night is simply unacceptable. have, we are going to thorough and independent review. we are in the process of getting the results out. >> [inaudible] said all along that we are going to make these caucuses the most transparent as possible. we are reporting up more data than ever before it we have more paper trails than ever before. when i ran for chair. thede a commitment to see caucus process through. that is what i am working on, that is what i will continue to work on. thank you all. the results are coming in. we will see you later. romaine: you were just listening to troy price of the iowa democratic party caucus chair. we will await the results. he says that 62% of the precincts from all 99 counties have come through. while we wait, joining us on the phone, political science professor at iota college. advisor to applied. can you give us a little bit of thinkt into whether you the iowa democratic party handled this in the most appropriate fashion? >> i was just listening to this presser. i am surprised that they are releasing at this point, this late, partial data. 60% --tioned we will get 62% of precincts reporting from 99 counties. thisalso surprised that in press conference, he did not stand there and take all the americans had. this is something we heard last night, that the iowa democratic party held a phone conference with members of the campaign, and it actually hung up when questions were asked. at this point, given what a debacle this has been, the fact that he just walked away from that platform. sympathetic very guy, a challenging night, but to walk away after not answering all the questions from reporters , i think that is a big mistake. should have released all the data or waited to release that data. joe: i think we have some numbers coming through. mem curious, just for political -- just from a political science perspective, do you think this caucus just will not have the effect it had in the previous election? jeanne: iowa is all about momentum. you needtes and stake, almost 2000. it is a very small sliver. spendly reason people inordinate amounts of time and money in iowa is about the momentum you get. candidates, campaigns, the voters, all the people who spent so much time have been robbed that ability given that this app was not properly tested, they have been robbed of this momentum. joe: i just want to jump in. it looks like we do have some numbers. these are the state delegate equivalent. precincts.f havebuttigieg appears to won the most state delegate equivalent with 362. bernie sanders appears to have come in second with 338, followed by elizabeth warren at 246. from a state delegate equivalent standpoint based on 62% of precincts -- of reported, pete buttigieg appears to have won based on this preliminary account. buttigieg leads sanders, warren, and biden. last night, there was some controversy after buttigieg because i declared fit -- quasi declared victory. this seems to vindicate, at least from one measure. thatne: the first question troy price was asked, how can anyone trust you now? do you trust him? jeanne: i have to say, we do have a paperback. he is right about that. to your point, i think all of these campaigns that did not do as well as expected will raise questions. from biden'ser out team last night. biden looks to have come in at least fourth, may be lower. i think they will raise questions about the integrity. we also may hear that from the bernie sanders campaign. we are talking about the state delegate equivalent. at the robbed -- look at the raw totals. there is a lot of data to go through on this. huge, huge victory for buttigieg. we may hear questions about the integrity. quickly, this idea that we are putting so much importance on these results, obviously for the political strategists and reporters, it means a lot. matter for those who don't live in iowa? has often give us a sense of candidates, where they come out. us where thells party is headed. increasingly, people are relying less and less on iowa. whether iowas to is first next time around. the teching aside questions, the app, as you have heard from the state democratic party chairman. that, caucuses problematic from a democracy standpoint? personally, i am not a huge fan of the caucus process. i think it leaves a lot of people out. even if you look at the highest turnout caucus for the democratic party, that was 2008, still a very small percentage of people who are able to take the timeout, show up. reasond --lenty there are plenty of reasons you might not be able to make that two or three hour period. and you have to make a public statement of what you are voting for. i would not personally be particularly sad to see it go. seemed toroy price really -- seemed to reiterate the idea that there is a paper trail, a backup. larry: i think something that is key to know is that all the battleground states for 2020 will have a paperback up. for iowa, it is important they are transparent with that paper. one of the reasons they got into this mess was they were not transparent. security experts would not even say who the offender was. i think it is going to be on them going forward to be transparent. joe: obviously, some questions how it isthy -- about affecting markets. markets, atures little bit of a break. on theday, monster rally major averages. most of this on the coronavirus fears. investors seem to be looking past the impact, saying it is priced in. since the best day august. stocks really rebounding. you may be able to make case that some traders say that the mess in iowa could leave to a desk with lead -- the mess in iowa could lead to a status quo white house. daystocks having its best since june. that is very china dependent. thatof the idea coronavirus fears are abating. reasonspective of the investors are buying, the theme has been to melt up and buy every dip. haven bonds slower. take a look at the 10 year yield, giving up nine basis points over the past two days. joe: thank you abigail doolittle, reminding us of the markets perspective. nneant to go back out to jea zaino. so far, it looks like it was a good night for pete buttigieg. at least by one measure. nonetheless, he clearly has problems. example,numbers, for with black voters. is his path to be the nominee even with the good result? uphill i think it is an battle for pete buttigieg. iowa is all about the ground game, all about retail. he did well but he spent a lot of time. four of his major opponents were stuck in washington dc at the impeachment trial. iowa tooe biden had themselves for a bit. first fourond the states to super tuesday, this turns from a ground game to an air game. can he get the money he needs to compete in the air? tuesday, 40% of delegates are up. looking at some of this data, beyond some of the problems the iowa democratic party has releasing this, we were told that enthusiasm was high, energy was high, and turnout was high. 2016, much than lower than 2008. you compare that to donald trump, i think it does pretend to challenge for democrats. the turnout, at least what we are hearing, not quite what we promised, definitely below the almost quarter million barack obama pulled out into thousand eight. see some of the results here. when you see where some of the other contenders landed, sanders was not far behind. warren did flip pretty significantly. some folks like biden and klobuchar did fairy little bit worse. when we talk about the iowa sensees, do we have any as to whether this is going to folks on, some of the the right of our screen? the first person i am looking to exit after iowa is tom steyer. only 222came up with statewide. i think it is clear, no matter how much he puts down in this campaign, a does not have a path to the nomination. if you add up some of the example sanders and warrant together, you get a sense of the progressive energy. biden, buttigieg, and klobuchar, you have sort of a centrist energy that matches the progressive energy. joe: i want to go out to iowa for we have rdc bureau chief. i am curious about biden. reported for a long time that iowa would be a tough state. not great organization, not great ground game. himmuch challenge is it for to begin momentum and win big on super tuesday after such a mediocre showing right out of the gate? >> i think it is a huge challenge. remember, barack obama essentially became president of the united states when he won the iowa caucus in 2008. joe biden went around saying, do you like obama? you have got to like me. stalwart of the democratic party. he simply could not get people in iowa to be excited about him. he was in danger of a force plays -- a fourth-place loss. his party here was in tatters. to february, it all came true. joe biden has one good state ahead of him. that is the state of south carolina. hard to see where he notches another with between now and super tuesday. is i havewhole pitch the most delectable, you have to start winning races. romaine: document elizabeth warren, given that she has a chance to regain the momentum here. date on theext calendar, new hampshire, should be friendly turf. she is underperforming a bit. 2016 beatders in hillary clinton quite handily in new hampshire. he is also leading in 2020. biden notdoing well, doing terribly. if you cannot win the state that is basically the next door neighbor to your state. massachusetts and new hampshire, they are almost like one state. it is hard to see how her path gets any easier. theset appears on preliminary results that from a delegate standpoint, pete havegieg is leading or may won iowa. bernie sanders also appears to have a lot of momentum. he is theeople say favorite. polls isss, 25% in the nowhere near a majority yet. take to consolidate and start winning sizable amount of delegates as their competitors dropout. the iowa caucuses, the the liberalpected contender and immoderate contender. andhat will help sanders buttigieg, if moderate supporters start to go to the mayor, warren supporters start to consolidate with sanders. it does seem like this is shaping up as a two-person race, sanders it buttigieg -- sanders and buttigieg, but i would be remiss if i did not mention the owner of this company, michael bloomberg, dublin is advertising spent -- doubling his advertising spending. at some point they are going to smack into him on super tuesday and that could scramble the race. saida number of pundits bloomberg may have been the de facto winner by not participating. course, michael bloomberg is the founder of bloomberg lp, the parent company of bloomberg news. 62% of the precincts. buttigieg, 26.9% of the vote. bernie sanders, 25%. warren at 18%. at 12.6%.5% klobuchar us inyou are still with d.c.. we have been talking about the democrats and what they have been doing in the campaign. there is a lot going on in washington as well. the leader of the republican party, donald trump, will have a platform all to himself in a few hours. we do expect a positive message coming out of his speech. he will focus more on the economy. it is an interesting moment for the president because he will be speaking in the house chamber where they impeached him. he is not yet acquitted but the vote is not until tomorrow. bothll be standing before houses of congress and be speaking to the jurors. joe: thank you for joining us, anna edgerton and craig gordon. craig will be off to new hampshire. larry, i want to come back to you on this. we heard from the chairman of ae iowa democratic party, full postmortem. what would you want to know? questions be the big they need to ask about the process? larry: first of all, i don't think they should be trying new technology inw the iowa caucuses. they should be very transparent about showing the paper results they have, the process going into the past day. pleasant,t is not what happened in iowa is a little bit of a gift to the rest of the country. this will be one of the highest turnout elections. all of the intelligence agencies are warning us about potential cyberattacks. if anybody needed it, it is a warning shot. to san: i want to go francisco. i want to bring in our bloomberg technology reporter who has been covering some of the issues going on. do we know a lot about the company who made this app? know theyly did not existed until about 15 hours ago. in that time, we have learned they were paid between december app formber to build an iowa democrats. in the past, they have not really done anything of this magnitude or this nature. out --provides messaging messaging platforms, data systems. this might be a combination of the two, but on a scale we have not seen them execute. a lot of questions about how they got here and what kind of testing they did. joe: live shots of pete buttigieg at a rally in new hampshire. you mentioned these questions, like what kind of testing. what about just the question of procurement? who gets to decide what company gets the contract to do this? are these questions that are now raised about the state parties and the transparency of what companies get to supply technology for democracy? >> it is technology for democracy but also technology for the iowa democratic party. issue an rmp. they certainly have an obligation to find the best technology so it actually works on caucus day. the fact they will go out there -- i am not sure it works the same way as if a state government were to do the same thing. romaine: pete buttigieg apparently had a rally. he has already moved on. when we talk about the technology, one thing that came up was this idea that these were all volunteers. if we get to the state level, the actual election, should we expect a little bit more responsibility. or is this really not going to make a difference? larry: we should. we do have a problem in the united states that we don't know . regulateders are more . that is a question we will have to deal with as a country. the department of homeland security said election infrastructure is critical infrastructure. romaine: we are going to have to leave it there. we appreciate you taking the time to join us. professor larry norden. also, our reporter in san francisco. that is it for me and joe. on bloomberghere television and radio. full coverage and results out of iowa. later tonight, it is the state of the union. this is bloomberg. ♪ amazon prime video is on xfinity x1. so when you say words like, "show me best of prime video" into this, you'll see awesome stuff like this. discover prime originals like, the emmy award winning the marvelous mrs. maisel, tom clancy's jack ryan, and the man in the high castle. all in the same place as your live tv. it's all included with your amazon prime membership. that's how xfinity makes tv... simple. easy. awesome. ♪ i'm feeing good right now [ fast-paced drumming ] >> welcome to bloomberg markets. i'm paul allen in sydney with taylor riggs in san francisco. let's get a check of first word news with riddick a wreps can. >> results have been announced in the iowa caucus. the final numbers are not yet available. the initial reading for pete buttigieg put him out front with bernie sanders at a close second. elizabeth warren is in third with joe biden a distant fourth. the democrats admit the final numbers will be accurate. white house economic advisor larry kudlow says the impact of the corona virus on the u.s. will be minimal. it will likely delay an export boom that was due from the china trade deal. there are more than 20,000 concert -- confirmed cases of the virus and more than 400 people have died including one in hong kong. the second death outside china. meanwhile, the who says almost 700 people have recovered from coronavirus symptoms. opec and its independent allies have spoken to china about the coronavirus and its impact on demand for energy. they had emergency talks in vienna. that china hased fallen by 3 million barrels a day. 20%.out opec plus did not discuss labor tax -- labor cuts but we will visit the idea later on wednesday. president trump is expected to ignore his impeachment trial when he delivers the state of the union address later, and instead be about reelection. he will likely take credit for the strong u.s. economy, newly signed trade deal and the crackdown on immigration. the president plans to deliver what he calls a positive speech to an audience that will likely include as many as five of his potential election rivals. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. taylor: risk appetite is returning. copper rebounding after a 14 day selloff as investors say the global economy will be able to withstand the impact from the global -- from the coronavirus. the s&p pushed into a two-day gain of 2.2%. amazon closed $1 trillion for the first time, joining the 13 digit club with shares surging in the wake of a blowout earning report last week. over in asia, it shanghai stocks piled back after a record 750 billion dollar wipeout. joining us from new york to discuss all of this is michael purves. i want your take on what it will take to pull this market back? you have the iran scares, the coronavirus and we are seeing a resilient rally. michael: there's no question, the underlying trend in momentum for risk assets has been very strong. just to put context on it, it was only a few months ago in september when we have the bond market signaling a recession that was coming in 2020. even though the bond market has clearly been supported, this concept of a recession narrative both domestically and further economic contraction overseas is fading there. you can check a lot of risk on boxes right now for sure. been there and liquidity is strong as many people have commented on. wanting to -- the resilience of this rallyer very. ownsr: michael, if anyone -- owns -- owes volatility analysis, it is you. what do you? michael: it is funny, i think the vix curve is really flat. strongnot -- given how the lift higher today was in equity levels, you might have expected to see a bigger contraction and a reese deepening of the curve. i think looking out into the future, the vix has a few things on its mind. one of which is that the that, buts and all of i think there is a view that a looming political risk as some of your colleagues were commenting on with what is coming out of iowa. it is very hard to contextualize and price the risk. but that is coming. i think the other issue the vix market may be focusing on is the 3250 level on the s&p is an interesting level because that is where the dealers have what pivot.ht call a gamma they may be forced to sell the market if the market were to plunge beneath that level. right now, the market has been very resilient. i think the idea about seeing some major realized volatility ticking up in the near term, it is going to be different. feels a lot different than january of 2018. paul: on the subject of volatility, i want to bring up this chart on the bloomberg. we did see chinese equities selling off when the markets reopened after the lunar new year break. now, offshore investors are absolutely piling in, buying those dips. my question is, is it too early? this crisis is not over yet. michael: no, i know. my way of comparing these types of -- the coronavirus and what it means for the markets, it is similar to natural disasters that are very large-scale. o'er the meadow terrorist events where there is a lot of headlines, and a lot of fears about how that is going to impact the economy in the markets. but usually those things fade. what we have seen, if you measure how the stock market reacts to terrorist attacks, it becomes increasingly resilient and increasingly capable of throwing this. fortunately, we have not had a terrorist attack in some time. i think there is an analog therefore viral outbreaks. hopefully we do not get more in the future but i think there is a reasonable case to think we might. if so, can the markets look at this as a deferment of growth as opposed to anything that is going to be permanently impairing economic growth? i think that seems to be what the narrative is. i have my own near-term concerns about the market. they are probably less to do with the coronavirus. expand will get you to on those. what are your concerns? michael: it is very simple. if you look at the trajectory of the tech stocks, not just semis, but the big cap text stocks -- text stocks, those have been leading and defining the rally. i have been structurally bullish on big cap tax -- tech for a long time and i continue to be so. right now, given the strength and the magnitude of the rally we have had over the last five months, i think they are overextended. some form of consolidation is inevitable. i was waiting for the big cap earnings to come in. i did not expect them to be bad, nor did i think they were going to be amazing. i thought it would be an event to ok, we get it, they are good, these companies continue to generate high quality, nice quantity of earnings growth. that would be a trigger to start taking some gains here. that happened as corona was sort of unfolding. it is hard to measure at all. i would argue that even if corona never happened, that there would start being -- upward momentum in the tech shares was going to continue to fade. if you look at various technical signals on tech shares, you will see a lot of the upward momentum is going. my question is this, do we have a horizontal consolidation or more of a vertical or price based consolidation over the next several weeks? needs to- the market process those and digest them. taylor: you talk about vertical and a stock that has gone from parabolic to vertical, is tesla. we will be speaking with the fundamental analysis in the next segment. on the technical side, how do you play tesla? do you by the ender -- the underline, or do you stay out of it because it has gone from parabolic to vertical? michael: it has been -- it is unbelievable. are very expensive the implied volatility. , relative to the call, i think the put call skew inverted on tesla this morning. which is very rare to see that. calls were richer than the puts were. on a timing is everything shorting tesla. it will be a spectacular short at some point. maybe that is tomorrow morning. i think some of your colleagues have commented, luke kawa has commented on tesla and some of the dynamics going on. but i would simply say this, i think one of the things about tesla that i find intriguing is that it is both -- it has technology component to it, clearly, and yet it is sort of a new fashioned industrial company. ultimately, i think when you have those types of business models that are ultimately asset heavy but have some aspects of transformational nature, the ability for the cost of that capital to be mispriced is very, very high. because you are simply dealing with a different type of return on investment than facebook or google or some of these other established tech giants. i think that is going to be one of these themes where they are twice the market cap of general moly -- general motor and forward. i can't help but wonder whether they will pull in aol time warner thing. the company with the richly priced stock will merge with an old-fashioned auto manufacturer at some point. who knows. thejust saying, i think tesla short thesis is one of those things where it is the ultimate sentiment stock and so you have to be extraordinarily disciplined with shorting it, even with the fundamental checks you can make. purves,l right, michael thank you for joining us with your insights. want to get you an update on the latest numbers we have on the coronavirus. china saying there are at least now.8 cases we will have more numbers and those numbers are from that province. on thoseave an update numbers as we get them. still to come, we will have more on tesla's hot start. the ev maker tearing through 2020. we will look at what supercharged the stock to this point. this is bloomberg. ♪ paul: the chinese stocks have stabilized after the markets biggest loss of value on record. many traders are unconvinced the recovery will last. david glacis looking ahead to today's open. what can we expect? similar had a look at cases over the past years where we had a massive selloff like we had on monday. typically, we get a rebound. and then things remain very volatile on day 3, 4, 5 and six. it is safe to assume that as you mentioned, it is not over. puts the macro moves across -- behind it, what is starting to emerge as a subplot, a sub angle here is the business impact. it is starting to become real. saying, we are in a region where it gets over $6 billion of its revenue, they are expecting material impact their. we heard from another good example that they are shutting production in korea. they can't get parts. casino is another good example. that is something we will track in the markets, following the big move down yesterday. casinos, senate -- cinemas and bars will be shut for the next 15 days. when you look at what is happening across some of these areas in china, because either operations are disrupted or virtually local economies have come to a standstill, companies will eventually run into things like liquidity if not solvency issues. it has been spread riot -- spread wide. i think fortunately, and i will end on this, we might not actually see any impact on earnings because the hong kong exchange has now allowed -- allowed companies to delay their earnings reports. taylor: our thank you to bloomberg's david ingles. tesla's red hot start in 2020, shares have tripled in more than three months. the electric carmakers market cap, now $50 billion more than that of volkswagen. andy w is allergic -- the world's largest automaker. let's head to new york where the research analyst is standing by, has an outperform on tesla. i love the title of your last note saying what to do now with the tesla shares, we have gone from parabolic to vertical. what are you doing now with tesla shares? colin: at this point, we are going back and trying to reframe the story and figure out what we missed. we have a 684 -- $684 price target. what is the sensitivity around earnings power? what we can say is if we are missing on margins by 100 basis points, that translates into three dollars of burning which we are looking at 20.4. our 30 times multiple, that turns into $90 of price on the stock. we're doing that, we are looking at the cycle time on their ability to bring vehicles to market and whether we might be short on that and the out years. on the autonomous side, they clearly have a massive lead in terms of the fleet that they are collecting data from. we are trying to understand how quickly they can bring oval for, level five vehicle to market and monetize it effectively. taylor: i want to show a chart i'm showing to our bloomberg audience in my terminal which is the street price and the median price target from the street at 466. the shares closing at 887. as you look at some of your outlook, your forecast, what you learned from the earnings report, what fundamentally changed for you from wednesday the 29th when we got earnings to now? do you think they could deliver more than 500,000 vehicles? what changed? colin: we have always had that number in over the last several quarters. we have been at 520 thousand vehicles since midyear last year for 2020. we are not surprised by that number. i think there are a lot of folks who were playing catch up. we went into the quarter with the street at 465,000. i think what is happening now is people are understanding the cycle time. the china facility is up in a year producing cars, we have model y from prototype to production in 10 months. they really are getting that is cycle time. it is so advantaged compared to what else is happening in the industry. the thought from your previous guest that tesla might merge with one of the lm's is ridiculous given they have a massive technology lead. as well is on the production side of things. they have made major mistakes for -- with model x and model three, but are from those mistakes and working through their process. paul: as the story has progressed, it has provided an incredible wealth of statistics and superlatives. i want to give you another one on the bloomberg terminal. it shows tesla call options rising nearly 10,000% on monday. that is a huge vote -- mode of confidence. what is happening? i have seen one analyst described this as a bitcoin on wheels. is this really the birth of this new industrial tech transport energy behemoth we are witnessing? colin: i think we are at the early stages of really massive disruption within the vehicle space. not only in terms of the move toward electric power, but toward how navigation systems work. i think there is a lot of price discovery happening, not only with consumers, but also with the stock. one of the things we were asking them about on the conference call was the pricing power and how they will leverage that. that translates into cash flow. from our perspective, there has been a lot of technology investment at tesla over the last 15 years, particularly on the battery side, and increasingly on the ai side as they work into the autonomy space. are notts of that clear. we are seeing advantage in terms of yield -- on range in terms of the vehicles. that is something people do not believe six months ago. it is proving to be a substantial advantage. is based in material science. i think those realities start to sink in, they are starting to consider things like 10% market share for tesla in the vehicle market, which was an unfathomable thought a couple years ago. it is a potential reality. what does that translate into for the size of the company? paul: i'm wondering what you were looking out for in terms of risks for tesla? what might be a catalyst i could make this parabolic rise return to normality? colin: there is any number of things. the macro environment for vehicles is a major concern. the safety regulations around autonomy is another thing we are watching and how regulations evolve quickly. and then really, it is about supply chain issues. it seems like the company has gotten themselves organized to be able to ramp quickly. one thing we are watching closely is what is happening with the tier one. tesla has gone from an annoyance for some of these tier one's and something to experience -- experiment with. especially if tesla is making market shares. the supply-chain disadvantage they have had historically, potentially turning into an advantage and how they manage that will be important for us from a risk perspective, in terms of their ability to ramp quickly. taylor: our thank you to colin rusch of oppenheimer. still ahead, disney coming out with first quarter results, giving the first real look at how its new streaming service is faring. we will have the numbers next. this is bloomberg. ♪ bloomberg. ♪ taylor: disney reported first-quarter earnings and subscribers of disney plus tour of more than 26 and a half million. it is a faster for the world's largest entertainment company as it challenges netflix's online dominance. shares rising in after hours trading. for more, i want to bring in lucas shaw in los angeles. earnings call just wrapping up in the last 20 minutes. what was your key takeaway? thes: they went and updated numbers for the different disney streaming services. that is something netflix does not characteristically do. tonight, we know disney plus has more than 28 million customers. espn plazas above seven. hulu grew by the smallest amount. all told, disney and one year has become the second biggest player in tv streaming after netflix. . you can say amazon is bigger because of the number of prime customers, but we don't know how many are watching video. let's say netflix is the biggest, but disney was really impressive growth. and small -- and strong viewership aced on the -- based on the data on how much people were watching on a weekly basis. paul: how about the cost? it is expensive to make all this wonderful new content. how is that looking for disney? lucas: it is no question that it is a major investment for them. the lawsuits from the disney significantly. i think north of $600 million. but that is to be expected. i don't know investors will be too worried about that. this is the game that netflix has been playing for a long time. the bet is that in the long term, this will work. one of the reasons disney moved into streaming was because it needed to show investors and that it had a growth opportunity going forward. cable tv, along with theme parks but especially cable had been a growth engine for this company. it needed to direct investors to a new area that would be that moving forward. the direct to consumer business grew from 900 million to 4 billion in this quarter year-over-year. that is really staggering growth, almost as much as netflix grew overall as a company last year. and that is something that bob iger can point to and say this is the future. long term, they will need to get the cost under control. they have forecasted by 2020 for that the division will be profitable. they have time to figure that out. we don't know if they will be profitable but investors will give them a pass on the short term i think. taylor: on the call, bob iger saying that they are seeing some international tourism down at their u.s. parks, also commenting on the closure of some of their international and china theme parks on the coronavirus. any numbers you can put on a hit to revenue or profit based on some of the coronavirus numbers we are getting? lucas: i think the numbers could be a couple hundred million. it kind of depends on how long they have to keep the parks closed. we don't know how long this virus is going to last. we don't know how long they will have to close the two major parks. it really depends. lucas, what is coming down the pipeline for disney in the next couple of quarters? what is going to be the driver for growth? that: one would assume streaming will still be a major driver. they will roll out new original series over the course of the year. that should boost disney plus and espn plus. the movie studio is probably going to have a tough comparison to 2019. 2020 is much weaker. they don't have star wars movies,. a movie like frozen the live-action remakes that have been successful for them like lion king are weaker in 2020. the tv business probably stays as is and the parks business depends a little bit on what happens with coronavirus. paul: all right, bloomberg's lucas shaw, thank you for updating us on those strong disney numbers. a reminder, we will have full coverage of the state of the union address at 9:00 p.m. eastern. we will have plenty more markets news ahead in the next hour. this is bloomberg. ♪ s is bloomberg. ♪ paul: welcome to "bloomberg markets." i'm paul allen in sydney. taylor: i'm taylor riggs in san francisco. our top story today, the coronavirus death toll approaches 500. the white house expects minimal u.s. disruption. china has locked down more than 50 million people. caucus.n in the pete buttigieg leads in iowa with full results still delayed. the democrats say the final numbers will be accurate. elon musk has plenty to smile about in 2020. tesla hit the fast lane, shares doubling in value this year alone. thanks, taylor. let's look at how the trading on the markets are right now. australia has just opened. currently, we are higher by a quarter of 1%. new zealand has been trading for a couple hours. a couple -- a bit of data out of new zealand. jobs coming in better than expected in the fourth quarter. the jobless rate falling to 4%. the participation rate was weaker. there are signs of wages growth in new zealand however. we see it up by almost 1%. nikkei futures are looking flat as the s&p uses as for -- after we saw a nice bounce on u.s. markets. taylor: i want to get a check on the first word news with ritika gupta. results haveal been announced in the iowa caucus. the final numbers are not available. it puts pete buttigieg in front with bernie sanders a close second. elizabeth warren is in third with joe biden a distant fourth the democrats. admit issues with the declaration but insist the final numbers will be accurate. president trump is expected to ignore his impeachment trial when he delivers the state of the union address later. and instead make his case for reelection. he will likely take credit for the strong u.s. economy, newly signed trade deal, and the crackdown on immigration. the president plans to deliver what he calls a positive speech to an audience that will likely include as many as five of his potential election rivals. president trump is mulling a plan to withdraw from a global pact worth $1.7 trillion in government contracts. we are told administration officials are circulating a draft executive order that would trigger a u.s. exit from the wto's government procurement agreement if the accord is not reformed in line with american demand. the agreement is designed to make public purchasing more transparent. alliesd its independent have spoken to china about the coronavirus and its impact on demand for energy. they meant for emergency talks in vienna. china has fallen by 3 million barrels a day or about 20%. did not discuss cuts but will revisit the idea later on wednesday. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. . paul: thanks. white house economic advisor to -- advisor larry kudlow says an export boom will be delayed thanks to the coronavirus. let's bring in our china correspondent in beijing for the latest on the outbreak. we are seeing today cases reported in china nudging closer to 24,000. what more do we know? selina: as he said, the cases surpassing 23,000 as well as more than 420 deaths. you have the world health organization reporting that 684 people have recovered from those infections. i want to break down more about what we know behind those numbers, given these global escalating fears. it is important to remember that the coronavirus is heavily concentrated in that china province. they are more cases there in the rest of china put together. the growth rate is faster. ofre is more than a dozen for hundred 20 cases that are outside of wuhan province and two of those are outside of china. only two of the deaths outside of china. one in hong kong and one of -- one in the philippines. these numbers are actually probably understated in terms of the number of cases in wuhan with chinese and official media reporting official cases that have not been reported in official numbers. that would mean it accounts for a higher proportion of deaths and illnesses. part of the increase is likely because of the increase in testing as well as more medical resources finally getting to the area. i want to touch on some updates on the corporate front. nike reporting that it has closed half of its stores temporarily as a result of the coronavirus. we have good news on the pharmaceutical front with signs saying it is donating its experimental coronavirus drug to treat 500 patients in china. trials could begin next week but it is important to remember that it does take more than a year, 12 to 18 months, for confirmation that these drugs are safe and useful in human bone develop and. is the biggest economic challenge china faces? selina: so far, you have seen policymakers react pretty measured to the health crisis. they are adding liquidity, considering other measures to assure the economy including selling more special government bonds or increasing the plant cap on the ratio of the budget deficit to gdp. the big issue they are facing is that there have been these two main goals that have been guiding china's economic policy. the question is whether they can maintain those goals as the coronavirus continues to pressure the economy. those goals are number one, doubling per-person gdp and household income over the next 10 years. number two, trying to contain the explosion in debt. what is becoming increasingly clear is that china's economy is not going to be as easily able to recover from this crisis as i did with sars in 2003. at that time, china's economy was turbocharged by its entry into the world trade organization and infrastructure investment boom. -- and now, told their ability to drive growth with infrastructure investment is now -- taylor: that was our chinese correspondent selena wang and beijing. thank you for joining us on the ground. sure to keep up-to-date on this coronavirus story. we will see the latest global figures from the cdc in the bloomberg news room as well as how specific companies may be exposed. the coronavirus prompting investors to shake their strategy in the short-term. aaron gibbs is president and cio of gibbs wealth management. she joins us from new york. i wonder, china markets had a good day yesterday, u.s. equity markets seemingly today. pretty positive rebounding. while it -- what will it take to get the pullback on the resilient equity markets? erin: i think we are going to see a lot of volatility where we see these down days and at days. i think today, what we saw in the asian markets is largely a shorter-term balance after we saw a disastrous day the day before with all of that pent-up negative selling action coming off the holiday. i think we are probably going to continue to see more of these down days particularly in emerging markets and asian markets. and then more of a mix in the u.s. markets. u.s. equities are really priced for perfection. we are looking at 19 times board earnings. these are levels we have not seen in 18 years. we are talking the 2002 boom. it really will not take much for us to have those nasty down days we have been seeing over the past week. and then hopefully, eventually, a good rebound as we have solid economic footing. i think one of the things we want to be careful of is one, if you can isolate some of your exposures to industries that have high exposure to china growth, energy, materials, machinery, and a lot of machinery companies fell, assion -- that we may see slowdown in. some of the retailers, hotels, airlines. also, the -- be more cautious on the u.s. side of not being so aggressive with on the growth side. but really being a core large-cap strategy. this is the global safe point right now when you are looking at overall equity markets. ofl: if i can get a couple sector specific route -- views, we have seen brent prices tumbled 21% on the month. crude prices for west texas down by a similar magnitude. you are steering clear of energy stocks. you are not optimistic that opec will prop up the price. erin: no, i think even obviously the u.s. took a large control of wti. i think if we don't have that demand, even if they cut back on supply, which we can do at opec and the u.s., the expectations of profit growth have been cut by two thirds already for the first quarter. a continual slowdown where the chinese consumers are quarantined, or a large part of the chinese relations are not able to be as productive, this could have a serious impact on demand, and further help those prices go down. i think energy, for now, is too risky and way too unstable at the moment. same thing for materials. and some of your staples as well. anything that has a high exposure to the chinese consumption, it could be a real weak point, not just for the fourth quarter but farther on. taylor: i love your comments on growth versus that. -- versus value. this -- does growth continue as you see companies like tesla dominating the news? erin: i think part of it is that we have had a valued resurgence in the fourth quarter of last year. we got to more conservative, i think now that we see there is really no expectation of interest rates going up, which has a big impact on how value stocks do, there is more of a likelihood that growth will do well. we are definitely in a growth economic environment. the problem is that growth stocks are already so highly priced, just like i said, we are priced to perfection. if we see any problem with them not being able to deliver on high expectations of earnings and revenue growth, it could pull them back. for me, i would say i am not advising to stay on the growth train i really believe, in a core strategy either in investing in an overall broad index that contains growth and value, or having a core strategy where you are looking more at growth at a reasonable price, and not buying growth at any price. , president ands ceo of gibbs wealth management, thank you for joining us. i want to give you some breaking news. you are probably aware of the diamond princess. it was detained over concerns of the coronavirus. 10 passengers on board the ship have tested positive for the coronavirus. this is according to reports from japan's health ministry. tested andgers were quarantined. in 10 passengers are testing positive for that. taylor: still ahead, we will be watching what happens when the world's factory shutter -- shots because of a infection or we will look at the impact on supply chains with our guest. us toori on a joins discuss the iowa caucus model and president trump's ops -- upcoming state of the union. this is bloomberg. ♪ paul: this is "bloomberg markets." i'm paul allen in sydney. taylor: i'm taylor riggs in san francisco. democrat pete buttigieg has been the narrow leader in iowa as the long-delayed caucus results come out. 62% of precincts reporting. bernie sanders is a close second. todd mariano joins us to dissected the results and very interesting as we discussed, we are getting headlines out. venezuela's guaido is planning to attend trump's state of the union address. he will attend as a guest. he is expected to sit in melania trump's box. he will be attending trump's state of the union address. if you don't mind, let's push it forward quickly to talk about the state of the union. what are you expecting to hear? todd: thanks, taylor. good to be with you and paul. what we are expecting to hear tonight is from what the white house is guiding two is a more low-key state of the union speech then we have seen before from president trump. and that certainly makes sense given the atmosphere in washington, given the impeachment process coming to a close tomorrow in the situation in iowa you discussed last night. president trump is enjoying some cycle highs in his approval ratings. the economy is doing well. he's looking forward to good odds of reelection in november. in some sense, there is less need for some of the bombast we have seen in previous state of the union speeches. in general, it is a time for the president to give his vision for the country and a plan to implement it. i think what we will be looking for tonight is something a little more orthodox. has: a need for bombast never really entered into the conversation. it is quite hard to imagine the president steering clear of all of the impeachment talk, isn't it? todd: i think that's true. we have heard some of that from the white house today. certainly, this is a president that likes to go off script and in his previous state of the union speeches, we have seen intances where his asides the margins, as it were, are some of the more trump elements of the speech versus the more polished text. i think we can probably expect that tonight. a need for bombast, this is also a president that got into office in part based on his unorthodox credentials and his willingness to take on issues in ways that his predecessors had declined to do. in some sense, his political fortunes are very much tied up with that identity. it is just that i think especially with impeachment over and the politics of it largely favorable to trump, there is probably a little less need for the sharpest edges that we have seen in the past. taylor: it was interesting you mentioned the approval ratings for president trump near all-time highs. seems as he goes into this speech, he does have a lot of wind at his back. you talked about the usmca, bipartisan deal, phase one of the trade deal, stockmarkets at record high, something he likes to talk about a lot. how much of this tailwind can to carry him through -- can carry him through the election? todd: i think if the election were being held tonight, i think trump's odds of winning are a lot higher than they will be come november when, as you were saying, it is a lot of time between now and then. certainly time enough for some softness in economic data, perhaps markets to not keep hitting record high after record high for the next nine months. dot president trump needs to is to keep this momentum going. that is one reason why we tend to see a more dovish posture on trade policy prevailing for the rest of 2020. you can look at the phase one u.s. china deal as emblematic of what it can deliver for trump in terms of the market and likely economic impact. his economic message is the central pillar of his reelection campaign. his challenge will be to keep the atmosphere and those elements that he has got working for him now continuing to work nine months from now. i think what we will see in the state of the union is a preview of how he plans to hammer that message throughout the rest of the year. paul: after a few uncomfortable delays, we did get some results out of that iowa primary. pete buttigieg appearing to take the lead there. which democrat do you think the president will least likely face later this year? think president trump matches up best against bernie sanders. probably against an elizabeth warren too. both senators sanders and warren, further out on the political spectrum than most of the rest of their competitors. and it is that progressive pedigree that i think probably works best for trump in the swing states that we see as really critical to winning the electoral college vote. not necessarily of course the popular vote. i think former vice president biden, i think, is likely a tougher matchup for trump. there is certainly some evidence that suggests that mayor pete, i think, would not be as strong a competitor as biden. iowame sense, i think the results we have seen so far, insofar as they are infirmed by the rest of the results coming in, probably shape up well for president trump. but biden's strength will come later in the electoral calendar. we were not expecting a very strong showing in iowa this week or new hampshire next week. nevada is the first real test of biden's viability on the soft current -- and then onto south carolina where he has advantages over his competitors. paul: eurasia group u.s. director todd mariano. we want to mention michael bloomberg is also seeking the democratic nomination for president. and bloomberg is the founder and majority owner of bloomberg lp, the parent company of bloomberg news. do stay with bloomberg for special coverage of president trump's state of the union address. that is coming at 10:00 a.m. hong kong, 9:00 p.m. in new york. coming up next, disney's crusade to become a streaming giant is off to a swift start as the online service soared past estimates. how is mickey faring against netflix? that's next. this is bloomberg. ♪ is is bloomberg. ♪ taylor: this is "bloomberg markets." i'm taylor riggs in san francisco. paul: i'm paul allen in sydney. disney grabbed the spotlight in after hours trading beating revenue and profit and blowing away forecasts for its new disney plus streaming service. su keenan has more. su: 29 subscribers and three months, but is from zero to 29 million in three months. that is the take away. it is certainly what had disney stock up better than 3.5% off the bat. you can see the gain has come down as we have gotten into the conference call. as expected, starting up a new service for disney has come up -- come with huge expenses and that attributed to a 23% decline. even though the the depth -- the declining profit beat estimates. the stock has been up 30% in the past 12 months. what you heard from the ceo, bob iger, on the conference call, was they not only posted 26.5 million for the last quarter, but they continued to sign up subscribers so that they are almost at the 29 million mark. and in his words, this really exceeded even iger's own "greatest expectations." are they a challenger to netflix? it certainly looks like they have the ability. let's look at the numbers. awayix is still by far and the biggest streaming service with 167.1 million versus disney plus's 29 million. abc's own hulu is at 30.7. and you have disney plus coming in third, ahead of its own espn service. they are benefiting from bundling those services for the $13 a month. that is increasing subscriber ship across the board. direct to consumer division where streaming results are reported posted a wider loss. still less than the expected loss. the tv unit side rise -- rose 23%. eps atuarter adjusted 153 versus 184. in first quarter revenue, 20.8 6 billion. that is up 36% year-over-year. the estimate first was for 24.8 one billion. a very strong quarter there. and again, there is concern about the theme park which we did not get into. paul: let's get into that now. mickey mouse, not immune to coronavirus. what is the story? su: they address that on the call. they are anticipating a 175 million lost, at least now, for the parks because of the coronavirus in hong kong and in shanghai. if we look at this graphic, what they are expecting is the operating loss of 135 if the park is closed for two months. the hong kong theme park already closed. they are expecting a 40 million lost their. they had previously disclosed losses for the hong kong park due to the unrest that is very much affected attendance and this is all at a peak time normally for these parks. taylor: bloomberg's su keenan, think you for joining. looking ahead, we will have an exclusive interview with our guest. the challenges and opportunities and the impact of the coronavirus. that is at 6:30 a.m. thursday hong kong. 5:30 p.m. wednesday in new york. , westpac sean callow joins us to look at where the yuan is heading as beijing steps up support. that's all next. this is bloomberg. ♪ ritika: this is daybreak asia. white house economic advisor larry kudlow says the impact of the coronavirus on the u.s. will be minimal but will likely delay and export boom that was due from the china trade deal. there are more than 23,000 confirmed cases of the virus in china and at least 490 people have died including one in hong kong. the second death outside the mainland. . meanwhile, the who says almost 700 people have recovered from coronavirus symptoms. nike shares fell and extended trade after it said the virus will have a material impact on sales in china. they closed about half of its stores there and operated -- operating reduced hours at the rest. starbucks has closed around half of its chinese cafes and apple is warning of the virus impact on its supply chain. the virus will slow its expansion plans but it will still higher wealth managers for its new operation. initial results have finally been announced in the iowa caucus, although the final numbers are not yet available. first readings put pete buttigieg in front with bernie sanders a close second. elizabeth warren is firs -- is third with a joe biden a distant fourth. democrats have admitted that that the final numbers will be accurate. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am ritika gupta. this is bloomberg. paul: thanks very much. just get you some breaking news at the moment. japan's health ministry confirming that 10 people have tested positive for coronavirus. these people were on board the cruise line and diamond princess which had been quarantined when it arrived. after testing two and a half thousand crew, they are confirming that 10 people are testing positive for the coronavirus. australian markets have been trading for over 30 minutes now. we are setting up for the second straight day of gains in australia. higher by 8/10 of 1%. the lead guards and gold miners giving up the gains we have seen them put on over the past couple of days. the aussie dollar, back above $.67. enjoying a boost on easing concerns around coronavirus and of course the reserved bank of australia remaining on hold. quarters of 1%. disney and nike are among the latest big-name corporate's flagging effects to their bottom line. david ingles is keeping an eye on this story. what are some of the other key names to note here? david: absolutely. i will not into -- not get into the details of nike and disney. i want to point out what those companies represent. what they are saying is the endpoint to customers is half of nike stores in china have closed. what is not as obvious is the supply chain that gets disrupted to take the goods there. a good example of how the china story is affecting supply chain. take en day, it is halting production at its korea plaint -- plant. that is another one. macau, obviously from midnight, has shut 41 casinos, theaters, cinemas, bars, for the next 15 days. that is another thing. part of this,ead the casino operators agree not to request workers to take unpaid leave. . that is the silver lining. the other thing i want to bring up is because you are getting these disruptions here and there, and i will bring in the cruise ship in japan, companies are bound to run into cash flow problems. you are starting to see that play out in credit markets where yields are on the way up. and then you are getting spreads on top of your top-rated credit. it is really playing out across assets and across sectors. taylor: what are you looking for today? you have equity markets in the u.s. rebounding. chinese markets yesterday stabilizing. does that translate into today's open for you? david: contingent on a few factors. one would be whether or not we get additional injection of liquidity from the pboc. 1.7 trillion crossed over the past two days. it did manage to help the sentiment. although, i would mention the currency, they are guiding the currency to the stronger side, similar to what they did in august. it will be very much in focus when that comes out 15 minutes before -- a couple minutes before the open. what i want to note and i'm guessing your next guest will be able to talk more about this, is if you think about it, massive liquidity injections and a strong currency tend not to drive with one another. i'm guessing we will have to wait for the day of reckoning, which of those two things eventually gives. taylor: thank you to our bloomberg anchor david ingles. ground.te it on the in a moment, a deeper slowdown in china due to the coronavirus could have a larger spill on global supply chains. we will have that story next. this is bloomberg. ♪ next. this is bloomberg. ♪ growing into is global supply chains means a slow down due to the virus outbreak could have a larger spillover than how the past. to discuss how the global economy may be impacted by the epidemic, we are joined by global sovereign ratings analyst at dbrs morningstar in new york. great to have you. talk to me about the broader implications you see from this coronavirus relative to what we witnessed in sars almost two decades ago? >> yes, thank you, taylor. givenhave mentioned, china's increasing share in the global economy, coupled with the growing integration in the supply chain, it clearly means any slowdown because of the virus will likely have a larger spillover than the past. in 2003,e seen, back the global fallout was limited. china had just joined the wto. since then, we have seen the economy has basically grown from 1.7 trillion to close to around 14 trillion to date. also if you look at the rate of the economy, it was only around 4% of gold old -- global gdp. it is around 18% today. the role of the chinese consumer, we have seen that the income levels in china have increased from around $1400 to close to $10,000 to date. consequently, because of all of this, we do expect there will likely be a larger share today as compared to what happened around 15 years ago. paul: we have seen markets rebounding, and buying going on. do you think investors are adequately pricing in the risks around the supply chain? think what we could look at is as far as the supply chain is concerned, probably the timing of the virus limits the impact of the production site. it happened in the first quarter, it generally is a bit slow. secondly, it happened during the lunar holidays. since the lunar holidays, a lot of companies had purchased raw materials as well as components the holidays. i wanted to get the retail impact as well from you. we have heard nike has been cutting down some of their stories. we have seen an impact on tourism. disney coming out today. potentialu see as any retail or consumer impact? rohini: i think what is important to note is the chinese consumer today has a larger global footprint as compared to the past. we are likely to see an impact on the retail industry. earlier, we mentioned forecast incomes have increased substantially over these large -- last few years. apart from retail, we have seen it across sectors. whether you are talking about tourism, the luxury sector, today, china has a larger footprint. for example, in the case of the tourism sector, back into thousand two, the shares of the chinese tourists was around 2%. today in terms of volume, it is around 10%. if one looks at the spending by the chinese tourists, it is as high as 18%. likewise in the net -- in the luxury market, we have seen in 2002, china -- the chinese consumer contributed around 2%. today the share is around 35%, according to one of the reports by one of the analysts at morningstar. i think the chinese consumer is clearly having a larger role in the global economy. of dbrs,ini malkani think you for joining us. let's stay on the yuan. we will talk with you on -- talk about china. let's speak to sean callow who joins us in sydney. as we were discussing, we have seen a number of markets rebound, never mound the -- never mind the coronavirus fears. we saw as you can see in this chart a stronger vix than expected for the yuan from china. on the stronger side of seven. the offshore is nudging the seven handle. is it just a matter of time before we break through it? i think so. that is very much the risk to the markets. in terms of the new slow from china, and of the authorities have taken some steps. the central bank trying to calm things down. on the the news outbreak, the impact on business and the uncertainty for how long it will last, i think it is likely to be ongoing pressure from -- on the yuan. i would expect we spend more time above seven rather than below near-term. paul: is the flipside to this an ongoing case for you as dollar strength? certainly inllar terms of the multi week perhaps through march or so, we are reasonably up on the dollar. we think the fed is pretty comfortable with where it is. the u.s. data flow for the most part has been quite resilient. the u.s. economy is not very exposed to the export side, not nearly as much as the eurozone, let alone the commodity currencies. it does have that strong domestic markets to rely on. the u.s. dollar, i think, along with flight to safety, it will likely be very resilient over the next few weeks. taylor: i'm curious if anything of this coronavirus has changed your call on dollar-you on or you assume that seven is the level at which the chinese government will let it did. sheet -- it depreciate further, or is there a more specific call given the virus? the baseline for the end of the year for dollar china is in the high sixes. near-term, the risk to the upside, clearly as it has been for several years, the stability and the current -- in the currency is a high priority for the chinese authorities. they have immense firepower to make sure it does not get too week, does not upset the sentiment. the last thing they need to have for the local investor is to have the currency collapsing in line with the way we have the stock market on monday. i think if they keep that on a short leash, and provide some stability. where it changes the china view is in terms of growth. we are reassessing the growth forecast. . i think everybody is cutting their first quarter gdp forecast. we will be publishing new forecasts in the next week or so as we try to get a clear handle. definitely weaker growth in china. a lot less demand for key commodities. particularly australia and the impact on services and trade. . big implications for our economic forecast by not so much for dollars china forecast. taylor: in a perfect world, it would mean a yen strength relative to dollar weakness. are you surprised by the stability of the end? -- of the yen? sean: it is a continuation of what we saw last year. in terms of the balance of risk aversion, i think of august, when trade tensions were at their highest and under great pressure, the dollar-yen did not fall that far and it did not dip for very long. it is a bit of a story there. it does look as though japanese life insurers and bond investors in general are looking for those high yields. it may be historically low. compared to the 10 year jgb hovering around zero, there is -- that is attractive to those investors to have low hedge ratios and therefore to be buying u.s. dollars. dollar-yen, we do see trading higher. we see it lower in the second half of the year. back toward 105. but only if the fed resumes cutting rates which at this point, it is still the base case. but not until june. paul: australia, one of the most exposed economies for whatever is going on in china. we saw the aussie sinking towards lows not seen in a decade. now we are bounding on optimism on the virus and the reserve bank of australia staying on hold yesterday. what is your projection for the aussie dollar in 2020? sean: i think we have a head lower. i am surprised it was as resilient as it was on monday's opening. i think the travel ban for chinese arrivals is huge for australia. the tourism and education are the top five ask -- exports for australia. this is a terrible time of year to be blocking students from arriving in australia where the academic you is about to kick off. and tourism, this could reverberate for some time. . we don't know how long. and other arrivals are not so affected. but we do think it is a big hit and we have the impact on supply chains. we have had a collapsing commodity prices of australia's key exports including lng which is number three export for australia. it is down to $.65. we see the near-term risk probably back toward 66. it did get a bounce from the rba statement yesterday. they are very upbeat. we disagree on their fourth -- there growth forecast. i think the risks are very much to the downside for the aussie side. i think it is reasonable to expect 66 over the next couple of weeks. paul: you know things are grim for the aussie when we start talking about parity with the kiwi dollar. those stories have begun to surface. is that something you are keeping an eye on? sean: certainly is. we are looking very closely at it. in terms of the fair value estimates for aussie q. week, -- kiwi, if it is on the trade input, than it is a lot better. we have current account surplus here which is very unusual. new zealand's current account deficit about 3% of gdp. near-term, it does look as though australia suffers more from a china slowdown than new zealand does. rates, theyinterest meet next week. the bottom line, the terminal rate in new zealand is not far below 1% whereas in australia, the markets are pratt bashar pricing 0.4%. that is a real burden on the aussie. the base case is 101 by june. once you get down to those lively.it does get very we have seen it bounce sharply off those approaches of parity before. it is going to be a big topic i think for the next few months. paul: west bank senior currency strategist sean callow, thanks so much for joining us. stay with bloomberg. we will have more on the coronavirus. david webb is calling for hong kong to close all of its borders with china. questioning whether a partial shutdown is enough. be sure to keep up-to-date to date on this developing coronavirus story. . you can walk -- you can run the function on the bloomberg terminal. there you will see the latest global figures from the cdc and bloomberg news room as well as how specific companies may be exposed. we also have the japanese health minister saying 200 73 people aboard the oklahoma cruise ship have been contested for the virus. we have learned to 10 people from the cruise ship have already tested positive. stay with us. more to come. this is bloomberg. ♪ this is bloomberg. ♪ bloombergis is markets. i'm taylor riggs in san francisco. paul: i'm paul allen in sydney. just getting you across him of those details we have had out of japan in the past few minutes. the health minister saying quarantine in progress for the 3700 passengers and crew on the cruise ship which is packed in yokohama. more than 200 70 people will be tested for the coronavirus. 10 already testing positive. taylor: we will keep our eyes on that. want to turn to shares of tesla. jumping and sharply trimming those gains in tuesday trading. joining us now in san francisco to discuss all of this is dan a whole. come and take a look at a chart i am showing inside of the terminal. at stark at 80's -- stock 887. average analyst on the street saying catch up. are you hearing from investors from the street about this massive rally? >> there have been so many catalysts that have broken elon musk's way. you are starting to see concerns about a short squeeze or retail investors could get clobbered. it has gone up so much -- so hi, how much higher could ago? feeling thatere a institutional money for the first time is taking the stock very seriously? you have free cash flow, earnings for the second quarter in a row. can serious institutional money finally take this company seriously? >> i think we are waiting for details. we learned the saudi public investment fund cut its stake in tesla in the last quarter which raises the question of who is buying? tesla's largest tail -- shareholder raise their stake. other large investors must be buying in. this cannot just be retail. paul: is some of this a function of short squeezes as well? dana: there is short covering. i think it is up for debate whether it is a squeeze or not. a short interest in the stock is very high. there is definitely covering going on. paul: but these parabolic moves that -- never and well. is there going to be a reckoning coming? dana: it is hard to say. i feel like we are not going to get -- the next big news we are going to get is in early april when tesla announces first quarter deliveries and the company did guide on its earning call that the first quarter is likely to be soft because of seasonality. this his -- this has historically been the case. everything has been baking -- breaking their way. you are seeing companies like ford report worse than expected earnings. it is almost like the company has switched places in terms of expectations. taylor: remind us about big company. for this they moved up model why production by six months. what else can we expect to see that could be a significant change coming for? ? the company dana: we could see rating agencies move on the debt. there is going to be a battery day for investors in april where tesla will talk about their advantages and batteries. it seems to be a significant advantage. they have been working on it for quite some time. they acquired maxwell year.logies last we have never gotten under the hood to hear why they made that acquisition and what advantages it brings. panasonic reported yesterday that this a gigafactory in nevada is profitable which was a big hag -- big catalyst. paul: dana hull, thank you for joining us. let's get a check of the latest business flash headlines. the former goldman sachs banker has been banned from the industry for his alleged involvement in the missing billions scandal in malaysia. federal reserve says they failed to tell goldman that a businessman who is the mastermind of the fraud was also involved in one bond offerings that the bank handled in 2012 and 2013. they agreed to the fed's order without admitting or denying wrongdoing. the head of business for apple news app is stepping down less than a year after launching a high profile subscription product failed to attract paying readers. she joined amid 2018 and oversaw relations with publishers. news is a key part of apple's shift to prescription services. it squeezes more revenue from customers. taylor: thanks. i want to get more breaking news. china is now saying that the death toll stands at 490. that the coronavirus cases have 24,324. an additional 3887 of those cases have now been reported. the additional, bringing death toll now to 490. to 24,324.ases risen the coronavirus will take a more corporate victims as all of this fallout does continue. macau shutting down its casinos. collin mansfield joins us on that next. activists say a partial shutdown of hong kong's borders with china is not enough. we will speak to david webb. the market open is next. this is bloomberg. ♪ >> a very good morning. asia's major markets have just opened for trade. bloomberg'sing from headquarters in new york. welcome to "bloomberg markets: asia." >> our top stories this wednesday, the coronavirus death toll approaches 500. has lots down more than 50 million people. >> the game is up in macau.