shop with us but i think it is too early to say whether it will present any type of opportunity for us.

>> what are you preparing for is the potential biggest downside risk if as you say you are not as exposed to supply chain issues are some of the retailers? so i think with regards to the supply chain we are focusing our attention already on the fall winter season. although we were -- we are covered for spring summer. we're working with all suppliers to make sure it's true for fall winter and since we are working with more than 2500 brands sourcing from an countries across the globe i think we will be able to make sure we are good for winter. we are also making sure that we can continue to operate as planned in europe, this is mainly the case for existing network tory benefit from a wide-ranging network with more than 10 sites across more than five countries and this also allows us to react flexibly to any type of situation. nejra: your profit guidance for

this year missed some analyst expectations. would you say that for the time being zalando is more focused on growth, increasing customers, gaining market share rather than on profitability? >> our number one priority is definitely to drive strong above market growth. drive upn the key to the company the long-term. this is something we already outlined when we issued a new strategy last year. we said we are going to continue to grow 20% to 25% over the next couple of years and we will continue to invest in acquiring additional come -- customers and deepening relationships. because transitioning we think all the things will help us to triple the size of our business roughly when we compare it to where we were 2018. we target to grow to the size of

2024 whichby 2023, works to climb a 5% market share. >> that said you earlier did mention the market. i'm wondering whether in the long run you still want to fix that to 10% of 13% and you have a timeline for when you might get there? i think we've provided a clear timeline when we communicated our long-term targets last year. wesaid during the transition will actually have a margin in the range of two to 4%. that's what we will achieve this year and we are seeing the other end of that range. also an outlook for this year. for the years after we target the margin to increase and a long-term target aspiration is

10% to 13%. nejra: talk to me about the broader strategy in terms of adding more premium brands. how successful will you be in taking on the likes of --? david: our key strategy is to offer consumers everything they shop.o look at and that also includes premium and luxury fashion items. if you look back at last year we were able to grow the premium category and it actually meant this was the strongest growth of any category we are very confident that with new brands coming on and further improvements to our premium experience we will be able to ande growth of all business deepen relationships with our customers. ,ejra: thank you so much david

chief financial officer at zalando. of -- treasuryw higher for a six-day. this is bloomberg. ♪

nejra: treasuries gaining for a sixth day today. investors increasing their bet on central bank easing to cope with the impact of the

coronavirus outbreak. didier we were talking about the move of yields across the treasury curve and you said you aren't looking to increase duration right now the other thing to note in fixed income is what's happening with credit. we've blown out quite a bit particular on high-yield. be,ead of that double triple be spread. do you hold much corporate setting in the portfolio right now? didier: we don't hold much exposure to corporate credit. valuations were extremely trenched. we were very much hedged. high-yield is suffering more because the interest-rate cushion is less so you would expect not only more risky but you get less protection so you are more

exposed there. probably there will be defaults. that should be the background of this is this is an external shot -- shock. we have had them before. , they took a big hit to activity. it's all about judging which issuers, which credit will manage their way through the period.rm that's the work we are doing. on credit, i would expect if things get truly hammered further. is thejust briefly overall message or taken from the credit markets now that this is a transitory shock rather than sending more maligned? didier: i don't think the market

itself can send the message. that's the thing with external ,hocks in the previous example it doesn't come from the accident itself, it comes from reaction to the accident. it sparks consumer sentiment. but it is also very much reaction by policymakers, governments and they have the pressure to do a lot which probably exacerbate the impact. up, how are south africa's companies preparing for the coronavirus? this is bloomberg. ♪

nejra: the coronavirus spreads. the u.s. identifies the first patient with no ties to the

existing outbreak. the selloff continues. you're plunges into the red. the routing of u.s. stocks is just getting started. ab inbev forecast its worst quarter in a decade. this is bloomberg surveillance. as the coronavirus spreads across the world, big business started to count the cost with several companies warning profits are getting hurt. >> the warnings are pouring through yet again this morning. ,ou mentioned that there pressure on revenue. they are saying the coronavirus could be one of the reasons why they failed to meet their revenue growth targets bracing invev expectct, ab in the worst quarter years seeing a drop of 10% on profit in the first quarter. really we are seeing that escalate around the world. they haven't at the moment

included it in their 2020 seeing which says to me that negative impact when we start to see the results. how these individual stocks are trading as we heard there companies talk about the coronavirus. within 3.5%. , really slumping today down 7.5%. viviana has your first word news in new york. >> we begin with the world's biggest sovereign wealth fund. a 20 -- a record number. its stock holding jumping by 26%. the results happened in a year in which the investor opted to cut its fossil fuel exposure. even if the outlook gets worse, the u.s. is ready for the coronavirus. this from president trump who is

putting vice president pence in charge of the government's response. saudi arabia has halted religious visits that includes medina and mecca. the world health organization says more new cases reported outside of china than in china. be -- you he says investors should seek safety in golden government bonds but that isn't the take of ubs. it's advising high network -- net worth clients to load up on chinese shares saying they have attractive valuation. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. the rand lower a day this morning after south africa's finance minister presented the budget to lawmakers.

include backtracking on a three year pay deal agreed with civil servants in 2018 in an attempt to curve debt -- curve debt. joining us now, the joint ceo of south africa's international bank. great to have you on the show. thank you for joining us. let's begin with the impact of coronavirus and the effect across all companies. virus --e corona coronavirus affecting your overall banking business? obviously with stockmarkets having retreated somewhat, that is likely to affect the valuation we may get but we have

some strong demand for the shares will remain quite confident the listing of 91 will be successful. with respect to a banking operation, we have an operation yesterdayhat i was at and we have reviewed our response plans in case there is an outbreak in the u.k. but on the ground there is a level of concern about the virus and secondly the economy has been affected by the uncertainty around brexit, those of the two factors over the next six to 12 months. they'll be critical. about 16th ofked march for the merger of 91. if the outbreak continues to have a more negative impact on the stockmarkets. is there any trouble it could be

later in the year? >> not at all. we are set on going through with the demerger. we are bidding the majority the shares. placement which we are planning at the moment. there intent on moving with demerger. nejra: which initiatives will investec focus on for future growth? >> we have very strong franchises in private banking, corporate banking and we have a very strong franchise in the wealth business space. both in the u.k. and south africa. these will be the core of what we take forward strategically.

we will be looking to offer the totality of investment to our clients both wealth and banking and in the u.k. specifically we have a number of initiatives around business banking in south africa. around new initiatives business banking. despite how tough the markets are we remain confident there is a path towards growth in the medium to long-term. the economies in which we operator quite difficult. with africa and the u.k. the advent of breakfast -- exit and some in certainty -- uncertainty about the trade deal with europe and the trade deal with the u.s. and other trade deals to follow, even brexit. howa: i was wondering aggressively you are investing

in building up the digital side of the business because this is something that came to the forefront of many people's minds , particularly with the hiring of -- with a digital banking background at the head of ubs. ani: we have been investing digitally for quite a long time. they have been on the basis of the bank -- we've been technology-based but , it's go into the future both a challenge and opportunity , we had invested on the wealth side which did not get the right scale. inside of the wealth business we are intensifying our own investment technology and the banking spaces we are digital led and that we didn't --

we have the branch network. it's a spacecraft familiar with but we have to invest more to maintain a competitive advantage. the budget delivered yesterday, is it a budget that will and should satisfy south african business and investors? i think business was pleased with the budget on a number of scales. the scale. call tobeen a tough move down. , theno significance economy is quite weak at the moment. affected the economy even further. the problem with the budget is revenues very low.

that economic growth has been sluggish. important is there was a signal the government will be looking at corporate tax which would be positive for growth but also the government is looking to make the ease of doing business even better. a business friendly budget signal, ample mentation is important. the minister also talked about implementing structural reforms. those are absolutely important for the economy to grow. they will take time to implement and the effects will be felt more in the medium term. in terms of positive signaling, it will be tough to get the wage bill implemented, so the real test comes when the government negotiates with the unions because in essence they have to reopen an existing agreement

going forward be much tougher with respect to wage increases and related matters. for your time today. really great to catch up. just saw headlines coming through on coronavirus. telling allzo abe schools to shut for march 2 on the virus. this is bloomberg. ♪

for thee objective private finance work is simple. to ensure every financial decision takes climate change into account and to do so we will work with you, the private sector, to put in place the right market frameworks so that you can do what you do best wishes to allocate capital, manage risk and sees opportunity across the economy and the world. making disclosure of climate financial risk comprehensive, it means transforming climate risk management and means investing .or net zero going mainstream on the road to glasgow we will focus on three r's. nejra: that's mark carney this

morning to launch the private finance agenda. that the climate summit the uk's hosting later this year. let's get back to earnings season. coronavirus outbreak will hurt results and delay ability to return on equity targets of 10% by 2021. we spoke with their ceo on the impact of the epidemic. is one ofonavirus those -- we've seen in the first couple months perform very well although it's clear the impact of that will probably come through in march and beyond. the uncertain future at the moment is which markets it will appears --e china we will have to see how long two. we have cautioned that this year may be more challenging. time will tell how challenging it is. we will do what we've done before, some things we can

improve, some things we cannot. >> let's talk about credit. the rest of it comes in the form of credit losses. can give us a number, what you tell us about your expectation this year at the moment? back, the overall nonperforming loans in the business are at the lowest proportion of our book we've seen for about five years. so the general quality of the book is really good and the trend of her but he goes after the last two or three years has been off the trend. we monitor things that are happening at the moment impact strong things at the virus we are keeping a close eye on. it's pretty difficult on this stage. what we have said is the wealth

that marches some impact. when we get to the first quarter we will take a view as to what sort of inherent risk. forink it's very difficult a precise number at this point in time. >> what we've heard from hsbc is the outbreaks lead to as much a six under million dollars in addition low losses if it continues into the second half of the year. is that a ballpark amount you been looking at as well even if you can't put a precise number on it? >> i think it is difficult. it's a much bigger business than ours. the hope would be this would not be immaterial event for us and i hope equally over time as this receipts back we will be reversed. no guidance on the numbers. we will see at the end of the first quarter. let's go to the good piece of news. the market was looking for one billion and that's what was

penciled in. one at a higher share of buyback and why not up that number? >> the good thing is we are now doing buybacks and buybacks plural. we did our first one last year which was $1 billion in though the first one we've done for very long time. we said if we got to a point where we actually had sufficient capital we could do further returns, we would do that. tohink the market was able view how much and when we would announce something and hopefully the fact we've done the announcement today will show that we are continuing to live to that promise and as we have excess capital we will continue to return it. >> first quarter gdp will preview that and discussed central bank's response to the coronavirus. that is next. more from mark carney as he speaks about climate change in

london. this is bloomberg. ♪

nejra: this is bloomberg surveillance. let's discuss coronavirus and how the world central banks might respond. u.s. gdp number will add to evidence being weighed by the fed. one of the most of his policymakers as japan's economy doesn't get require additional easing as a result of the virus. take a look at some of the key players we spoken to. >> it's difficult to assess the magnitude to the effects but this new source of uncertainty is something i will be monitoring. spill disruptions could over to the rest of the global economy but it is still too soon to even speculate about either the size or persistence of these effects. >> the view with the economic impact on coronavirus will be focused in the first quarter and will be bigger. we think the microlevel policies will be more effective.

cure-all, but it will provide a little bit of support to consumer spending and to the u.s. economy into financial markets. nejra: what is the key question investors need to get to grips with as we look ahead to the end of the year and the central bank response? whatr: the key question is are policymakers going to do to get the economy going again once the short-term shock is behind us. the messages we already heard from from central bankers is suggesting the monetary solutions are not going to be used for the time being or anytime soon and that matters hugely. that's where the growth is coming from. so the way china is going to try and deal with its economic

recovery is the key. fed, that'sr the not the reason to bring it down, that's -- then the problem is china probably partly because of the trade deal with donald trump has sort of committed to a stable currency so if the dollar remains strong, it's totally opposite of what you would system, thethe weaker currency would be a way to explain the economy. can they move fiscal? can they restart their economy by starting strong and spending again? going up on this macro leverage. has beeni jinping quite clear he does not wish to

play again with the budget deficit over the overall indebtedness of the country. it seems to me we are heading for quite a slow recovery afterwards, nothing inflationary. thinking two or three months ago that it was time to going to value stocks or inflation assets. it doesn't seem to be the case. certainly not now but even a second stage it doesn't look that way unless the fed surprises us and manages to bring the dollar down and then it would give room to the world economy. for the time being it's not happening. nejra: two to three cuts price by the markets on the fed. is that the market overestimate what the fed is going to do? >> in my opinion, two or three cuts won't do it. when you look at the past few months, would really dwarf the markets, the fact it was

come $400 by the qe billion. to the marketst where there were two months ago you would need something of the same magnitude if you want the reflation trade to take place afterwards. i suspect right now the policymakers might disappoint the markets. nejra: in a non-inflationary market, you hold bonds? what about gold? didier: gold is a strange animal. it's not necessarily historically a great hedge against inflation. you can have other good reasons to hoard gold. one would be to think about the endgame whereby ultimately the central bank including the fed will have to be, we have to go back to monetary supply. issuech case you get an

with the interest and value of those fiat currencies and if you start not really liking the ,ollar because it is overvalued but you are not particularly keen on the yen or the euro, then surely moving to real assets becomes the options and that's why think gold is doing white -- quite well. thank you so much for joining us. bloomberg surveillance continues for the next hour. tom keene in new york as we look at his sixth straight day of the kleins for global equities. this is bloomberg. ♪

tom: virus news keeps markets on

edge. there is a first u.s. case of unknown origin. saudi arabia may suspend pilgrimage to mecca and medina. israel urges citizens to not travel. president trump says we are "very, very ready." the yen strengthens. bonds bid. yields drive lower. the vix nearing a 30 level. may we suggest we all take three aspirin. we speak to the bayer ceo. this is "bloomberg surveillance." from new york. in london, anna edwards. lincoln scheer of london and the united kingdom and the continent. how is britain reacting to the news here and the news there of the virus on the continent? anna: we mentioned what trump

said about being ready. that is the message from the u.k. government. they are ready. the number of cases has gone up by two in the u.k., that was through known transmission routes. the message from the u.k. government is things are under control, but there are questions being asked about who should be traveling to where. tom: you will see me turning a lot to the bloomberg terminal to see what is going on. right now futures are -17. we will do a data check in just a moment. right now we need an update with first word news. here is viviana hurtado. viviana: president trump wants to close ranks within his administration over the threat posed by the coronavirus. he and health officials speaking to the nation. they dollar j broader outbreak in the u.s. is possible but they say the risk to the average american is low. mixed messages from the administration are rattling wall street.

there are troubling signs the coronavirus may be circulating in the u.s.. health officials say they have identified the first case that does not have ties to existing outbreak. the patient is being treated in sacramento. more coronavirus cases reported in countries other than china. japan's prime minister shinzo abe telling schools to close next week through the end of spring holidays. congressional democrats are trying to separate themselves from 2020 front-runner bernie sanders. their goal, keep the house majority in the swing districts they want. embracedrs has policies unpopular in republican leaning districts. we end with boris johnson. he will put the u.k. on a collision course with the eu over trade. today he will lay out just how far the government will go. next week talks start on post exit trade agreements. mr. johnson's office has made it clear the u.k. wants full independence from eu rules.

global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you so much. let's do the data right now. hugely flexible. ever lower in the equity market. dow futures -1.38. we are 1800 points from a bear market. we are very much up on a 10% correction. not quite there yet. euro stronger with dollar weaker. crude oil is its own story. near 30, 28.18. the two year yield, 1.119 years zero -- one point 1190. 1.1190.

the yen not as strong as we would expect. anna: but it features in my check as well. the fx market changing the way they're playing this. european equity markets are selling. in the fx market does seem to be where we found the most disciplined movers through the european morning. the dollar is weaker as the tension from investors focuses more on the u.s. and less on the asian side of things. the dollar is weaker and the yen is rising. the euro is rising. area economic confidence rising to 103.5. that was ahead of estimates. we will take that, but maybe backward looking. tom: we are trying to place in context where we are rather than the banner stock market plunges. we need to place things in perspective. yen.rday i talked about today let's look at oil. this is oil adjusted for

inflation. this is a classic chart from years ago. and the prizeil and then the two stages of opec through the crisis of 1986. down we go with a massive oil deflation in the persian gulf war. here is china boom and you can see where we are now coming back from the great china boom and the break down over the last two years and oil. well under $100 a barrel. puts into perspective where inflation-adjusted oil is. assetthe risk conversation, just to talk about what is going on on the u.k. government, we saw the u.k. publishing its negotiating mandate for u.k. -- for eu trade talks. the eu starts no deal preparations if a packed is not clear by june. this is on the u.k., something we have talked about before, no

deal preparations if the pact is not clear by june. the eu -- the u.k. is willing to trade on a no deal basis. the u.k. says it wants something canada style. we are tense on the u.k. front. you saw a glimpse of my coronavirus chart. maybe we will take that. , withne of the headlines the many headlines coming out, and this is with sterling erasing gains seen this morning, i want to go back to a pet project of mine, which is the accessys fisheries should be subject to annual tops. that is a visceral statement by the government, isn't it? anna: fisheries access should be subject to annual talks. this is not a significant part of the u.k. economy but has

captured many headlines. thames istes on the very iconic and was sold to fishing communities that their rights would be protected in brexit negotiations as the eu has been adamant that fisheries need to be included as a part of the negotiation. tom: let's continue forward. let's have you go to our good guest from china. she has been wonderful. anna: more coronavirus cases were reported in countries other than china. the development is highlighting the spread of the epidemic around the world donald trump trying to ease fears around the virus. trump: because of all we have done the risk to the american people remains very low. we are ready to do whatever we have to. this one is different. this is much different. this is like a flu. i think the stock market will recover.

the economy is very strong. we are ready, willing, and able. anna: president trump giving his thoughts on the coronavirus. selina wang joins us from beijing. this gives us an opportunity to mention the chart i was going to talk about before we were interrupted by u.k. headline. this is the new confirmed coronavirus cases in china and i suppose this is the glass half-full data set. to the extent we believe the data we are getting, it does show some level of control, some downward trajectory. that is the good news. tell us the story from the ground in beijing. selina: the number of new cases does moderate from china if you take the new cases at face value. the total case count to more than 78,000, but you did see areas.ases in other

a dramatic moderation from weeks past. xi jinping is still warning that heightened coronavirus control is needed given the situation in wuhan is complicated and serious and there is still risk of rebound in other cities. that cannot be overlooked. they also stressed control efforts needed in beijing and other cities. in the capital to new cases were reported yesterday. that is the highest daily total in two weeks. you are optimism from state media. a respiratory disease expert advising the chinese government, he says he is confident the virus will be largely contained by the end of april, although that date is contested. tom: i want to show you the chart we have been showing every day. .ou can see clearly the slope this is the number of global cases. there is some sense of it leveling out and the deaths from the virus have not leveled out yet. there is little bit of positive

tone. that is on a global basis. dying, thereeople is a zeitgeist in the western press it is older people, yet i am not getting that in the china reports. what is the age distribution of our reporting on who is dying? know from people studying this is that older people are more vulnerable. if you look at the distribution of deaths of people who are in their 70's and 80's, the risk of dying is much higher. more than 10%. if you're in your teens and 20's, that is lower than the 2%. some experts put that death rate at 2%. that mortality rate is lower than some other diseases, but considerably higher than the flu. organizationlth has refrained from calling this a pandemic, but you do have many health experts saying there are

many reasons to policy pandemic given that researchers -- two this a pandemic given that call this a-- oto pandemic given the fact that this is transmissible and the data shows the travelers with the disease are much larger than the number being reported. tom: selina wang, thank you so much in beijing and thanks to all of our asian team for this coverage. right now not underdressed and joining the food court are two guests. pleased to bring you patrick armstrong and hugh gimber. thanks to both of you for coming in. has j.p. morgan asset management changed and if the allocation strategies they have because of the virus? hugh: at the moment we are thinking about diversification in terms of a regional basis and

an asset class basis. i think there was a good case for that at the start of this year. we had taken the view that treasuries would play an important role in portfolios throughout 2020. clearly we have been surprised by the magnitude of the falling yields but this is been a classic risk off scenario so you see the strength in u.s. government bonds, the strength in gold, and we are starting to see concern -- currencies such as the gann and swiss franc -- this is largely playing off as we would expect for a market risk off. price, markets go up in is there even a port -- a point where patrick armstrong starts to sell? how do you hold bonds? patrick: it is easy if you're looking at the price movement, but long-term it is hard to justify 10-year gilts at 1.3%, 30 year yields at 1.8%.

at some point, markets are going to move from fear of coronavirus, which is driving markets, to thinking about the consequences of what central banks are going to do to respond to this. when you're a hammer, everything looks like a nail, when you're a central bank everything looks like cutting rates. i think we'll probably go to monetization of debt. you have bernie sanders and bonds trump -- long-term are not a good by on hold. short term, you have a lot of momentum. in a traditional balanced portfolio approach, it is working very well. safe havens rallying while equities are weak. anna: what's balanced you want to see between those havens and riskier assets? we look at the yen gaining momentum, behaving more like the haven it has often behaved as. up .2%.

the dollar now weaker. what balance do you want to see? >> the challenge is we have very little insight into how this virus is going to spread. as strategists we cannot make a call on how this is going to evolve over the next couple of months. it is about maintaining a healthy balance within fixed income and equities. within equity allocations we are looking at slightly more defensive styles. the companies with the strongest balance sheet, the most diversified revenues would probably do best in this uncertain environment. anna: thanks to both of you. hugh gimber and patrick armstrong. they are both staying with us. a quick check of the headlines with regards to the you kate you casing is willing to trade on a note yield brexit -- the u.k. is willing to trade on a no it looks from these

headlines as if they are saying they will not do that and you see the pound is weaker as a result of this. the pound has been getting against the dollar and a lot of those other currencies. that is no longer the case. cable.on this is bloomberg. ♪

tom: extraordinary movements in the markets. anna edwards in london and tom keene in new york. we welcome all of you. trying to give you perspective around the politics in london. that is quite a move in sterling, isn't it? anna: it is of interest, certainly. we were up quite strongly on the pound earlier. it was sold off a little because

of concerns about the incoming budget, whether the incoming chancellor will stick to previously declared rules. the focus now is on the brexit headlines. tom: let me show a chart as we put things in perspective with patrick armstrong and hugh gimber. here is the fourth quarter of 2018, down we go to a legitimate bear market. christmas eve of 2018. almost a correction. where are we now? we are on the cusp of legitimate offection, we are down 10% of the virus drop. patrick armstrong, what would a correction signal? patrick: corrections signal buyers are getting up or they are getting worried and we probably have a bit of all of those things. just a week ago we saw the s&p 500 trading at unprecedented down 7% 8%and we are

from there. earnings are going to be hit hard. some sectors will be decimated, some sectors will be resilient. with equities you have the luxury of looking through short-term and investing in the long-term. our view is this virus is unlikely to create a mass recession. it is possible. we have not given up on equities even though they still remain expensive in our opinion. anna: where you go to look for the equities you want to keep in this context? we saw the initial reaction in europe around the italian headlines over the weekend and the ftse may have, and now it seems to be keeping with the other markets. what are you looking at? hugh: what has changed over the past week is initially we thought the european economy would be harder hit because this look like more of a manufacturing shop and therefore the higher exposure to the manufacturing sector within

europe would fare worse. we now think this is a full economy sock -- a full economy shock. that is why you are seeing europe not lag as much. on a relative basis, the economy does not seem like it will fare that much worse then somewhere like the u.s.. tom: you see a headline coming out across bloomberg on heathrow. they will face further delay. what i noticed is an article from british airways that they are cutting back the trips to milan through march, through march 11. there are beginning to be real -- anna: this is an ongoing conversation. whether it is sensible to cut flights from areas more affected because we know from the italian example when you do that with china people tend to find another way through. there are mixed views and i have heard the who speak out against

stopping flights. things are moving very fast. tom: i totally agree. it was heated about this yesterday about adapting to a traditional closed border europe. we will continue. anna edwards in london, tom keene in new york. later we will speak about bayer management and government challenges and also the virus. this is bloomberg. ♪

viviana: this is "bloomberg surveillance." -- forecasting the worst quarter and at least five years. first quarter earnings will drop about 10%. fourth-quarter profit falling more than estimates. on the biggest jump in raw materials in a decade. we end with the world's largest advertising agency. in expects of fourth-year with no sales growth. suffer fromng to competition with big north american brands. the full-year revenue forecast missing estimates. the ceo is trying to stop the company from losing influence with tech giants such as google. that is your bloomberg business flash. tom: market deterioration, let's look at it. oil down to new lows. down 12% since february 20.

nymex.on texas bond markets with lower yields. anna: i want to point out what is going on in the fx markets. the dollar weaker, the market increasingly focuses on the coronavirus in the u.s. that is where the market saw progress. we see u.s. assets under pressure. u.s. futures down .6% in the dollar down .2%. higher, the euro is higher .5%. this is bloomberg. ♪

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

♪ this point, it is difficult to assess the magnitude of the economic effects, but this new source of uncertainty is something i will

carefully monitor. >> the disruption could spill over to the rest of the global economy but it is too soon to speculate about the size or persistence of these effects. >> the view is that the economic effects of the coronavirus will be focused in the first quarter. i think the microlevel policies will be more affected. >> if it does have some scope, it is not a cure-all, but it will provide a little bit of support to consumer spending and to the u.s. economy and financial markets. tom: you saw the president and the vice president yesterday, and now with central bank officials, it is delicate and not an easy task to manage the message. patrick armstrong with us and also hugh gimber. they are managing the message and they are public officials. what would you presume is the debate behind the doors at the fed? hugh: i think at this stage it

is a debate as to how much they can do and how effective monetary policy changes would be , because in the face of this type of scenario i think rate cuts look like fairly blunt tools to get the economy going where this is much more of a demand shock. i think they will be bearing in mind they want to ensure the market understands the fed will act if the economy requires that , but do not want to be wasting their ammunition if they can afford to hold that back for a more material downturn further down the road. tom: fascinating to see the geometry we all learned in school, and you have a virus, a true supply-side, exhaustion is shock. what is your -- exile jeanette shock -- exile janice -- exogenous shock. they willrobably what

be investigating over the next two months as the weak links in the financial system, will companies face issues like payrolls and paying rent? companies can go direct to the fed. --may not be just lower conventional lower rates by bonds and may be more macro prudential measures. anna: the thing that caught my attention from the bank of korea, they did not change rates and there had been an expectation with 1500 cases of coronavirus they would do and they did not. they said they think other measures will be more effective and extended lending for 4 billion companies. will they be creative in that sent? patrick: the weak links, it will be a consumption hit. with thee consumption virus as a backdrop, i am not

sure. can i trust credit from small companies? the fed will have to be proactive and not reacting to these things, but putting measures in place that can create confidence. tom: futures and dow futures down. a chart that speaks volumes to put into perspective some of these trends, this is back before volcker -- more recently than volcker, but the long-term disinflation, inflation-adjusted to year yield. here we are the crisis, another , we areand the leg down not to the point of enough is enough on the real yield, are we? patrick: real yields can fall. you have nominal regular rates elsewhere. the central bank will be cutting if there is a shock to consumer confidence, even though i don't think it will be incredibly

effective. real yields likely will fall further in the short term, long-term is where i'm starting to worry. safety and yield i am getting in cash which is the safest. keep annart, just to entertained, the german 10 year yield and there is the rollover in the last couple of days. i am not supra--- i'm surprised germany has not rolled over more. hugh: it is a question of where central banks have the most ammunition to cut rate so the reason u.s. treasuries outperformed his people are looking at the fed as having more scope to act if they decide rate changes are the appropriate course. anna: we are also seeing a different conversation emerging in germany. there is talk of removing the physical break that has been in place, talk.

how much do you think that turns into action? hugh: this is not a huge issue because it has been entrained for many months. there is a danger that the talk of extra fiscal stimulus in germany is being combined into broader discussions around fiscal stimulus needing to come through for protection against the coronavirus. this is something the german government have been looking at for many months and quarters, and it is about the reallocation of debt within the government levels rather than a big turning on of the taps. tom: right now with your first word news, here is viviana hurtado. viviana: donald trump dying to downplay the risk of the coronavirus in the u.s. he addressed the nation and said the risk to the average american is low but still they acknowledged a broader virus outbreak is possible. wall street rattled by the mixed messages.

a possible sign the coronavirus is spreading in a u.s. community , a case near sacramento, california could be the first with no known connection to overseas travel or another case. authorities are tracking down people with whom the person has been in contact. more coronavirus cases reported in countries other than china. the number in south korea is 1700. to milwaukee, police are discussing a motive at the coors campus. a 51-year-old employee shot five coworkers and then himself. at one point molson coors where theployees shooter was located. he will notrs said take money for michael bloomberg if he wins the nomination.

the sanders campaign says on its own it can raise over a billion dollars. mr. bloomberg is the founder and majority owner of bloomberg lp, parent company of bloomberg news. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. anna: thank you very much. the u.k. is willing to trade on a no deal basis with the e.u. if talks fail. hael. bring in therese rap great to see you. i like the headline -- johnson gives e.u. for months to make a brexit deal or he walks. thatve heard this before the deadline at the end of december is hard. is this another sign they think so? therese: you expect some hardening just before negotiations begin, but this is qualitatively different than what we saw during the theresa

may administration or last year before boris johnson had his deal. this government is united and committed to one thing, they got brexit what they want to virgins. it is not enough simply to leave the e.u. they believe they only deliver brexit if they diverted from e.u. rules. does that mean they do not want the trade deal? they would like one. they would like frictionless trade if it went to virgins. -- meant divergence. tom: i am worn-out by this discussion. who holds the cards? who has the power in this debate to december? therese: if you look at the size of the two economies, it seems straightforward the e.u. holds the most cards, but the e.u. is only the bigger, stronger player if it remains united and there are pressures on the e.u. from

the coronavirus. the e.u. needs to remain united and johnson, by saying he will walk away, he is putting time pressure on the e.u. there are indications he could walk in june. what happens if he does walk? the u.k. would leave this termstion period on wto and more than likely would be back at the negotiation table trying to work out something. the timeframe left gives little time for anything either than a binary choice between no deal or a deal that fudge is these issues of diversions -- fudges these issues of diversions -- divergence. anna: the u.k. keep saying they deal andal -- canada why can't we stick to e.u. rules? the e.u. says, you are much closer and we cannot have you sitting on our doorstep with the

suggestions for financial services and the race to the bottom for regulations. how is that fudged? therese: they have left barnier negotiating room in his mandate. they have put a red line around state aid, but on other issues there is a little bit of room where the u.k. could agree some dynamic butaybe not non-regression. the e.u. is not really giving its negotiator so much room that he could agree to boris johnson's conditions, no oversight by the european court of justice, no requirement to meet e.u. rules on a whole host of issues. it would be hard for the e.u. to can choose between areas in which it imposes tariffs and areas in which there is a level playing field. the time is too short. they are going to have to make a

decision. theresenk you so much, raphael on bloomberg opinion. one thing we are not aware of, the south carolina elections saturday. and then 48 hours later as super tuesday. they are really, really close together. march 3, kevin cirilli, david westin, super tuesday coverage. this is bloomberg. ♪

anna: i am anna edwards in london with tom keene in new york. but coronavirus continues to pylon in northern italy, the inber of cases -- pile on

northern italy, the number of cases increasing. they saw insert parts of northern italy too many people had been tested in too many false positives came through. andain the latest twists turns in this data conundrum. dan: as you mentioned, this report came through this morning and a couple of italian newspapers. i think it is just added to some confusion that unfortunately has been part of this process. virus situation came up totally unexpected in a region probably that nobody expected. but the larger issue is that there is a feeling that perhaps there is no one really in charge here. we have seen politicians jump into the fray, trying to get a

message across that everything is ok, but the link with the medical side, with the experts on this just hasn't been strong enough, and people have been left confused. tom: what is the mood at the jamaica bar, the acclaimed and famous bar in milan? on the streets, what is the mood? dan: the mood is somber and surreal. i took the metro to the office this morning. it was practically empty. you mentioned bars, bars can remain open in the evening so they have lifted that restriction, but there is still a sense, i don't want to say panic, but certainly people wearing masks. they are sold out at pharmacies. it is a bizarre situation. tom: british air through march 11 shuts down planes from one of

the two airports in milan. what are the impact -- what is the impact of these restricted flights? what does it mean for italy? dan: it is going to be quite damaging certainly for the tourism industry. as you well know, italy is a preferred destination for lots of travelers. the country's economy has already been facing a severe challenge to try and get back on a growth path, and this is just not going to be a good situation. we have seen cancellations , obviouslyy, hotels businesses. it is going to be devastating. anna: thanks very much, joining us from milan with an update on what is going on on the coronavirus. patrick armstrong is still with us. when we are trying to gauge the

impact of this kind of shutting down of an area has on an economy, i look at the reporting and they talk about shining -- china where bars and restaurants are entirely closed. maybe that is not where everybody instinctively has sympathies at this time, but it gives you an idea of how much life changes and how severe an impact the economy will feel. patrick: the economy is driven by animal spirits and confidence and when people get fearful, the news change and effects that they will see a decimation of their earnings profile. anna: i talked earlier about the fiscal plan in germany. are things shifting in a direction that means action or is it a lot of talk? patrick: i don't know it is talk at this point.

with most of the coronavirus, not germany. patrick: germany with a fiscal surplus, you need something to boost aggregate demand. fiscal stimulus would complement negative interest rates well. it is something germany does not want to do but the economy is screaming out for fiscal stimulus. tom: i do not want to go into the alphabet soup of v-shaped bottom and whatever. how many quarters out to where it really gets serious? to me, it is not a one quarter thing. how many quarters out roughly? patrick: some companies will face more issues than others in the short-term. oil and gas, oil prices falling off over the last month. iran was just a month ago and we were talking about the risk remain him and oil companies benefiting from that. they are highly leveraged, the

shale companies in america. you start to get credit risks so you do not want to invest too far out unless they have a sound balance sheet. we bought alphabet shares yesterday. they have tons of cash, cloud, youtube, search. all of these people are staying at home. different companies impacted differently. tom: patrick is getting out the buy order in the heat of the crisis. interesting to see, and i continue to focus on the price of oil today, well under $48, west texas intermediate. that seems to be the one series breaking down. anna: prices under pressure, 52.39 on brent. i saw headlines from the russian oil minister, denying there was any risk with opec friends is the message that is catching on

whether it is corporate around the world -- opec friends. this is the message that is catching on whether it is corporate around the world, the coronavirus is having an impact. at a 40 --prudent brent crude at a 40 handle would be amazing but we are not there at. the chief executive of bayer aspirin needs some bayer aspirin. inner turmoil, and then the virus. this is bloomberg. ♪

♪ viviana: you are watching bloomberg "surveillance." bayer bang -- bayer is painting a grim picture around the weedkiller and says it may have to sell assets or borrow money at unfavorable rates. in the u.s., it faces more than 48,000 lawsuits. , warning from aston martin saying revenue will slide.

they are marking the time until they can get a boost from the are bracing for the impact of the coronavirus on chinese demand. gas shares falling after the ceo backed out a survival plan that must be completed within months. chesapeake is going ahead with a reverse stock split. that is your bloomberg business flash. tom: i will pick it up, let's do a chart on gold. we have been looking at long term charts. for is a stunning success dennis gartman. insaid buy gold, but by it yen -- buy it in yen. what now for gold? patrick: i like gold but i don't like to buy in yen because i

like yen. gold is getting a tailwind from negative real rates and negative nominal rates in europe. there is no opportunity cost and it is a hedge against geopolitical risk, potential inflationary measures put in place to offset the weakening global backdrop, and a hedge against diversification of reserves. no one wants just dollars anymore. anna: is the dollar overbought and the yen not bought enough as a haven? patrick: i get that sense and you have not seen a lot of repatriation of yen which you see in a risk and -- risk aversion moment. the japanese economy is that risk asis at as much everyone else of the coronavirus. it will fulfill its safe haven ile as time -- over time so

would rather buy gold than yen rather than gold and yen. tom: patrick armstrong, thank you so much for being with us. futures -30 now, dow futures -239. the british pound weaker off of political news and oil weaker as we look to the global headlines on the virus. what we will do is bring in a good conversation with marcus people on where the markets are. we will speak to a gentleman with an immense multinational platform and the challenges he is facing. baumann will join us in a bit. ♪

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keeps markets on edge. the first u.s. case of "unknown origin." saudi arabia has pilger men's to mecca and -- pilgrimage to mecca and jerusalem, they are asked not to go. the yen strengthens this morning. the bid drives ever lower and the vix near a 30 level. may we suggest you take three bayer aspirin? the chief executive of bayer. i am tom keene, anna edwards holding court in london. london has been quiet on the u.k.-year upfront. that changed in the our. anna: the u.k. setting out its negotiating man tate -- mandate in the trade talks with the u.k., saying it is willing to

trade on a no deal basis with the e.u.. this is upping the ante, giving a much harder message, a tough message than previously with guard to where these talks go. tom: let's do a data check .efore futures have deteriorated. i don't think they are back to where they were midnight near time, but we had a deterioration in the last two hours. dow futures -267. that puts us on a corrective 10% down phase. europe strength, dollar weakness. wti deteriorated in the last hour. we printed a 47 handle and then much weaker in the last hour, 47.70 on american oil. the vix at 29. yen, i have not had a

confirmation. so.ed a 109.80 or that gets my attention at 110.06. anna: it is up three tens of a percent against the dollar. the/10 of a percent against dollar. the markets focus on u.s. assets and the coronavirus case in the u.s. is focusing more on selling the dollar into other havens like the yen and euro. i put the pound in my data check to look at the impact from the tough talking lines around trade deal negotiations, brexit having to some extent been achieved. the pound down a quarter of a percent. tom: thank you so much for your emails, tweets, and notes worldwide. just bring us in experts.

that is what we want. as fede truly expert watchers and linking them into the business. we brought in marcus ashworth is well. it is day after day after day. what is the significance of the repeat effort, day four, day six? marcus: what we have to look at is funds have got to raise capital, cash, but be liquid. initially they thought they could ride this out, buy the dip, but there is no real bounce that is meaningful. this is a fairly straightforward market turn, and that is what it must now be seen as. the economies are around the world and in specific, they will struggle this fourth quarter without a doubt that takes the

whole deal away from china and europe, and we need to look at this in a wider context then perhaps we thought there is collective worry spread out in a strange way, but overall this is not a panic. it is a straightforward market correction needs to be seen as a broader picture. tom: bring up the chart, this is the famous eco go chart from bloomberg. 2.1%ou need to know is the statistic on fourth-quarter gdp. how are you adjusting u.s. gdp off of the virus? >> the interesting thing is the data coming out today will be viewed as old news. the other releases like jobless claims, we will be watching more closely than gdp but the gdp could have interesting effects when we look at the first

quarter because if to the extent there are supply chain disruptions, and we are not getting evidence that there are -- if you look at the bender index -- tom: you are above 2% on first quarter gdp? conrad: we are above 2%, but if there are negative impacts from the inability to import from china, that will boost gdp. something pretty strange, imports will fall and that will boost gdp. on the flipside, we may have inventory liquidation to comp eight from that. i think you will have some offset -- compensate from that i think you will have some offset effects. tom: it is on the flipside, the modern and. anna: from a european perspective, you paint a picture of resilience which is probably right in the u.s., but sitting in london we see company after

on closingating operations in china. there are attempts to bring china back to economic life, but lots of damage has been done. do you see that extensive enough as it is impact on the u.s.? conrad: i don't think so. one of the big issues here is we just don't know where we go on this and to what extent we have -- this spreads through the u.s. 1.i would make, there is some evidence of containment in china. now of the new cases are outside of the u.s. and that is remarkable given that 96% of the cases are in china, and we are not getting new cases where most of the virus is. there is evidence there can be containment. there are signs that factories in china are starting to get going.

despite those significant disruptions to the manufacturing hub of the world in china, in late january early february, we have not yet seen the real material negative impacts on the manufacturing sector where you would expect it, through supply chains, through a deterioration of vendor performance. we have not seen that and that is an encouraging sign. momentum is important. we have the confidence index out of europe. that was surveyed prior to evidence of the virus in italy, but through february 20 we had economic confidence in europe that was improving. there is a tremendous amount of uncertainty about where we go from here and to what extent we will have continued disruption. anna: does it make sense to you strength of the u.s. story, we get into dollars

and buy the euro, does that make sense? marcus: i am not nearly as confident. the sentiment is that the news is coming out, is pretty worrying. we moved to a sell or rally aspect in europe rather than by the dip constantly -- buy the dip constantly. data will show that is our little bit worse than the last couple of weeks. as far as the currency situation , the european economy will go into a recession led by germany and italy. the yen isow about an interesting story. there are arguments both sides of here. the dollar remains the principal currency that will benefit in the fact that its economy is the strongest unless there is an unfortunate event. i still think king dollar remains in the rest i worry about.

tom: marcus ashworth, thank you so much, with bloomberg opinion. conrad dequadros will continue ,ith us futures deteriorating -33, dow futures down almost 300 points. he is someone who needs to take three bayer bank -- failure aspirin -- three bayer aspirin he has been at the company for 30 years and he and the company are under siege. we are thrilled you could join us. i want to go to right -- right to one of the headlines. when i look at the financials on the bloomberg it is the first thing i thought when well you need a cash call -- thought. when will you need a cash call to deal with the roundup issue? tore will you bring in money pay for these legal issues? werner: good morning, and i am

happy i can join you. arst of all, we have had great year, good results. could deliver on everything we said we would do as we disclosed, just about this time last year and gave our guidance in 2009. whether it is topline, ebita, cory p -- core eps, we have done well. do your point on levering the company, it has gone better than we anticipated, more than 4 billion in free cash flow. we have a solid balance sheet. tom: are you saying that you do not need a bill for a cash call? werner: i think it is way too early. we are working diligently with the dual path approach that you know about. we continue to litigate the

cases. on the others, we work deliberately -- deliberately and cooperatively and we have to know where we will end up. tom: i am going to give you great credit for stability through 2019, even with the recent rollover for whatever the issues are. your stock is down 52% from 2015. this has been a busted transaction. your chairman has serious issues out the door. what is the management stability at your good company? just brought in quite a number of new board members. all of them are doing very well, as documented by the strongly -- strong results you have seen for fiscal 2019.

three out of the five operating board members have been with the company for less than two years, all with great credentials. i believe the team is very strong. you have seen the announcement the chairmanship of the supervisory board will be handed member of the supervisory board since 2018. it has been great to have worked under his leadership, and his leadership for the supervisory board, and now we are looking forward to having the first independent new chairman who does not have an operating history as an executive in the company. anna: good morning. does the supervisory board, with the strength you have described, is there a lack of expertise in agriculture and in the u.s., in the areas you are experiencing

these difficulties? the new chairman comes with an accounting background, a business background. do you need more expertise on agriculture and the u.s. business? you look at the composition of our board, of there is some great expertise that is complementary to the rest of the expertise that is already resident in the board. he has led a large organization in europe and has been a member of the global executive team at pwc, one of the biggest auditing firms around. he has pushed hard for digitization, a key topic for our businesses. don't forget to look at the other additions that have been made to the board. prominently -- who was

the head of the global food program at the united nations, she joined last year, an expert in u.s. politics and expert in agriculture and food. we have colleen goggins who chaired the u.s. consumer lackess at j&j there is no -- j&j. u.s. is no lack of expertise at the board. , theve great scientists head of i.t. at juilliard. it is a strong balance of expertise at the board. anna: so you pushback on that point? tom was asking about the need to raise funds. your cfo has said there is a need to consider raising funds.

despite the fact you have the resources to cover the settlement, was his assessment. are you leaning toward new equity, are weighing money? what would be -- borrowing money? what would be the preferred route? of liquidityources would be available to us. the question is what is the most commonsensical thing to do? we are cognizant of our shareholder base, but without going much further, i have to come back to what i said earlier. we need to know what it is and then we saw for the structure and financing. anna: thank you so much for bayer ceo. the edging closer to a pandemic perhaps.

says we areump very, very ready for this. all the latest next, this is bloomberg. ♪

,"m: bloomberg "surveillance tom keene in new york, anna edwards in london. futures -243.ow showing yen, 110.10, not all that bad the two year yield is 1.1170. jack fitzpatrick is in charge of all of our coverage of the government response to a virus,

and it was mixed signals last night from the president of the united states. what will vice president pence actually do? jack: the trump administration has actually said after a little bit of a fumbled rollout, they will be following congress' lead on how many resources they put into the coronavirus response. mike pence is leading an interagency response because it is not only health and human services, but people in the department of state and other agencies responding to this. as you mentioned the switch from saying that alex a czar -- alex azar is in charge of the response and sending him to capitol hill, and then saying it is vice president pence is one of a few reasons for lawmakers to say this has been an opaque

start. tom: he is going into meetings to say what, we will cut your budget but fix the virus? jack: that got complaints on capitol hill. they proposed cdc and nhi -- nih cuts and asked for additional spending and taking some money from the funds that were available to continue working on ebola. there were other proposals to take money from low income energy bills, subsidies, things that turned out to be very on popular -- unpopular on capitol hill. the proposal for their spending plan and where they take money really got swatted aside on capitol hill, and it was a little surprising to see the response from president trump and others in the administration say whenever congress wants to do, we will follow their lead. anna: it did seem that president trump yesterday was very much

talking about this as if it is seasonal flu. i know we have an expert in that field coming up later. is he on a different page from his advisers? jack: that is one area where there have been mixed messages that the administration has sent -- he has talked about this sent out. he has talked about this as if it is similar to the seasonal flu and in april it will go away. there are a lot of biological unknowns and incorrect information that went out about how long it will take to develop a vaccine especially lawmakers -- vaccine. especially lawmakers have been frustrated with the bakken fourth. -- back and forth. up: i got my calendar messed this saturday, -- messed up.

this saturday, south carolina and then 1, 2, 3 days, and then it is super tuesday. 7:00 p.m. coverage with david westin and kevin cirilli. this is bloomberg. ♪

tom: one question with bloomberg " with conrad the quadro's -- -- conrad dequadros -- what does the yield to --

conrad: we have heard some pushback for rate cuts. what we haven't heard is why the fed -- what would a rate cut do? it will not solve any supply disruptions from china and will not make someone -- tom: it eases the system. conrad: the fed can do that without cutting rates. disruptions because of liquidity issues, the fed can address that. i don't see why a rate cut is the right move and i don't think it is strange for the market to price a rate cut because that is how the fed response to everything. tom: we will continue with conrad dequadros ♪

♪ tom: good morning, everyone. anna edwards in london, tom keene in new york. your first word in -- news in

new york. viviana: donald trump is trying to downplay the risk of the coronavirus in the u.s. last night he addressed the nation and said the risk to the average american is low but they acknowledge a broader viral outbreak is possible. wall street rattled by the mixed messages. a possible sign the coronavirus is spreading in a u.s. community, a case in northern california could be the first with no known connection to overseas travel or another case. authorities are tracking down people with whom the patient has been in contract. more virus cases were reported in companies other than china, in iran the death toll rising. cases in south korea top 1700. in milwaukee, police are not discussing a motive for a deadly shooting at the molson coors campus. an employee shot and killed five

of his coworkers and himself. email,point in an telling employees where the shooter was located. heathrow airport facing more delays. heathrow saying it needs next to runway to compete with rival hubs but opponents say the government has not taken into account the effects of climate change. global news 24 hours a day, on air and @quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. hurtado.ana this is bloomberg. tom: thank you so much. what we have tried to do is bring you experts on the virus, but it is much more than just the virus and variola g -- virology. ramifications of the virus to the body. we are thrilled to bring you bernheimh avenue, adam

, returning from china in november, and he joins us today with what you see in your images, the radiology you see when someone has this virus. what does the image look like? adam: it is a pleasure to be here. my focus is on imaging and the manifestation of the disease. we were able to get a few hundred scans from china and categorically go through them and tabulate findings. a pattern is emerging where lesions within the lungs have a characteristic shape and distribution within the long that is different from other infections. tom: different from sars? adam: it is related to sars but is different to bacterial infections and other viral infections. tom: explain left and right of

these issues. adam: this is a patient from china who was positive for the coronavirus. there are a number of lesions on the outside portion of the lungs , which is characteristic for this disease. the area of white in the lungs having a preference for the periphery or the outside of the lungs. particularly later in the disease course, one of the things we looked at is not only the findings themselves but how they correlated with different time points in the infection. certain patients, if we image them after initial onset, they have often less extensive findings or normal scans, but patients longer along had more extensive findings, and the pattern started to emerge. link thent you to timelines you have observed in

all of your experience and your work at harvard and now mount sinai. the media, a 14 day gestation as an amateur and then there is the on say of the infection. how long is that illness going to be? adam: this phase is variable, but one thing that is concerning as it is a longer phase than other viral infections. that is a reason why continued spread has been a bigger challenge from viruses like sars. we are seeing a period of time where patients rcep -- asymptomatic. tom: the president of the united states said we have this under control. do you agree? adam: it will require a concerted effort among physicians, as well as policymakers and public health officials. this is a new disease.

we do not know the trajectory of where it is going, but in the cdc's own words, this is something that will inevitably reach more americans and it is a matter of when rather than if. anna: good morning. from a global perspective, it only bem as if we will as strong as the weakest link. are you concerned other parts of the world will not have the tools you are using? ct scans are not that advanced, but in some parts of the world it will not be used in a timely enough fashion. adam: that is always an excellent question in an epidemic. in most countries, even those with more limited resources ct scanning is considered foundational. one thing we are trying to do is raise awareness, general education, and knowledge of radiologist and the medical

community to recognize the hallmark findings of coronavirus infections so for patients where there is an index of suspicion we will be able to rule in or out the virus. the test kits have not been as reliable as we would like to see. these viral rna pcr test as the gold standard -- tom: talking rna and the mechanics of virology, can money fix the dearth of test kit? adam: not quickly. hotez tellingter me vaccines are not quickly. reality?he root out -- adam: in combating an epidemic, there are different phases and approaches. now during the acute phase, vaccines might be helpful longer term but during the acute phase the focus is on prompt diagnosis

and isolation of pay since -- patients who may be infected and treatment of patients who are infected. longer-term as we spread into the more chronic phase, more effective treatments and vaccines will be held all. -- help all. -- helpful. anna: it seems and northern italy there is a debate going on and a lot of paul's -- ian northern italy there is a lot of debates going on and a lot of false positives. what does it mean if too much testing was being in everly? adam: overdiagnosis is a problem . requires clinical factors, the ct scan, and the test. we have seen cases where the first rna test was negative or a subsequent one was positive. a viral test was negative and

the ct scan was positive. you may have noticed a few weeks ago where the number of cases jumped significantly in wuhan. it was a change in what they considered a positive case. they were more inclusive of patients who may have had a negative test result but were using diagnostic criteria on imaging. there is a lot of gray area for accurate diagnosis, particularly where resources are limited. tom: we get from our other expert guest that funding is important. you work with people like carl icahn, henry kravitz and others. are you guys short of money in terms of being prepared for the next virus? i am nota radiologist, sure it is a financial question. my emphasis is on diagnosis. tom: do you have the tools for that? adam: i think so.

at mount sinai, we are on the leading edge of knowledge and we are able to synthesize information we are seeing on the imaging, especially now that we are able to get hundreds of scans rapidly from chinese colleagues. we are able to categorize the findings which will allow us to make the most appropriate diagnosis. tom: adam bernheim with us for mount sinai. we will continue with conrad dequadros as we look at the news flow on the virus and the market. the two year yield, 1.1032. conrad is not leaving until we get to 0.99. this is bloomberg. good morning. ♪

"surveillance," different manifestations of the market. off onoking at sterling no deal headlines out of written. a -- britain. yield andow 10 year i'm watching the two year yield give way. i go to japanese yen. if i had on the "surveillance" 110.02,i could see it, some deterioration. conrad dequadros has been a saint today. after theking notes doctor. here is the chart of the day, single best chart. it is worse in germany. they have a rollover to unthinkable low yields. two year and 10 year yields, the artificiality of the market, how

does the fed deal with the artificial construct manifested in the bond market? conrad: this is a problem of the fed's making. the fed has conditioned us to make red -- rate cuts if there is volatility in the market, a trade war. whether that is the right medicine, the fed has conditioned us to expect that and it seems like they are trying to push back on market expectations. it does not surprise me that markets are adding to bet on rate cuts -- bets on rate cuts this year. this argument that what is the cost of the fed cutting rates? i think the fed is using its ammunition when it doesn't need to. we are in this process of the fed considering its frameworks and what is driving that consideration is the belief that they do not have enough amine nation with interest rates to

address downturns. one thing i would bring up is the issue is that the fed is not accumulating that ammunition when it has the opportunity to, and uses the ammunition when it shouldn't be using it. what are lower overnight rates going to do to address the potential risk from a trade war? nothing, in my view. when those risks past, the fed has no way to take back. tom: that is a key point, it is not what they do. they then reverse it. anna: what what they do if we start to see inflationary impact from the coronavirus? you seem confident about the resilience of the u.s. economy so maybe you do not see inflation coming, but it would be a peculiar situation if they cut rates in higher inflation because of supply chain issues. conrad: it is highly unlikely

that the fed would respond to the inflation impact of this if there were to be any. the fed wants to see higher inflation and i don't think it is concerned about how we get there. if we were to see inflation rise to 3%, i don't think the fed would respond to that i don't think it is a one-way bet on interest rates and that is why we are seeing the markets respond the way they are. one of the issues with the fed's we know they have limited ammunition and what is the next step after they take rates down to zero? start buying longer-term assets again so that is a reason why longer-term yields are behaving the way they are. i don't think this is what the economy needs but it is the way the fed has behaved. anna: interesting to see global bait -- thanks engaging in a -- global banks engaging in a way that is innovative, deciding not

to cut rates but extending lending to smaller companies. do you think any kind of corporate credit event is something we need to watch for, maybe not in the u.s., but maybe globally? conrad: i think the announcement from the bank of korea is exactly what enter banks should be doing. -- central banks should be doing. we do not need an interest rate cut. we need to make sure markets function properly. do ishe bank of korea did precisely the thing other central banks should be considering. tom: what is the elasticity in the american consumer? the whole china dynamic, long what isd all that, but the malleability of the american consumer? conrad: obviously, this is dependent on this not becoming a really widespread health crisis

in the u.s. as the u.s. consumer continues to have jobs and income, the consumer will hold up. we have had limited information on the can tumor from february -- consumer from february but it does -- all three reports suggest consumer attitudes are holding in. even if we dig in the conference plan report, those are holding up, and consumers are not responding to this health crisis in a negative way tom: charles is what -- negative way. tom: charles is watching from turks and kinko's and says get -- of -- turks and capos caicos and says, get rid of the tariffs. conrad: that is one way we could get this addressed. tom: conrad dequadros, we will

continue with you. this is bloomberg. ♪

anna: welcome back super return

-- welcome back. super return at the conference in berlin. matt miller is standing by with a guest. matt: it is a pleasure to be here with rebecca gibson from oakley. the interesting thing about your your you manage to keep leverage down lower than average. when i read the bain and company report yesterday which was the talk of the conference, i was shocked by the trajectory and level in the industry. how do you stay disciplined on that subject? rebecca: it is very much about looking at each company individually. we are looking at companies where the entry valuation and capital structure are important to how we view the overall outcome.

we are buying from founders and we are avoiding auctions. 85% of our company has been bought by the natural process so we do not get caught in the momentum of an auction which leads to writing prices and -- rising prices and rising leverage. matt: companies that have been founded by a group that is still there? rebecca: absolutely. an extra turn of leverage will not be -- we are looking to partner with them and professionalize their business and help them achieve an exit in three to five years. when we look at our returns, they are not driven by rev -- leverage. our fort growth -- our portfolio is growing 10% a year. thing i think is interesting is private equity is the domain of in my mind, big

institutions that have a ton of money, or people on the bloomberg rich list that can throw in a couple of million at a time, but for me, my only option is for me to buy a share. you have a different vehicle. rebecca: one of our cornerstone investors was oakley capital investments and that purpose is to invest in oakley funds. any retail investor can buy a share of oci and get access to the profits of the underlying oakley funds. , wetly, the lockup period are asking our direct investors to commit their capital for 10 years and that can be difficult for a private investor. as an institutional investor, there is a high ticket lies to come in, but as a return investor it can be are

manageable. matt: let's get to the coronavirus, because clearly it has roiled the public markets, and i'm sure that any of your meetings as you have returned focused on the effects as well. there is obviously a great unknown in terms of the future, but how do you see it impacting businesses you invest in? rebecca: we have the benefit of private equity being longer-term investors. we are making sure our companies are well prepared, and what use have seen -- what you have seen is a move from the supply chain in asia to coming back home. it is also about business operations, thinking about your company and your workforce, what are the quarantine implications? becoming a much more active debate about the business operations themselves and we are

trying to communicate across a portfolio, help smaller companies benefit from bigger ones and make sure we have a live discussion as to what the latest news flow is and how we can best help. matt: how do you see this playing out in terms of the european economy, which was already hit and stagnating? rebecca: you are seeing fiscal stimulus policies in germany and a slight market correction. many will view that as a buying opportunity. periods of more turbulence can be great buying opportunities. i think there will be a great advantage to go out and invest and look at longer-term rather than short-term noise. we need to see how it plays out. matt: rebecca gibson from oakley talking to us. we are here in berlin where the super return conference is being held, the biggest private equity

gathering or the most important one in the world. anna: matt miller in berlin bringing us an interesting guestroom that conference. so interesting to see the conference taking place when others are pulling out because of the coronavirus. europe the stoxx 600 in down by 2.25%. the dollar is being sold off, around one quarter percent on the dollar index as the market focuses stake side -- stateside away from europe. dollar assets weaker. u.s. futures a point lower. this is bloomberg. ♪

♪ >> because of always done, the

risk best all we have done, the risk to the american people remains low. we are ready to adopt and do whatever we have to as the disease spreads. >> president trump tries to calm the markets, with little success lows.es hit new record former fed chair janet yellen says the fed can help, but it is not a cure-all in case the u.s. is dragged into recession because of the virus. andit warnings, microsoft standard chartered are the latest to warn about the impact of the virus on earnings. daybreak,""bloomberg i am alix steel. we rolled over into session and we are willing again now. .03%.tures off by you want to buy the dip, but not yet. are we in the middle of a growth scare. taking a look at the currency market, the dollar is weak