ecb restricts travel, and depends olympics might be delayed -- and japan's olympics might be delayed. the fed cut disappoints -- [no audio] alix: -- wins nine states on super tuesday, revising his campaign, while senator bernie sanders holds firm after winning california. welcome to "bloomberg daybreak" on this wednesday, march 4. uncharted territory is something we talk about all the time in the markets, and today is no exception. as be futures up by about 62 points, but it is the bond market we continue to watch. -- yields down another two basis points, hitting a low yesterday with fed cuts.

many expect to more in the first half of the year. time now for global exchange. we are going to bring your today's market moving news from all around the world. from hong kong to new york to washington, or bloomberg voices are on the ground with this morning's top stories. coronavirus cases around the world are over 93,000. joining me now is yvonne man, and with some data to go with it that is not so supportive. yvonne: right. south korea now topping 5600 cases. the government there now seeking $9.1 billion to help businesses. we have seen surging cases in italy and iran. rate for this is now at 3.4%. we also saw in the u.s., reporting its ninth death, and

china, more signs of containment. we saw the number of total cases have topped 80,000. we also learned of 15,000 that dischargedred and from the hospital. china come of the total death toll now at 2981. we saw car sales out of mainland china falling a record 80% as this virus keeps shoppers away, and you see more pressure added to these automakers that have been struggling already with this unprecedented slump in the industry that we have seen. the hong kong monetary authority essentially following the fed when it comes to cutting interest rates to 1.5%, and additional 50 basis points. now we are seeing more events being canceled. nonessentialng travel, and japan now saying they could postpone the tokyo

games later this year. alix: thank you very much. now we turn to central-bank response to the virus outbreak. the fed's surprise basis point cut seemed to unnerve markets by signaling it is unclear how long the virus will last. joining us is michael mckee. why did the market hate it so much? michael: if i knew what the markets were thinking, i would be a very rich man. nobody really knows why the market tanked. a lot of speculation, but we might as well ask why the futures market is up this morning. let's look at some questions that may have some answers. who is next, and what's next? the bank of canada is widely expected to cut interest rates later today. take a look at this chart here. more action coming from the european central bank, according to futures traders, and the fed

will cut again in march at their regularly scheduled meeting. look at the white line, though. that is the bank of england, weirdly decreased on a rate cut. still mostly priced in, however. what happens next in terms of the economy? that much. we got adp today -- not much. we've got adp today, jobs numbers friday. you can forget about those because it is old news. infections are just starting to ramp up in the united states. maybe you will see something on march 17, when we get retail sales. people stocking up on hand sanitizer and masks may show up a little bit of a bump in the sales, but it is going to be a while until we know anything in terms of how the virus is affecting the u.s. economy. alix: thanks very much. coming up later today on "bloomberg daybreak," we have an exclusive interview with james bullard, the st. louis fed president. that rate cut pushed the 10 year

yield below 1% for the first time. putting me for more on the market action in new york is bloomberg's annmarie hordern. annmarie: we are in uncharted territory, as you said at the start of the show. the 10 year yield since the start of the year down about 90 basis points, nearly a full percentage point lower. it just shows this flight to safety and the worry about the coronavirus, and the fact that this rate cut might not prevent the damage we see in the u.s. economy. many are saying that the real question is the unknown. could this trigger a recession? the market is now pressing in another 25 basis points. many on the street say for the first half of the year, we can get about 100 basis points from the fed. the second big question, is this the right tool? many people in the market are saying, how does a rate cut fix a public health policy?

we could potentially see the selloff yesterday. the futures are coming back now, but yields flipping because the fed acted alone after that rare g7 call. potentially today, we could see some more action. alix: thanks so much. we want to end on u.s. politics. former vice president joe biden performing well on tuesday, and what appears to be a street fight with bernie sanders to challenge president trump in november. mr. biden: for those who have been knocked down, counted out, left behind, this is your campaign. [cheers and applause] mr. biden: just a few days ago, the press and the pundits declared the campaign dead. then came south carolina. they had something to say about it. alix: joining me from washington is kevin cirilli. some of your big takeaways? kevin: call him the comeback kid.

this was a big night for former vice president joe biden, who beat expectations and was even able to pick off texas, but it is not over yet. the second point i would make, senator bernie sanders, i'm told, behind-the-scenes has been preparing for a contested convention for weeks now, and that this fight increasingly comes a two-person race. in just over a week, there's another series of contests, including in arizona. the sanders campaign feels they are poised to have this for the long haul. questions now surround the campaigns of former new york city mayor mike bloomberg, as well as senator elizabeth warren, and weather is not -- and whether or not them staying in a race could ultimately hurt the candidates it would like to see become the eventual nominee. if you're looking ahead and down the line, look to see how senator bernie sanders looks to say he would still be able to unify the party and break past the democratic-socialist ceiling of sorts that has hindered his chances for expansion, and also look for how the biden campaign

is able to make inroads with the progressive movement in a rivers political strategy of sorts to try to say they would be able to boost turnout in a general election. alix: thank you very much. michael bloomberg is seeking the presidential nomination, and is the founder and majority owner of bloomberg lp, the parent company of bloomberg news. general electric says it will take a hit from the coronavirus. ge came out with an adjusted first quarter forecasts that missed estimates. asian --om ge heavy from ge aviation is expected to shrink. they expect that the grounded 737 will return to service in the middle of the year. coming up on this program, more of your morning news, trade, and analysis of the markets in today's first take. this is bloomberg. ♪

alix: time now for bloomberg first take. joining me from our in-house team of wall street veterans and insiders, damian sassower. ,lso joining us, david lebovitz j.p. morgan invest the management -- investment management global market strategist, and adam posen come up peers and for international economics resident -- adam posen, peterson institute for international economics president. damian: our friends at credit suisse put out a piece last

night which was excellent, and it shows that since the coronavirus broke, the funding, we haven't really seen funding stress in the market. finance,r trade commodity finance has all come down. that is a temporary boost to bank balance sheets. manifest,t seen that but now we may begin to see that manifest, and i think that is what the fed is trying to preempt. alix: is that a worse case scenario? the credit markets are still relatively functioning, right? damian: since september of last year, the fed has only injected $150 billion. we can see in places like southeast asia, companies like apple have supplied their key suppliers, funding them in the near term to get through this. they could be really feeling the pressure. if we start to see real credit stress, we will start to see libor blowout. cross currency basis is starting to we can hear.

e -- weting to weaken hwe can -- weaken here. >> keep in mind, this is a fed that likes to shoot first, ask questions later. they wanted to give the business community a bit of a pat on the back. there are concerns that with companies having cut all their capex, if they begin to get really nervous about the outlook for growth and profit ability, the next drop is going to be on the unemployment side. was kind of an attempt at shock at all, but really saying, we've got your back. i think they're going to keep buying short bills. i think they will probably reduce rates further. the question is when the recession eventually shows up, a question of when, not if. economies work in cycles. what tools are they going to

have left? i think you are looking a significant balance sheet expansion. alix: adam posen come away in on this one. what did you think about the cut yesterday? adam: i think it was probably fine, but unimportant, relatively speaking. the emphasis now has to be on fiscal. summers,f us, larry janet yellen, mario draghi have been saying that this time around, you would have to use fiscal policy. the g20 keeps saying it is time for fiscal policy. it is not doing monetary policy. on top of it, you get the coronavirus shock driven by non-us -- by nonfinancial factors. i've got to disagree with some of your colleagues. i think the financial stress is really second-order, and i am not sure that this fed response is going to matter that much. david: the fiscal point is really interesting because it is something everyone has been waiting to come to fruition. particularly in europe, this

could get things moving in that direction, but the question is, we are now talking about very low rates, fiscal expansion. what does the toolkit look like going forward? more importantly, what do investors do? when we think about building portfolios in this environment, now you need to think about three different buckets. you've got your risk bucket, which is your equity beta, your income bucket, and then things like 10 year treasuries, where you are not getting paid. alix: and you have duration risk. david: but you are buying it for the percussion -- for the protection. adam: i went to agree very strongly on that, that this is about what germany and the rest of europe decides. i've got to assume that the combination of uncertainty about fiscal tools and about monetary was what drove the fact that we didn't get a g7 statement of any meaning ahead of the fed decision.

when you're looking around, i do think that people are overestimating the persistence of the cycle, and there's going to be distressed credit opportunities and comeback opportunities in 12 to 18 months. alix: does that imply that you thought the g7 didn't act because they are going to go do more fiscal? adam: my interpretation was you held the meeting. you raised expectations that there was going to be some kind of coordinated response. then suddenly, the fed is out there on their own. i think this means the europeans were unable to decide on what the next steps were. i hope this is a tipping point for germany and europe because once they start to move on fiscal, there's room for everybody else to move. damian: we may as well be "waiting for godot" at this point. the u.k. and china can definitely stimulate fiscally, adam isree with what

saying, but if you are waiting for fiscal stimulus, you're going to be waiting for a long time. i think that is what the fed really identified, and the building,should be given what we are seeing from the coronavirus. look at china factory numbers overnight, falling off a cliff. you've got to believe that is something they are seeing. the fed is saying this is a very real problem. we need to get ahead of it right now. i'm not disagreeing with you that fiscal is a long-term help. what i am trying to emphasizes that the monetary actions of the fed and the others are a very pale substitute. if we don't get that, the fed is not come to save us. , the: in addition to that fed is the world central bank. whether it is a slowdown in

growth, the potential rerate think it employment, the tightening -- potential reratin the tightening, of spreads, what can the other major central banks do? fundamentally, i'm not sure, like we've been talking about, that reducing interest rates really addresses the underlying problem here. alix: what i find confusing is where is the talk of fiscal in the u.s.? we are talking about it come about after the fed cut yesterday, the tweet from president trump saying the fed is cutting, but must further ease. are we going to bet our hopes this is not going to come, and we have a safe haven bid coming into u.s. equities that is going to wash out? --ian: adam: to be crude about it,

maybe there isn't that much hope. you are going to have to deal with the reality that things are going to be bad for year and a half with some downside risk. i totally get what you are saying about trump, but this is so straightforward. you just treat the hospitality towards the transport sector the way you treated the auto sector. loano targeted sba rollovers, targeted employment support in that sector, all of which fiscal can do in no time. that's not to say it is going to happen. it is just an incredible shame that the president is foolishly yelling at the fed rather than trying to amass some agreement to do something straightforward. david: i think what is so challenging about this, usually the fed drops rates and stimulates things like spending more housing rates or industries we know are cyclical and account for a lot of volatility in gdp. to your point, what are the industries that are going to come under pressure here?

hotels, tourism, services. if i'm not going to the mall because i'm worried i'm going to get sick, i'm not sure how dropping the fed funds rate gets me to go to the mall. that's the big challenge, and that is why we need to see some fiscal. there's going to be debate about it, but that is the only thing that can really break us out of this malaise. otherwise, there will be some pain involved, and investors need to understand those bifurcated outcomes. damian: the rate cut was not designed to stimulate. it was designed to lubricate. we should expect more easing ahead, for sure. alix: if that is the situation we are heading for in the u.s., for emerging markets that are pumping fiscal stimulus, that are cutting rates, does that make them a good bet or not because the u.s. is weaker. been thinking about that. emerging markets have kept a lot of foreign reserves, and that should be a buffer against any liquidity stress, but they

take those and invest to those in the fx swap markets. that is going to manifest itself in the short end of the u.s. market. that is what you have to stay focused on today just to see what we have witnessed in the last 24 hours. adam: i think there's another angle on emerging markets, even though i think that is all right. the health crisis is a stress test for governments and governments -- and governance. you're going to see a few of these countries fail the stress test. the quarantine and other resources. this will lead to real governance problems. does the market sort out those causing a fullut selloff? the first round effect is what was just said, but i would emphasize looking at each country's ability to survive

this global pandemic. alix: to wrap it up here, what is your favorite buy today? david: there are two things i'm watching very closely. the energy sector, i'm going to say it, is looking more and more interesting as it continues to get cheaper and cheaper. in a world where everything is expensive for long-term investors, unless using the energy spaces going away, you will have to sit through some pain first. -- i alsonk gradually think value is gradually coming on sale. even in banks, the re-rating of yields had made value look attractive. you can look through the stress we are going to see in the economy and with respect to corporate profitability, but not completely abandon cyclicality in their portfolios, and focus on quality and income. at the end of the day comes that is going to be the right approach. alix: damian sassower of

bloomberg intelligence, thank you so much. adam posen of the peterson institute and david lebovitz of jp morgan are staying with me. for more analysis of our program come i go to gtv on the terminal -- our program, go to gtv on the terminal. browse the features, check it out. this is bloomberg. ♪ this is bloomberg. ♪

♪ viviana: this is "bloomberg daybreak." reaffirming its guidance for this year -- at&t reaffirming its guidance for this year. at&t saying by the end of the second quarter, it plans to have nationwide 5g service. saudi arabia pushing opec and allies for deeper production cuts than planned. the saudis what the cartel to cut more than one billion the -- more than one million barrels a day of output. oil prices have been battered by the coronavirus. that is your bloomberg business flash. alix: thanks so much. one reason there's a call for

deeper cuts in production is the big jump in the flow of oil from opec middle east exporters. take a look at this. crude supplies from middle east exporters rose to the biggest , despite the016 fact that opec and allies had agreed on cuts for the first part of the quarter. glenn sacks is not far behind, downgrading their price forecast to $47 for brent, a brutal price drop. coming up, joe biden pulls off a stunning super tuesday come back. we will have more on the primary results and what it means for the markets. this is bloomberg. ♪ awesome internet.

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is this about maybe biden getting the nomination for democratic president, or maybe other things cutting rates? you caned rate cut -- see the aftereffect of the fed rate cut. the twos-tens spread continues to bull steepen as you are still seeing a relentless bid into the treasury market. yesterday, the 10 year yield moved 24 basis points. crude up by about 2%. that feels like opec is going to come in and support the market. like i mentioned, former vice president joe biden's done with a super tuesday victory and places like massachusetts and minnesota. me in new york is rick davis, bloomberg contributor and former manager of john mccain's campaign. david lebovitz and adam posen

still with me as well. what was your biggest take away from last night? rick: the only surprise was from the biden can't. bernie did what we thought he was going to do. he won california, the big prize. he had been devoting resources to that tv and ground game at a time when nobody else was. that was really a lifesaver for him last night because without california, it was a dismal showing. all of the surprises were on biden's side. he beat elizabeth warren at home in massachusetts. he won texas, which had been written off for dead. his minnesota win was particularly crazy because he was pulling at 8% a week before the election in that state, and wound up winning it. these prize in the political world right now is looking up to find out that the biden campaign is no longer on life-support. if anything, it is the incumbent

narrative now that bernie is going to have to be biden, not the other way around -- have to beat biden, not the other way around. alix: you got a boost inequities yesterday in the futures market because biden is more safe. do you buy that narrative? david: when i thing about markets over the last few weeks, i think it is 2/3 covid-19, 1/3 concerns about what is happening with the presidential race. investors are taking a bit of solace just because if you thing about what volatility represents, it were prisons a wide distribution of outcomes. what we are seeing is that the distribution of outcomes is still wide, but there is a clear path toward something everybody is more comfortable and familiar with, and that is what is giving futures abuse this morning. there's still a lot of race to be run. i think this is definitely a positive development against a broader global economic

backdrop, which was looking particularly fragile. rick: i can't agree with that more. the republican establishment has been hiding under donald trump, and last night was a time we saw an establishment try to embrace someone and add some stability. bernie sanders is the insurgent trying to burn down washington, and i think by all rallying around biden, it gave the vice chance at some stability that hasn't happened a long time. david: -- adam: back in 2016, i pointed out that white suburban women where the tree swing vote, and that trump had a better chance of winning that people thought at the time. did you get to 2018 and the congressional swing is driven by white suburban women switching back from republicans and democrats. i think that is the key factor going ahead, and that is why some of this argument on sanders' part about this is the establishment, this is what is going to matter.

it is interesting to thing about how the virus and a short-term turn down in the economy plays out for those people. our elections have been increasingly ideological, less economics driven, but no matter what, the trumpet minister she and is going to look bad even if they were doing a decent job on the virus, which -- the trump administration is going to look isthe trump administration going to look bad even if they were doing a decent job on the virus, which they are not. david: coming into this year, one of the church that was always making the rounds is if you take some of the unemployment rate inflation and use that as a gauge for the state of the economy, it looks like the administration had a really good chance at getting another four years, but again, the economic strength has been called into question. how do people deal with something that is going to impact consumption and services, which are much more tangible to

the average american, then manufacturing and investment spending? i think we have been dealt a hand that nobody saw coming. david, iadam: completely agree with you. first, if you are doing this -- istically, the biggest going to be growth of income this year. we will see what happens with that. secondly, you've got an issue -- ine just saw with argentina. the threat of the left coming in i have effects -- coming in affects the stock market. this is what happened with the kershner ticket in argentina. president trump is probably going to get blamed for what happens on his watch, whether or not he does it. the sentiment of the

democrat party was on display during the midterm elections, when 9 million people voted against the republican party a margin of victory for the democrats. the question you have to ask is can trump reduce that number down? he lost the general election vote when he won the presidency by 3 million, lost the midterm by 9 million, and there is no evidence that the administration is doing anything to prepare its image in the suburbs or with suburban white women voters, who will dictate the outcome of this election. alix: so as we walked this forward, no matter who wins the white house in november, what happens to fiscal stimulus? i want to bring up one chart and talk about budget deficits. we are already at $84 billion. what do we do with that when you have a 10-year treasury yeild low 1%? are we going to see mmt?

is modern monetary theory going to come into the vernacular next year, no matter what? --david: icerely sincerely -- adam: i sincerely hope not. the deficits don't matter in that nobody votes on the basis of how big the deficit is maybe they should, but they don't. and second, what is much more important is the composition of spending and tax cuts that create the deficits. that is what distributes to the particular voters what it is they think they are getting or not getting. that is what determines the impact on the economy. i think unfortunately, the deficit ends up being a distraction as a total number. it is more about the quality and composition of what the government does. i totally agree. the deficit isn't going to be an issue, but perhaps it should be. i think what we are seeing

globally is that expansion of deficits at very low rates. this modern monetary theory come into the conversation? perhaps not, but we are looking at an environment where the lower for longer environment is forced to play out. abovest rates move higher the face of nominal gdp. that will prevent governments from being able to service these debts, so i think it is a combination of all of this. eventually, things will come home to roost, but that is five or 10 years down the road. in terms of the impact in november, i get a somewhat secondary. alix: we are not going to care until we care, basically. rick: it is a level playing field where basically, spending has been geared towards trying to find votes. adam is right, i don't think there's a political issue. alix: why haven't we seen fiscal come out of the administration

due to the virus? why are we seeing president trump only focusing on the fed? there are speculations on that. sorry to interrupt. congress is unable to make decisions. second, there is this overhang of ideology that visible, tangible spending is more indefensible than big tax cuts. that is wrong on the economics, and i think it is going to be wrong on the politics. donald trump has tried to pull every lever he could. he's already talked about a tax cut. he's trying to distract from the coronavirus because he doesn't a plan that the public needs during a crisis like this. one is his favorite targets is the fed. regardless of whether it is

or not, you can expect some full counteroffensive by the administration on how the fed didn't do enough. it is not a rational approach to fiscal or monetary policy in this administration, steve got to assume that you're putting on your political glasses between now and november and hope it doesn't record the economy. the economy.eck david: we are having this in talkingt rate about fiscal expansion keeping rates low. you had a market showing signs of life going into last year. i understand it has been dealt a bit of a different hand in terms of the virus and the broad uncertainty that creates, but the one risk investors aren't necessarily appreciating, and this may be a longer-term risk, is the potential for inflation

to begin to come back. look at the way government bonds are priced, equities are priced. people are assuming interest rates are going to stay low, so we have been expending that opportunity set we are focusing on in portfolios and focusing on things like infrastructure and real estate, which we highlight in our guides for alternatives coming out today. [laughter] david: these do provide yield inflation protection and diversification. when it comes to building portfolios going forward come others are going to be key things that investors perhaps aren't thinking about. alix: all right, adam. last word to you. adam: if i am worrying about something, i would view inflation risk as a speculative investment. i think the biggest worry in this is the true message of the ratesalling into sub zero , very flat yield curves.

that, the u.s. is ranked to get ahead of come whether or not it works. alix: thank you very much for joining me. we really appreciate it. we want to get an update on what is making headlines outside the business world. viviana hurtado is here with first word news. viviana: the coronavirus is causing more travel bands. more events being canceled. the partial list is significant. amazon is banning nonessential travel. all business travel band. -- scrapping its largest business travel banned. the administration says it is a good time for lawmakers to cut taxes. what the president hasn't done, come up with a major fiscal plan. we end with the tokyo olympics.

they could be postponed because of the coronavirus. that is the word from japan's olympic minister. right now, the tokyo olympics set to begin july 24. spentstimated japan has $24 million on this event. 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'm the fiamma hurtado. this is blue -- i'm viviana hurtado. this is bloomberg. alix: coming up, why working from home in the face of the virus outbreak is not too simple. if you have a bloomberg terminal, check out tv . you can watch us online, click on charts and graphics, and interact with us directly. review anything you may have missed throughout the program. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up -- "bloomberg daybreak." coming up later today on "bloomberg markets," james, st. louis fed president -- new york fed president -- st. louis fed president. we begin with think meet makers cutting prices -- with fake meat makers cutting prices. impossible foods has cut wholesale prices for its products by 15%. big companies such as nestle plan to make their own plant-based burgers. now to the billionaire family that has agreed to sell the thesurance business ream --

french insurance business team. testing ah jp morgan, coronavirus plan for u.s. employees today. thousands are being asked work from home. bloomberg has learned about 10% of the staff and consumer banking will work remotely. -- thatabout 1000 2000 is about 1270 workers. now it's time for wall street beat. deals pulled from leverage loans. the refinancing frenzy dying down as billions were pulled in the last six trading days. and kkr at the top of pe median salary pay.

joining us is bloomberg's sonali basak. can jp morgan do business from home? sonali: not everybody, for sure. you can't trade a big amounts from home. volatility is going wild. there's a lot that can go wrong. short answer is no, but let's see how people start to play into these contingency plans, and security. the traders can't trade from home, but just a couple of weeks ago, we were talking about the bulletproof windows at retail banks. like even those measures are not enough. people are rushing to do more and seeing how well they can bear this weather. alix: i'm having a hard getting a real read of what is happening in the credit market.

sonali: as of right now, the window is pretty close. leverage loans are much trickier than typical debt. if that window was just open for a little bit, the leveraged loan market is really going to be impacted. so what does this mean? private equity sponsors will have to pay up a lot more for saw someey probably tension in the market through the end of last year, and this is really adding to it. alix: this is also what happens with covenants. what happens if you guys have to keep it all in their books? sonali: exactly. we did see a couple of deals get .tuck with the banks alix: we will see how that goes. out here on the median salaries. sonali: this is my favorite

story. at firms like blackstone, you have the top three executives .aking $800 million combined the median salary is around $200,000. remember, these are a wide range of workers. the top portfolio managers get paid a lot. but there is quite a disparity between the top paid executives at blackstone or kkr and their median salary for a worker. abigail: where there -- alix: where are they competing with talent? theyil: dave -- sonali: been competing everywhere, and this shows you just how far the ceo is. is 200 to one.it

you look at the financial industry, and it seems really start, but you look at the tech industry and wonder if it is worse there. alix: thank you very much. in today's bloomberg green, called ceo mike worth for reducing emissions within its own operation. if you look at third-party assessments of flaring in the permian basin, we are the leader. a wide range of companies -- leader against a wide range of companies. we have not set long-term targets. we've begun to march down the path of taking concrete actions that reduce emissions. we learn more, we invest in technology, and keep that going overtime. alix: he went on to say he wouldn't commit to a new budget

-- a new budget. coming up on this program, we are taking a closer look at how the fed emergency rate cut is impacting u.s. spreads. if you are jumping into your car, tune into bloomberg radio across the u.s. on sirius xm channel 119 end of the bloomberg business app. this is bloomberg. ♪

alix: time now for trader's take. joining me is damian sassower. we were talking about it earlier, what stress we might be seeing in the dollar funding system. damian: if you look at the white and bluish gray -- i'm colorblind. [laughter] damian: what you see yesterday

is a pretty big spike. i think that is spilling over into credit markets. we have seen spreads widening and not coming back. i think that is something you have to keep a watch on in that environment when there might be payment pressure in dollar funding availability pressure. what you're looking at here is cross currency basis. this is offshore demand from offshore banks and central banks, etc. when the u.s. cut rates, you should have seen the cross currency basis explode to the upside, but reversed overnight. why? because there is still relentless demand for dollars from offshore. that is what the basis is back down. but i was basically going to say is that that means there's demand for dollars, and that is building across orders on coronavirus and some of the fed pressures.

so if you want to make a trade off of it, how do you do it? damian: unless you are a big bank, you don't have access to these markets. but you have to keep an eye on these indicators because the spill over into credit spreads, you just need to keep an eye on it. there's no real trade there. alix: thank you very much. coming up, we continue the coverage of the fed rate cut with michael these us that with michael's asos -- with michael zezas of morgan stanley. this is bloomberg. ♪

♪ alix: welcome to "bloomberg this wednesday,

march 4. i'm alix steel. let's take it from the top. >> we have seen bookings decline -- declined by averaged 25% to 30% on a daily basis. cases in surging italy, iran, and perhaps that is puts the fatality rate for this virus at 3.4%. kong pmi falls to a 17 year low. fed chair jay powell surprises the market with a 50 basis point cut. nk.cks si it is all uncharted territory. >> i see another 15% decline from where we are now in stocks. alix: the market speculates the boe could also issue an emergency cut.

michael: we got adp today, jobs day friday. you can forget those because it is old news. we might not see anything until april because it will take a while for anything to get into the data, as infections are just starting to ramp up in the united states. alix: now support is starting to mount for fiscal support. mr. biden: for those who have been knocked down, counted out, left behind, this is your campaign. alix: former vice president joe biden stages a huge comeback as wins theernie sanders california primary. sen. sanders: i can tell you with absolute confidence we will win the democratic nomination. kevin: this was a big night for former vice president joe biden, who beat expectations and was even able to pick off texas in the super tuesday prize, but it is not over yet. alix: elizabeth ryan and mike

bloomberg face questions on whether to end their campaigns -- elizabeth warren and mike bloomberg face questions on whether to enter campaigns. michael bloomberg is the founder and majority owner of bloomberg lp, the parent company of bloomberg news. we are seeing a relief rally. how sustainable is it? euro-dollar down by 0.5%. the dollar sold off hard yesterday on the fed rate cut, now coming back. the 10 year yield sitting at 1%, clawing back from below that level. where doing over from here, and what is going to support us? the said surprised with that 50 .asis point cut yesterday joining us here in new york is chief us, morgan stanley strategist of municipals and , mila richardson,

richardson, -- nela edward jones investment strategist, and nick maroutsos, janus capital management. look at where bonds are trading. they are all trading at the fed funds rate. that means the fed is behind the curve. 10-yearcalling for a 1% probably about nine months ago, more so on the back of the structural challenges that the u.s. would encounter in moving towards zero. i think this was a catalyst to get there, and i don't think we will be moving too far off of it . alix: what do you think? nela: i think it is still too soon to tell. the fed has been motivated by providing this bottom to the markets, this liquidity.

this is obviously not an economic move. this is a financially motivated ,ove to prolong the expansion not necessarily intended or expected were able to stimulate the economy. been that, the fed may behind the curve when it comes to the markets, but i think they are ahead of the curve when it comes to the economy. we still don't know what the economic impact will be and whether the stimulus is actually going to help with that expansion. alix: jay powell was like, we have no idea. this could be bad. we just don't know. which leads me to why the political sphere is still focusing on the fed and not fiscal. >> i think they are focusing on the fed because it is probably the only game in town a washington, d.c. at the moment. if you look at the levers available for the u.s. monetary iso pull,

one, and fiscal would be another come up at the u.s. government basically has no track record of being proactive on fiscal stimulus. it has a track record of being reactive. havevided government, you just laid of gridlock, so you are -- you have legislativ gridlock. you probably shouldn't mark up your expectations for that mess there is real economic pain in the data. nela: we haven't seen that yet, and we probably won't see it in the jobs report either. impactus has not had an on job creation so far. it is just going to be another data point that disproves that the fed action was needed right now. alix: we haven't seen the stress in the funding markets that we did in 2008. that was the rhetoric yesterday. i wonder if you see that continuing.

"the biggest said, risk in the plumbing we see is the fed cutting rates aggressively and a mass drawdown of corporate credit lines due to missed payments to push the u.s. banking system back into deficit in short order." nick, how do you see that? nick: i think the fed and other central banks are going to adopt a kitchen sink mentality. they are going to throw everything they can at this situation. if that means providing more liquidity to the markets, they will. if that means quantitative easing, yield curve control, credit easing, everything is on the table. the fed is somewhat constrained as a result of dodd-frank, but this is the new environment we are living in. backstopping market chaos is now part of mandates. monetary policy is not going to be able to address supply-side chucks, but the market is hoping that some form of psychological -- supply-side shocks, but the

market is hoping that in some form, it psychologically can. then implement some measures that will get us out of the woods with regards to the coronavirus and the effects of that. alix: does that mean you have to take on duration risk and credit risk at the same time? nick: in this type in the night are meant, you need to be -- this type of environment, you need to be offensive. you knew to be cautious, particularly in fixed income portfolios. we are trying to deliver some kind of income generation. we are owning high quality, highly liquid. we are buying duration. we are looking to hedge out some of the credit risk. days like today, the market is up. days like yesterday, the market is down. we believe the effects of the coronavirus aren't complete yet. the defensive be as

liquid as possible. alix: why would it be a duration trap? nick: to be honest, i don't think there is a duration trap. i think investors should be looking to buy duration. the fed is looking to cut rates again. the directory for the fed is lower. the market is going to tell them what to do, and the fed is going to oblige. that means, whether we are going to move towards zero remains to be seen, but you are seeing other central banks doing the same thing. so you are also looking at buying yields in australia, new zealand, canada, the u.k. rba in australia just cut rates a couple of days ago. they are likely to again in april. there's rumors of an emergency cut in bank of england. this is going to be the continued theme, and we are going to move towards that zero

interest rate policy. nela: i think nick just spelled out the fed playbook very well. the one thing i would add is that each cut becomes less effective. more effective here at home, but if you look at global central , so their effects are going to be even less than here at home -- global central banks, they are lower or negative, so their effects are going to be even less than here at home. there's a risk that we still don't have a good way of quantifying. alix: ultimately, it seems like other countries may have a better chance of fiscal stimulus, like germany, and we see italy interested. is that a better playbook for the u.s.? i think that is a better narrative overseas. we are building a body of other countries

about how the virus moves through populations. public health concerns, and it is possible that as that progresses and we can confirm our own biases or push against them about how disruptive this actually is, it means couple of months outcome of the markets recognize this as a temporary disruption. i think that is a counterbalance to the idea that the fed and the markets have to be in a permanent risk off mode. alix: which begs the question, will the fed gives back those rate cuts? if that happens and everything is ok, are they really going to hike 50? michael: i think that is a decent point. perhaps they are reticent to take that back because it wants to be watchful and waiting, and the market recognizes the rebound. he could have something like a

bear steepening of the yield curve. that's not necessarily what we are projecting, but that is a risk we have to be aware of. nela: even though we were in the ,eat of this coronavirus event i think there is general agreement that this is not a forever risk. thatis a temporary risk does delay, but does not derail, the grope will -- the global growth rebound. it does not end the economic expansion. in that situation, where we expect the risk to maybe be profound in the moment, but fleeting over time, what is the fed fed's correct action, and what is the cost of another 50 basis point cut going to be with an event that you would expect to resolve itself by the end of the year? that is something the fed is going to have to grapple with. alix: in light of that, what is your counter to this?

the fed has already called this, and that is the problem. they are really going to be pushed around by markets, and their mandate is focusing on what level the s&p is trading at. if you are worried about a duration trap, hide out in the front end. the front end is where you're going to get kerry. the fed isn't -- going to get carry. the fed isn't going to be hiking anytime soon. focus on the front end and roll down to maturity. i agree with the previous panelist. we are not necessarily in panic mode, so we don't want people to assume that we are just complete bears when it comes to the market. this virus is temporary. there's a time of stimulus coming down the chute. there's a ton of stimulus that already exists.

you are faced with low rates and low inflation. in that sort environment, you want to own risk assets. we just believe that bonds will perform equally as well. alix: the pedestrian question for you, and we will move on and a second, how low can the 10 year yield go? nick: that's a good question. we made the call of 1% in july, and we didn't expect the coronavirus to be the ultimate iuse of that, but again, don't see why the 10 year can't go down to 0.5%. if you read the tea leaves that central banks are going to continue to ease policy, if this coronavirus, if this worsens, if this intensifies, there's going to be a natural bid towards quality assets, and that is going to be treasuries. , nickmichael zezas maroutsos, and nela richardson, all of. . your sticking with me stay tuned to bloomberg -- all of you are going to be sticking with me.

stay tuned to bloomberg television for our interview bullard, said lewis that president -- st. louis fed president. this is bloomberg. ♪

mr. biden: for those who have been knocked down, counted out, left behind, this is your campaign. [cheers and applause] mr. biden: just a few days ago, the press and the pundits declared the campaign dead. then came south carolina. they had something to say about it. alix: that was former vice president joe biden speaking after a stunning super tuesday come back. as,ll with me, michael zez

nick but sue suits -- nick maroutsos, and nela richardson. market thishink any noisy, it is hard to pin anything on political outcome. to the extent that you as an investor are looking at a binary between biden and sanders, saying one is more constructive than the other, i would encourage people to think critically and take a couple of steps ahead. it might not be the wrong way to think about it, but i think you've got to specify why that is. our contention has been does not actually, if one of them became the candidate and ultimately president, that big of a difference between the policies they could practically get done. obviously the presentation is different, but in our view, you need a unified government to get any major legislation passed. get what you can actually

through a unified government through the lens of a slim senate majority where you have to satisfy moderates, probably something that is fiscally expansionary, not as harsh on the tax side as you would think, but at the end of the day, very different. fears thate of the were stated by some of the candidates' platforms. there's a regulatory story. microair to say that on a level, there's going to be some binaries, but those are more driven by the republican versus democrat and the bernie/biden binary. nela: with think politics will be a source of volatility in the markets. we have the same recommendation every four years, don't play politics with your portfolio. if you look at last week's

action, last monday was the first market trading open after bernie's breakout in nevada, and the markets didn't really get a chance to fully digest that news before we had more news on the coronavirus. i think these things are getting conflated together. we don't know if today's bump is due to biden's breakout over super tuesday. we think there is going to be volatility driven by these new headlines. at all comes down to taxes. which candidate is more likely to roll back the tax cuts that were enacted in 2019? once you get a benefit, it is very difficult to take it away, even in an undivided congress. that would be a big uphill battle for any candidate to actually take away or rollback a tax cut. michael: i think that's fair. sandersy, the bernie tax program is much more aggressive than joe biden's, but

the question isn't the candidate and what they can do with taxes. it is what you can get done with a slim majority. the answer is probably not a full rollback of some of the more aggressive tax measures. so you get some tax rollback, but insufficient to fund probably even something like joe biden's more modest health care proposals. you get some of that extra spending and stimulus, and of course, there are some mixed net,ts of that, but on the almost by definition, your near-term growth inflation expectations change. alix: nick, from your perspective, do you hedge the election at all? nela was saying, we don't -- politics don't play that big a role in our portfolios, but we need to look and examine what is going on.

i think with what happened last night, with biden really coming back from the dead, politics is now less of a driver in markets. we know what to expect. i think that is what markets want, which is why you are probably seeing some level of bounce today in equity markets. the certainty may not be complete in the sense of who is going to be the democratic candidate, but we have a clear picture of who that might be. now markets can focus on the macro picture, whether it is coronavirus, the fed, and say now we can put this to the side, knowing full well that even if biden or sanders is elected, they are going to have a tough time getting things through. but when there is a biden presidency or candidacy, it is less a risk of what is going to happen in markets. they don't like uncertainty because that adds to volatility and risk. alix: i think it is also important when you talk about corporate taxes as well, how much it actually did add to earnings. it happened a couple years ago,

and it was really 2019 earnings were you did see a significant boost. that was significant. nela: that's correct. alix: taking that away would be huge. nela: we are already seeing the effect of corporate tax cuts. you can see that in q4 earnings, for sure. we think because of the coronavirus, they will be revised down for the first half of the year. inyes, they had a big effect 2017, 2018, may be in the first half of 2019, but they have already basically lived their life in terms of their effect on earnings. now we are looking for another catalyst. that was supposed to be trade. it was supposed to be the phase one trade deal that limited or reduced trade uncertainty. we are seeing the virus pick up where the trade tensions left off, and really cutting down supply chains in a way that may be more expensive, at least temporarily, than the trade

tensions. we are not getting the catalyst we expected this year. alix: so it is like trade one deal later because now no one is going to buy anything? michael: it is interesting how the trade risk in the virus risk rhyme in terms of their impact, but i think at least in the short term, i would not view those things as multiplying on top of each other. of phase one and moving to phase two is sort of an excuse to delay the hard stuff. the virus is another useful excuse to delay conflict. that doesn't mean you should feel good about trade because the virus itself is a much bigger risk. alix: michael zezas of morgan stanley, thank you for coming in. and nilautsos richardson will be sticking with me. 183,000 jobs were added in february, but january was revised down by about 80,000. this is bloomberg. ♪

alix: i want to check on some of the big movers in the markets. the markets reducing the odds of e for allnders' medicar plan that might not become a reality. thinkge really disappointing first-quarter guidance, saying they could have reduced cash flow as much as $500 million. nordstrom getting creamed after the profit outlook came up short. coming up, we will be speaking to chris debt. this is bloomberg. ♪ ♪ [ fast-paced drumming ]

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alix: this is "bloomberg daybreak." i am alix steel. happy wednesday. yesterday was painful. as a market participant. s&p futures are now up 50 points.

how much of that is a joe biden when yesterday and how much is just a rebound from the selloff we saw? classes, a couple of things to pay attention to. adp came in stronger than estimated but was revised down. the dollar gaining. the fed dragged down the dollar yesterday. we are seeing the bull steepener in the bond market. 2.10 is where we set. pay attention to the effect this has on the corporate credit market. mohamed el-erian wrote in a financial times that the likelihood of a growing number of fallen angels comes at a time when the long-standing structural deficiency of the $1.2 trillion high-yield market, a small space of dedicated investors relative to the amount of outstanding bonds is more apparent. liquidity threats are being exacerbated by a lack of funds

willing to cross over into junk territory. still with me is nila richardson and nick maroutsos. what do you think? more foreign angels -- more fallen angels? nick: i think mohammed is right. you have an environment with a ton of excess debt. people have been reaching for yields for the longest time and now they are set up for an environment where there is the low liquidity in the credit markets, particularly in the fallen angels and high-yield markets. that is where people get in trouble. they are looking to create a bond portfolio with equity like returns. you are buying bonds with a high correlation to equity. bonds are supposed to be defensive. high-yield bonds do not do that. there is a reckoning coming in the sense you will see issuance continue to slow. hopefully we will see the plumbing get unclogged, particularly in the

investment-grade market. there is still going to be a lot more volatility in the credit space. if there are opportunities to take on more risk, where would that be if it is not in corporate credit? nick: i do not think you want to be taking on too much risk right now. you up to watch what has happened over the last two weeks. it has been an exciting time. we have seen rates rally significantly. ,e have seen credit spreads both investment-grade and sub investment-grade. we are taking more of a patient approach, particularly right now as we see how things play out with the coronavirus, how things play out with the jobs number and how things finish off with the fed rate cut. ultimately, there will be a silver lining. there it's going to be good opportunities. we like looking at global assets, particularly in the short duration space. that is what our mandate and the font we manage does. we look for good opportunities globally where we can maintain a

solid yield without changing the riskfully ofo -- the portfolio of the profile. there are a lot of good names out there. it is almost like the contagion effect we saw, not quite to the degree of 2008, but we saw a quality companies are widening and the equities are deteriorating, where these are actually good investments over time. alix: talking about plumbing, the fed repo operation is oversubscribed for the second state day. the narrative the fed will have to support the market when it comes to repo. nila, what do you think? nila: diversification is a teachable lesson of last week's market volatility. that onwith nick duration you need to take credit. i would also note that the high-yield market, the spreads did not widen as much as you would expect from a 10% correction. we've been told for the past year and a half that the risk was in the corporate bond market. when we got to last week, we did

not see the risk pray -- the risk play out. this is a concern we are still watching. it becomes harder for companies to make payments. we do not think the corporate bond market is risky enough to trigger a recession, but if there is a slow down it could prolong or make it more pronounced. that is why we are watching it. are: for companies that able to come out and issue debt now, the window is open a little bit. will we see a tougher covenant? what we see a different duration? what you think the result might be? nela: i do not -- nick: i do not think we will see different covenants. corporations are not stupid. of course they will be issuing as long as debt as possible if there is demand. you will see a situation where there will be a lot of fixed rate debt. problems for the end investor? sure. you are buying long-term debt at

below 1% in some cases. moretly longer, maybe just than 1%. it is a tricky game and that is why we are big advocates of staying in the front. it is a great place to hide, and why you may not get the yield you are used to over the last couple of years, you can still get a decent return for a little bit level of risk. when we argue in our portfolio is you are effectively getting 85% to 90% of the yield of the u.s., which is the standard index and debt. taking on 10% to 15% of the duration risk. to me that is a great payoff, particularly in a stressful environment. alix: thanks for the conversation. richardson and nick maroutsos. thank you so much for joining us. i know you have to get up early. just a point out, starbucks is holding its annual meeting virtually, citing the coronavirus.

the next company to change how they will be running their business. let's stay on the corporate credit market. if you, inside the bloomberg, this is one area seeing the funding stress. the yields blowing out, touching 1%. the blue line slipped below $50. joining me as someone who might try to find opportunity and that, chris abbate, partner at riverstone, a global equity firm that focuses on energy, and infrastructure and looks for district -- for distressed debt opportunities. the past couple of weeks the oil companies have been stressing about their cash flow. what kind of opportunity is it for you? chris: it is a great opportunity. we are looking to fund midmarket energy companies looking to fund our growth. we have seen great opportunity over the last several years and accentuated now. this shows what you dabble in. companies that are not a startup

but not big enough to ipo or get taken out. you're in the middle range. why do you see that is a good opportunity? chris: that's right. riverstone is a 20-year-old firm focused solely on the energy markets. initially it was private equity only. about six years ago my partners and i started the business to create a middle-market energy lending firm within riverstone. banks love to lend to energy companies, or they had until recently been very interested in putting capital apps the energy sector. the high-yield markets have traditionally loved energy. your charger showed with spreads widening, certainly cause for concern, but that is the highest part of the high-yield index. high-yield investors do like energy companies. in the middle market was not anyone there. we looked to be the middle-market replicating what other direct lenders had done in other sectors and we like that space. alix: where you sit in the capital structure?

lien: we are typical first at the top of the capital structure, taking the place of the bank. alix: how do you buy energy when everyone hates it? in 2016 everything was distressed but no one thought energy would be out of vogue. now everyone hates it so much. chris: we use an asset based lending strategy and try to value the asset from the ground up and set an advanced rating against that. we max out at about 60% loan value. whether oil is up or down you should be able to value the asset based on the current market and we think a 40% equity cushion in a loan investment is solid. in today's market, when everyone is running away, making those types of investments is attractive. alix: how long do you typically have the loan, and then when you accept, what is your exit strategy? chris: the strategy initially was designed to help bridge people from when no one would

lend them money -- alix: like a bridge loan to buy a house? chris: something like that. when you have a real piece of land that has one cost of capital and you make improvements, you get permits, you put a foundation on, you build a building, you rent it out, it has another cost of capital. energy is similar. we tried to be that bridge lender going from the real piece of land into something that was a renting structure. donerically, what we have is try to bridge people into the bank market. that is becoming much more challenging right now is the access to those markets has been reduced. i think right now we are focused on cash. if we cannot lend money to somebody and have them cash flow out of the zone for 24 years, it is not an investment we make. alix: have those investments dried up or not? today the opportunity is

bigger than ever. it is the past investments we made where we were hoping to get to an ipo or high-yield offering where that is not an exit. we are having to go back and find other ways to help the companies get their debt paid down and get out of the loan we made to them. alix: do you see -- the narrative and the market is energy markets will be cutting their capex, there will be a lot of m&a, do you see that in the market, or these companies going to stick it out? chris: it is front and center. funding is scarce on the equity side. the banks are cutting back as well. it will force capex down. companies will have to combine and reduce overhead. they will have to reduce cost to capital as well. we see that all live. most of our portfolio is considering some type of merger or combination with somebody .

alix: was your favorite position or what is the favorite thing you're looking at? chris: all of our deals are private, so we cannot talk about the names, but a theme we like is there is one bright spot in the u.s. energy landscape. that is crude exports. president obama legalized exporting crew from the u.s., it set off a huge amount of capital spending from the permian basin and other basins to get crude out of the water and into the global markets. we like participating in that in any form or fashion. we have done a number of deals on all ends of that value chain. it is a bright spot, despite where prices sit. alix: thank you so much. chris: thank you. alix: chris abbate of riverstone. i want to give you an update what is making headlines outside of the business world. viviana hurtado is here. viviana: tuesday was super for joe biden, the former vice

president refining his hopes on the biggest night of the democratic presidential campaign. joe biden winning nine states, including upsets in texas and massachusetts. bernie sanders taking the biggest prize of the night, california. he also one in utah and vermont. bet days ago sanders seem to on the way to an insurmountable lead, now biden has momentum. now to the number of u.s. deaths from the coronavirus. it has risen to nine, most of those taking place near the seattle area. global infection rising above 93,000. the world health organization saying the coronavirus does not transmit as efficiently as the loop but the mortality rate is higher, 3.4% based on cases. saudi arabia pushing opec for deeper production cuts than planned. the saudi's want the cartel to cut more than one million barrels a day from its output. that is more than recommended by a technical committee.

opec meeting in vienna. oil prices has been -- oil prices have been battered by the coronavirus. 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. chevron carbon, reduction reality. we'll hear from chevron ceo on how the company is taking a more realistic approach in reducing admissions. remember bloomberg users, go to gtv on your terminal for any charts you may have missed on the program. this is bloomberg. ♪

viviana: i am viviana hurtado

coming to live from the principal move. later on balance of power, lawrence called, ge chairman -- lawrence culp, ge chairman and ceo. ♪ viviana: you're watching "bloomberg daybreak." i'm viviana hurtado with your bloomberg business flash. we begin with general electric. the company says the coronavirus could cut up to $300 million from first quarter operating profit. ge is still standing by its full-year forecast but it says for the last three quarters, the impact of the virus was not incorporated in expectations. later today, we will speak with ge ceo lawrence culp at noon. now to jp morgan, the company testing a coronavirus plan for u.s. employees. thousands being asked to work from home. bloomberg has learned about 10% of the staff will work remotely. the division has about 127,000

workers. makerswith fake meat cutting prices. startups are battling food industry giants for a share of the growing markets. impossible foods session. -- nestle anducts cargo plan to make their own plant-based burgers. alix: time for bottom line. we'll take a look at companies worth watching this morning. our focus is on chevron. the company showered investors with $80 billion worth of buybacks and dividends, and pushed back somewhat on the long-term industry push for carbon neutrality, opting for shorter-term targets like reducing methane emissions. i spoke to mike wirth, chevron ceo, and asked how he plans to combat climate change compared to his peers. mike: i think we have to be taking action. we are taking a lot of actions. we have set four different greenhouse gas intensity reduction metrics across our

entire portfolio. those are tied to the compensation of all employees in the company. we are investing in renewables in support of our core business around the world, and we are investing in future technologies and funds and other investments to try to find breakthrough technologies. we are taking actions across the board. that is what investors are looking for. are you engaged? are you taking action? alix: the story is the european oil majors are way ahead of you guys. mike: we are all in this together. everybody is trying to achieve the same end. we all want to be part of the solution to the big climate challenge. the challenge in energy is there is a growing population of rising standard of delivering -- standard of living that will demand more energy in a way that is affordable and reliable for those people and do it with a lower carbon footprint. all of the ceos i know -- how we

are approaching that in terms of long-term aspirational goals, our approach has been to get on the path. start taking actions towards short-term accountability metrics. alix: the story is bp has everybody aggressive for 2050 climate goals, perfect omissions for their own operations, why aren't you going to do those things? mike: we are doing a lot of those things right now. if you look at third-party assessments of flaring in the permian basin, we are the leader against a wide range of companies, including large companies. we are taking actions today. we have not set long-term targets and we are not sure how we would get to, but we have begun to march down the path of taking concrete actions to reduce emissions. we continue on that journey over time. alix: can you tell me what it is like to talk to investors where

as a ceo you need the revenue from oil to work on the energy transition, but at the same time you need to pay out dividends and buybacks. at the same time you have to continue to run your business well. how can you walk and chew gum at the same time and dance at the same time? mike: i'm not much of a dancer so i will tell you about the walk and chew gum. we have high expectations of ourselves. the biggest thing investors are looking for or improve returns. it is a sector of the economy that has invested a lot of capital over the last decade and investors are expecting to see something for that. risk andlowering the improving shareholder distribution. that is what we talk about today with our investors is our ability to continue a $5 billion a year share repurchase program to grow our dividend at somewhere between 5% and 9% compound annual growth rate and we are already yielding about 5% and invest in our core business and future energy at the same time. it requires a strong balance

sheet, requires capital discipline, and cost discipline. alix: how can you do it all under capital discipline? that is what i feel is the missing piece for big oil. you want capital discipline, investors need that, but then you have to spend on energy. you know you have to spend it on new technology. how do you do that? mike: the challenge is to find things that are good for the environment and good for shareholders. if we do things that are only good for shareholders -- jonathan: that is possible -- alix: that is possible? mike: it is hard. if we do things only good for the environment and not for shareholders, that is not sustainable. if we ignore the environment, that is not sustainable. it is finding the intersection. alix: is that the permian? what is the intersection? mike: it is reducing the emissions footprint in everything we do. our oil emissions are coming down. methane emissions coming down.

and then investing in renewables in support of our business and investing in breakthrough technology. we have a wide range of things we are spending money on. what is important is the people you have smart people challenge to find solutions to these big problems. there is no one company, there is no one industry, there is no one country that will find all the answers. we reach outside and collaborate with others. alix: that was part of my conversation with mike wirth, the chevron ceo. you can see more of that on "bloomberg: commodities edge." tomorrow at 1:00. at somegaining, we look of the trades in today's technically speaking. if you're heading out, tune into bloomberg radio heard across the u.s. on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: time for technically

speaking. we set you up at some traits for the day. bill maloney, voice of bloomberg's equities brought joints me now. listen to bill by typing in squa on the terminal. .ill: futures are up big s&p futures up 60. the first levels to watch, 3061. that is a retracement level. above that, 3987 and 3100. your first levels 3061. alix: walk me through what to do with tech. you will be selling the winners. what do we see? bill: nasdaq futures up 161. looking at those resistance level, 88 65, that is your first retracement level. that is 38.2% of the move. is 8865 for the nasdaq. alix: let's wrap it up for the 10 year. how low can the? , i asked -- how low can the yield go? bill: we will give you a level.

right now around 1%. it was at .9% yesterday. 2019, reachingto out .85%. hopefully that is your loafer yields. alix: bill maloney setting up for your levels of the day. that wraps it up for me. , wellsup, chris harvey fargo security head of equity strategy. we are seeing a furious bounce back the futures market, yesterday closing below the 200 day moving average. is this part of abide in potentially winning? is it a dead cat bounce? or some calm into the market? this is bloomberg. ♪

jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪

jonathan: coming up, pricing out sanders, pricing in a bounce. jay powell stuck between a rock and a hard place as 10 year yield dropped below 1% for the first time ever. 30 minutes until the opening bal, good morning. let's get you your wednesday morning price action. equity futures positive 59 points on the s&p, up 2%. in foreign, the euro-dollar down to 1.1125. there is your move on treasuries.