And the corporate impact come up mastercard and United Airlines are the latest companies to warn that sales profits are getting hurt. Manus welcome to daybreak europe. Hedges. To hedge your the defensive positions traders have put on especially in the bond market are already being shaken to the core. The biggest oneday drop since 2016. . Hat is your hedge, and nejra nejra fish you ask yourself what caused this must don . We saw the biggest move down in global stocks, one of the biggest in 10 years. The gain in Global Equities for 2020 wiped out. That theabout the fact spread for the coronavirus outside china was causing concern, or did equity markets finally wake up to what the bond market was signaling, that that that the 30yearold yield plunging . Manus i think what are the best articles is from Goldman Sachs saying, another 25 basis points down in terms of yield. A really bad surprise would be 35 basis points. My line of choice in the bond story this morning is one punter spend 12who million on a hedge, 1. 25 . Goldmans point is that there is another part of that to come to bear. I was late with my call. The bottom line for markets is that you on and gold. Yuan is stronger. The yuan believes, that the pboc may go for rrr cut or a deposit rate cut. Is that enough . We will hear from the ceo a little later on. 2000 and counting is a possibility. Good morning. Nejra good morning. We are seeing what u. S. And european features are signaling. Japan is coming back online and that is where the brunt of the today. Are in asia the u. S. Equity market had its worst day since february of 2018, more than 1 trillion wiped out from the u. S. Stock benchmark. To give your context, in 2019, we added 6 trillion. Features are pointing to a better the us to a positive open. The yen had its biggest jump in six months. The yen could get to 120 on recession fears to do with japan. Our top story, the spread of the coronavirus to regions outside of japan is parking fears of a pandemic. 200 cases in italy, 893 in south korea, 12 dead in iran, afghanistan, bahrain, oman and iraq confirmed their first cases. The World Health Organizations called that new cases concerning but they say the disease is still not yet. A pandemic there is also word of an experimental drug being tested. Gilead and disciplines results from two trials in china to come in april. Manus meanwhile, the Trump Administration said, it asks 2. 5 billion to battle the virus. More than 1 billion would be would go to work creating manufacturing, disturbing the vaccine, according to a person familiar with the matter. The impact of the virus on businesses is being felt worldwide. Must a card and the United Airlines emerged as the latest companies mastercard and the United Airlines a much does the latest companies to warn that profits are being hurt. The u. S. Benchmark closed down more than 3 yesterday. Volatility spiked. On murray has the chart but Annmarie Hordern has the chart that shows it all. It has the vix spiking. The wall street fear gauge surged 47 yesterday. We have not seen it levels like that since february of 2018, the market almost down. What we have here is a Third Straight day of gains. On top of that, in terms of points, the seventh biggest move ever for the vix. Citi says we could see more to the upside. Analysis showing 36 as the key resistance points, level. Nejra all. Nejra eyes will be on the vix the next few weeks Annmarie Hordern, thank you so much. Joining as as the guest host for the hour is dr Nannette Hechlerfaydherbe , she is the cio of Credit Suisse. Should investors brace themselves for more drawdowns in the equity market liquid saw yesterday . Dr. Hechlerfaydherbe i think there is a period of riskoff as long as the cases will show an increased momentum especially outside china. There are still areas of uncertainty likely to bring concern to equity markets. Manus netnet, good to see you. You. Ette, good to see when you look at the reverberations we saw yesterday, three standard deviation moves on the ugly markets, you think the repricing of the equity markets is a fair value for the possible slowdown from china and world growth . Dr. Hechlerfaydherbe i think it is always certainly from different measures, difficult to say what is fair value, especially when looking at on the one hand, a period of slowdown in growth, markets are reflecting that, but on the other side as well, centralbank responses. When Interest Rates are likely to go lower, at the moment, markets are expecting two cuts by the Federal Reserve, then there is also likely to be stabilization. From our standpoint, we have a position in as at a location with respect to equities that is reflecting these two forces. On the one hand, growth concerns that are likely to also drive earnings expectations negatively , but then on the other hand, the likely responses and support that will be expected from and perhaps also fiscal policy increasing the around the world. The nejra what about the bond markets and particularly the treasury market, are they pricing in the worstcase scenario of the coronavirus . The 30 year yield plunged to fresh record lows. The 10 year yield, not far off, hitting the handle hit in 2016 . Nanette it tells us that the yields are quite low compared to where we are standing, especially in the u. S. When you think about the economy in the states, it is certainly not as exposed to exports for example as European Countries are. Taken germany, as the other case in point here for a large export orientation. States, the groove impact might not be as pronounced. Perhaps disruption in supply chains will lift a little bit the Inflation Expectations up and from that angle, Interest Rates and bond yields may seem lower. At the moment, we think that there is quite a bit of value in inflation. Manus one of the guests we have regularly on the show sent to me through an encapsulation of what Central Banks have done. Emergingmarket Central Banks have been very aggressive. We have a wave of developed market Central Banks to come this next month. 80 of the world gdp now in easing mode. Samete cuts have the veracity in 2020 as they had in in 2020 thatity they had in 2019 . Nanette when we entered the year, we didnt think Central Banks would be eager to cut Interest Rates and be even more supportive than what they had done in 2019. Now, the answer will be dependent on how the coronavirus spreading is going to continue, and what the impact is going to be on the various economies. Just as an example, for the European Central bank, we think it is likely that they will in the second quarter, most likely in june, cut Interest Rate another 10 basis points. This is not an expectation we had two or three months ago. So it is giving a sense that those economies most affected, in terms of the exports, in terms of the Growth Outlook, may also be the ones that will have to take a more supportive angle the last year. Nejra interesting, well you say that about the ecb, you continue to think the fed will be reluctant to cut. You were talking about your equity exposure and how it is neutral across portfolios. Why do you prefer to take a pro cyclical risk among commodities now . Nanette as we enter the period, we need to last hour equities exposure before the whole outbreak. We had wanted commodities as a better riskreward, because it would contain both the cyclical side, for example with energy and industrial metals, but then also a hedging aspect with Precious Metals and the gold side in commodities. We thought the risk budget was going to be better allocated in commodities. Now, we have to reassess as things continue, whether the cyclical outlook will be supportive enough for us to retain that. But for the moment, this is the rationale the us into commodities that brought us into commodities rather than equities. Manus i quite like this reading. We are debating the Goldman Sachs point about whether we have more than days, taking us down another 25 or 35 basis yields. N treasury you say that barring the recession, we expect Government Investment grade bonds to show meager returns over the tactical horizon. When you see the nearrecord lows in 10year yields, what do you do . Nanette for sure, we are underweight government bonds. Government bonds have in, in many countries, like my home country, switzerland, where you have negative yield, they have been more of an insurance in portfolios than they are a source of yields and a source of income. We have found, and we reiterate that at these levels, it seems to us that an underweight position is reflecting this new function they are having, not eliminating them completely from portfolios, because they are an important source of stability, of insurance, if you want, but then also not being too exposed. Because if we are coming to a the case is registered in terms of the viral outbreak are hitting a peak, then yields could be spiking up quite fast. So this is what you have done with respect to government bonds, preferring much more to look at alternative sources of income both in credit but also in real estate. Nejra interesting. She stays with us for the hour. Now lets get to the first word news. Harv wednesday and has been coveted of rape and a criminal sexual act, more than two years after allegations sparked the metoo movement. He was acquitted of the most serious charges including predatory sexual assault. He is due to be sentenced in march 11. He plans to appeal. Manus u. K. Prime minister Boris Johnson is facing complaints of bad faith ahead of the trade talks with the e. U. The two sides are incredibly accusing each other of backing away from past promises. Johnson rosie Spokesman Says of regaining political independence from the e. U. Would take priority over securing a trade deal. Nejra rhetoric between Democratic Candidates Bernie Sanders and Michael Bloomberg has escalated. Bloomberg criticizing sanders gun control record. Sanders suggesting bloomberg could not win a debate against president trump. Sanders is the favorite in most super tuesday states, where bloomberg will appear for the candidate. As a a reminder, bloomberg is a majority owner of bloomberg lp. 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. Coming up, paris is forging ahead with fashion week despite concerns around the coronavirus. The stories you need to know. Next. This is bloomberg. Manus this is daybreak europe. I am manus cranny in dubai. Nejra and i am nejra cehic in london. We are seeing weakness in asia led to japan. U. S. Futures pointed to a comeback, u. S. Stocks yesterday and european features in the green. 10 year yield back up slightly after moving toward a record low yesterday. The 30yearold hit its record low. Oil is on the front foot. Manus this group says they want risk. Long yen into this lets discuss the policy response to the coronavirus. Because you have the virus hammering the world secondbiggest economy. Top leaders in china edged to be more proactive in using fiscal policy. In europe, ecb officials want governments that Monetary Policy warned governments that Monetary Policy cannot be the only response. The head of the ecb says the situation is a call to arms. U. S. , fedthe president Raphael Bostic says the u. S. Economy is pretty good and that he has no impulses to change the Interest Rate. He says that while the coronavirus outbreak represents a threat to the u. S. Economy, it does not justify a change to the yet. Y at this point it is difficult to assess the magnitude of the economic effect, but the new source of uncertainty is something i will be carefully monitoring. Nejra Nannette Hechler from Credit Suisse is still with us. Pricing bond market is two rate cuts from the fed next year. Dovishfed does not turn in its outlook within the next three months, what kind of onact would it have the market . Nanette i think it would concern all asset markets because of the growth implications of it, because of the signal that the fed would be sending, it is not there to used in the fed put that to be the stabilizing force oftentimes. As yield curves have turned negative, reflecting the growth concerned, if the Federal Reserve is not changing the rhetoric a little bit to be attentive to what is taking place in terms of growth worldwide, not just in the u. S. , stillhis may very well nourish volatility in equities. Manus that volatility was resplendent. We have in certain asset classes, argued u. S. Exceptionalism, u. S. Splendid isolation in the equity market in terms of policy response and growth. That is a risk, isnt it, that the coronavirus could smash that exceptionalism. Nanette yes, there are certain characteristics of the u. S. Economy that simply are not the same as in europe are as in a number of emerging markets. This characteristic is that, this is a very large economy that depends enormous it on its own domestic economic conditions,on the consumer in the u. S. Therefore, for as long as the u. S. Is doing well in terms of the labor market and in terms of the conditions that feed a good Consumer Sentiment, the exceptionalism of the u. S. Economy, the extraordinary resilience may likely to be continued. I think it is where it might be catching up with the u. S. , is ,here inflation, where the u. S. It is obviously exposed to chain production, is in the delivery and imports of goods. That could be what eventually brings and feeds the rest of the worlds conditions into the u. S. Economy. Nejra so the rest of the worlds conditions might feed into the u. S. Economy. If they dont, should the fed cut nonetheless, or should it let other Central Banks carry the burden . If it does, will that satisfy investors . Nanette we have seen in the past that the fed does get influenced by what the curves are signaling. If the yield curve stays negative for a long time, that may very well be, in the first place, a rationale for the fed to take stock of the risk in the rhetoric. Often times, we have seen a sequencing in the u. S. Fed actions with rhetoric, and only , furthert period signals with Growth Outlook and thents, eventually, action. So i think that in the next is a sequencing that we should be anticipating. Nejra coming up, gold retreats, as investors weigh the outlook for the coronavirus. We will talk commodities next. This is bloomberg. Nejra this is bloomberg daybreak europe, i am nejra cehic in london. Manus i am manus cranny in dubai. Possible use of a vaccine, that is 18 months away. This is from the Vice President of this company commenting in a rigid interview. He says the company is about growth and security, but 1218 months, that is a long way away in terms of the vaccine. This is the debate. We heard this from the novartis ceo as well, which is why we have these moments, dont we . Through this huge amount we throw this huge amount of effort at finding vaccines. But this has caught the world unawares. Nejra every time you get headlines about a vaccine, it seems to be what feeds into some of the riskon in the markets. Compared to yesterday, the riskon his muted. Nevertheless, god has retreated from its highest levels old has retreated from its highest levels. Gold moving through seven 200 and perhaps into the 2000 range, i would not move it will it out. We are very highly leveraged to the gold price. It doesnt change how we are running our business. Nejra Nannette Hechlerfaydherbe they still with us. The you hold gold in the portfolio as protection to diversify, given your underweight bonds . Nanette gold is part of commodities and commodities is part of alternative investment at Credit Suisse. We see it as an excellent diversifier which is one of the commoditieslso have commodit as a good consummate in the portfolio. It reacts to factors that are different from the rest of the portfolio and drivers. To Interest Rates in the u. S. And to the dollar. When you are in a period a period of riskoff as we are now, when Interest Rate cuts are being priced in, then gold is reacting positively because of what is driving the price of gold. Manus can i ask you, the oil markets are in flux. We are going to be a next week, we will discover what action opec might take. You look at oil and you look at the super cycle in commodities and oil, what shifted for you . Nanette the oil market for us is always one where demand is in some sense the driving force, then supply is adjusting to it. It is the market that gets balanced it is a market that gets balanced relatively, with a couple of months of delay. My expectation is that if we are now in a period where people are adjusting their Growth Outlook for example, we have revised our Growth Outlook for china down from 5. 9 for 2020 to 5. 5 growth, that has implications for oil demand and hence it is likely that oil supply will be adjusting down in terms of production. But thisis a delay, balancing mechanism in the oil market is what is also the stabilizing eventually prices. Manus let us see what balance in things to bear next week. She stays with us nannette , hechlerfaydherbe of Credit Suisse, in the house. E. Good morning from Bloomberg European headquarters in london, i am nejra cehic with manus cranny live from dubai. This is bloomberg daybreak europe. And these are todays top stories. Persist. Rus fears u. S. Equity futures drop back gains draw back gains after 1 trillion was wiped from the stock market. 10 edge up from record lows. But it is a mixed picture in asia. Reason for optimism. The World Health Organization are deeplyses concerning, but it stopped short of labeling it a pandemic. Shares in a Biotech Group gilead jumped as the World Health Organization said a drug might be the best bet to find a treatment. And corporate impact. United airlines and mastercard are the latest companies to warn that sales and profit are getting hurt, of the epidemic spreads beyond the center of chinas hubei province. A warm welcome to you, it has just gone 6 30 a. M. In london. Story, the spread of the coronavirus outbreak to regions in italy and a wrong is sparking and iran is sparking concerns. As the cases worldwide top 80,000, 200 cases in italy, 893 in south korea. 12 dead in iran. Afghanistan, but rain, iraq and oman have confirmed that their first cases. The World Health Organization called the new cases troubling but the outbreak is not yet a pandemic. It says the experimental drug being tested by gilead for the coronavirus might even best hope treatment. Gilead anticipates results from two trials in china to come through in april. Sophie kamaruddin is in hong kong tracking this story. Good to see you. What about the efforts to develop these vaccines . How far away are they . We just heard from sanofi talking about 18 months. Sophie japan is reported planning to recommend fujifilms antiinfluenza drug to treat the coronavirus. The company is also boosting upwards on that drug that has been used to treat ebola in the past. But fujifilms spokesperson said it is not clear whether that dosage used for influenza it would be used for covid19 would be appropriate for covid19. However, shares jumped more than 8 earlier on that news. With japan taking on more precautions, we are seeing it issue a travel warning for its neighbor, south korea, as the country reported more cases. Japan joining the u. S. And hong kong in issuing a travel alert against south korea. Here in hong kong, as we wait to find out the details of how the government might tap fiscal reserves for its 2020 budget in providing relief measures given the impact of the virus, the city has said schools will remain closed until after the easter break, with april 20 the earliest date to restart. Some University Exams will go on as scheduled. The government will provide masks for students sitting for those exams. Taiwanese lawmakers have approved a special bill to whether the virus impact to virus. The nejra coronavirus concerns yesterday caused a meltdown. We are still seeing red on the screen in asia. Japan coming back on the line, leading the losses. Yesterday we saw a three standard deviation move in Global Equities that wiped out the gains of the year. The worst date for the. S p 500 since 2018. We get all the Market Action from around the world. Manus we do indeed. Lets get to Juliette Saly in singapore, Bloomberg Quint partner niraj shah in mumbai and Annmarie Hordern in london. Where should we go to first . Lets go to Juliette Saly. Im looking ats, the effect of the virus has had on Consumer Sentiment in south korea, which plunged the most in five years, when it was first. Last hit by mrs we are showing you this shock you are seeing in terms of Consumer Sentiment. If we can pull a chart, you can really highlight where we are. The reading coming in at 96. 9. Down 7. 3 points in february. This as we continue to see virus cases in south korea soar, making it the most infected country outside of china. Ofpays to what the bank korea can do to lift Consumer Sentiment. We have a Rate Decision on thursday. We expect the bank will cut 1 . S from 1. 25 to due to the spread of the coronavirus in south korea, it is likely they will actually hand the decision down online, via text message, rather than in a packed press room, where they normally deliver the decision. Nejra very interesting. Thank you, Juliette Saly. You are looking at airline stocks. They remained resilient the past few days. What is happening . Niraj good morning to all of you. Surprise surprise, Indian Airline stocks stayed resilient in the wake of what some of the other geography Airline Companies have done. The reason i bring this up is stocks, theythese are correcting about 1. 5 . It is because two brokerages, Morgan Stanley as well as hsbc, came out with notes on another airline, saying that both these companies are likely to post a loss in the fourth quarter, which is the Current Quarter for us, despite crude oil prices slipping. That is because the cost structures stayed elevated for these companies and traffic has slowed down, albeit not as much as some of the other geographies, but indian traffic has slowed down. Therefore, they are in focus today, these two airlines. Manus thank you very much. On marie, you are looking at chinas and, youre looking at china, as the coronavirus affect the demand side of the equation. Annmarie yesterday we had the benchmark index dropped 5 , one of the worst follows we have seen in the minors across industry. Lets look at china in terms of demand. Steel inventories have risen to a record. Reinforcement bars easing construction, a lot of these projects are either on hold or easinglower because construction, reinforcement construction, a lot of these projects are either on hold or going slower because of the coronavirus fears. Nejra thank you so much to all three of you. Manus. Manus indeed. Lets get back to our top story, it is all roads from the coronavirus. It has turned it in the into europes worst hit nation. A combination of bad luck, and safety protocols that fell short. Health Officials Say that the countrys meticulous search for new cases is inflating the tally. Giuseppe conti is battling to cope, as the caseload escalates to more than 200, with six deaths. Credit suisse is with us. How italy grapples with this out rick is being monitored on a minute by minute races. But the risk raises a much bigger conversation about the economic risk to italy and the risk to europe as a whole. Do you think we are sufficiently pricing the risk to europe . I look at the yield curve for germany, now in negative territory. Talk me through the risks at the moment in europe. Nanette we have already in the space of the last four weeks, as we have seen the situation develop because of the exposure of europe in particular and some countries like germany to exports, we have already started to downgrade our economic outlook. For the eurozone as a whole, we used to have a growth forecast of 1. 5 . 0. 9 for countries like germany, that are very much trade. To international it will mean something to 0. 3 of growth in our base case. That spreading goes to europe with further disruption, and further with services, remember, services and consumption is what has been really Holding Growth around the world. Forum and stable throughout this period and before firm and stable throughout this beirut and before. Now they are starting to get impacted because people cannot travel the way they want to, they cannot come home. They cannot consume. Ecommerce is not as widespread in europe as it is for example in china, then there may be also grounds to revise even further the outlook in europe. But for sure, we have already started to take off some of the expectations because just q1 and q2 is likely to be directly impacted by what has happened first in china, and we may be going through a slower period cause of european spreading. Nejra what is interesting is that on friday, we had pmis showing improvement. Yes, a lot of them are still in contraction territory but an improvement nonetheless,. The index showed unexpected improvement in february. I wonder how you integrate that information into your european strategy. Do you stay away from europe in the portfolio . Anette we did not take very aggressive stance toward equities. The one market we thought was offering a window of Opportunity One month ago to which we took exposure in europe was the u. K. Equity market. We will be monitoring this closely, of course, but there hasnt been as much exposure for us to really review very actively. We thought that with respect to german equities, there was a case to be made for them. This, we will have to carefully assess at the moment. I think, however, also for investors who are looking for opportunities in equities, it has to be mentioned that dividendpaying stocks are the way to go through a period of heightened volatility because of the driving factor of return in the longterm that dividends represent. So i think opportunities at the moment, where there is a lot of scare in the market, a lot of uncertainty, but as well, opportunities for investors. Manus nannette, thank you so much. You will stay with us. A bit of breaking news coming through on the oil market. This comes from prince abdulaziz, the saudi oil minister. We have seen oil spike higher, 56. 74. He says the confidence in an opec deal. What is the size and the scale . This is next week. Annmarie hordern and the rest of the team will be on the ground. What is the size and the scale of the reaction from opec , and are the russians on board . That is what we want to know. He is confident. Just how confident, what is the size and what is the scale . Nejra coming up, paris is forging ahead with fashion week despite concerns of the coronavirus. The story you need to know is next. This is bloomberg. Nejra this is bloomberg daybreak europe. I am nejra cehic in london. Manus and i am manus cranny in dubai. The coronavirus has put the spotlight on Fashion Industries biggest month. Fashion weeks from new york to milan are taking a hit. It stems from the spread of the virus. One lady with everything you need to know, the fashion is to of the newsroom, Annmarie Hordern. [laughter] milan some Brands Fashion weeks, michael kors canceled an event. Giorgio armani electromed a video of his show from an empty theater. Those who forge ahead have to do so without the usual number of chinese models and celebrities socialmedia whose social media posts and orders are key to the market. , take new York Fashion Week based on online posts by asian celebrities and influencers, there was a fall of 7 in value versus 2019. China is key because it accounts for more than one third of luxury purchases. Due to the virus, we have seen spending grind to. A halt the next focus is paris, dior do your and where and others say the show must go on. Nejra lets stay with us story. Joining us to discuss is our Bloomberg Opinion columnist, andrea olmsted, and still with us dr. Nannette , hechlerfaydherbe. How quickly can fashion week bounce back from this . Andrea fashion week is only a part of the fashion cycle. They are about creating a buzz for the brand. So if that does not happen, that is a problem. But as we have seen, the designers can livestream, there is a lot of technology coming into the industry anyway. Most shows are live streamed anyway. But there will be less of a was, and that is what these shows are for, they are big showcases for the land and the brand message. Something onceo online, as george our money did yesterday to an empty theater, the whole thing might go digital. Here . S the biggest risk is it the travelers from china . I had a big ceo in here yesterday who runs major malls. Is that the biggest risk, traveling Chinese Tourists in lockdown . Andrea the biggest risk is that most of the analysts are expecting this to bounce back in the second half of the year. Looking for about 5 growth in luxury sales. Now they are looking for 1 . As things have developed over the last few days, i think there is a big risk of that that is going to happen. We translate this more broadly to ask ourselves the question we think many investors are asking, whether the coronavirus risks poses demand delays versus demand obstruction . Nanette for the time being i think it is still demand delays come but that is the base case of most investors for sure, as well as for us. At Credit Suisse, certainly, we have adjusted profiles. This has an impact on overall growth and expectations, but it is not really disruption that we are looking at. So the effect of an top demand that is in some sense being hindered for a while bentup demand that is in some says being hindered for a while will come back online and ensure the trends in every industry that is cyclical. So i do believe for the time being that the best case is that a delayedmporary, and shock rather than a more persistent one. Manus i look at some of the names on your Global Equities strategy, and i am drawn to lvmh and bmw. One is highlythat lvmh. To luxury, it dropped 7 , the most in 16 months, yesterday. When you see big repricing in core names on the portfolio list , does it make you want to put more money to work in some of these key names . Nanette i think this always has to be carefully assessed. When we look at Luxury Brands generally and the consumers seem, we feel confident that over the longterm, consumers are really looking in good shape both in developed markets as well as in emerging markets. Important factors are very good labor markets sentiment that could come back as well quite quickly. I think that from that angle, we are happy with the stock picks that we have decided, but there is always a Risk Management aspect that investors have to take into account. Cyclical sectors like luxury will bring periods of volatility and hence draw down when there is uncertainty. This has to be managed on a casebycase basis in portfolios. We are certainly very attentively monitoring all of our stock recommendations but we feel that the underlying longterm things are not questioned. Nejra i think what the coronavirus has highlighted for many companies, outside of luxury, like apple, is the danger of high china exposure. Any kind of longterm shift in the luxury industry if the coronavirus risks and impact persist . Andrea i think we could. Last time, the brand pivoted to marketing to local customers. We could see that again. We had a big boom over the last three years from the chinese consumer. They have lost size to those local consumers. I would expect to see more focus on those again. Manus ok. Thank you very much, our opinion andmnist andrea felsted, dr. Nannette hechlerfaydherbe from Credit Suisse. You stay with us. To head, your head because it ubs Global Wealth management says it prefers emerging markets over eurozone stocks. What does Credit Suisse think . Headtohead. Right here on bloomberg. Thmanus this is bloomberg daybreak europe. I am at manus cranny in dubai. Nejra and i am nejra cehic in london. Chinas relative success in containing the coronavirus has made ubs logo was management prefer emerging markets stocks over eurozone equities. Lets go to Annmarie Hordern. Annmarie another day, another note about coronavirus. Ubs says they see opportunity in emerging markets due to the fact ,f how well china has contained a lot of these containment measures. Say Msci Asia Pacific excluding japan may mean that this is an opportunity to buy. As opposed to europe. What this means for the economy in europe. If they were to start doing aggressive containment measures, growth. Ld mean lower what they are saying is they like these stayathome stocks fooddelivery, gaming, etc. Manus order those takeaways. [laughter] Annmarie Hordern, thank you very much. The very latest from ubs. Lets bring that proposition to Credit Suisse, Nannette Hechlerfaydherbe is with nejra and myself. As far as ubss proposition, explain to their and i how you differentiate em, your current status on em. Nanette emerging markets for us is not one aggregate that is having the same story, it is a compilation of very different stories. For example, there are countries that are oil importers. Take india is a good example. These will be benefiting from a period when oil prices are low. In contrast, those that are Oil Exporters will obviously be hit. The same goes on a number of different areas. Group, not a homogeneous is the key message from us. We like a number of countries very much and take exposure to them. For example, in latin america, we think at the moment that there is good value. In emerging markets, there is always this valuation advantage we are very attentive to. On the other side, in asia, because it has been the center of the outbreak, at least initially, we have taken a bit of a more neutral stance for the time being. But china is heavyweight in there and have also seen in past episodes with sars for example, that once the peak is hit in terms of the cases registered, this tends to be a good moment then to consider this type of market. So i think at the moment, we are unusual for emerging markets equities overall, but we lack specific countries like brazil and turkey. Nejra chief Investment Officer of international Wealth Management and global head of economics and research, great to have you with us. Research, great to have you with us. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Nejra welcome to Bloomberg Markets the european open. We are live in the city of london. Im anna edwards alongside matt miller in berlin. Matt good morning. The markets ask is the worst over . Yesterdays exit is from risk asset shows signs of letting up. European and u. S. Equity futures both advancing in the cash trade trade one hour away. Matt coronavirus cases top 80,000
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