alix: unleashing fiscal stimulus. asian nations pledge spending measures, and the u.s. has a representative as profit warnings meant for investors. u.s. 10 year yield trades below 1%. bunds flirt with record lows. in the oil standoff. russia and opec face-off yet again. saudi arabia delegates push for deep oil production -- deep cuts to oil production. welcome to "bloomberg daybreak." i'm alix steel. s&p futures off by almost 1%. you are seeing a flight into safe havens. in the currency market, the yen is the outperform or. -- the outperformer.

yields down by about eight basis points, once again under 1% for the 10 year. time now for global exchange. from hong kong to washington to new york, our bloomberg voices are on the ground with this morning's top stories. want to beginning asia. total coronavirus cases around the world is now above 95,000. cases seem to slow in south korea, while switzerland reported its first death. with us now is sophie kamaruddin. is reporting an increasing number of recovery patients, roughly 62% of those who have been diagnosed who have been discharged from hospitals. the number of fatalities reported wednesday totaling 31, all of which were in hubei province. jinping's scheduled

visit to tokyo has been delayed, and prime minister shinzo abe did reveal tighter border controls and japan, including two weeks of quarantine from visitors arriving from china and iran, as well as south korea, where cases have topped 6000, but the daily count has slowed has monday at the country been testing hundreds of thousands of people. italy closing cinemas and theaters, suspending schools, while the government is putting together a package that could amount to about $5.6 billion. iran also closing schools and universities as the infection spreads to all provinces. 3500.ts and iran topping bethlehem, the palestinian authority there closing mosques and churches for two weeks. the firstng, we have human to animal transmission as the pet of a patient, a

pomeranian, has tested for a low level of the infection. and i want to highlight that south africa has reported its first case of covid-19. an italian man has tested positive. we are seeing the south african rand under pressure on that news. alix: policymakers are doubling down on efforts to cushion the fallout from the outbreak using fiscal tools. joining me from hong kong is enda curran. walk us through the response and what we can expect. enda: we've had a sweep of interest rate cuts across asia. we are now getting a shift to the fiscal side of things. chinese government is talking about a tighter fiscal policy that would likely include more tax cuts in spending on fiscal projects. willuestion is, how big the stimulus be that china rolls out? in japan, prime minister shinzo abe is talking about a next draw almost $50 billion in extra

spending towards combating the virus. in south korea, they've passed a budget of around $10 billion to .id medical response across the rest of asia, we are toing governments dig deep spend more and support their own economy. it seems as though in asia, we are getting a shift from monetary to fiscal. alix: thank you very much. let's stay with fiscal. in the u.s., the house of representatives passed an emergency spending bill to fund the response to the virus outbreak, more than triple the amount president trump proposed last week. putting it from washington is bloomberg's government reporter. what's in it, and when can it pass? reporter: it is about $7.8 billion total with a $3.1 billion pot of money for vaccine

, therapeutic and diagnostic funding. there's $950 million that would go through grants to state, local and tribal governments. a provision would ensure at least half of that goes out within the next month. there's more resources going around the country, both in the federal government and going to state governments. the house passed this very , yesterday.2 the senate is expected to take it up this afternoon. patrick leahy, who was one of the principal negotiators, said he thought they could get something together with 85 to 90 votes support in the senate, so it has a pretty clear path to the president's desk. richard neal said after a meeting with the vice president that mike pence seemed enthusiastic about it, and the president has basically said he will follow congress' lead on these funding decisions.

the big question is after this is signed into law, will there need to be another bill down the road, whether it is a few weeks or a few months down the road? dick durbin said he wouldn't be surprised if another measure is needed, even within a few weeks. so congress is acting fast, trying to get money out the door really quickly, and they are open to taking action again, whether it is for medicinal needs or economic needs, sometime in the near to mid to distant future. alix: jack, thanks very much. i want to turn to vienna, where opec has agreed to a huge out that cut. members agreeing to cut production by 1.5 million barrels today to offset demand hits from the virus. unclear whether russia is on board. meeting, saudi arabia and russia were split on further cuts.

[indiscernible] >> we are going to discuss and find a way how to help the market to balance the situation. alix: joining me from vienna is manus cranny. what can you tell us? if they areoks as just about to break up behind us. this is the opec meeting. tomorrow, russia will be in the room. why is wti not much better bid? we don't know that the russians are on board with this. the saudis, the kuwaitis, the emiratis have been backing the brunt of this. russia will arrive tomorrow, and maybe that is when the real nitty-gritty is begun to

discuss. how much will the russians be prepared to do? there has been a fast market and expectations from a 600,000 barrel day cut by the committee, monitoring the output, threw two atre we were this morning one million to 1.2. is 1.5 credible, or is this really taking drastic action perhaps at hearing and listening to what the fed has done, and calling for coordinated, substantive action to really galvanize this market? standard chartered did it. it got to do something large in size and substance. alix: thank you so much. finally, we end with companies here experiencing some turbulence. the international transport association warned that the virus could cost $13 billion in

lost revenue this year. in the u.k. come original u.k. come- in the original airlines -- reporter: a lot of european airlines have done this already. i want to go through some of the names. united saying they are going to slash domestic flights by about 10%. cuttingas well are capacity 5% in the near term. all of these stocks are a bit softer on the way into the open. southwest this morning cutting revenue. they say they are seeing declining customer demand and an increase in trip cancellations. the international air transportation association bracing for a $113 billion in lost revenue. just two weeks ago, that was $30 billion. this is a huge amount of money the airlines will lose for 2020. alix: thank you very much.

one other story is the shocking week of reversals in the market and the volatility superlatives are really piling up. we want to give you the lay of the land. for one, big moves are definitely back. in eight trading sessions, the s&p have five big swings. in three of them, the index closed up or down 5%. we haven't seen that kind of movement and quite a long time. would you look at the 10 day annualized price swing volatility, it is the most we have seen since back in 2011, where the s&p lowered the u.s. credit rating. saw inurprising what we 2015, as well as 2018. meanwhile, there is a lot of volume being traded. about 10 billion shares traded hands on u.s. exchanges yesterday. that is the eighth day in a row. that hasn't happened since stocks were rebounding from the financial crisis in may of 2009.

hedge funds are piling back into momentum, and you have a lot of churn within the market rather than just going right to cash. coming up, more of your morning and analysis on 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, michael mckee, and mark rossano also joining us, c6 capital holdings founder and ceo. what have we learned in the last couple of trading days? trade, trade, trade? damian: i think we learned china is committed to keeping the exchange rate pretty stable.

if you look at the breakdown your to date, the best-performing bond after the swiss denominated bonds and u.s. treasuries are yuan-denominated bonds. finally performing pretty well. it is driving em equities up higher as well. it is interesting to see how well the yuan is performing amid the malaise. mark: it is interesting because you had the fed with the 50 basis point rate cut, you have the expectation of at least goingr 25, so the pboc is to be forced to act. everyone keeps talking about this infrastructure capital that is going to be coming in, but it is over the course of multiple years. you can say $5 trillion is going to come in now, but can the provinces really take down these additional bonds, these sre

loans, these special-purpose bonds? my short answer is no. how are you going to finance it? are you going to have to continue to finance it with tax revenue? michael: one thing we've learned is that the fed made a big mistake, and that the fed did the exact right thing, and today the futures suggest the fed may have made a big mistake again. [laughter] we are implying the lessons of the past, fighting the last war. this is something that is completely different because it is not a demand shock and it is not a supply shock. it is both things at the same time, and central banks can't fight that. fiscal authorities can do something. what if people won't lose their house, if things are canceled, that money is gone. you're going to have a slump. whether we can boost demand bends on how long it lasts and what areas are hit the most, but i don't think you can say at this point exactly where we are going or how long it is going to take to get there. mark: i think it is a great

point. we keep hearing about demand delay is demand destruction. this is outright destruction. some things might come back a at someit, but point, demand is lost forever. those conferences are gone. now where issue you have central banks that have or organicdiscovery price discovery, so now we have a point where you are going to have to let the markets move around, and i think they have to go lower. you look at libor, 58 basis points. that makes the september move look like peanuts. that signals wider spreads. start looking at fundamentals for a lot of these companies in bbb land that are at risk of getting downgraded to junk. michael: i thought that was really interesting yesterday, looking at the chart of the makeup of the corporate bond market. bbb's make up about half of

that, so you could see a lot of fallen angels. can the fiscal authorities step in in some way to prop this up? obviously the small business administration can make loans or have some forbearance, but are banks going to do that on their own? the fed doesn't have the lending programs anymore. this administration is continually telling our reporters that we are not think of any kind of tax breaks at the moment. how do we help the businesses? you saw it a little bit in the beige book yesterday. that was only through late february. they mentioned coronavirus 48 times and talk about the fact that they are seeing supply chain disruption. it is only going to get worse. damian: you make a great point. it was designed to fight a shock to the system, not the overall economy. out, that isdrawn

really bad. going to be very limited in their ability to stimulate and support some of these troubled companies. mark: you look at liquidity, and everyone has looked at repo. we were supposed to be at $20 billion on the overnight. we are at $100 billion. alix: and we are oversubscribed. mark: so is that liquidity going to find its way down to the loans to the small businesses that need it? in the near term, they are going to trying to stop -- they are going to try to find a way. maybe let's delay some of the tobearance on principal make them interest-only at this point. do something until we get potential for a tax break or some forgiveness on tariffs, or something to really support these guys. we really don't know how bad this is going to get. there is still a lot we can say, and that is a question of can we

really get that liquidity to where it needs to be. michael: since you are wearing black today, we can be negative. [laughter] alix: thanks, guys. michael: in europe they are talking about more negative rates. how are banks going to have to do that? they are going to have to do tiering. they can maybe do tltro's. tltro's have sometimes worked and sometimes not. so an open question what europe does. alix: and this is a chart that i want to get in here. the idea of global yields everywhere continuing to roll over and really converging, that is not good for the banks. damian: look at emerging markets. all of these oil exporters are going to be feeling it pretty badly. we should see more isi support onm multilaterals that are

the frontier. how much can they really do? all of these multilaterals are backed by developed market economies. i'm concerned about em. alix: i'm just going to do the other side, not because i believe it, but i am going to quote someone else. mark cabana is going to be on later in the show. he was talking about the recent repo pressure technical. that the markets are pricing in ois. would you guys say to that? what if it's ok? damian: i'm so relieved. [laughter] michael: a little bit of sunshine. end up in an interesting situation in august or september or october, where central banks have put a lot of stimulus into the global

economy, and we get a bit of a v-shaped recovery that then becomes a rocketship higher because we've lowered rates and made credit so available that the economies around the u.s. and europe and asia start to boom. china probably is going to have to wait a while because the damage is so bad. europe is looking at recession anyway, so maybe it is not that big. in the united states, we could have a major turnaround. mark: as someone who has always been bearish, for me when i look at this, i have to say, where were we before coronavirus? q4 -- wheree-in were we in q4? we weren't on a good footing coming into this year, and this is a pile-on. if things normalize and you do get supply chains where everything is fine, where are my raw materials?

how delayed are they? there are still bottlenecks in terms of freight. are there still blockades? it is not a simple as flipping things on and everything is fine. how much have i been impacted from the port to the manufacturing back to the port? michael: meanwhile, wash your hands. alix: michael mckee and damian sassower of bloomberg intelligence, thank you. mark rossano a c6 capital is going to be sticking with me. go to gtv in your terminal to browse the charts. check it out. this is bloomberg. ♪

♪ viviana: this is "bloomberg daybreak." billionting the $34 solicited takeover bid -- billion unsolicited takeover bid from xerox. xerox began considering the acquisition almost 10 months

ago. hp has consistently rejected the overtures. now to a potential point to a potential put into billion-dollar deal collapsing. the parent of 7-eleven convenience stores dropping its plan to buy marathon gas station chains in the u.s. ultimately, the price was too high. it was also concerned about the effects of the coronavirus on the economy. we end with the biggest domestic airline in the u.k. collapsing. flybe has entered administration, and most of its workers will be dismissed. talks on a government bailout failing, plus pressures from coronavirus giving the airline no breathing room. alix: thanks so much. for more on the company fallout from the virus, you have a supply shock wiping out sales growth. u.k.ave carriers in the and france already dealing with supply disruptions. the virus brought much of

chinese industry to a halt. that is not even counting any demand issues those guys might feel. predicting arck is reduced impact from the virus based on the pharmaceutical and chemical maker's experience in china. coming up on the program, opec agrees to a large output cut as warnings about global demand pile up. jeff currie of goldman sachs sees growth at the lowest rate since the financial crisis, and downgraded his forecast to $47 on average. a day cution barrels is agreed-upon, except russia has not yet signed onto the deal. this is bloomberg. ♪ hi! we're glad you came in, what's on your mind?

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

of course, you can customize and save. can you save me from this conversation? that we can't do, but come in and see what we can do. we're here to make life simple. easy. awesome. ask. shop. discover. at your local xfinity store today. ♪ alix: this is "bloomberg daybreak." a quick check on the market.

yesterday we had a monster rally, so guess what is happening today? it is a big down day. the s&p 500 down by almost 2%. european equities rolling over, as well. flybe had to go basically into bankruptcy. that is a u.k. flyer. you are seeing a rush into safety, kind of. the yen is the outperform are in the g10 space. in europe, you are seeing some selling across the board in the bond market. in the u.s., you're still seeing some overall buying at the 10 year yield is still below that 1% level. crude doesn't know what to do, partly because of what is not happening in vienna. opec ministers concluding their meeting in vienna. they agreed to a large production cut of about 1.5 million barrels a day to offset the hit from the coronavirus. russia, though, not yet on board. joining me from london is jeff

currie, goldman sachs global head of commodities research. good to see you. if we don't see a 1.5 million barrels a day cut, what happens to oil? jeff: i have to argue that regardless of the size, it is too little, too late. demand fell off sharply in china doing back three or four weeks ago. ex-china is now beginning to deteriorate. the question is, how do they mitigate the builds and inventories? downside risk is still there. we are comfortable with our april target of $48 a barrel. alix: global demand now for this year you see as negative, falling 150,000 barrels a day. that's the first time we have seen that since the financial crisis. if opec can't stabilize the market, if we don't see v-shaped recovery, what is your bearish case? 408i to drop too far below

barrel, you need to blowout they reachaning storage capacity and you get this location of the spot price relative to the forward price, and that is where you could sink into the $30 a barrel range. breaching storage capacity, we think somewhere in the low 40's is probably a reasonable downside scenario consistent with a moderate type recession say 2001.t of let's alix: can they really handle that? jeff: i think the damage is done. by the time they cut production and come to an agreement, you are talking a reduction in april supplies. the demand damage is happening today, right now. you look at china, probably down somewhere between 3 million and 4 million barrels a day. of five be down upwards million barrels a day, maybe even six. 1.5 millionuction

barrels a day in april or may is not really going to save you the current environment. like i say, too little, too late. alix: we are entering the spring season, which is when you see refinery turnaround as well. what is the effect going to be on the market? jeff: china is an importer of crude and an exporter of product. now that we see a recovery in china, it is likely to put downward pressure, at least in the pacific. i was going through the data this morning. the rebound in china israel. it is significant -- china is real. it is significant. the rebound in the evidence suggests this morning it is coming back in a vengeance. alix: is there any danger that opec can over tighten the market

if we see a recovery we are not expecting? jeff: no, because the inventories are likely to build through q2 and potentially even q3. case was for an effective cut out of this opec meeting of a million barrels a day. given that, we don't see inventories beginning to normalize until you get into the first quarter of 2021. alix: if i take a look at the ,ne your time spread for brent the one to 13 months time spread, obviously it is going to be cheaper now than 13 months out. question isbetter what is the market thinking is going to happen? what are they pricing and right now, versus what you are talking about? jeff: they are beginning to price in a normal inventory build, a standard surplus margin. i think that is appropriate given the current environment. if this is a very temporary

shot, the inventory build should be adequate relative to the inventory capacity, and we should avoid that blowout scenario that sends prices rocketing to the downside. as consistent across the curve, which is consistent with a modest inventory build. the opposite -- the odds of it being a v-shaped recovery are quite high. as soon as you have a recovery in confidence, you pop back out. the evidence of china, going back to what we are seeing the last couple of days, it was down, and we are already beginning to come up in china. that is the model which we apply to the west, and i am very comfortable you're going to get through this without having a really damaging environment that sends you too much lower prices. alix: can you spread that over to other commodities, like copper, steel, and iron ore as well? jeff: the thing that separates

them relative to the energy is that the demand for metals is deferred. the demand for energy is lost. you can't really make up that lost energy demand. this situation with metals, if you have a lot of stimulus coming down the pipeline, not only the recent central bank cuts in the u.s., but also big stimulus coming down the pipeline in china, you put that forward, particularly if the stimulus is devoted toward infrastructure development, the potential for a catch-up in the demand i think is significant. look at where steel is pricing in china. it is pricing the inventory build today, but the price level is high. $1652.old is at it has been wrapped up in margin calls as well. what do you think the trajectory is now? jeff: i am very positive on gold, the one commodity we are

willing to take a very strong directional view on. we like to argue that gold is immune to the virus. like a currency, the population -- gold is like a currency of last report that is immune to the virus. you have the basement going on with the rate cuts that will support gold. dollarization still going on, buying gold at a pace not seen since the nixon era. we are comfortable with a target of $1800 an ounce. alix: jeff, really appreciate it. jeff currie of goldman sachs, thank you so much. here with me in new york is mark rossano of c6 capital. would you be buying here? mark: at this point, i think gold, i do agree. i have been a gold bug for a while, and i think you will continue to see this go. the biggest knock on gold has

always been that there is no yield. when you have negative rates, central banks being so we continue to see inflation creep higher, all of a sudden that you will look better and better on a real-time basis, which is why i think gold is going to continue to see that person to the upside. alix: do you feel like oil has a bottom here? mark: i think you do get that continued deterioration in pricing. i don't believe in a v-shaped recovery. we've heard about a v-shaped recovery since 2015, and we have just never really gotten it. to go back to 2019, we had a demand problem, which is why we already had a 2.1 million barrel a day cut. so the demand problem was still there. it was a supply problem, but more because you had a demand issue. the demand issue continued because distillate demand continued to fall, shipping

already slowing, and now coronavirus is piling on. you havean example, european refineries. european refineries were already seeing margins getting compressed because it did have that debt in market demand. the big point that i think was brought out was talking about how china is now an exporter of certain products, and you are seeing more and more pressure across the refining front because of that. alix: you have a lot of product coming out of china, dumping on the market. that has now backed its way up into the refinery world, which means they need less crude, all before the virus actually hits. so you are shorting oil here? jeff: yes, i'm shorting wti specifically because i think at this point, debbie ti -- at this point, wti and american crude is the furthest away from potential end markets. angola and at

nigeria, they are still 70% and 90% of cargoes still unsold. i think you are starting to see that bleed through. oil demand has to be broken up. there's oil, natural gas liquids , and oil has had pressure for a while with condensate, which goes into the chemical industry. that is where you have already seen end markets being under pressure. alix: let's get some equity view here. if you come inside the bloomberg, this is just how bad it is for some energy stocks. you have the white line that tracks oil companies, the blue yellow isi, and the the high-yield index. buy?o you still mark: i think you are going to start to see a lot of bankruptcies rolled out. i think at this point, you have some of the delaware basin

specifically that can come under some pressure. you needof a sale, that protection of the balance sheet. that still keeps me in exxon. they are speaking today with their analyst. i also think it comes back to the quality of oil. you really want to focus on someone who, like murphy, has the ability to go offshore. condensate, for an example, is down 8% to wti. you want to get away from that condensate and get into heavier oil. i think there will be some continued pressure. that's what you get with us here on bloomberg television. [laughter] capital,ano of c6 thank you. we will have more on the opec meeting later today on "bloomberg: commodities edge." viviana hurtado is here with first word news. viviana: in london, a

coronavirus scare at one of the country's largest banks is underway. hsbc ejaculating employees from its london office. one worker testing -- hsbc ejecting employees -- hsbc evacuating employees from its london office. one worker testing positive. now to u.s. politics, it just got tougher for bernie sanders, whose next primaries are in states where joe biden is poised to do well. after winning 10 states super tuesday, esther biden is in a strong position to pull away. biden also picking up the endorsement of michael bloomberg , who dropped out of the race yesterday. mr. bloomberg is the founder and majority owner of bloomberg lp, the parent company of bloomberg news. serving a madoff is

100 year prison sentence for defrauding investors of more than $19 billion, the biggest ponzi scheme in history. prosecutors say keeping him behind bars until his death will send a message. he's been in prison for 10 years. 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 viviana hurtado. this is bloomberg. alix: thank you so much. coming up, london banks preparing for the worst of the coronavirus. hsbc says one employee has tested positive, prompting evacuation. if you have a bloomberg terminal, check out tv . watch us online, click on charts and graphics, interact with us directly. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up later today, an exclusive interview with robert kaplan, dallas fed president. ♪ viviana: this is "bloomberg daybreak." blessinguse committee wells fargo's board and government regulators, saying neither did enough to prevent customer abuses. wells fargo suffering a number of consumer scandals. one involved employees creating fake customer accounts. more big names pulling out of the annual sxsw festival in austin, texas. apple and netflix are the latest to cancel because of concerns over the coronavirus. both companies planning to debut programming at the show. and listen to this. if you have young children, make

sure they are in another room. hasbro has said coronavirus could cause a shortage of the anticipated baby yoda toys. the outbreak in china keeping workers from assembling them. the toys were inspired by the disney hit show "demand a lori ndalorian." ma alix: i want one. they are so cute. it's time for wall street beat. the fed issues a new stress capital buffer, drawing criticism from that governor lau brainard -- governor lyle brainard. then, a worker at hsbc test positive for coronavirus. wrote --ity entity infidelity -- fidelity and t. rowe. joining us now is sonali basak.

first of all, the fed went under the wire yesterday. what did the fed actually do for banks? sonali: they are looking at the stress capital buffer, so how much capital they hold against their assets in a stress scenario. this will be factored into the stress tests this year as well. our colleague calls this a mixed bag for the banks, but of course, we have brainard coming out and saying this is basically giving a green light for large banks to reduce their capital buffers materially. the vice-chairman for super visit -- for supervision has said this could increase the capital buffer on average, but there's kind of a range here, and the average they are using is from 2013 to 2019. alix: exactly. is it better for regionals at the end of the day? sonali: that's the idea, that it could be better for regional banks, that have also gotten bigger in a lot of ways. but i think what it all boils

down to is we haven't been in a stress scenario in more than a decade, so do these postcrisis rules really work in the next crisis? the: in the crisis is coronavirus, which is a whole different thing. this time we are looking at it for a personnel issue. wharfhut down in canary in london when one employee tested positive. sonali: it is wild. remember, at trading desks, everyone is in close proximity, so it is scary if one employee has it. other banks are planning for what it would be like to really move operations away from that w, these large banks are already preparing for issues related to brexit and whether staff is located, so it has just been a very big mess. interesting, a lot of the banks have curbed travel. a lot of senior bankers are still out and about, flying around the world, so the rules do not apply to everybody. alix: when you talk to your

sources, what do they really -- sonali: they laughed at me. they are completely still traveling. alix: the third story was also really interesting. fidelity, they are using bankers to get access, and they cut them out. what are we looking at here? sonali: super interesting to see side managers come together and invite ceos in. these kind of conferences are typically held by banks. with that said, there are still things banks can do to bring investors together, like ipo roadshows. this week, we saw masayoshi son visit new york. goldman sachs helped organize that event and bring new investors to the room that may not have otherwise looked at softbank or were skeptical of the story. alix: why didn't they do this before? sonali: it is expensive, not to mention, you're getting all

these competitors join together to do this. this might be a significant way to say not only are we cutting actually, but this improves our relationship with the corporations by not having a middleman banker, which to me is actually a bigger blow. alix: interesting. thank you very much. in today's off the beaten street, if you haven't seen superheroes like these on the silver screen, marvel comics' latest line of do-gooders was inspired by brexit. they are called the union, and they represent england, scotland, ireland, and wales. the goal is to get along after the u.k. exit from the european union. plus, they have some villains to defeat, like an extraterrestrial race called the skrull. the comic book series is due out in may. i am so conflicted. it is my goal to never talk about brexit, but avengers are my jam.

coming up, we will look at the worst-performing currency market this year. if you are heading out, tune into bloomberg radio on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪

alix: time for a trader's take. joining me is damian sassower, bloomberg chief emerging-market credit strategist. we are looking at the real. damian: looking at the whole of emerging-market currencies. but you're right to look at the autumn of the list, which is the brazilian real -- at the bottom of the list, which is the brazilian real. if you look at the options market, 10% of all calls against the real is actually rising. alix: why? damian: the fact of the matter

is, you haven't seen that much in terms of the fx swap activity. they want to keep the currency relatively low in an environment where nobody is buying commodities anymore. that may be one reason. alix: i guess it helps with a trade deal. if the phase i trade deal is actually executed and china buys u.s., less from brazil, maybe. realn: a weaker brazilian will not do much for bolsonaro and his support base back home. the rand, i think 3% of all options right now are priced on the 17 handle or higher. 14% with an 18 or higher. you are seeing tariffs across these really rising, and that creates greater uncertainty about the magnitude of what you may see. what you are seeing is everybody cutting, so it is a relative game. if you look at relative rate differentials, you look at

hungry come up: -- hungary, poland, these are the best performers this week because those economies are not cutting rates. if you want to see some kind of ethics support, that is a good base case for you. alix: thank you very much. coming up on the program, alicia levine, bny mellon investment management chief investment strategist, will be joining us. a quick look at where we are trading. yesterday was the update, so today has to be the down day. you're still seeing a movie to safety, but that seems somewhat regulated to just u.s. treasuries, as well as the yen. you're still seeing 10 year yields declined by about an basis points here in the u.s. happy thursday, guys. this is bloomberg. ♪

♪

welcome to "bloomberg daybreak" on this thursday, march 5. i'm alix steel. here's everything you need to know at this hour. >> i went to ensure the people that are in these communities being impacted by the coronavirus that we are with them. alix: vice president mike pence will visit 3m today, it, correct protective face masks, to discuss the supply chain issues as they ramp up their response to the virus. >> with this new patient that passed away, we've entered into the next phase that has required me, under the circumstances, to advance a proclamation of a state of emergency. alix: california declares a state of emergency. companies issue travel restrictions and work from home policies. world leaders promise more help. on emergency grounds, countries can draw this money if they need it right away.

for poor countries with zero interest rates. >> imf dedicating $50 billion to help fight the virus after its has the global economic outlook has shifted to more dire scenarios. >> we are seeing the chinese government talk about a more proactive fiscal policy that will likely include more tax cuts and more local government spending on infrastructure projects. remember, economists are expecting china's economy to fall into its biggest slump in decades. alix: the u.s. house of representatives approving a $7.8 billion spending package. >> there's more resources going around the country, both in the federal government and going to state governments. the house passed this very easily. alix: more central banks cut at coordinateds monetary and fiscal policy. >> i think it is quite reasonable to expect we are going to have to collectively provide some sort of supply chain finance in the not very

distant future. alix: multinational companies continue to downgrade their forecasts, and airlines struggle to keep afloat. >> we are really seeing a customer demand crisis for the airlines. we have been tracking it in europe. a lot of international and european airlines have done this already. now we are seeing it in the u.s. alix: global cases top 95000 and the death toll reaches 3200. in the markets, s&p is turning out to be a lot moody or -- a lot moodier. we are down by almost 2% in s&p futures. dollar-yen also weaker. the yen the outperform are in the g10 space. same thing in the treasury market. yields down almost 10 basis points on the 10 year. at feeling the same kind of love for bonds in europe. crude trying to catch a bid here. the reporting is that we will see a 1.5 million barrel a day cut out of opec, but russia is

not yet on board. joining me for the hour, alicia chief, bny mellon strategist. what do you tell them? alicia: we are telling clients you have to have a view of where this is going and what the hit to the economy is here and globally. if you believe this is essentially a v-shaped hit, which is our essential scenario, so you come down quickly come , but ife is recovery you believe that, there's a price at which you can buy equities. it looks more or less like the price here is where the s&p is bouncing, stabilizing, and looking to hold support. if you go any lower than that and just take is 0% earnings game for 2020 in the u.s. for less&p, you get more or

2800. so that is your buying range over here. i think anything over 3000 feels right now that you are very optimistic, and i feel if you are a little more pessimistic, it is around 2800. but that would be the range. the market is telling you that. alix: and the bond market is telling you we are a little pessimistic right now. if you take a look at the terminal, this is the spread on the twos-tens steepening to the highest since about 2018, signaling the market expects more immediate easing from the fed. ,oining us now is mark cabana bank of america securities head of u.s. rates strategy. how low can we go? low is zero. the certainly the fed hopes that is the low. sentence is at little bit bananas, by the way. [laughter] mark: right. you referenced european rates earlier. that is not what we expect here. we don't think we are going to be going to zero. we do think they are going to

ease again in march, and likely april, and you want to be biased long duration here. there is probably further downside risk as concerns continue to increase around coronavirus, and i don't think you want to fight it yet. we think there will be real resistance in the 80-ish basis point range, but that assumes that the fed goes back to zero. that is not our core central scenario right now. we think they will cut a few more times, but in regards to the shape of the recovery kia -- recovery, i am less of a v, more of a u type of person. l, u, u, i think vulnerable. alix: oh, i think love. tok: well, you don't want fight this move. germany can't really rally even

with 10 years almost down 10 basis points today. until there's is greater clarity about where we go, i don't think you really want to fight anything materially. it is very hard to have that view at the present. alicia: that's very interesting because we are also using those three letters, the v, l, and the u. clearly, the l is where you don't get output going back to where the traditional trajectory was. but the u is a downside risk, too. the hit really comes into services and the supply chain, and the recovery of that takes much longer, and you don't get there by the end of the year. in both of those cases, that if your downside risk. alix: you guys were talking in the break about your fx and rates guys, what they talk about. what is coming through? alicia: we are concerned about the credit event. the credit event for us is really that u-shaped recovery

where your small and medium-sized businesses without access to capital, because with the curve and version on the short end, regional banks are not lending. you get stressed in those smaller businesses. they can't land. they can't fund themselves. you get a ricochet credit event higher in the triple seas -- in the ccc's, the high-end market. the end result is the financial crisis 11 years ago, this regime has not been tested yet. no macrobid coming from dealers. what happens and there's no bid in the markets because the credits are rolling over? that is the worst case scenario, but not an unreasonable scenario. mark: i think it is a fair concern. that is one thing i have trying to -- i have been trying to get a handle on. what are liquidity conditions like?

hauer markets functioning? there were pretty disorderly moves over the last two weeks in markets. one of the things i found cautiously optimistic or cautiously inspiring is that there seems to be ok market functioning across most markets, fundingarticular, markets. that seems different to me than 2007, when these concerns initially pete. peaked.re -- initially there were real cross credit fears in 2007. you didn't know if those assets were going to perform or not, and that raises risks about their long-term viability. the sense i have right now as we are not seeing those. higher.a little bit you are seeing libor ois higher. the sense i have is that it is generally orderly and not with these credit concerns. i guess we are still somewhat

cautiously optimistic that markets continue to function. the fed is worried about credit widening right now. i think that is one of the reasons why they cut enter meeting, and one of the reasons why they will keep going. they don't want to fight the market at the present. i think that is expected to some extent, and i don't get the sense that we are in this disorderly credit concern. just to state most concisely, it appears to me that the regs are working. we are untested, so it is fair somewhaton, but i am sure they are working. alix: the question is, when does it not work? credit suisse writes about the repo market. "the biggest risk we see is the fed cutting rates civilly without open the put support through its balance sheet. a miss drawdown could push the deficit shorter."

do you expect we will be able to see the balance sheet grow enough to a compass this -- to encompass this? mark: maybe i am cautiously optimistic, and naturally glass half-full person -- which is tough being in the bond market -- but for me, i am so pathetic to the curve steepening concerns and potential outflows from money markets, but we are not seeking that the curve is going to stephen that much. look at the price action today. the curve is flattening. that is a macro signal. from offending market perspective, you are not getting paid to take duration risk. i think that is going to pull cash towards the end of the curve. we see a high correlation, and as long as the curve is relatively flat, that is going to keep a lot of cash in funding arkets and at least stabilize run a liquidity. it also helps that the fed is serving as a obvious stabilizer.

the fed had to take a number of unprecedented steps to ensure adequate liquidity. they already had the automatic stabilizer. that is already blunting some of the upward pressures we might be seeing in money markets. the fed can automatically turn that up. it is hard to believe the fed is going to continue with as aggressive of a taper in the repo positioning they have been doing. they are going to be more cautious. they don't want to see this get exacerbated. whether or not they start true qe, thatader not qe remains to be seen. i think they won't engage in more aggressive balance sheet expansion until they go back to zero, and it seems we are still a little way away from that. alix: does that make you feel better? alicia: it makes me feel better for now, but it is the untested nature of this. and the message from the bond market is actually not the message from the equity market,

if you thing about yesterday. there really seems to be a disconnect. in the equity market, you are looking for price discovery. it is the uncertainty creating these enormous wings. that's what the market is telling you. so i am looking for stability and the equity market because there is no price discovery just yet. that is what the swings are all about. when it feels a little bit like vegas like the last few days, you have to ask yourself, what is my base case scenario? what do i believe? how i my modeling this? what is the level at which i am getting into the market? you can't just let these alien motions determine what you're going to do. alix: pimco had a blog post out that said the fed should start buying mortgage backed securities anymore. are these the tweaks we are going to see from the fed to really help the course? mark: it is certainly an

available option for them. i sort of think that they first cut rates to zero, and then engage in more aggressive balance sheet expansion. move't think they will from mortgage prepayments until they cut rates to zero, unless you see disorder in the mortgage market, which i don't believe you are seeing at this point in time. i still think that measure is not going to occur until they hit zero. if they hit zero. but if they do hit zero, that is something they will employ. then i think the fed will roll out a whole host of unconventional monetary policies relatively quickly. the fed has talked a lot of theory about how when you're so close to zero with limited and you munition, you need to act -- limited ammunition, you need to act swiftly and decisively. so i think they are going to be biased to go quicker, and that

will mean perhaps true qe. alix: really interesting conversation. i should point out the ecb is now asking for emergency plans for planning. what else are they going to d o? mark cabana, thank you so much for coming by. alicia levine will be sticking with me. tune in later today for an exclusive interview with robert kaplan, dallas fed president. coming up, opec gamble. opec ministers agree on an output cut. russia not yet on board. this is bloomberg. ♪

alix: opec ministers conclude their meeting in vienna,

agreeing to an output cut of 1.5 million barrels a day. russia not yet on board. 20 me now is gary ross, black gold investors ceo, and --omberg's and reordering bloomberg's annmarie hordern. annmarie: we just heard from iran saying that there is no plan b. it is interesting that opec decided to release this press statement today. as time, they waited for opec+ to meet. so it looks like the saudis are trying to put putin in a bit of a corner. it is a risky move. on top of that, if russia calls their bluff, the saudis aren't going to allow the price to drop. they are going to have to cut even deeper than they already are. alix: what do you think? gary: i think russia likes the

attention, and they are going to cut. why not? they haven't cut much at all anyway. if you look so far, there's been agreed to cuts of something like 7 million barrels a day. the saudis have done all the cutting. cut a littleave bit. why shouldn't russia go along? .hey do hate it they hate this deal. annmarie: russian oil companies don't like it. they dragged their feet. fiscal breakeven is, like, double. gary: with all of the demand relatively priced in, it makes sense for producers to cut production to raise revenue. alicia: why don't you think there is a free rider problem here? if the saudis are panicked because they need $70 or $80 a barrel to balance their needs $u

think there is a free rider problem with the russians potentially don't cut, , andhey are going to take what they can get from it while everyone else is cutting? gary: they have cut. they probably have not cut as much as they should have, and they will cut a little bit more. so their cooperation is important. it is symbolic. together with the non-opec group, you are talking about over 50 million barrels a day. world crude runs is a huge share of the overall supply to the markets. think it is important to have them go along, and i think russia likes the attention. why not? putin comes out and says yes, of course we will go along. annmarie: every meeting it is like this. and this was all of february. comparing theally

coronavirus impacts to the house wantre, saying the saudis to call the fire brigade and use the firehose, but he wants the house to stand there. gary: they have to shock the market. that is why they came out with this 5 million barrel a day cut. they were talking about 600 a day cut, so they want to shock the market. i think it will work. i think it is problematic because of the demand loss from the coronavirus. world demand is going to be down to million barrels a day year on year in the first quarter. the second quarter a major question mark. i assume it is something like flat year on year, when it should have been up. if you assume additional cuts, we should stay in this $50, $55 market, but lift as we get to the second half of the year, when demand seasonally rises

people in 5 million barrels a day, and then see prices move back up to $55, $60 brent. they don't want to see $41. alicia: what is the calculation for opec+ with u.s. shale producers? how do they look at it when they look at ways in levels to cut? gary: in their minds, they know that shale is there in the resource is there. they factor in a certain amount of increase. the market is still rising in a normal environment. unfortunately, this is not a normal environment. so this year, we may only get a few hundred thousand barrels a day. in their minds, they make room for shale. i think they are not all that unhappy that the shale companies are hurting. alicia: no doubt. gary: the exit rate probably won't be any higher. , wti is kind of prices

five dollars under. capexe talking about being slashed. i think that will benefit opec towards the second half of the year. annmarie: but they are definitely making room for shale. we saw yesterday americans producing at a record. worried about the price. you will hear a lot of rhetoric about vision 2030, the economy diversifying. they are relying on oil today the same way they were 5, 10 years ago. the problem is under the former saudi oil minister, they had market share. they were willing to not care about prices and just go after market share. what they are doing now if they continue to cut, they are just giving shale more room to breathe even though it has been troubling for the permian and some of these producers. alix: i also wonder, the more

that the saudis actually cut, the more spare capacity they have, which is another type of inventory in the world. there's got to be a nice cap on oils rally, too. gary: it reduces the demand for inventory when people know this is this spare capacity. keep in mind, we have libya out. that is one million barrels off the market, probably continuing into the second quarter. indian companies have said they will not take venezuelan oil. so they are getting help from elsewhere, but they need all the help they can get from this coronavirus. if people stopped going to amusement parks, they can work at home, the dependent jewel -- the potential demand loss is huge. alix: gary ross of black gold

investors, thank you. annmarie hordern, thank you as well. alicia levine will be sticking with me. we will have more on oil later on "bloomberg: commodities edge." this is bloomberg. ♪

alix: let's check on some movers in the market. we are looking at airlines down by about 3% or more. united and jetblue cutting flights because of the virus. bernstein on top of it slashing price targets for the carriers, writing, "there's no way to handicap the outcomes from the spread of the virus." the international transport association says it could cost the industry up to $113 billion. coming up, kkr is the first global impact fund where they find value. ♪ awesome internet.

it's more than just fast. it keeps all your devices running smoothly. with built-in security that protects your kids... ...no matter what they're up to. it protects your info... ...and gives you 24/7 peace of mind...

...that if it's connected, it's protected. even that that pet-camera thingy. [ whines ] can your internet do that? xfinity xfi can because it's... ...simple, easy, awesome. [ barking ] alix: this is "bloomberg daybreak." i am alix steel. i am alix steel. we are a few seconds away from

initial jobless claims. here is where we check it on the market. a down day for the s&p after an update yesterday. s&p futures down over 2%. in other asset classes, you are seeing a stronger yen and treasury yields move lower. bund yields near 65 basis points. jobless claims breaking. at 216 thousand people applied for initial jobless claims last week. unit labor costs fell. .9%. norton -- nonfarm productivity came in 1.2%. alicia levine of bny still with me. i wonder how much labor costs next couplever the of months and couple of weeks? alicia: we think the peak of the hit are still six weeks away.

if you think of this as the first week where there started to be a decline in economic activity, people starting to stay closer to home, maybe some hits to their local businesses because they were home and not out buying lunch on a workday, we think the peak of the hit is still six weeks away. you're going to start seeing slowly rising claims. alix: i wonder how it impacts productivity? the workers were healthy and can come to work, does productivity increase and unit labor cross -- cost increase, it feels like a chess piece. alicia: it is. i think it is unknown right now. it is clear you will have some shedding of the work first -- the workforce on the margins. also not clear that up whatever the workers are doing is more productive. alix: you have a trickling off of demand and so your productivity does not have to

necessarily pick up to stay with that. alix: to wrap up the jobs numbers for tomorrow, what is the one thing you will care about considering it will be backward looking? alicia: i think the market will completely look through this number. it is yesterday's news and we care about the number for next month instead. you want to see it in the 165 range, which is what wall street is expecting. that would suggest that pre-coronavirus, we were still within the 2.2% gdp area for this year. you want to know we were coming in at a pretty good place before we get the short-term hit. v we were talking about. alix: alicia levine, you'll be sticking with me. i want to give you an update on what is making headlines outside the business world. viviana: we begin with opec, it has taken a big gamble on russia. oil ministers from the cartel agreeing production should be cut by 1.5 million barrels a day

to offset the huge demand hit from the coronavirus outbreak. opec is betting it can overcome opposition from russia that would block the move. and the.s. politics road to the democratic presidential nomination. but just got tougher for bernie sanders. the next primaries are in states where joe biden is poised to do well, florida, michigan, and ohio. after winning 10 states on super tuesday, mr. biden is in a strong position to pull away. joe biden also picking up the endorsement of michael bloomberg good mr. bloomberg is the founder and majority owner of bloomberg lp, the parent of bloomberg news. brown university selling 90% of investments in companies that extract fossil fuels. those will be liquidated as soon as possible. two years ago brown decided to sell off its entire exposure to fossil fuels. the process taking time because but the investments were not

liquid. 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. hurtado.ana this is bloomberg. alix: thanks so much. i want to stay with the esg scene. raisedbal impact fund $1.3 billion, it is now the largest bond of its kind. joining me is elizabeth seeger, kkr director of investing. she has years of experience working at corporate environmental issues. after working with kkr helping build esg management, she is now a member of the global impact team. alicia levine still with me as well. elizabeth, thank you for joining. $1.3 billion, that is a lot of money. where can you find the opportunity versus the value trap? everyone is talking about how sexy esg is and they want to invest in it. elizabeth: not only esg but the impact investing is hard to get away from. everybody is trying to get into that space.

for kkr it is part of a journey that started 12 years ago. two things happened. accounted taking into environmental, social, and governmental issues. importantly, we started partnering with our portfolio companies to help them improve their environmental and social performance while also improving business performance. alix: if you are looking to invest in a retail company, you would make sure they are sourcing the right place and not using child labor and so forth. elizabeth: exactly. and driving value by partnering with them on reducing fuel use in their facilities. the second thing that started happening 12 years ago as we started making investments in companies we thought were helping us solve critical challenges in our marketplace, and we were doing that for our flagship private equity funds. we recognized, may be more important than the fact that we are making those investments, we

realize there were more commercial opportunities that we cannot achieve because our funds were too large and are a lot of opportunities in the middle private equity space. those things built a track record and a deep understanding of the topics, and then we are hearing from our investors that we liked our work and wanted to put more money at work in that. those things came together. our launching the impact fund is very intentional. we want to think about what does kkr bring to the space. the impact investing spaces brought, but what does kkr bring? the strategy we lost is something that builds on our core competencies. alix: the buzzwords are all out there and some are greenwashing and some are not and are different definitions of different things, so i would like an example of a company you invested in and what kind of return profile you can expect? elizabeth: i can talk all day on the terminology issue. i know we do not have all day.

everyone who knows me knows i could. one thing that has gone the way of progress on esg's confusion around what are we talking about when we say those terms? for us, esg is thinking about how does the company operate and how do we partner with that company to improve that performance to enhance value? impact investing is about investing in companies whose core products or service is helping solve a challenge. we are using the u.n. sustainable develop goals as a framework for that. alix: give me some specific examples. elizabeth: one of the things we started doing 12 years ago was toking with a number of them help them improve their environmental performance while also improving their business performance. a lot of that was around energy efficiency work and helping them save cost. a lot of the retail companies were part of that program. we built expertise in energy efficiency and roll that out to more than 50 companies globally.

to bring it back to the impact fund, that deep expertise we built set into the first investment we made, which is a company called farkas building performance headquartered in singapore. companies -- its customers reduce energy use in their heating and air conditioning business, which is that asg we recognize huge consumer of energy can consume 40% of a facility's energy in an industrial and commercial setting. if you can find a solution that helps these customers reduce energy use, you saving a lot of costs. alicia: one of the things that interests me is how further along the curve on this issue of european investors are compared to what is happening in the u.s.. talk to us about what you see in the u.s. lp market and the u.s.

client base. what are the things clients are saying to you they want to see? would say what you said is true five years ago or 11 years ago when i started at kkr. we have hit a tipping point. six months ago, we are seeing interests from around the world, not just europe and north america, but also asia. a lot of people are starting to focus on topics that are important to them, not only how do we manage esg issues broadly, but topics such as diversity in climate change. alicia: in terms of the types of investment you make, are they mostly global investments are u.s. focused? it is interesting that the funds is raised here. does that mean the target companies are here and is that a way to raise the profile of this issue? elizabeth: it is actually a global fund, it is called global impact fund. we are investing in all of the

regions where kkr invest and building on the network and the expertise over the past 10 years to find opportunities. a few of our companies we have invested in in asia for us in north america, and we are also investing in europe. your clients ask about esg? alicia: we see increasing interest across the board. the european clients have been there. we are seeing it in the younger generation. values investing. the negative demand, meeting we do not want to be invested in fossil fuel companies. we are seeing it from the millennial generation of investors bubble up, but also the larger institutions. .oundation and larger are i.e. -- rie. the client base there is asking for esg suites on all of their investments. for us as well, in the equity

world, we are definitely seeing it. in the fixed income world, green bonds. i do not want to use the word exploding, but it is growing rapidly. i think five years from now, the demands from the client base will look different than they did 10 years ago. elizabeth: this is now business as usual for all of us and luckily we've been building on this for the last 12 years. the global impact fund is part of our effort to help solve these critical challenges. alix: thanks so much. i appreciate the conversation. elizabeth seeger of kkr and alicia levine of bny, thank you so much. coming up, investors have been slammed by the selloff in equities. one female lead hedge fund is bucking that trend. her fund is up 31%. that is coming up next. bloomberg users can interact with charts shown on gtv .

this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up later, an exclusive interview with robert kaplan, dallas fed president. ♪ the brutal selloff in stocks has punished most investors. some are doing well. with the hedgeis fund founder and cio. rik: i am here with anna nikolayevsky. gushedrted as it capital she started asset capital and is having a wonderful year. tell me how you've been trading the coronavirus selloff and

these periodic rebounds we have seen yesterday? anna: we enter this year fairly bearish. we saw a lot of throb -- a lot of froth particularly in the middle of last year. the market ignored a lot of factors like the repo late -- the repo rate going to 9%. we saw absolutely no earnings growth. the entire multiple move -- we enter this year 20% net short on the data adjusted basis. streetonavirus hit wall around january 22. until then there was no reaction. the market continued to go higher. it took a month for things to finally be priced in. erik: things do not really start to crater until february 19? anna: it took a very long time. we saw 16% mark the decline during that time.

we were actually actively covering our short and thought a lot of downside would be priced in. as of now, when we look at what is going on in china, we are seeing the rate above the inception rate and we are seeing communities rally together to try and conquer the disease. i think at some point borders will be open again and markets will rebound. up one taken our exposure significant down days and have reduced it on days like yesterday when the market the market rallied 4%. erik: how are you positioned on the net short for net long basis. long andare 85% net would be looking to add, absolutely. erik: why? you think the coronavirus selloff is overdone and things are likely to get better as opposed to worse? anna: i think there will be a revenue hit in many industries, but if you look at auto dealers,

if you need a part for your car, you will buy it, because you have to go to work at some point. the service industry will have a large hit in the beginning, but at some point there will be suppressed demand. a lot of events are being canceled, but they will ultimately be rescheduled. give that point of view, tell me what you think of the fed emergency rate cut. anna: that is not something we were expecting at all. i thought the market would take care of itself. i think the fed cut made a significantly more bullish, and a lot of other governments will continue in the same vein. there is a major global policy response, which is going to be very stimulative. another reason -- another reason we are long. erik: there is a distinction to be drawn between when you are running a hedge fund between your structural view and your tactical view. is what we are talking about your tactical view?

are you still bearish on the longer term prospects for the economy like you were heading into the selloff? anna: in the short term we are bullish. strategically long-term we are bearish. a lot of the factors that led to the market decline in the fourth quarter of 2018 are still here. that was why the fed reversed itself and started cutting after attempting to raise rates. 2018, you had a significant drop off in car sales, you had a major drop off in truck orders. the freight index is down substantially. even the january numbers before the coronavirus hit were disastrous. when looking at the entire industrial complex, we are seeing a lot of problems and a major revenue slowdown across the board on a global basis. erik: we should show some of this because we track commodities like oil and copper

and we can map them against things like manufacturing pmi's and we can look at what is happening with auto sales and see that at the very least and commodities, it has been a long selloff. anna: it is part of what central banks are doing and negative interest rates in europe. that is pretty shocking. erik: you look at a chart like this where we see crude, copper, and pmi's, all trending down. what does that tell you? anna: global gdp will be weaker than we expect. in such a situation you have to focus on maintaining positive cash flow. impliescases that changes in your employment and cost reductions on an ongoing basis. that is why we are longer-term concern about the economy because we do not know if the unemployment rate can continue to decline. jolts look at things like -- erik: job openings. anna: yes.

they are actually starting to decline. that is a leading indicator for the unemployment rate. erik: how long do you think it will take other investors to come around to the same point of view, to look at thing like jolts, commodities, pmi's, and draw the same conclusion you have drawn, which is that the underlying economy is nowhere near as healthy as the stock market suggests it was only three weeks ago. anna: right now the data is murky because companies are getting a benefit from announcing negatively and blaming it on corona. right now there is not a lot of transparency as to what normalized business looks like. maybe three or four months, when the virus subsides after the weather gets warmer, we will get more normalized estimates for the rest of the year and forecasts for 2021. erik: what we are talking about right now is very much a macro thesis. you're principally an equity investor.

how do you express a macro view in the stock market? had to focus a lot more on what the banks are doing. whenwas never a big forte i started looking more at what was going on with commodities and inflation, we had to focus on what china was doing. when china was growing its fixed asset investment, there was obviously a lot of inflation. everything was moving up. when we are trying to figure out why the fed cannot get back to its 3%, it is because china has slowed down and the u.s. is not large enough to reinvigorate that entire process. actually, we think that lower rates are deflationary because they have created excess capacity in virtually every sector. erik: i want to acknowledge the obvious, which is that you are something of unicorn. you're a woman running a hedge fund, which is a great thing and we are delighted to have you. my question is why aren't there more women in the hedge fund

industry and what do you think could be done to make that industry more attractive to women or at least persuade the men who are in it to employ more women? anna: it is a complicated situation. i've seen a lot of women be threatened and intimidated by the industry in highs going college. they do not bother thinking about finance in general as a career. i have seen other women drop out in their 30's when they have families and because they are not content in their current careers and they do not to the opportunity to move up your eye became super involved in an organization called girls who invest. we basically provide a training platform for young women in college for several weeks, and then we guarantee them paid internships at top firms in the hopes that when they graduate the program they will enter the industry. for me i think it is an ideal industry for a woman, whether you have a family or not because you get to pursue every interest.

if i'm looking at lithium, i get to go to chile and look at the process of mining lithium, if i'm interested in electronics i can go to ces and see all the topic technologies, if i'm interested in autos i can go see what is going on -- erik: at the detroit auto show. anna: or geneva or perish it is fascinating from an intellectual standpoint. erik: great having you here. axe is anna nikolayevsky of l capital management. coronavirus selloff positioned almost perfectly. alix: appreciate that. or coming up next. this is bloomberg. ♪

alix: time for technically speaking. bill maloney joints me now. listen to bill at squa . bill: s&p futures are plunging around 70. we talk about resistance

yesterday. today we talk about support. that is retracement level. that is yesterday's low. figure, thenund 2183. 3061 is your first level in the s&p cash. alix: now let's go to airlines. they have been hammered. you are looking at love in particular. what you see? bill: all of the airlines and the cruise liners look like this chart. they've been plunging. support is the march 2 low around 44. that dates back to december 2018 lows. 44 is a key support in the southwest. 34 is your level on southwest. setting you up for the are traits of the morning. that wraps it up for me on bloomberg daybreak: americas. coming up on "the open," matt hornbach of morgan stanley. this is bloomberg. ♪

[ fast-paced drumming ]

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

jonathan: coming up, the global growth scare fueling a surgeon volatility. low rate sending european banks back toward the bear market at opec ministers looking to russia to help lift supply cuts. with 30 minutes until the opening bell, good morning, good morning. thursday morning price action. wednesday up, thursday down and down hard. off to percent on the s&p. in the bond market, look at the bid on 10. back to 0.95%. the euro with a bounce, 1.1187. up .5%. let's begin with the big issue. the surgeon volatility. -- the surge in volatility. >> extraordinary volatility. >> elevated volatility. >> we will see more of it. >> part of it is crowd mentality

and the anxiety of the unknown. >> a high level of uncertainty. >>