Transcripts For BLOOMBERG Bloomberg Daybreak Americas 20240713

Said yesterday, you know very well what you said yesterday, it was a big story. I just dont know how they cannot recuse themselves for anything having to do with trump or trumprelated. The right thing to do. As a Supreme Court justice, there is a different standard. At the same time, i think it is a higher standard in a certain sense. Her statement was so inappropriate. When you are a justice of the Supreme Court, it is a like what you strength to do is take the people that do feel a different way and get them to vote the way that she would like them to vote. I thought it was so inappropriate, such a turbo statement for a Supreme Court justice. What was inappropriate about the statement . I am not an attorney, so i cant she seemed to criticize the white house for running to the Supreme Court at the drop of a hat to seek pres. Trump no, that wasnt it. I think she is trying to shame people with perhaps a different view into voting her way. That is so inappropriate. Lets see what happens. We have things, whether or not they will recuse themselves, look, Justice Ginsburg during my campaign, she apologized in a very minor form. What Justice Sotomayor said yesterday was highly inappropriate. Everybody agrees to that. Virtually everybody. I have seen papers on it. People cannot believe that she said it. Go ahead. President. U, mr. The Intelligence Community believes russia is trying to meddle in the 2010 election. The you agree with their assessment, and what is your message to Vladimir Putin about potentially interfering regardless of the candidates they support . Pres. Trump they went to see bernie and they told bernie about something having to do with the want bernie to win. They did not tell me. Intelligence never told me, and we have a couple of people here that would know very well. They never told me anything about that, it was a strange thing that they want to bernie. Out, if i believe what i read in some of your documents and some of your papers, that it was highly exaggerated, and frankly, i think it is disgraceful that i think it was weeks from the intelligence committee, the house version, and a think they leaked it. I think probably adam schiff leaked it. Shes licked it, in my opinion. He shouldnt be leaking things adam schiff leaks it in my opinion. They shouldnt be leaking things like that. Bernie looks like he is winning. He has. And maybe they dont want him from use reasons so they put out the thing that russia is backing him. This is what they do. I have gone through the long time. I get it, i get the game better than anybody. That is the way it is. A terrible thing to say. I will say this, somebody leaked it in intelligence, but nobody ever told me that. We have ambassador obrien in the audience, he can tell you that this was never discussed with us. I think it is terrible, they have to stop the leaking from the intelligence committee. If they dont stop it, i cant imagine people will not go after them and find out what is happening. Go ahead. Reporter mr. President , from indian tv news. The way the deal is being worked out, what would be indias role and pakistans role in the region . Pres. Trump i think india would like to see it happen. I spoke with Prime Minister modi and i think he would very much like to see it happen. We are pretty close, we will see what is going on. We have two days under our belt with no violence or i guess a minimum of violence. We will see what happens. It is very interesting. Everybody is happy about it, even people that are normally against me, like 99. 9 of the time. Because we have been there 19 years. Everybody would like to see it happen. I was actually surprised, i thought the schumers of the world would say the opposite because that is all they can do. But people really are happy to see that we are trying very hard. We are going to bring it down to 8600 and from there, we will make a decision as to what the final outcome will be, but there has been tremendous praise for the fact that we are doing something. Other administrations have tried to do something in particular, the Previous Administration for a long time. They were never able to do it. We are really serving not as a military force as you are a police force. We are not a police force. They have to police their own country. We are not a police force. That is the way it is. So we would like to, after 19 years i can tell you, after 19 years, we would like to bring our young people back home. That is where they want to be. We will always have intelligence, they will have other things, but for the most part, we would like to bring them home. We want to watch the area, it is a hotbed of problems. When we bring them home, we would let them know that if something had is, we will hit them so hard. We could win that easily if it wanted to kill millions of people i dont want to kill millions of innocent people. We could win easily. We dont have to act as a police force, we could act as a military force to win, not a police force to take care of things in that very, very difficult part of the world. It is a very difficult, very dangerous part of the world. So that i see what happens. So far so good. But i am very impressed with the kind of kudos we are getting. Yes, please. Reporter mr. President , namaste. I interviewed you during your last campaign. In new jersey. I asked you this question at that time about the trump doctrine that the trump doctrine on fighting islamic fundamentalism. You talked about the moditrump doctrine. What is your roadmap to counter Islamic Radical extremism . Pres. Trump i dont think anybody has down as i have. Check your maps and look at iraq and syria, it was all over. In fact, they had it painted a certain color, i will not tell you what color because it doesnt matter. Somebody will say it was a republican color, so i dont want to get it confused. It happened to be read. It was basic it happened to red, and it was showing where isis was in those areas, and it was out of control. I gave the orders, and you have 100 of the caliphate. Tens of thousands of people in prisons being guarded by the kurds and others. We did europe a big favor, we captured them. I did that. Killed albaghdadi a few months ago. Gone. Leimani, he is he is no longer putting roadside bombs of over the place. Somebody else may be, but he was the father, the king of the roadside bomb. All those young people you see with missing legs and arms. I have seen every combination. Of the legs are gone. You go over to walter reed, i have to say, the doctors at walter reed are incredible, what they have to do, it is incredible. He thought that was a beautiful weapon. A roadside bomb. It is a cowards bump. All these young people that have been so badly hurt it is a cowards bomb. All these young people who have been so badly hurt. In addition to that, hamza bin laden is now gone. He was looking to do damage and he is gone. And al qaeda last week, you saw what happened. Nobody has done more than what i have done. At the same time, russia should do it. Iran should do it. Iraq should do it. Syria should do it. We are in a different part of the world and we are doing it. Everybody says we are the only was the conduit. At some point, everybody says we are the only ones who can do it. Iran should do it. Iran hits isis and they should do it. We have done a great job. We have taken our soldiers essentially out of syria except for a few hotspots. But we have taken the oil and the soldiers we have there are the ones guarding the oil. We have the oil. That is what we have there. If you look, we are down to a small portion of iraq. A small force. Even now, we have a small force in afghanistan. So we are moving out and moving around. The only soldiers we have in terms of syria, the predominant number of soldiers are the ones guarding the oil. Reporter what about terrorist groups in pakistan . That is a big concern in this region. There are a lot of terror groups will pose a danger to the u. S. And democracies like india. Pres. Trump i agree, but you also have other countries who can do this. The u. S. Is 8000 miles away. They are all saying, could you do it . We have been doing it a long time. I have been doing it much better than anyone else has done. What we have done in the last couple of years has been incredible. Caliphate. of the remember, we had 99 and i said, good, we are leaving. And i was hit with, people couldnt believe it. They said, do 100. 100. Did i did 100 with some great generals who knew exactly what they were doing. They were unbelievable. And we have thousands of prisoners right now locked up. Isis fighters. Who killed thousands we killed thousands. Not that i want to do that, but that is what we had to do. When i came in isis was all over the place, totally out of control. Please. Thank you. Reporter while you have been here in the country, in the northeast part of daily, there have been violent northeast part of delhi, there have been clashes, nine deaths so far and 100plus injured. What did Prime Minister modi say to you about this amended citizenship law, and how concerned are you about this kind of religious violence; we did talk about religious freedom, and i will say the Prime Minister was incredible. Pres. Trump he told me he wants to put have religious freedom. He said in india, they have worked very hard to have great an open religious freedom. And if you look back at what is going on, relative to other places especially, but they have really worked hard on religious freedom. I asked that question him in front of a very large group of people today, and he talked about it, we talked about it for a long time. I really believe that is what he wants. As far as the individual attack, i heard about it but i did not discuss that with him. That is up to india. Go ahead, please. Reporter Emily Goodman with daily mail. Com. Do you think justice was served in the Harvey Weinstein case . Pres. Trump i was never a fan of Harvey Weinstein, in fact, he said he would work hard to defeat me in the election. How did that work out, by the way, i am trying to figure that out. He was a person i did not like. I dont know too much about the case [indiscernible] traveling and being at meetings almost every hour of the day, every minute of the day. I havent been able to see too much of it. But i was not a fan. I knew him a little bit, not very well. I knew him because he was in new york. Not a person that i liked. I will say that the people that liked him or the democrats. Michelle obama loved him. Loved him. Hillary clinton loved him. He gave tremendous my to the democrats. I guess my question is, will the democrats be asking for that money back . Because you give a lot of money to the democrats. Too bad. But that is the way it worked out. Yeah, peter. Reporter just wanted to followup on that quickly if i can. I have a question on the Harvey Weinstein situation. This is being viewed as a milestone for the me too movement. What message can you as president deliver to women in america who are still afraid to come forward and share their stories of Sexual Harassment and assault . Pres. Trump again, i dont know the actual results. I have been in india, as you know. I think that from the standpoint of women, i think it was a great thing. It was a great victory. And it sends a very strong message. Very, very strong message, peter. Reporter can i follow up. Reporter , quickly on the coronavirus specifically, 2014, when the ebola situation was very concerning, you tweeted, ebola patients will be brought to the u. S. In a few days. Now i know for sure that our incompetent. In all caps, you wrote keep them out of here. More than 20 americans have now been brought back to the u. S. With the coronavirus. Does that mean your government has be incompetent . Pres. Trump in case you dont know, there is a difference between ebola and the coronavirus. Big difference, it is like a day or night. I feel like we should bring back the americans. We should bring them back. With ebola, it is very expensive. We are making strides on ebola with the things you are doing, as you know. Let me answer the question but there is a tremendous, vast difference. At that time, nobody had ever even heard of ebola or conceived of something where you basically, people would disintegrate. Ebola. Still working on reporter to be clear, you are pres. Trump we are doing a vaccine. We are not forgetting about ebola. It is horrible. We have that now very much under control. Parts of thertain congo where they have war and we cannot get in. But were still working on that. But as far as what were doing on the new virus, i think we are doing a good job. Doing a great job. I felt that the decision that was made in japan, let these americans come back and they were amy lee put into quarantine. As you know, we approved i approved 2. 5 billion for just that purpose, and also for working on getting a vaccine. Reporter for clarity, those with ebola, when they were brought here, they were quarantined. And all americans also survived. Pres. Trump the level of death with ebola, at the time, it was a virtual 100 . Reporter but none of the americans who came here. Pres. Trump it was a good chance youre not going to die. It is very much the opposite. You are talking about 1 or 2 , whereas in the other case it was a virtual 100 . Now they have studied it. We are very close to a backseat. Go ahead. Go ahead. Reporter hi. So, how do you define, with theiate and deal the of in india, and h1b visa in america. Pres. Trump we are talking about the h1b visas. This is not from me, this is for dust from almost everybody, they say that the history of india, a long and brilliant history in so many different given to never been somebody as it was given. Nobody else that came here got the kind of reception we got. It was 125,000 i think seats that they had yesterday. Thousands and thousands of people outside. Prime minister modi was telling me, thousands of people outside. That is not uncommon for me to be honest with you. But when i look at 125,000 seats, that was an incredible scene yesterday. In addition, all the people lined up from the airport to the event. It was in a critical thing. Nobody has ever seen anything like it. The ambassador just told me that he has been in india for a long time. He has never seen in fact, both ambassadors, our ambassador end the ambassador from india, said that in 40 years, they have never seen anything like it. Earlier than that, but yesterday, that they had never seen anything like it. That was a good complement to our country. I am a leader of the country but i am the leader of our country but it was a great complement to our country. They said, usually when somebody comes in, they have to look for people to fill up the areas, they said. There was something very special. Look, it is a massive country in terms of its population. And people just wanted to see they wanted to pay their respects to the United States. I appreciate it it. I was a recipient, but i was just here are present in the country. Peter . Nini mr. President , your newly installed personnel director has began talking with agencies about finding people in government who are not loyal to you and perhaps moving them on. How large a list do you imagine this will be . The you imagine this will be a big problem . Can you describe the them as you see it . Pres. Trump i dont think it is many people, i think we had a whistleblower who is fake. As an example, if you look at his report and compare that to the transcripts, it bore no relationship. That was a very sad situation, a lot of time wasted, though you wrote very nicely, the poll numbers have gone up very much, but that is not appropriate to benefit by Something Like that. There was supposed to be a second whistleblower. As soon as i released the transcripts, the second was a war was gone. What happened to the second whistleblower . Ill ask you, where is he. He or she . The second whistleblower was never going to happen. Then i released the real phone call, the transcripts, which are now 100 accurate even according to Lieutenant Colonel vindman. We want to have people who are loyal to the country. Because that was a disgraceful situation. Yes . Reporter mr. President , i am from a parliamentary channel of india. Maybe you have seen it. Even Prime Minister modi said youre very good friends. What do you think about the religion that is coming out from pakistan to india. The terrorism that is coming out from pakistan to india . We have been suffering . From it for years . What are you going to do . . Pres. Trump we talked about pakistan. I have a Good Relationship with khan. Minister we talk about it at length with Prime Minister modi and it is no question, it is a problem. They are working on it. India is a brave nation. There is no pullback from india. We just hope, and i said it will help. I will do whatever i have to do if i can, because my relationship with both gentlemen is so good. But there has been difficulty in pakistan. We are seeing what we can do about it. Everything i can do to immediate and help, i will do. They are working on kashmir. It has been a thorn in a lot of peoples sides for a long time. There are two sides to every story. We discussed it at great length, terrorism. I think we have some very good ideas. He is very strongly against terrorism. Ill tell you, Prime Minister man, ofa very religious calm man man a very but also a very strong person. Very tough, actually. I have seen him in action. He has that foremost in his mind, terrorism. Hell take care of it. Please. Go ahead. Right here. Mr. President , thank you. We would like to take you through todays meetings. Before coming to india, you said a trade deal would be later but sometime soon. In the morning, you spoke about Energy Security and energy deals. You said other sources also. We would like you to elaborate on that. When you are talking Energy Security and energy deal, what are we looking at . Pres. Trump we talked about many things. Iraq, we about iran, days. Ogether for two i will be with Prime Minister modi tonight for a state dinner we7 00, i believe, and talked about exactly all the things youre talking about. We also talked about tariffs, because as you know, india is probably the highest tariff nation in the world, meaning charging tariffs to outsiders. I said, we have to stop that, at least a as it pertains to the u. S. I think were understanding each other. With china, we worked a deal and we worked it because of the tariffs and i was able to leave the tariffs. We will take care of phase ii. In the meantime, we are working with china very much on the virus. We feel that is something. I have to tell you, i spoke to president xi the other day, and he is so committed to solving the problem, working very hard. He is very capable. The country is very capable. It snuck up on him, but i think he is going to do well. Now you will see it is going to south korea, to italy and two other places. I spoke to all of them. They are working very hard on it. The United States, because of an early decision i made, i made a decision, i believe it was the first time it has ever been done, we close the country to certain areas, as you know. I was criticized for that decision. Now they are saying it was a good decision. Because we have very few people. You can add to it a few people that we took in because they are americans. What are we going to do . They were in between countries where people were not going to take them. And they are americans. But they are fully quarantined. They call it fully quarantined. We did the right thing. If you were out there if you are an american, and you refused to have any help from your country these were wonderful people, it was not their fault. We are really down to probably 10. Most of the people are outside of danger right now. But we have had a very strict line on the people taken from areas from which we take. I did it very early. It has never been done before, and i did it early. So i think it was a good decision, as it turned out. Please. Reporter just wanted to followup up on my colleagues question about russian interference. Can you pledge to the American People that he was not accept any foreign assistance in the upcoming election, and on this idea of a purge in your administration, there was recently the departure of your acting dni, joseph mcguire. You replaced him with your ambassador to germany. Medics have pointed out that renell has noeg intelligence experience. How can you justify to the American People having and acting director of National Intelligence with no experience . Pres. Trump first of all, i want no help and have been given no help from any country. Cnn, wonderful network. I guess they apologized in a way that didnt they apologize for the fact that they said certain things that were not true . Tell me, what was the apology yesterday, what did they say . I think mr. President , our record on delivering the truth is a lot better than ours. Pres. Trump your record is so bad, he ought to be ashamed of yourself. The worst in the history of broadcasting. As far as maguire is concerned, he is a terrific guy. On march 11, his time and it anyway. We would have had his time anyway, so by statute, we wouldve had to change it. Reporter will your new odni have experience. Pres. Trump we are talking to five people right now and i will make a decision in the next week to two weeks. We have some very good people. But maguire is a very excellent guide, a very good man. His time was i believe march 11, when he wouldve had to leave. Reporter was he brought down because he was not sufficiently loyal to you . No. Trump he was not pushed out, on march 11, he wouldve had to leave. But we will be making a decision on a dni very shortly. Go ahead, please. Trump mr. Pres. Trump europe to the themic outripped of her hand. Reporter mr. President , i hope youre having a good time in india. We heard from Prime Minister modi as well as you on a longimpending trade deal. Still not happened. We heard both you and him talking about how in the future there is going to be one. Have you been able to figure out the kind of differences that were there, especially on data localization . That has been one of the sticky points . Pres. Trump we know the problems. Previously, the administrations have no clue. I know the problems, we are being charged large amounts of tariffs. Cant do that. Cant do that. So they understand that that is where i am. If they want to deal with us, and they will, they are going to. Just like china, everybody said, you will never make a deal with china. We made it 250 billion worth of product. That is only a piece of the deal. A large piece. It is probably 40 to 50 , but deal. An incredible in addition, we are taking billions of dollars worth of tariffs that we can use for phase ii. Because they want to get rid of the 25 . Well, with india, india is i think the highest again, i said it before the highest tariffs. When you deal with india, Harley Davidson has to pay enormous tariffs when they send motorcycles here. When india sends motorcycles to the u. S. , it is virtually no tariffs. For the most part, absolutely no tariffs. I said that was unfair. We are working it out. We are working it out. [reporters shouting questions] pres. Trump go ahead. I think we will win easily. We are working on that one. Reporter good evening [indiscernible] pres. Trump when a company is tariffs on numerous companies, not just Harley Davidson. Actually, tariffs were raised not too long ago. We also did something. It was a form of rent control if you put it in a different sense, given to india and we terminated it, you know that. No, we are talking. We have great discussions. Look, i cant lose this. I cant lose it. I never lose. It is too easy. Because i want reciprocal. It has to be reciprocal. The money you are talking about is major, but the United States has to be treated fairly. That. Understands the relationship is outstanding, but india understands that. We have had a tremendous deficit for many years with india, with everybody, was frankly so many different countries. A massive, massive deficit. But a large deficit, 30 billion with india. It is down now to 24 billion because of what we have been doing. Still, that is too high. We should have a 24 billion deficit. With other countries, we have more than that. Japan, we are doing now 40 billion coming in. A lot of good deals are being made. They will be kicking in toward the end of the year. If the deal happens with india, it will be toward the end of the year. If it does not happen, it will be something else. Reporter you said at the time of the article 370, that you cashmere. But india kashmir, but india rejected it . Pres. Trump wait a minute, i never said anything about that. I said there is a big problem between pakistan and india and i think they will work out their problem. But i will say, they have been doing it for a long time. Position what is your at the moment on indias citizenship Amendment Act . Pres. Trump i dont want to discuss that. I was to leave that for india. Hopefully the limits the right decision for the people hopefully they will make the right decision for the people. Reporter thank you, mr. President. I am an indian journalist, and i a very simple question. Now, back home, when you reflect on your tour of india, the first diplomatic visit to the country, how would you describe it, our cultural diplomacy, or do you that . Ny words for pres. Trump first of all i would describe it as incredible, because when i look at the various things, like today have been listening to President Trump speaking in india at a press conference. Some of the highlights were the true deal between india and the u. S. , saying it could happen at the end of the year. He is working on it when it comes to tariffs. He has urged president modi to lower tariffs on the u. S. It seemed like it was a good meeting. Things came out of it in terms of india by an energy and in terms of a defense deal, yet those tariffs and a potential trade deal are still up for grabs. In the markets, it was a brutal day yesterday if you were long equities. We are seeing some stabilization in the equity markets. But european equities are consistently rolling over. Exposed to sectors like china 7. 5 . Now down in the 50day average. We will want to see if it can hold that level in which the 100. That would accelerate some selling. You can see the fall off from other asset classes. Option, the twoyear the three month 10 year continue to roll over into negative territory. Now down 17 basis points. The 10 year really flirting with the record lows. We see the dollaryen finally getting a safe haven bid. It did not get that yesterday. Will that continue, is a question. The vix had a huge dump, holding onto that, its urged the highest in more than a year. Gold as high, it had a monster yesterday. Is this a positive the selling, or are we going to find destabilization . Lets give you the news around the world. Time now for the global exchange. First up, we will talk about beijing, new delhi, new york, charleston, South Carolina. Our bloomberg voices are on the ground with the top stories. We begin in asia with the latest on the coronavirus. The infection rate now topping 80,000 worldwide, with cases in south korea rising to 900. Joining us now in beijing is selina wang. The rate ofhina, infections continued to show stabilization but it is the spike abroad. That is concerning south korea has become the worst affected country in china. Now nine reported deaths. The u. S. , japan and hong kong have issued travel warnings to the country. Singapore is going to ban all shortterm visitors to the country with a recent history to the region of the outbreak. Even though the virus is now in more than 30 countries and territories, and global cases 80,000, i want to remind the viewers that the majority of the cases are still province,n hubei where the Chinese Government maintains strict control on some 60 million people. The who has said that while the spike in infections outside china is concerning, at this point, it has not reached pandemic level. The organization said in addition that the only thing that might be able to treat the coronavirus symptoms is an experimental drug. China said it will release results of a Clinical Trial of the drug on wuhan patients on april 27. Alix thank you very much we go back to india, where President Trump is wrapping up his twoday visit. We just heard him from new delhi. Joining me is our Bloomberg Government editor. We heard a lot the last 37 minutes. Walk us through some of the highlights of the presser. Talkedhe president has about tremendous progress on a deal with india, and he will continue to talk with Prime Minister modi today on the final day of the visit. He sees the country as key to American Assets to block chinas influence in asia. While officials have tried to hammer out a modest trade deal between india and the u. S. Before the president s visit, that is yet to materialize. While trump is optimistic a deal can be raised, it might not happen until after the u. S. Elections. Still, the two countries did sign a 3 billion arms deal, and they pledged closer ties on Maritime Security in order to deal with chinas growing power in the indo pacific. Noticeably, the u. S. President lavished his praise at Prime Minister modi even as indias capital again interrupted in deadly protests over modis citizenship amendment law. Alix thank you so much. I should update you on more that. Nes from President Trump saying he is watching venezuela closely and could sanction them more. It is a big week for retail. Macys, home depot, out this morning. Joining me on the phone is our Bloomberg Opinion columnist. They are both up in premarket . Guest which is a pleasant surprise for the retail landscape, where we have had some rather disappointing numbers. Home depot coming with a strong showing for the holiday season. It is important because remember, it had to cut its guidance twice last year. At the time, analysts said it was a reflection of Strategic Initiatives taking longer to play out than any statement on the consumer, and were certainly seeing that in the morning. F this the ceo specifically calling out the strength in the u. S. Consumer for that strong result. They are seeing a more than 5 comparable sales growth in the fourth quarter. Turning to macys, they did see a decline in instore sales in the fourth quarter, but they are declining less than they have been, which for macys, a company that has really been positive. , it is a of course, you wanted to see the number turn upward over the course of time. They rolled out of that significant Restructuring Plan last month and we want to see some results coming through for that. They are looking for sales to be down more in the coming year than they were in 2019, so still a ways to go, but still some progress. I think that is good to see, especially at a tough time for retail. Alix Brooke Sutherland of Bloomberg Opinion, thank you very much. The impact of the coronavirus is being felt by big businesses. You now have united airlines, mastercard and apple emerging as the latest companies to warn that sales and profit might get harmed by the virus spread. Joining me from new york is dani burger. Walk me through what we heard from mr. Cut and united. They said mastercard is down in premarket. This last forecasting. Travelers will be holding back because of coronavirus concerns. I should point out a change in leadership at mastercard. We learned of a new ceo coming in he will become the ceo 2021. But for these other companies, the coronavirus is front and center. United completely scrapping its 2020 outlook. But it is not just the forecast, it is the on the ground data. Apple, according to ubs looking at chinese data, says apple iphone sales in china fell 28 in january. This is when the coronavirus was emerging. So ubs says that february is likely to be much worse. We are getting the peak of the virus. All of these are anecdotal individual cases, so it is easy to brush off, but the data is compelling when you look at the whole. As a so far, about 180 companies on their Conference Call for earnings have mentioned coronavirus risk. That is 10 trillion of the u. S. Market cap saying they are concerned. By far, the majority have said this is something they are monitoring. The effects will be small and manageable. A smaller amount said there will be drastic impacts from the virus on earnings, but the amount is growing. That has analysts concerned that it is not just in supply chain anymore, it is the virus spreading and infecting the supply and demand picture. Alix thank you so much, bloombergs dani burger. Announcements happening here in london, bear with me as we have a loudspeaker going. Several Democratic Candidates will meet in South Carolina for a last encounter, before the primary on saturday. Joining us from charleston is kevin cirilli, bloombergs chief washington correspondent. Kevin hey. The big showdown is tonight at debate. Bernie sanders, fresh off his nevada caucus win, trying to ride the momentum and clinched the democratic nomination. Last night at a cnn democratic town hall, the senate are saying that even if he doesnt obtain a 1991 delegates needed to officially clinch the democratic threshold, if he gets a plurality of those delegates, he feels that he should still be the nominee. Former Vice President joe biden saying, not so fast. He is hoping to be fueled by africanamerican support here in South Carolina ahead of this weekends contest, hoping that that will give him a bounceback of sorts heading into super tuesday, one week from today. The other candidates also making their case, including pete buttigieg, amy klobuchar. And is a beth strong showing in andas last week elizabeth warren, off of that strong showing in the las vegas debate last week and michael will be on the stage as well. So lots to look forward to tonight, one of the final opportunities for all the candidates to make their pitches not on day 2 south carolinians, but all the voters at the super tuesday contest. Alix kevin, thank you very much. Stay with bloomberg, we will have coverage and analysis of the democratic debate in trust in, South Carolina. Now we move to the markets. Time for the bloomberg first take, the news, the trade and analysis of the markets. Joining me, wall street veterans and insiders. We are dealing with a loudspeaker, it is tough. You might not hear it at home, but this will be impressive if we can get through this segment. [laughter] so, what do you do today . It should be turnaround tuesday. It should be an opportunity to buy the dip, but i dont think the particulate opportunity. It is a little worrying. In the context of the trend. And we have more to pull out from this. Alix to your point, we are seeing the s p futures up. Dow futures up 123. But you are not buying that. Enough. O, it is not it might be by the end of the day, but at the moment, no . Guest we are seeing american buyers be more willing to by. This also speaks to the fundamentals of according to the u. S. Stock market that made you there for europe and other regions. You still have the tech sector with longterm prospects of growth beyond what we are seeing now in terms of the coronavirus catalyst. I think what this is the is it is getting people thinking about what is beyond this, what are the unique selling points of each market beyond just the coronavirus. [laughter] you consider the s p 500 at a record high just last risks are i think the very clearly to the downside as we sit here right now. We could easily get to a repetition of the correction we had in the market in december of 2018. That was the last time we had a correction of more than 10 . If we get more cases in europe and even asia, but does not necessarily directly impact the u. S. Initially, but from a global perspective, there is a lot more potential downside. Stocks and bonds follow each other in tandem, and importantly, credit now. You are seeing credit spreads start to widen. What the ecb can do is purchase bt. E corporate de in the past couple of days, new issue volumes have stopped. The record start of the year, does that continue, or do we have a real impulse here. Guest europe i think really is the sticking point, marcus. There seems to be more reason to worry about the european story just because even before the coronavirus fears, there was question over whether the temporary nature of the slowdown was going to be temporary. And the assessment we got from beencb so far has not alarming, but you have to wonder now that more of the data of the First Quarter coming in, it is not necessarily looking like it is on a big uptrend. You have to wonder what the ecb will be saying that th best now that they have what the ecb will be saying now that they have more information. [laughter] is, i guess the question the loudspeaker here. You buy you doing, do the dip, does you buy goals, treasuries, cash. Guest the interesting point is that if you look at volatility, bond market volatility spiked, vix has spiked. Alix i have the chart, it is my favorite chart in the whole world . Guest fx volume is still low, but when i look back historically, when fx volatility is at such low level as it is now, the break comes usually after equity or bond market volatility has picked up. So another couple of days of high volatility in vix and on the markets and i think fx could follow. I dont i this view of the yen losing its safe haven status. , butd a bad week last week dont forget, equity markets hit a record high wednesday, the same day the dollaryen most higher. From an equity perspective, risk week. Rong last and if this continues, i think the yen will be the clear our performer. But it was it has done historically and i dont see that changing, that is right could have big moves in the fx. Marcus that is absolutely possible. Whether or not that breaks, i dont think so either. Derek. I agree with particularly in terms of sterling and europe. We have a big boost coming from the u. K. The european sector is a real worry here. We have seen what happens with the unexplained breakout in italy. Else,were to go anywhere it really has not hit other parts of the world, but there is a potential bigger move here and that is why i think we got a wakeup call this week, that this coronavirus is not over. Alix to that point, not only do we have mastercard coming out and warning, also united warning, but it feels like when you have firstquarter earnings reports, which hit in the middle of the Second Quarter, and you are expecting recovery in the back half of the year, seems like that will be the door die moment for these companies. Kristina exactly, initially the response to the coronavirus was sentimentdriven. We saw that in the move on risk assets. Then you get the second order impact, when it starts showing up in the data, in company reports, in their actual results. That is the danger of this becoming a negative feedback loop almost, because just when people are getting over the initial risk sentiment shock from the headlines that we see every day, then it is kind of getting into a bit more consolidation, then you see the reports hit, and the hard data hit. It is almost a risk creating a second wave of risk sentiment. Bestly see for instance last year, trade was a similar catalyst in terms of the way it markets responded. I think this very much has the potential to be the trade story, the equivalent for 2020 would be. He coronavirus story derek certainly, the camila and from the fed so far is, this is transitory, vshaped recovery, we dont have to respond, but of course, we are at a stage where having this , andary framework reviewed they are arguing about the need for a makeup in inflation strategy. When you have inflation to the downside, you have to be more aggressive to get it to be higher. Now we are getting this potential global shock. It will be all eyes on the fed to see there is any change in their reaction function. How they respond has a potential for additional impact on the u. S. Economy and what it does to inflation going forward. They should be in a situation of responding more quickly than they would have in the past. Marcus that is the key point, the fed normally would say something, but they feel constrained by this rather conveniently timed review. The ecb had a time to review as well. But the fed normally is the one we would be looking to to calm things down. At the moment, the body language is, we dont want to test this. Election year. We have done three cuts. But this may get out of their hands. Particularly the ecb, they may have to do something before they want to. Alix and there is a bloomberg article that says that. You have cut three times already, what are you hesitant to cut now . Thank you guys for dealing with the sound issues. And give for joining me, i really appreciate it, bloombergs kristine aquino, Derek Halpenny and Marcus Ashworth will be dealing with it. We want to get an update on the headlines outside the business world. Viviana hurtado is here with the first word news. Viviana we begin with the coronavirus outbreak. There is growing concern it could turn into a pandemic, the number of cases topping 80,000. Outside china, south korea is the worst infected country. Nine people have died. Dead. N, at least 15 are afghanistan, bahrain and kuwait are confirming their first cases. Michael bloomberg is hoping for a do over internet democratic doovertial debate in tonights democratic president ial debate. Mr. Bloomberg is making it clear that he will turn his focus tonight to the frontrunner, Bernie Sanders. Bloomberg is the founder and majority owner of bloomberg lp, the Parent Company of Bloomberg News. We finish with former hollywood weinstein. Y he spent the night in custody here in new york city. Until his sentencing next month he will be held for raping one woman and sexually assaulting another. His lawyers plan to appeal. 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 Viviana Hurtado. This is bloomberg. Alix thank you so much. Coming up, it is j. P. Morgans investor day. We will look at what is on the agenda. And if you are jumping into your car, tune into Bloomberg Radio across the u. S. On sirius xm channel 119, on the Bloomberg Business app. This is bloomberg. Alix j. P. Morgan says it expects Noninterest Income to fall slightly, as lower rates squeeze into its lending business. All that coming from the animal investor day and there were in new york. Bloomberg Sonali Bostic is covering the event. What are some of the highlights . The ceo of jp morgan is about to speak in a couple of minutes. They will say that not income is going to be a little lower this year, albeit not by much, only by about 200 million, we will see potentially a rise in Net Interest Income next year due to more lending and through greater credit card business. How they want to bring on those consumers will be of interest. We will also hear from dan tinto. Return onto raise equity by bringing greater revenue. The have been ringing in greater market share in their business, and how they feel they will grow the business while consuming less capital will be interest. Until we hear from jamie dimon later today, when he tends to talk about much Bigger Picture things. Alix uncensored come up may be. Thank you, Bloomberg Sonali Bostic joining us. We have had of Global Markets research here. Now and ithe 10 year say, do you like cyclicals, or do you like banks . Derk we have had big declines in rates and the holden on the cusp changed. If you look at spreads, everyone has been bullish on the u. S. Dollar because of the spread story, very attractive and in favor of the u. S. Those spreads are shrinking dramatically. In japan, 165 basis points the last 12 months, in europe, 100 basis points. At some point it will start having an influence. The dollar is obvious safe haven currency and in these uncertainties, it could continue to rally. But at some point, the window will close. If we get third rate cuts, which is quite a possibility later in the year, than the dynamic start to change for the dollar and it is not as supportive as it has been. Alix thank you very much for joining me. Erek halpenny of mufg coming up in the market, i will be joined by james athey, this is bloomberg. Arbor day in standard investment senior manager. Aberdeen standard investment senior manager. This is bloomberg. This is bloomberg. 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. Alix welcome to bloomberg daybreak i am alix steel. Here is everything you need to know at this hour from the top. Does this virus have pandemic potential . Absolutely, it has. Are we there yet, from our assessment, not yet. Alix the global infection rate tops 80,000. Hong kong announces school will close until the end of april. Here in china, the rate of new infections does continue to show stabilization, but its a spike in cases of brought that is concerning. South korea has become the worst affected country outside china. Alix infections in south korea rise to nearly 900. Pres. Trump our relationship is so special with india. It has never been as good as it is right now. Alix mr. Trump says the u. S. An and you have made progress on trade and he is optimistic a deal can be reached. Pres. Trump we just had a lot a lot of the press was there. A lot of businessmen that come from india are agreeing to invest billions and billions of dollars. You heard it yourself. They will be investing billions in our country. Alix president modi says the u. S. Is an important trading partner for energy with companies supplying 20 billion worth of oil and gas. It is difficult to assess the multitude of economic effects, but this new source of uncertainty is something i will monitoring. Alix the cleveland fed president says she thinks the u. S. Economy will grow, while companies begin to warn on their profit outlooks. But for these other companies, coronavirus is certainly front and center. United completely scrapping its 2020 outlook. But it is not just the forecast, it is the on the ground data. Apple, according to ubs looking at chinese data, says apple iphone sales in china fell 28 in january. Analysts are advising on their earnings outlook for the year. Home depot Beat Estimates and raised its dividend 10 . The number we saw today at 5 comp was pretty much in line with the consensus was expecting. I think it will provide relief to investors. Importantly, they will reaffirm their outlook for 2020, which we think is achievable if not conservative. Home depot has not missed profit estimates since the First Quarter of 2014. Alix in the markets, we saw a risk try to make a comeback earlier this morning. S p futures up and 5 . Europe continues to roll over. You are seeing a yen bid. Is it a safe haven or not . Still trying to figure that out. That a tiny bit of selling in the bond market. Yields are up one basis point. Will we see some solid takedown . Joining me for the hour is laura cooper, bloomberg mliv columnist. You literally live and breathe the market. You read about it all day. What are they saying today . Lara i think the highlight was whether we would see the buy the dip action. We saw the deep selloff yesterday. Was it one and done . What the european action is saying that it is probably too soon, still some caution, but ultimately, it is a waitandsee mode at this page. Alix which is why we wanted to see you some technical advice. What do you do with the technicals . Joining us for that from new york is all from bank of america. Chief technical strategists. Paul, good to see you. 10. Re looking at the 2 what do you see, technically . Paul , good to be back. The markets have been a raging bull for most of 2019. In 2020i think is what we would a drope beginning of down to the treasury yield low. Ime a lot of the bond market rally is behind us in its fifth wave. The challenge and the struggle is will the markets let the target of 1. 25 be reached . It is a very significant breakdown in yields. If theres anything about the trend it is breaking down below the 1. 32 intraday treasury yield low from a few years ago. Is it the start of a new trend . Andhe potential to just be stay bullish. We think we will stay that way in the treasury market as this way down to an alltime low plays itself out. Look, very nice continuation triangle pattern for the second half of 2019 into 2020. Two year treasury yields to get down to 1. 5 before there is a critical test of a make or break level. So we are still bullish. We think there is more coming in the bond market rally. Alix right, lets talk gold. If you are looking to buy bonds, i wonder if you have to buy gold. There was a huge runup, you could argue that maybe we overbought here. What do you see. Paul we are undoubtably overbought in gold. We call for it in the Second Quarter of 2019, gold prices were off to the races. 1690 was a second target. We actually had that on the explosive rally on the monday open, and weak a left since then, because you had these shortterm overbought trends being traded in one direction. But in the context of the medium and longterm multiyear view, gold is still on the way to an alltime high. What we have been advising our clients is you buy gold on the thed dipe news on then you settle oil. Positiones are on to outperform oil and copper. They are the choice purchase metal in this case for financial markets. With that said, silver actually might be due to catch up. So we will definitely take a look at that. Alix interesting point on silver. I want to get your final take on credit spreads over all in the u. S. And europe. Issue was was dead yesterday in europe. What do you see in the emerging markets pride, riskoff, that has got to be the place to look. Paul absolutely. When you look at where the market has been positioned over the course of the last 3, 6, 9, 12 months, credit has certainly been one of them. All of 2019, the market was buying credit, buying credit. The spread got tighter and tighter and tighter. The question becomes, what is it really too tight . What was amazing in december and into january, e. M. Credit spreads didnt continue to tighten after the u. S. China trade deal was signed and agreed upon, right . They had the big ceremony. Em credit spreads, as referred to by the jp morgan global spread, did not tighten further, it sat there. Now that macro conditions have changed with regards to the inflation trade, with regards to the unknown coronavirus and some of the other political factors, that em credit spreads are starting to widen. In fact, we are in a wider position right now in our book, thinking that em spreads will continue to widen in the First Quarter here. And if that happens, that is a positioning squeeze. That is the market leaving credit and potentially moving back into the bond market, to push treasury yields to alltime lows. Moving back into gold prices to push gold prices higher. It could be a safe haven run. Alix paul, i really appreciate it. Paul ciana of bank of america securities. James at the joins us now, Senior Investment manager at aberdeen. That was a technical take. Give me the professional take. [laughter] james massively different, to be honest. Pretty good reasons behind the market woes we have seen the last couple of days. Dustnk a lot of people are i am a bond guy and a rich guy so i am paid to be more miserable than the average investor and a little more ircumspect than the equity investor. Equitiesg to see how could ignore information for such a parent of time, between where equity prices and bonds were, it is getting bigger. I think the bond market had an idea what was going on more than the equity market. The point paul made in terms of investor positioning and that can be the fuel to the fire, that is important to the equities as well, because buybacks have slowed, and they were the only game in town for many years. Valuation was egregious. If it could get messy and quite easily, i think. Alix the think there is further move to run for the bond rally. Laura and that equities will further capitulate . In other words, more reflect the bond story . James absent very few, relatively short periods of time, bond yields go down with them. Unless you are in an inflationary environment, which i dont see coming soon. Interestingly at the moment, we are basically saying, nothing to see here, that is what the saying. Reserve is but actually, the curve has been flattening. So if the fed sit idly by while markets are collapsing, the curb will invert further. If the fed decides they want to play ball, it will rally. Either way, it should be good for bonds. Laura but, what happens if it is still buy the dip, like in equities . I am really skeptical we will continue to see a continued selloff within the s p. Alix even if you are having mastercard worn and united warning, and united where do you put your money,. James there is that fomo, there are acronyms to describe it, that there arent many attractive options. Investors look at valuation in any given market. I am a macro guy, so i say, what is happening to Earnings Growth . 25 year on year Earnings Growth, the coronavirus is now a meaningful Global Economic shock. China is more integrated supply chains. So there is some negativity. I dont know how much. But to stand still, equities would have to reprice lower. Your point is the right one. From a psychology perspective, a pavlovian perspective, investors have been rewarded for more than a decade to buy the dip and i cannot see that this time it will be different. Laura do you think we will get, when we look at secondquarter first see when we the First Quarter earnings, is there a risk of further repricing . A lot of the forecast revisions have come from that em china space. The and u. S. Have remained relatively resilient at the headline level. We have seen some cyclical revisions, in terms of energy and auto stocks, but ultimately, they have fared relatively well. Are they remaining complacent in terms of what is to come. James if i was good at their jobs, without being cynical, they could smooth and the earnings. Alix or tech. James leadership is so narrow. You have seen that quite some time. That irt that i love think sells the story best is the bea data on whole economy profits. Versus the spx. The gap is gigantic, way worse than it was at the end of the nasdaq bubble. The repricing is more broadbased. There is definitely an element of that. But i think earnings, accounting principles and profitability across the whole economy tells three different pictures. Unfortunately, the markets look at for pharma earnings pro forma earnings. Laura does that mean the revisions in the middle of the Second Quarter, when we get firstquarter numbers will not actually come . Alix in talking to people, that is what they are expecting. Waiting for the earnings report. James it is interesting, we are already seeing the photronics, some corporate drop their some profit warnings, some corporates drop their guidance. Q4 was more of an improvement, but ultimately, it seems that we are seeing a decoupling from equity performance and earnings. It remains to be seen whether it will take a shock to the market earnings. F q1 alix one more question before we go, is the yen still a safe haven . What are traders talking about right now . James because of the move we saw in dollaryen two or three days ago, that question has been at the back of everyones mind, then it came front and center. There were a think lot of people who were very long equities without the yen was basically attractive as an estimator can. I think they are right attractive as an asymmetric hedge. Back upen, we have gone to 112yen. The correlation with dollaryen is back to where it would be. The u. S. Dollar can be weaker now. When the u. S. Dollar was rallying because of its inflows, it was tough to selloff the dollaryen. Alix james f he will be staying with us. Laura cooper and i is well. At this point, is difficult to assess the magnitude of the economic effects, but this is something i will be carefully monitoring. Alix thats good to the cleveland fed president arata master speaking in washington Loretta Mester speaking yesterday. Still with me is james at the from Aberdeen Senate investments, and laura cooper. Can you have the equity markets higher if you do not have a fed cut . James honestly, that is a conversation we had on the desk this morning. I do think that is the right question to ask. Pretty circumstance we have been pretty circumspect in on the outlook. I am tempted to say no. Why was equity market rallying when valuations looked egregious . Always and everywhere, the story was low bond yields, search for etc. Liquidity driven, all of those were derivatives of some sort of fed policy. I dont think the fed can sit here well things are happening negatively and not expect equities to run for cover. Laura that is interesting. Since the friday session over yesterday, we saw this repricing of Market Expectations for not only fed cuts, but for ecb and g7. Across the the markets instant reaction is to price in more cuts. These think the fed will in order tohen provide these conditions for equities to propel higher, or because of where inflation is, because of full employment, that they withstand that for now that would be a massive . James break it would be a massive break from Monetary Policymaking. Regardless of whether growth is decent or and implement is falling, the Central Banks and the fed have found a way to be dovish. One thing they dont like his instability. The rapidity of repricing, things which look like they control. Ral out of but includes the equity markets. The fed is in a trap of its own making. In december of 2018, they had a chance to rip off the bandaid and they did not. The market knows they can force a fed reaction. They might try to wait a little longer but eventually they will crack. Alix narayan a cartoon a coda narayan the coach are coletta the man minneapolis fed president said the fed should not pass it up. Didier he wrote, yard he three rate cuts, so why not do more went there is actually a problem. Laura i think the question is, you dont want to look markets, come in when he have been under this wait and see mode and then shock markets with a 50 basis point cut. It brings in the second question cutif we werent to see a in march, or further outcome of how much will it provide stimulus to the actual economic backdrop if the u. S. Is fairly contained with respect to virus fears so it really would be a cut for sentiment as opposed to factors. Onomic james agreed, but that has been the case in numerous decisions for years and years. Cultural issues, trying to deal with cyclical policy, market shocks. All of these are not influenced by Monetary Policy. It tells you that Monetary Policy has the impact o in the longterm, yet it is used. That is unfortunately the world we live in. Laura so what would be the catalyst for the fed to shift their current guidance and markets begin to calm and say, we are leaning towards more easing . James it is interesting the point you make, does it have the opposite effect . On the economy, maybe. We saw in australia, the rba cut rates. Business confidence plummeted afterwards. They were like, what do you see that we dont see . There is a potential for economically that to happen. What does it take to get the fed over the line. She is a known hawk, consistent hawk. Not for inflation reasons but for the reasons were talking about, what good are you doing in the longterm versus the shortterm . Is this a problem that needs dealing with Monetary Policy . She is starting to open her mind towards, maybe we need to do something. That is the first step in the journey to the fed getting to, we need to provide stimulus. But u. S. Services pmi was some 50. Forget why that economic weakness, that the fed will feel compelled to respond to. Alix does it do anything but stimulate asset prices and housing and refinancing in the Mortgage Market question mark doesnt actually do anything . James know, Monetary Policy is an indirect transmission. It relies on actors in the economy behaving differently. When confidence gets to either extremely bullish or actually concerned, Monetary Policy has next to no impact. If you thought you were losing your job tomorrow and morgan down,age rates go youre not thinking, i am going to refinance my house. You are thinking that you will lose your job tomorrow. , you are not there yet have Bloomberg Consumer confidence today, that will be interesting, but if people feel less confident going forward, Monetary Policy will have less impact. Alix james athey of Aberdeen Center investments and laura cooper of bloomberg will be sticking with me. Coming up, j. P. Morgans annual investor day is kicking off in new york. We will talk about what to expect coming up next, as the yield curve continues to flatten. This is bloomberg. His is bloomberg. Viviana you are watching bloomberg daybreak i am Viviana Hurtado with your bloombergs flash. Macys bucking retail trends. Quarterly earnings were better than expected. Saying fouryear results were not as good as the company intended, but still, they were held by a strong holiday season. Home depot rebounded from a string of disappointing results. The largest Home Improvement chain in the u. S. Reporting fourthquarter results but Beat Estimates. Home depot samestore sales did better than expected. This year, the company is forecasting comfortable sales growth of up to 4 . That is your Bloomberg Business flash. Alix thanks so much. J. P. Morgans annual investor do is underway in new york. Bloomberg sonali basak is following the event. What have we heard so far . Sonali everybody better listen closely. After 15 years of investor days, they may not have one next year. It is not set in stone yet. While the Interest Income was guided lower this year, it has risen for next year. They want to increase the return on equity at their investment bank. We have first reactions coming in from analysts, including it will, which believes be lower because of costs rising. They have to investigate revenues higher, especially in areas they want to grow. In branches across the u. S. , india commercial banks internationally. Remember, we have until 1 p. M. Today to hear of these initiatives from everyone of the ceos at this bank. Alix bloombergs generally bested, thank you very much for that best Sonali Bostic, thank you for that. Analysts are rushing to downgrade their forecasts from china growth. More to expect. Lazard Asset Management cohead of em debt will be here. Lets get a check of the markets. We tried to make a bid for risk earlier but we didnt make it. European equities are still rolling over. But you are still getting a bid in u. S. Markets. Is it the worst short on the block or the worst house of the block . Is at the house of the short . [laughter] in other asset classes, still a safety trade here. The yen benefiting from the safe haven bounce as well. This is bloomberg. Alix this is bloomberg daybreak. I am alix steel. Markets, we have try to get some sort of risk going, but really the u. S. Futures off. 4 . In the red but not as bad as previously expected. Classes,t other asset the three month 10 year continues a little bit steeper. We have been inverting. The yen getting a bid as a safe haven. The vix staying elevated. Gold losing 22 an ounce. It is hard to create a full narrative story where you have gold not participating. That seems to been the safe haven of choice in the last couple of weeks. Rushing to downgrade forecasts for chinas growth. It will be key to where we go from here. The latest numbers from the street point to gdp expanding 3 year on year or last. Simon, us now is denise also james athey is still with me as well as laura cooper. Denise, apology for not being there onset with you. When you take a look at the virus, what is the result of trickledown in terms of emergingmarket . Isise i think the market expecting a downturn in chinese growth. The focus now is how this spreads outside china. The market was expecting a downturn in china and if the virus had stayed there and was contained, the market was expecting to see a pickup toward the end of the year. Now is the spread outside of china. When i look at asset prices in emerging markets, credit has been very resilient. 4 across to sovereigns and corporate credit. That is because it is higher credit quality and has benefited from the decline in u. S. Treasuries. There has been some spread widening but not a lot, not enough to offset the decline in treasuries. How do you see the promise of chinese stimulus playing into the emergingmarket space . We have seen chinese equities bounce back sharply on these hopes of further stimulus. ,hen we look at the em space are you seeing a preference for the dollar . Hard currency versus local currency . How are you looking at the landscape . Is the what we have seen more defensive part of the asset class has been resilient. What has bear the brunt of the adjustment is currencies, which are more growth asset, or more correlated to the growth outlook. Given the big move we have seen over the last couple of days, they are beginning to look interesting but it will be tricky on calling timing. One area, you mentioned china stimulus, i think there is a lot of room in emerging markets for Central Banks to ease. Looking around 60 of the countries in our universe that will continue to ease, mostly in asia but also latin america. You will see rates lower an opportunity for rates to go lower and some of the highyield countries in emerging markets. Alix james, what do you think . James it is complicated. Very strong dollar, very weak china, we commodities is not a great starting point. I agree with denise and the fact that you still have p. M. Central banks that have a willingness to cut inflation. Some of them have performance that allows them to keep cutting remains to be seen. If the dollar would start weakening, that buys them time. That is a local rate story. Maybe that is attractive, and especially if the fx even goes sideways. I think him credit and hard currency is not that interesting. Countries wethe em can significantly versus the dollar. Places where they do not have a lot of dollar revenue tends to be water behind the dam. People do not sell out because it is not a liquid asset class. Then something happens that tips that over the edge and you get a rush for the exit door at a time that cannot be mocked up. I do not know that this is that but there is a potential with the coronavirus. Alix wrapping those points together, you mentioned Central Banks cutting in emerging markets, but there is also the transfer fiscal. It seems like the talk about fiscal has been in the em space. Can you talk about that in relation to what james was talking about . Denise in asia they have room for fiscal stimulus. Malaysia and singapore have announced fiscal stimulus. Latin america it has been harder. They have been on a consolidation trend. They will be focusing more on rates as a stimulus to support the slowdown. Laura when we look at the inflation in em, certainly we see supply chain disruptions that tends to be inflationary and we are seeing headline pressures building. Does that limit the capacity for central bank easing and does that limit your preference for em at all . Denise you still have negative output gaps, especially in latin america. Inflation is below centralbank targets. Continues to surprise on the downside. They still have room to cut. The one area where we do see Inflationary Pressure is in central europe. They are in more of a bind where growth is slowing down on the back of what is going on in europe and inflation is getting up to 3 to 4 and they have very negative real Interest Rates. It will be tougher for central europe. , where would you be investing in emerging markets right now or where do you want to wait . Denise on the credit side, the investmentgrade space, we are the lowest yields ever. There it is getting expensive. I would look to reduce investmentgrade credit. I think the short end of the highyield market and some of the sovereigns and also the corporate space, where you have the sectors there are not as vulnerable given the Balance Sheet leverage ratios. The highyield and the short duration, i would increase investmentgrade credit. Interest rates, there is still room to go, especially in countries like mexico, indonesia, peru, south africa. On the current seaside, again we have had a big move, commodities down 6 to 8 . Asiancern sees currencies connected to the supply chain and related to tourism are down. If the virus is contained in terms of the spreading of the virus, even if we do see a downturn, currencies could start to look interesting. Alix if we do get some kind of stabilization, where would you want to reach for yields and yen in em . James there couple of places that have high Interest Rates and structurally better pictures. ,exico is the most extreme notwithstanding the direct correlation with u. S. Economic activity. In south africa the curve is steep. Indonesia, similar stories. And local rates, there are attracting stories. Attractive stories. 2008, when china was building a super cycle with low rates and abundant money, a lot of these em should have engaged in structural reform. Most of them did not. Most of them went in the opposite direction. We mentioned brazil. This is the end of the upstage of the cycle. What happens when you go down the other side. I have strategic concerns about how they can pay the bill. Alix can i get your response on south africa in relation to that . Denise i think we have to keep in mind that when we look at the Balance Sheets of the sovereigns, i agree there are issues with the longterm growth trajectory and a lot of these countries, but when you look the Balance Sheet and the dollar liability, that is something these countries have been reducing. A lot of these countries are net not issuing dollar denominated net and financing themselves in their local currency. There will be some countries i would be concerned about. Some countries that get a majority of the revenue from oil and have less flexibility. Countries like ecuador and nigeria where they have very rigid Exchange Rates and do not have the ability to adjust. Overall, the Balance Sheets are unlevered from a dollar perspective. In south africa, i like the rate story. As james mentioned, youve a positive curve and inflation coming down. Growth is puttering. I would avoid the currency. I think the longerterm growth challenges will keep the currency under pressure. Alix denise simon, thank you very much. James athey of Aberdeen Standard Investments will be stepping with laura and i. We want to give you an update on what is making headlines outside the business world. Viviana hurtado is here. Viviana donald trump says a trade deal with india could happen at the end of the year. He says he is urging Prime Minister modi to lower tariffs on american products. He says the leaders understand each other on the issue. Now to the coronavirus outbreak. Growing concern it will turn into a pandemic. The number of cases topping 80,000. Outside china, south korea is the worst affected country. Almost 1000 cases have been reported. Afghanistan, parade, and kuwait confirmed their first cases. Michael bloomberg is hoping for a do over into nightss president ial debate. In a debate last week he was widely panned. Turning hisg is focus to Bernie Sanders. Bloomberg is the founder and majority owner of bloomberg lp, the Parent Company of Bloomberg News. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Alix thanks so much. James and laura are still with me. Politics, is the market democratica sanders nomination in terms of volatility in the Health Care Sector . Laura the way our Team Approaches it is we look at the betting markets as a proxy for how markets are gauging this. It looks to be that a trump reelection is largely what markets are pricing in at this stage. We see volatility when we saw Bernie Sanders when these primaries, but until we get to super tuesday and see that he is the clear frontrunner, it looks to be the case that it is a in that markets are expecting. James markets are not good at these binary events and seemed systematically incapable of pricing in information. Speaking to people in the states, internationally, everybody got it wrong last time and nobody wants to make that mistake again. Now trump is a shooin. Checked, trump is losing every headtohead in the average of national polls, and let the market yet the market refuses to believe that. As the chances of bernie getting the democratic nomination increase in the chances of him winning the presidency increase, any marginal attempt to price that equity market leads to a selloff in equities and that is bad for the incumbent chances, which means you have to ever greater chance of a sanders when if that a greater chance of a sanders win. If that were to pick up pace the market cannot focus on too many things at different times, and it overwhelmingly thinks trump will win. Alix james athey, always great to chat with you. James athey of aberdeen standard investment. Stay with bloomberg for coverage and analysis of the democratic debate this evening in charleston, South Carolina. Coming up, retail halves and havenots. Macys flipping into slightly negative territory. We talked to Stacey Widlitz of sw. This is bloomberg. Viviana coming up later today on bloomberg markets, hewitt ceo. This is Viviana Hurtado with your Bloomberg Business flash. Shares of exxon mobil have hit a 15 year low. The stocks have been under pressure since the oil giant reported disappointing earnings last month. The coronavirus outbreak have lowered expectations for a nearterm recovery. Ceo darren woods presenting a longterm Strategic Plan to investors and analysts. Iphone sales in china last month plummeted 28 . Ubs warning this months numbers are likely by far worse because of the coronavirus outbreak. And Mainland China apple closing all of its stores due to the virus. It is now starting to reopen them. Activist investor Edward Bramson is taking aim at barclays. He is pushing chairman Nigel Higgins to end what he calls a cycle of disruption. Barclays ceo is facing another regulatory probe. Im Viviana Hurtado that is your Bloomberg News flash. Alix time for bottom line. We will focus on Companies Worth watching. With home depot out with results. Macys did see a strong holiday season. Home depot rebounding. Joining us to break it down is Stacey Widlitz, s w Retail Advisors president. Thanks for joining. Macys seems solid but the stock is down. What is your take away . Stacey macys had an investor day, and the comp was expected. No big surprises here. I think the issue is macys is shrinking to thrive and survive, whereas other retailers are investing in their stores to thrive and survive, like a target. The Department Store space continues to lose traffic. Clothing stores is what we will hear more and more about over the next few years laura when i look at the retail index, macys has been the underperformers. The top performers on the online sales, the ones that capture there. Are they doing anything to combat the bricks and mortar structural declines or is there anything they can do to potentially boost their performance . Stacey they are, and they are investing in their growth 150 stores, the topperforming stores. The question is what does the store base look like if they close 20 . To they need to close 50 . Youre seeing that with nordstrom. Stores, and big then Little Stores and local markets you can share inventory. That is the model of the future the retailers that are going to do well, home depot, target, walmart, they are investing in their stores and coming out the other end with bigger multiples. About thewe worried coronavirus hitting retail and Consumer Sentiment . Apple is a specific china story, but when you see the headlines you get scared they do not want to buy stuff and the consumer has been holding up the equity market. Are we worried about this . Stacey yes. Most brands and most retailers are global. For luxury guidance, up to 40 of their business comes from the Global Chinese consumer. If you see the Chinese Consumer shutdown. When they travel, they spent way more money on luxury than at home. It is a double whammy. It will eventually fall over into the states if it keeps going the way it is going. Laura we do still expect a vshaped recovery, we would expect the u. S. Consumer would be inflated and able to weather the storm through that . Stacey i think so. I think it depends who you are. The companies positioning themselves for the future to capture more and more wallet share like home depot results comp, they are5 in investment mode. They are out the other end with better comps. Once they convince the street theyre getting through the investment cycle and it is paying off, those are the stocks you want to own. Consumers do not want concern, but it seems far away. Alix you bring up home depot. I wonder how much the good results have to do with the lower rates from the fed and how much that wears out because you might not see rate cuts . Stacey your Mortgage Rates are down. We are seeing an aging inventory of u. S. Homes. There is a cycle for operating cost. I think the rest of it is that home depot is expanding are going back into the core and focusing on Customer Service to capture share and capture wallets. Laura do you think bricks and Mortar Stores have to have that Online Presence . Do they have to ship structurally to capture market shares there are you losing to amazon they are losing to amazon . Stacey they have to have an ecommerce option and integrated to stores. At target, half of their digital sales, people are coming to stores to pick those up. That is what you want. You want the consumer to draw them into the store and buy their stuff because you are executing and able to fulfill it. Alix if you wanted that day, you cannot wait for amazon. As we go through this week, which will be quite busy with other retail earnings, who are you expecting the most from . Stacey home depot was the one today that we were expecting the most from. Certainly we have jcpenney, no expectations there. We have lv, we already know there is a transaction there. The question is can they turn that brand around . They have gone so far down the rabbit holes of ignoring what the customer wants. Have big expectations from tjx in europe, t. J. Maxx doing incredibly well. Alix great to get your perspective. Stacey widlitz of s w advisors, and laura, thank you. Come to new york. Laura sign me up. Alix coming up, more on home depot. We will break it all down in technically speaking. If youre company and your car, tune into Bloomberg Radio and across the u. S. On sirius xm channel 119 and the Bloomberg Business app. This is bloomberg. Alix time for technically speaking. Bill maloney, chartered market technician and voice of bloomberg equities brought joints me now. Listen to bill all day. Type in squa on your terminal. Lets talk home depot. Bill up around 3 right now. The stock has been a longterm uptrend dating back to december 2018. Look for first shortterm resistance around 247. If we get a break above that, look at 250 and 254. Your first level is 247. Alix lets look at palo alto. What you see when it comes to the chart for the sector and palo alto . Bill they do network security. Down 15 in the premarket. 200. Support around 198 to if that fails, look at 193, the support level getting back to june and august lows. Your first level is 198 to 200. Gileadrapping it up with. Maybe they are the closest with a drug or vaccine for the virus. What is the chart telling you . Bill the chart has been spiking off of that news. It spiked yesterday again. Up another 1 in the premarket. 75 yorkielevel resistance in gilead. Alix thanks so much. Bloombergs bill maloney. That does it for me. Open miken the wilson of morgan stanley. This is bloomberg. Jonathan from new york city for our audience worldwide. Im jonathan ferro. The countdown to the open starts right now. Jonathan looking for the calm after the storm. Stops inching higher. Mastercard cutting guidance. United withdraws there. Headed forhopefuls the debate stage in South Carolina. Here is your Tuesday Morning price action. Equities bouncing back 15. Up. 5 . No big move after yesterdays monster rally. Yields down to 1. 36 on the 10. Eurodollar 1. 0 840. Lets begin with the big issue. Testing the faith in a vshaped recovery. We will get a recovery. The market says it is a vshaped. A vshaped recovery and we are done. That will not be the case. That vshaped can turn into a ushape. The u