Transcripts For BLOOMBERG Bloomberg Markets 20240713

Day. Thet issues and trade, ongoing battle between the u. S. And potential cyber warfare. Here in california. A lot of people commute. It is a feeling our colleagues in asia have been living with for weeks. How are markets opening up over there . Paul some unambiguous signals. New zealand has been open for an 2. 5 , aready off by move down of similar magnitude for futures in australia. 4. 5 , theures are off kospi weaker as well. We continue to see strength in the japanese yen. A lot of data coming out of japan today, retail sales, tokyo cpi, both of those contracting, even before the coronavirus outbreak. Take a look at the yields, big move down. Of at a fresh record low. 83. Global stocks plunging to fourmonth lows, u. S. Equities falling the most since august 2011 as anxiety over the coronavirus deepens. Lets get to Abigail Doolittle in new york. A lot of red. And id be on the close. Averages all down more than 4 , there was a rebound rally attempt. Turned briefly higher, but that is not how they close. Dow transports down nearly 4 . Outlines continue to come about the corona virus. You were mentioning that clustering california, also napa county, a number of people are being quarantine. Stunning. Ly the dow shedding more than 2000 points, its worst week since 2008, investors really nervous on what this could mean for the corporate profit outlook, we have been talking about this weekend we have already had the ears on Companies Cutting profits around asia, but if it really extends to the u. S. , and it gets really bad, and that is shown by the chart we have in the brumberg model, the s p 500 today slightly below the 200 day moving average, and the less time it has gone below the 200 a average or around the 208 moving average, it has been successful and buyers have stepped up, nutso in 2018 when we had the selling and her team today in our cross and in it and ended when he 11, so there is reason to think that there is more work to be done to the downside, especially since the tech heavy net nasdaq and the stock are not on the 200 day moving average. All of this suggest more selling ahead and that is true when we go across asset, because oil is in a bear market, oil is one of the haven assets with one of the were stocks of the last week, look at oil over the last five days, down 13 , bonds rallying in a huge way, the 10 year yield near record low as investors want in on haven, that vix at 839, higher than the level seen in december 2018, and we have Royal Caribbean in a bear market on the week. Taking a look at another chart in the bloomberg, not good for stocks, up top, the s p 500 over the last year in yellow, we have oil, much of the move last year basically trading in the same is pulling on oil the s p 500, suggesting more selling like he had coronavirus fears. So much to digest. Thank you. Infectionknown u. S. Not linked to foreign travel has been identified. More than a thousand people in the area are being monitored. Governor newsom gave this update. Currently being monitored, with 49 local jurisdictions doing those protocols and monitoring as it relates to more traditional commercial flights they came in from points of concern and potential points of contact, particularly in asia. As of today at this hour, we have 33 confirmed positive tests for the virus, five individuals have moved out of state. Last hour, the cdc said it will give coronavirus testing to more people. To discuss we are joined by david baker who is in the newsroom in San Francisco and max nixon in new york. What do we know about this case in Northern California. A lot of mystery surrounding it and still no idea as far as we understand about how this patient was infected. Right. That is the troubling part. We know very little about how this woman contracted the virus. It is a woman who lives in salonika county, not terribly far from San Francisco, but Officials Say they dont see any obvious link between her and any pathway to this disease. She did not travel. She has not had contact with anybody with the virus. Even though she lives in a county that is at an air force base where people are being quarantine or she hasnt had any contact with that based, so it is not known at all where this came from. Virus ben the contained if were looking at Community Spread in the United States . It will be exceptionally difficult. When you have cases out of nowhere, it suggests there are more. Limitedhas been pretty because of capacity constraints and because of limited guidelines from the cdc. We are likely to see more testing that may reveal we have sustained Community Spread. When you have that, it becomes difficult to contain. You can take measures, shutdown schools, cancel public events, but you cant necessarily rely on people to take the right steps themselves. The cdc says people should self quarantine, but many people sick have paid six days days to take time off, so there is only so much you can do. It takes a Robust Public Health response and discipline from the government and individuals to contain a virus spread like this. Paul the Vice President mike pence has been put in charge of all this. The president brace pacific about that. The president very specific about that. Is someone coordinating response, so that might lead to more discipline, but there are concerning elements as well. Not someone with a scientific background, and it seems from reporting by the New York Times that there has been control over the messaging. Anything said has to go through that office, according to that report. Response thats a is transparent and scientifically motivated, not affected by political concerns. I am hoping that will be the case, but there are reasons why you might be worried about what the priorities are. Paul all right. Thanks for joining us. Lets look at how the virus is impacting europe, particularly germany, more than a dozen new cases. The government is looking at a range of measures to address damage and crossborder travel. On the phone from germany, we have our bureau chief, daniel schaefer. Germany is an export driven economy. What is the potential for the fallout . Far we have not seen a drastic impact on the economy, but you can save the dark clouds have appeared over germany, weakened the economy. Exportdriven, it is highly dependent on global trade. We heard an important Industry Group this week warned companies are holding back from investments over the growing uncertainty with the corona spreading. Economyhe german of growingually worn uncertainty already hitting the German Economy and came out with a range of measures he said he ,xamining in case things worsen tax relief, ramping up of the german that government could give to companies that face pain due to the disruption. Emily borders seem to be open, but what did the government announced today. They want to keep they might open, but take additional measures. Travel to germany by sayor train, they have to where they have come from and beforeere they have been in order to control people coming from regions where there has been a bigger outbreak. Paul thank you so much for joining us. The World Health Organization says the coronavirus is at a decisive stage. Detailst the from yvonne man in hong kong. Governments to back to contain the virus, and if the government acts aggressively, they can contain the virus. 520 cases. Eporting we also heard from the ecb, Christine Lagarde saying this does not require a monetary response yet. The president of the central bank said it is important not to overreact and Christine Lagarde sang she does not see a longlasting impact on inflation from this coronavirus, so it seems like it is echoing analysts and central bankers out there that perhaps monetary tooly may not be the best fighting the fallout from this outbreak. Stood pat yesterday and is waiting for a response. It seems like the imf is thinking about what to do in its spring meetings with the world bank organizers as they are reconsidering the scale and scope of the spring meetings that are supposed to happen in washington, d. C. In april. Be smaller delegations or even a virtual format. We are seeing numbers of new cases growing faster outside of china. Also seeing the numbers continue to spike. , china yesterday, new cases out of the country. South korea was the biggest daily spike, surpassing the 433 cases we saw in china. The total number of cases in 1700, thea topping death toll at 13. The south korean president has come under heavy fire for the governments response. He said this will disappear before long and was not quick enough to close its borders with china. Saying hision incompetence will be a key issue in the parliamentary election. Now you have more than one Million People who have signed an online petition for impeachment. Japan will be shutting down schools on monday until the end of their spring holiday. You for joining us. If you want to track the spread of the coronavirus, you can do so on bloomberg. Com and on the bloomberg terminal. Vrus paul still to come we look at the Global Impact next. This is bloomberg. Welcome back to Bloomberg Markets. Allhe government says japanese schools will remain shut until late march. It affects 13 Million Students and 35,000 schools. Japan has more than 200 confirmed infections. That figure doesnt include another 705 cases which were spread on a cruise ship. Malaysia has announced a 4. 8 billion stimulus package because of the Economic Impact of the outbreak. The money would be used to support businesses, particularly the tourism industry, and he said malaysia may issue bonds if necessary. The economy is now expected to grow between 3. 2 and 3. 4 , down from an earlier forecast of 4. 8 . Wasnd that u. S. Economy slower than first reported at the end of last year, thats according to revised fourthquarter gdp data. Revise trade and inventory figures at the economy standing at a 2. 1 annual rate, but Consumer Spending was revised down, and nonresidential investment match the steepest rate of decline since 2015. 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. This is possibly the worst thing i have seen in my career i have been through a lot, the stock market crash in 19 87, the financial crisis. Potential to become something extremely serious. Discuss we have jay jacobs. Would you agree . I think the commentary might be a little extreme. The concern is the unknown. No windows when this will end. This is not something economist can plan out. I think the uncertainty is hurting financial markets, not that what we have seen is so dramatic yet. We just dont know the endpoint. Emily you have companies canceling events. Facebook canceling its Developers Conference three ofths from now, the irony that company canceling its event is rich. Microsoft reducing its forecast, pulling out of conferences. What do you see protect . This could be a big positive protect. If you think about how people will have to leverage the internet, social media, meetings via video my people will be entertaining themselves with videogames games and esports. It may be a big win for tech because its not impacted by air travel and other things. Do the fundamentals tell a different story. I will offer you this chart as exhibit a. ,f you look at this bottom line you can see the s p 500 has fallen through its 200day moving average. The nasdaq yet to do so. How long before the nasdaq capitulateds . Capitulates . Usually have these downturns with a quick vshaped recovery because the fed or other central bank was coming in with stimulus, liquidity or cutting Interest Rates. In anoes not apply environment where that virus is causing the concern. Cutting rates does not change how people will be affected or how people will consume by going out to the movies or traveling for a conference. The fed is irrelevant. That has taken the backstop out of the occasion for the selloff, so we dont know how long this could continue. We recommend to clients that this is the value of diversification by owning long dated bonds, is providing a balanced portfolio that people have forgotten about over the last 10 years due to this equity rally. An etf guy and were sounding a note of optimism. If you are looking at etfs to weather the storm, whered you go . Themes,ntioned a few video games and esports will be the big winner because people will look for entertainment that is not in public spaces. If you ask the average person if you feel comfortable going to a sporting event or on a plane for a conference, people are getting concerned. Our own company canceled a few trips, as well as the big names you were talking about earlier. I think video games in this environment, given the upgrade cycle with the playstation 5 in the Microsoft Xbox this year, we could see a huge amount of revenue in these names. Emily what is your thesis about what investors should be doing right now . Stayople should diversified or get more durso five. That hasnt paid off in the last decade. We areer thing suggesting is to look for quality equity names. The thing that will not change in the near term about the coronavirus is Companies Need to take on board debt to sustain their operations now. Even if people arent buying things or traveling, they still have to pay the rent, pay their employees, service the debt they have. We continue to see the global expandment continuing to this now. Quality equity names have low debt and high profitability. They will have more longevity throughout this crisis. Want to bring your attention to another chart on the bloomberg terminal. Bond to do with jk etfs, which are seeing the biggest outflows since 2017. How long do you see that trend persisting . We have been seeing tight credit spreads and everything had been priced, which is now falling apart, so we could see a lot of areas like highyield credit where people will move to investment grade, moved to gold, quality equity names, and tighten up that portfolio after years of being comfortable taking more risk because there was no real risk in the system. Paul right. We will have to leave it there. Thank you for joining us. Plenty more coming up. Paul welcome back. Lets look at the more goods. Day of heavy selling most of the indexes all by 4 . Zealand has been trading for 90 minutes. Continuing to slide. Lower, poised to open two. 5 to the dome slide. Gave off all its gains. The key futures pointing heavily to the downside as well, off by four point 5 , a huge day for data out of japan, we will have tokyo cpi for the month of february. The jobless rate for january, retail sales for january as well. Worth mentioning all those indicators are pointing weaker anyway and some of them predate the outbreak of the virus. Futures on the kospi off by 0. 8 . Currencies as well on the aussie at that level. Ly the 10year has hit a first record low,. 84 . Facebook cancels its Developers Conference and microsoft pulls out of the beginning show over coronavirus concerns. More to come. This is bloomberg. Good morning oh no, here comes the neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. Paul welcome back to Bloomberg Markets. Im paul allen in sydney with emily chang in San Francisco. The pace of new cases of the coronavirus continues to moderate in china. Its get to tom in beijing. What are you hearing in terms of when or even if this virus could be fully contained . Tom we are waiting for the latest daily numbers. They should be out in the next couple of hours. The trend has been of moderating rates of infection. We heard from one of the medical experts who has been advising the Chinese Government. His expert his estimate as you could be looking for containment by the end of april. He previously predicted it would peak toward the end of february. Inis a man who fought sars 2003. He said the disease may not have originated in china. In terms of his forecast for when they could get this under control, the end of april. We also heard from the premier. He is saying a need to step up their attempts to get Food Supplies to wuhan and hubei. They are saying that schools across china will remain closed for the foreseeable future, pushing the dates back on that. Line, thetroversy on story of a woman who managed to drive from a prison in wuhan all the way to beijing. This was after president xi jinping that beijing should be protected from the virus. Restrictions have increased. There are a lot of question marks as to how that woman managed to evade that. It is another headache for officials. Emily we are expecting chinese pmis tomorrow. What to expect the impact of the virus to be . Impact of expect the the virus to be there . Pretty grim numbers. We are expecting the purchasers index for manufacturing on saturday. We are expecting the forecast infor it to contract to 40. 7 february to 50 from january. That would be the weakest reading since the financial crisis. In november 2008, 38. 8. You are looking at potentially 40. 7. A grim reading from manufacturing pmi. A survey that looks at the Smaller Enterprises is out on monday. Weakening in the financial crisis, 34. 50 is the line between contraction and expansion. You have nonmanufacturing pmi. That is expected to fall to its lowest level since the survey started in 2007. Another indication of how much pain the economy has been in. Emily Tom Mackenzie for us in beijing. Warnings and market volatility, dan ives is staying bullish writing, tech valuations will reflect more risk with fundamental in the near term. The cybersecurity sector remains unchanged. Dan joins me now in the studio. We just heard from scott who said this is the worst event of his career. Where you so optimistic . A major tragedy. View, the pastur 10 years of being bullish on tech, the events we look at and we have to say, does this impact demand longerterm and does this change demand for winners . When i look at apple and microsoft, even though this is going to be an uncertain time anda lie of handholding, a lot of handholding, this continues to be stocks we want to be owning even though you have to factor in risk in the near term. Emily facebook canceled a conference that is three months away. Microsoft, hp cutting their forecasts for the quarter. What do you think the impact is going to be in the near term if in the long term, your positive. You are positive . Pcs, a third of revenue. Cloud, thirds, the azure, a key part of the transformation of microsoft. That continues to be something they kept on the table. 70 to 80 of the valuation is because of that. To be at are going victim of the supply chain. No different from apple or any other pc player. At microsoft, 9, 10 months, as is a name that continues to be the best cloud play over what i think is a transformational growth trend . This. Inue to view you look at your winners. You look at the names that list. You continue to buy them during this massive volatility. Paul youre not alone in that view. A number of analyst still rate microsoft a buy, but it has slipped 11 this week. The question is, when do you by . When do you buy . Dan clients are on the phone all day. Our view is, you do scenario analysis. You pick your spots. Own thesentinuing to names and buy at these levels if you believe in the fundamentals that we do. This is not the time to go into the bunkers. It is a time to look at your whiteboard. Look at the names you wanted to own over the last four or five months. When i look at a lot of these stocks, you have in five days, six or seven months of gains wiped out. There is obviously going to be the bears and more of the armageddon. They are not going to be buying high growth. In my opinion, this is more of a pause in the long term bull market for tech rather than the start of a darker time. That is our review. Paul in the short term, i am wondering if the risks around the supply chain are fully understood. Great point. A when apple was the first one to fess up and then microsoft, that is something they tried to get their arms around. It is such an unprecedented situation where the supply chain do we start seeing normalization in march, april, may . Ist is have to you that how you have to put the goal post. And we see some normalization starting in march, 5g super cycle remains. You have the 5g phones for apple, in december. The impacts are going to be much more pervasive. Youre seeing a lot more of that reflected in these stocks as we continue to go through this volatile situation. Emily what about a company like tesla who has production footholds in china and depends on production for cars. This is a huge purchase after the country has gone through a dramatic kind of reckoning. Dan when you look at apple and tesla in particular, so much of the growth especially for tesla is china. You look at the chinese market, that is a big part of the growth thesis and the bowl thesis. And the bull thesis. Me, i believe it is more of a pause and a delay than changing the long term demand thesis for china. Even though tesla is a wild stock, i continue to view that as a name where the china thesis remains even though in the near term, this has been a gut punch fundamentally to any company that plays into china. Emily do you expect any of these companies will fundamentally change the location of their supply chains . It is something they are probably already thinking about given the u. S. China trade tensions. That would be a huge lift for any company that has a deep and long supply chain in china. To threeould take two years to remove 10 of that supply chains other countries. Vietnamd definitely in and other areas in india, you could see production move. Apple, that is the hearts and lungs. You will see around the edges some changes. Even as we went through the u. S. China trade war over the last year, there was a lot of talk and little action. Youre going to see more diversification. The reality is the vast majority of the supply chain is ingrained in china and the region. Emily always good to have you. Good to see you in the studio. What the, a look into u. S. Can do to defend against not just election but also Cyber Threats as signs of foreign interference surface. This is bloomberg. Paul welcome back to Bloomberg Markets. Check the first word news. Thanks, paul. The head of the World Health Organization says the coronavirus epidemic is at a Decisive Point. He is urging affected countries to act aggressively to contain the disease. The outbreak reached an important Inflection Point on thursday when more cases were recorded outside china than inside. Where than 82,000 people have been infected around the world. More than 2800 people have died. Moreornia is monitoring than 8000 people for signs of the virus. It is the state with the first known Coronavirus Infection in the u. S. And not associated with previous outbreaks. Governor gavin newsom says all those being monitored have recently traveled to china. California has reported 32 conformed cases of the virus. As the World Economy may be heading for its worst performance since the financial crisis. That is as hopes for a swift rebound from the coronavirus fade. Economist expect to. 8 Global Growth this year. Key Central Banks are holding off on cutting Interest Rates. Economists are beginning to join investors in predicting policies. Money markets already see three reductions this year. 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. Im jessica summers. This is bloomberg. Markets facing massive economic uncertainty, the u. S. Is facing many months of political uncertainty. Democratic president ial hopefuls continue to battle for the nomination and the u. S. Government has warned russia is already interfering again. U. S. Intelligence has informed front runner Bernie Sanders the russians are meddling to help him with the ultimate goal of boosting President Trump. Studio, then the founder of the National Security institute who works on surveillance, cybersecurity and other security matters. Given the tension between the u. S. And china more recently, would china be getting there as well . The russians have very successfully conducted operations in 2016. The head of the dhs called it a sputnik moment. The chinese are watching that they are interested in allowing the u. S. To hamstring itself. We have had a very aggressive trade policy. If we continue to incite over these issues, it can benefit china as it has benefited russia. Emily you imagine that china has a favorite candidate especially the perceived ire between President Trump and xi jinping. For the chinese, what they see benefiting them is chaos in america as the russians do. For all nations, when the u. S. Is shooting at each other and not folks on the outside, the challenges in the world, that is when they benefit. Paul the u. S. Does of course course have the benefit of experience from 2016. How well placed is the u. S. To too such attacks in 20 repel such attacks and a 20 . Capabilityt have the today to defend collectively. Work with oned to another and the federal government, the internet industry, facebook, twitter to come together and defend jointly and recognize this is a threat coming from the outside. Move against these threats the same way the attackers are coming up against us. Paul lets talk about some of the influence of those social media giants. Are they doing enough to contribute . We know facebook has taken on a number of accounts already. They are actively engaged with the fbi. We know twitter is doing the same on their side. Thatow reddit, a platform makes its business to engage in these interesting conversations, is focused on ensuring these voices are not magnified in ways that are problematic. The government be sharing more information in real time . Yes. The dhs is working on that, but they need more help. Business of the sharing classified information in realtime. The Industry Needs to stop these things and focus on defending democracy. Isly is the krona virus the coronavirus making any waves in cyberspace . One of the interesting things about the coronavirus, what happens when we all have to stayathome . We are even more reliant on our Cyber Systems to do our daily business if we are not able to interact with other people. It is even more important in this era that we focus on cybersecurity and defending that system. Emily want to ask you about huawei. Of publicbeen a lack evidence to support President Trumps case we should be afraid of huawei. What is your take on this twist . What we have seen is a lot of bad activity we have seen them engage in active efforts to evade u. S. Sections on iran and the like. Toy have the capability influence. Has there been evidence in the Public Record . Not as much as we would like to see. The australians and the british have allowed huawei to have some access to those systems. The key western nations recognize there is a real threat. Andmuch that threat is whether we can mitigate it is a harder question. It is an uphill battle for sure globally. Paul just to bring things fullcircle, is there an argument that huawei is looking is being used as an economic on and the longer i get punished, the greater the risk of Cyber Retaliation from china . There is always a risk of Cyber Retaliation. U. S. Ey are a pollen in the fight against china, they have always been a proxy for china going forward. China has funded huawei with low interest loans. They have been a key player in propagating the chinese capability out into the world. It may be that this is part of the economic fight. One thing the president has made clear is if he is a full trade deal with china, he may walk back some of the issues with huawei. It demonstrates there are economic aspects to the debate also. Emily we have the coronavirus, markets in upheaval, political uncertainty. Is theu look ahead, what biggest cyber threat you see . That is a hard one. Thethreat continues to be attempt to remove intellectual property from the United States. When you take account of all things happening in our economy, we are fundamentally shifting from an industrialbased economy to an innovation economy. Whether it is china and other countries and we cannot trust our systems, that made that means we are not going to succeed economically as a nation. If we are not succeeding economically, we cannot lead in the world. This at rsa, we hear all talk about innovation. We cannot let that intellectual property walk out the back door. We need to bring companies together, industries together, the government realizing this is a joint problem. We need to work on this as a joint effort. Always emily good to have you on those show. Good to have you. Still ahead, our interview with the chairman of saudi aramco as the Worlds Biggest Oil producer reveals it is planning for an overseas listing. This is bloomberg. Paul saudi aramco went public in december, raising nearly 30 billion and making at the Worlds Largest ipo. Now, the saudi arabia and government is considering listing it on a foreign Stock Exchange. The oil producer has already begun discussions with wall street banks to draw up second listing scenarios. In an interview, the chairman spoke to the Carlyle Group cofounder, David Rubenstein. You went public not too long ago. Valuations were roughly 1. 8 trillion. 1. 7. It is above 2 trillion for a couple weeks. 1. 8. It is no company is as valuable as that company. Has traded on the local Stock Exchange. Have you thought about listing it in new york or london or other places yet . Have you thought we only offee company. By of the company is owned the government of saudi arabia. Our program is to have a multiple number of listings over the years. We are looking into it. To have more offerings. These offerings continue to be in saudi. If we have any good Stock Exchange we think can bring some Value Investors to us, we will consider it should lenny we will consider it should Many Organizations want to be Carbon Neutral because carbon contribute to climate change. Do you want to be Carbon Neutral by a certain time . Saudi aramco has been working ion onions their emissions for decades. Regulations of organizations that are talking about the Carbon Neutral or less emissions. We have one of the largest productions. We have as a country and a company, one of the lowest emissions for a good reason. We started early on to have more efficient. Working for the years, the concession we have from the government today is 60 years. Unlike most of the other oil and gas companies, their concessions is from five to 10 years. Wenever we go to a side, went to make sure we want to make sure this well is big enough to produce more at the same time, the depletion rate is very small. Some of the wells we have, 86 years ago or 84 years ago, the uptodate operations for a number of reason. The technologies are very much superb. Below emissions in low emissions because we have less water we are injecting. To energy we are using retrieve the oil is lesser. Having said that, oil is very much important. It is the cheapest fossil fuel. It is the Cheapest Energy source. Today, you have over a billion people in the world who do not have access to electricity. Have to that is way we think we should be more efficient but we should not forget who we are and what we do. Emily Public Investment Fund Governor and saudi aramco to. You can catch more of the interview on the David Rubenstein show wednesday, march 4. Much more coming up here on Bloomberg Television including an interview with the former chief economist at the imf. Stay tuned. This is bloomberg. A very good morning. Markets have just come online. Open in and south korea an hour. Welcome to Bloomberg Markets asia. Decisive point the World Health Organization urges countries to move swiftly as california monitors 8400 people for signs of the virus. South korea records more cases then china for the first time. We will tell you about the figures. And the fastest stock Market Correction on record. 10 s p 500 falls more than in six days at the bank of america warns of the worst shakedown since the financial crisis. Lets turn to south korea. Numbers coming in at a contraction of 1. 3 month on month. The expectation was for contraction of one point 7 . A smaller contraction that expected. Afterstill a contraction we saw those December Numbers in the green. Year on year contracting 2. 4 . The number actually much bigger than expected. The expectation was for a slight growth in these numbers. We have seen early trade data for february showing trade imports down almost 20 year on year. Likeanuary numbers look this. February numbers could be worse. I suppose that is really what is concerning. The data point we are getting is already showing pressure across the region. Largely do not even show the real pain point of the virus, which began in february. Another horrible day for u. S. Stocks. Really one for the record books. Since last declined friday, to get on track for the worst week since the Global Financial crisis. Aussie stocks are claiming. The asx is trading at the lowest since december 2019. Futures looking at the downward beginnings. Tokyo inflation numbers, they are never expected to change the trajectory for the bank of japan. We are continuing to see u. S. Futures continue with the downside trajectory going into the friday u. S. Session. Lets bring in david english. David jim the uncle had a very good piece. What he is saying is, if you want to feed the bottom to the market, one of the first things you will need to see as the market stop reacting to bad news. There are no signs of that happening at the moment. The nature of the uncertainty is we are not used to it. It is hard to quantify. You,al banks what have can do little to actually solve the problem. Arguably speaking, when you look at we know china is going to be in a bad shape. That part of the equation, and markets have figured out. What we are starting to figure out right now china, korea, italy, we have been talking about the west coast in the u. S. Youre starting to see bits and pieces of those economies shutting down and people working from home. Another thing people hoped approach in as well. When you look at u. S. Futures, it seems to be pressure is surmounting on risk as heads. As you head into the japanese open, im looking at japanese futures right now. We are likely going to see more pressure. The Silver Lining and i think there is a chart that shows you this e. M. Markets actually sold off quite badly at the end of january. They plateaued and it is now dms that are planning catch up. In that respect, maybe you could argue that the worst for ems is over. It is a very fluid situation. What is in fashion are these hedges. Shery thank you so much. Headlinesthe latest that they are seeing increased volatility in the markets. There is a possibility of more volatility. They are monitoring the selloff in korean stocks by foreigners. Lets turn to the United States. We are seeing Health Authorities moving to expand testing for the coronavirus as california says it is monitoring more than 8000 people for signs of exposure after they returned to the state from asia. Had heard President Trump earlier saying the administration has done a great job on the coronavirus. Does this feel a little premature to be singing victory at this point . It is definitely soon because we do not know what is going to be happening. Just yesterday in california, they confirmed the first case. This new case in california is not linked to any known travelers, which raises the risk that there could be spread going on in the United States. There is a very uncertain time with what is going to happen. Haidi are we getting more encouraging news about the level of testing we are seeing given we know there was a snafu with the quality of the initial testing kits from the cdc . That is one of the biggest problems in the u. S. The tests that were sent to states and local Health Authorities, they have had problems with using that test. Most of the tests have been going through the cdc in atlanta. That has made it hard for states to get all the testing done that they want to. Aboutates have been upset that. The cdc loosened the rules for testing on their own. They are rushing out a new kit. They just today expanded the criteria for who should be tested. Going forward, a lot more people should be tested for this. It may help us know whether it is spreading in the u. S. Shery President Trump saying he is in constant communication with president xi jinping, noting the coronavirus numbers in china are going down. Have mike pence dealing with the outbreak here. What is he expected to do . It is not clear how that is going to rollout. Alex azor is the have a is the executive of health and human services. Trump has put the white house directly in charge of the task force. They seem to want to take more control of the message. How that is going to shake out is not clear. Haidi thank you so much for joining us. Tradingust checking on on the asx. This is what we are seeing. Downside of overt 2 when it comes to trading in the first few minutes of the australian session. This is the sixth straight day of losses for the asx, which takes effect to the longest losing streak of october in 2018. Just one indication of what we are seeing in the early part of the friday Asian Session after we had the plummet in u. S. Stocks overnight. Since as the government says it is in pandemic preparedness moment already. Shery this as we heard the World Health Organization say we are at a Decisive Point in the fight against the coronavirus and country should move swiftly. On the economic front, christine at the ecb says she does not need does not seem to need for policy response. For joining usch tonight. Talk about Central Bank Policy because we saw the ok Holding Steady and not cutting rates. We have seen these banks trying to use tools outside of Interest Rates. How effective will those be . It is not going to be very effective in actually spurring activity. It could have some modest effect on sentiment. I think at this point, it seems we have moved from extreme complacency to panic in one week. It would seem people want to have a sense there is a limit to the spread of this virus perhaps because of containment measures or because there is some hope antiviralkind of solution can be found from one of the drug companies. Something has to be there to say this is going to be contained. We have seen it contained in china. We need to know a can be limited elsewhere. It can be limited elsewhere. Shery whether it is limited are not, will there be a Lasting Legacy from this coronavirus when it comes to the Global Economy . There will certainly be a legacy in the sense of businesses rethinking their long supply chains because today, with these Global Supply chains, which are focused on maximizing efficiency, it is also subject to risks and the weakest link. Isit has disrupted if it disrupted, the entire supply chain is held ransom. Companies are going to start rethinking, should you have these spread out Global Supply chains or should we bring them back closer home . How much diversification should we have . Should we have multiple production sites across the world rather than have them focused in asia . We will see a lot of rethinking on this coming on the backs of the trade disruption. Globalization in production is going to be hit quite badly. Haidi does that sound like a good thing to you for future prospects of Global Growth if we do see sentiment trending toward a reversal of globalization of trade . No. Problematic. O be just primarily in terms of productivity. Earlier produced in a country where was easier to produce, now youre going to produce near the markets guard list of cost of production. That is going to increase the cost of production. It is also going to make it less in countries incentives to keep borders open. The trend to protectionism that has been rising the last few years can only get stronger when countries have less incentive to maintain these Global Supply chains. This is definitely a strike against globalization. Talking to ae just reporter about a piece on the bloomberg about this time, it is different. Event where analysts and investors are having to scramble around infection rates and dislocation of supply chains and demand and Everything Else like quarantine and trade restrictions and social discontent and political issues wrapped up into the coronavirus outbreak. Is this something that Central Banks have been so used to rushing to the rescue is this something they can fix . No. It is not easily fixed. Demandoth a shock to because people are staying at home, people are not buying. It is a shock to supply because supply chains are not working. There is not that much that Central Banks can do to supply. As far as demand goes, the biggest tool they have to Interest Rate policy is played out in parts of the world. Japan does not have it. Neither does europe. They have gone negative. There is not much room to go further negative. At this point, they have tools like resuming quantitative easing. These have only modest effectiveness. At this point, Central Banks can say, we will act when the time comes. There is not much ammunition left. It is up to the fiscal authorities. Broadly, we also need to consider whether direct action against the spread of the epidemic is going to be the thing that restores confidence. Shery what types of fiscal measures are we talking about because hong kong just had cash handouts. A lot of people are saying people will say then not spend. You needi think what is a combination of spending power as well as greater confidence. That is why i keep saying that we need to see some containment of the epidemic. I would say the best thing that governments can do is fight the epidemic rather than worry about stimulus measures. That comes later. Shery here in the u. S. , we have seen consumption holding up growth. Coronavirus combined with other trade tensions we never know what is going to happen on that front. While this disrupt consumption enough to trigger a recession . I think the single biggest Factor Holding up consumption is strong jobs market. People see their jobs are safe. If the coronavirus episode is a passing one without a serious disruption of companies and the beginning of layoffs, i think it is quite possible the consumer will see through it. It is too early to say this, but if it turns out to be more startng, if companies laying off, the kind of consumption support we have seen in the markets is going to follow. Dependsns on a lot on the job situation and consumer confidence. They are both intertwined. That is going to depend on the spread of the disease. The university of Chicago School of business professor. He is staying on with us. Thats get you the first word news with jessica summers. Japan will close schools nationwide to help control the spread of the coronavirus. All schools will remain shut until spring holidays began in late march. The measure affects 13 Million Students and 13 and 30 5000 schools. Japan has more than 200 confirmed infections. That does not include another 700 five cases that were spread on a cruise ship. Malaysia has announced a 4. 8 billion stimulus package to counter the Economic Impact of the outbreak. Saidnterim Prime Minister the money will be used to support businesses, particularly the tourism industry. He says malaysia may issue bonds if necessary. The economy is expected to grow 4. 2 , down from an earlier forecast of 4. 8 percent. Demand in the u. S. Economy was slower than first reported at the end of last year according to fourthquarter gdp data. Kept and inventory figures the economy expanding at a 2. 1 annual rate. Consumer spending was revised down and nonresidential investment matched the steepest rate of decline since 2015. 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. Im jessica summers. This is bloomberg. Ahead, more with the governor. We will be discussing outlook for indias economy and the tool cleats of global central bank. Shery plus, why scott minard says the coronavirus is the worst thing he has seen in his career. Take a look at the asx 200 right now. We are seeing a fall the most since september 2015. This as we see ozzie yields dropping to record lows. The government telling the public to prepare for a likely pandemic. This is bloomberg. Shery this is Bloomberg Markets asia. Im shery ahn in new york. Haidi im howdy stash im haidi stroudwatts in sydney. The road economy may be heading for its worst performance since the financial crisis. Lets head back to chicago and the university of Chicago School of business professor of finance. He is still with us. He is the former governor at the reserve bank of india. Thank you for staying on with us. Beens growth story has unfulfilled potential. What is stopping that potential from being filled . It is a sad story. Most recently, it is politics. Government post a massive election win has focused more on fulfilling its political and social agenda rather than paying attention to the economics. Continued this draft has continued a pace of slowing growth which was precipitated by some actions the government towed such as the demonic tonights asian and a fully rolled up goods and services tax reform. Paid sufficient attention to cleaning up the Financial Sector. That is leading to slowing growth. These are things that can change if attention is paid to them and the appropriate actions are taken. Shery in terms of the haidi in terms of the policy toolkit, we have seen everyone theyre all sorts of other banks taking a leaf out of the ecbs book. R. B. I. Ist one, the doing. Have efficient is it going to be in creating Credit Demand . We have seen a variety of attempts from the reserve bank of india. As the issue that it does not matter how much credit you loosen up and how much you try to boost transmission, it is not spurring Credit Demand . Issue ie sexual think the central issue in india today is Financial Institutions who have limited capacity to lend either because they have two exhibited capital as is the case with some state owned Financial Institutions over, they are in some degree of distress as is true of some of the nonbank financial companies. My mind, at this point, some of these liquidity measures may have modest effect, but the real challenge is of rectifying the problems in the Financial System by cleaning up these companies and recapitalizing them. That requires direct attention resident indirect attention through liquidity provision. Shery we sell President Trumps visit to india recently. Plenty of photo ops, not much substance when it came to the trade deal. There seems to be no more easy trade deals out there. How have trade negotiations become exercises of power and how can we overcome this trend in Global Politics . A this is a consequence of country after country looking inward and getting more protectionist. Partly because the kinds of organs that were available in the past, for example, the countries opened up markets to goods and services from the markets while the emerging markets opened up to services from the industrial countries. Each one wants to compete on close front. The easy trade deals of the past are no longer available, especially because people like President Trump or Prime Minister modi are looking to protect some of their weaker constituencies against the effects of trade competition. Countries becoming more protectionist, looking more inwards, what kind of trade deals where you get under these circumstances . Shery thank you very much for your time today. The university of Chicago School of business. Thank you for joining us. He was with us from chicago. We will have plenty more analysis leading up to the release of indias Fourth Quarter gdp data. Is on the next half hour of Bloomberg Markets asia. This is bloomberg. Haidi welcome back to Bloomberg Markets asia. Earlyin continues in the part of the australian session. This is what we are seeing when it comes to training in sydney. We are seeing the longest losing streak since september 28 further s p. Years,st drop in two extending the losses. We are seeing have to losses in new zealand. Interesting to see u. S. Futures have just popped into the grain. Volatile movements after the s p had its worst day sensed august 20 11 since august 2011. This is bloomberg. Haidi we are getting breaking news on japans economy crossing the bloomberg. Tokyo cpa undershooting expectations, 4 10 of 1 . We were expecting half a percent for the month of february, excluding fresh food year on year, inflation. Half a percent also missing expectations. This is the leading indicator when it comes to nationwide consumer inflation trends. The cpi reading excluding fresh food and energy costs, which we know have been fluctuating, given the Coronavirus Impact for february, coming in at 7 10 of 1 . Slightly missing expectations of 8 10 of 1 . The jobless rate ticked up to 2. 4 from 2. 2 . A bit of a surprise given that the jobless rate had held pretty steady in japan pretty much since the early 1990s. The story is the shortage of labor availability given the aging demographic. We are also getting readings from retail sales and production out a little later on. Likely to change the trajectory when it comes to the bank of japan. Shery lets look at how the markets are reacting. We are key. Seeing nikkei futures under little pressure at the moment. Of should actually seeing a little upside. This is after four sessions of losses. When it comes to u. S. Futures, also offsite after u. S. Stocks dropped the most since august 2011. We are seeing a bit of a rebound when it comes to the futures markets, but the asx 200 now falling the most since 2015. Remember, australian stocks were at a record high just a week ago. What a reversal. All of this to do with the coronavirus outbreak. The number of new sessions has grown faster outside china than inside for the last couple days. In particular, south korea. Lets go to yvonne man in hong kong. How have they been handling the rising numbers . Reporter the government has been under heavy fire. President moon jaein earlier said the virus will disappear or not before long. Theyve also been criticized for not closing the border with china. We have seen other countries do the same. The latest development, which is quite a turning point, is that south korea yesterday reported new more new cases than china for the first time. Thursday, it was 505 cases in south korea. That was the largest daily spike we saw from the country, surpassing the 433 we saw out of china. Now it seems like when it comes to the political pressure that moon jaein has, the opposition now is saying his incompetency is going to be the key issue in aprils parliamentary elections. Theres more than one million south koreans that have signed an online petition calling for his impeachment. A lot of question marks about this trumpkim summit, whether it will be happening this year, given that south korea is now stuck finding this virus fighting this virus. North korea has basically turned inward since the outbreak began and shut its own borders. In japan, we have seen the government go through similar scrutiny as well. We saw an unprecedented move from the Prime Minister yesterday, closing all schools, starting monday until the end of the spring holiday. Thats at least 13 million kids that will be at home for at least a month. I bet thats really getting parents tearing their hair out from hong kong to japan. The decisive stage, what does that mean . Reporter that means this is the time when the who is urging governments to take action. The director general says if you act aggressively now, you can virus. In contain the this is as we see a spike of cases across europe. Italy, the number of infections are now 520. We heard from the ecb president Christine Lagarde who says coronavirus at this point doesnt require Monetary Policy to fight it just yet. The Vice President of the central bank also saying its important to not overreact. Lagarde saying they dont see a longlasting impact on inflation from the coronavirus. It echoes what you heard from analysts and central bankers that perhaps Monetary Policy is not going to be as powerful of a tool in limiting the economic fallout from this outbreak. Meanwhile, at the imf, they are also reconsidering what to do with spring meetings in washington, d. C. That is supposed to happen in april with the world bank. Sources tell us they are reconsidering the scale and scope, whether cutting it down with smaller delegations, or even a virtual format. Haidi yvonne man in hong kong. One of the biggest names in finance is sounding the alarm over the coronavirus in a big way. Saying this is possibly the worst thing he seen in his carrier. He spoke on bloombergs whatd you miss . Earlier. I dont think its inevitable, necessarily. I dont think we should stop out the s p somewhere between 3000, 3100, which is where we did today. We need to take a breather and get perspective. But as the data keeps coming in, i have said to some people, an epidemic is when your neighbor has the illness. A pandemic is when you have the illness. The illness has really not come to the u. S. Yet, but if this really turns into an epidemic in the u. S. , i have a lot more downside. Reporter thinking about market risk, there seems to be two things that make this particularly different than anything we have seen lately. One of them is the extreme levels of uncertainty. Its really hard to model Something Like this, especially when so much Human Behavior is involved. And second of all, weve had other periods of volatility. They can usually address it via rate cut. China devalue the currency to percent at the end of 2015, but still a stimulus and rebalancing. A rate cut may in theory help, but isnt that a monetary phenomenon . Not at all. I think the fed is fairly impotent in this environment. People keep talking about this demand shock and will we have a demand shock . Or that there is no demand shock, it is a supply shock. Come on. Hotels in new york are air empty. People are not traveling. It is a demand shock also. Lowering Interest Rates is it going to encourage someone taking a risk of getting the virus. One thing i will tell you that ive not said to anybody else in public, this is possibly the worst thing ive ever seen in my career. And ive been through a lot. Ive been through the stock market crash in 1987. I went through the financial crisis. This has the potential to real into something extremely serious. Reporter at what point did you have that realization . This morning. Reporter why this morning . What happened overnight . When you start looking at the data that came in today, not yesterdays data, but we picked up overnight for increases in cases in korea, increases in italy, and now spain is becoming it is very hard to imagine a scenario where you can actually contain this thing. So thats the thing that is to me very frightening. Reporter how likely is a global recession . For you answer that, how do you even quantify global recession . Does that mean . First of all, to get to that answer, we have to make sure the trainees are not lying about output numbers chinese are not lying about output numbers. I went on record a few weeks ago saying first we could track 6 . Don straszheim at isi who is more familiar is now saying 14 . I dont think the Chinese Government will actually print that kind of number. But if thats the substantive number, we are in global recession. Reporter right now . Yes, at this point. I think that europe would easily output, which of would put most European Countries under recession. For the United States, its a little different. I think for the moment for where we are, we should expect about a. 5 drag on gdp. Other experts say 1 . That is certainly not a u. S. Recession, but over time it has the potential to cascade into that. Ofry Scott Minerd Guggenheim assessments. Lets get first word news. Reporter californias monitoring more than 8000 people for signs of the virus. It is the state where the first known Coronavirus Infection in the u. S. , and not associated with previous outbreaks was detected. Governor newsom says all those being monitored have recently traveled to china. California has reported 33 confirmed cases of the virus. The World Economy may be heading for its worst performance since the financial crisis. That is as hopes for a swift rebound from the coronavirus stays. Bank of america economists now expect to. 8 Global Growth this year, the weakest since 2009. Key Central Banks are also holding off on cutting Interest Rates, but economists are beginning to join investors in predicting loser policy. Money markets already see three fed reductions this year. Economynd in the u. S. Was slower than first reported at the end of last year. Thats according to revised fourthquarter gdp data. Upwardly revised trade and inventory figures cap to the economy expanding at a 2. 1 annual rate, but Consumer Spending was revised down at nonresidential investment matched the steepest rate of decline since 2015. 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. Im jessica summers. This is bloomberg. Haidi thank you. Coming up next, the weekly bloomberg segment speaking to an organization working to empower female entrepreneurs in africa. This is bloomberg. Shery the latest edition of bloomberg equality, we are focusing on africa, which according to the world bank, is the only region in the world where more women than men become entrepreneurs. Despite this , they say barriers to resources dont support this. Women interpret nurser cooperative entrepreneurship cooperative, meant to empower women in the continent, bloomberg philanthropies, along with bloomberg lp, helps fund this cooperative. Is founder and ceo. Quite an exciting project. Let me start with asking about does and what your role is. This is a remarkable organization that brings together 200 women every year from all across africa. It almost covers 50 countries in africa. It is kind of a mini mba. It is entrepreneurs building their own businesses and they meet virtually and different times during the month. They have mentors, assignments, and women who do webcasts for them on different subjects. Ofot involved because one the subjects everyone wanted to hear about was branding and marketing. It has been a wonderful experience. You meet 200 women virtually. Best questions ive ever been asked. I have done things at a lot of Business Schools and i have never gotten better questions. That im going to bet colette is one of your best students. You found this star line to the Construction Company is a sand mining company. This would be a pretty maledominated industry. Tell us about your businesses and perhaps the challenges you face. Right. Is dredging, like you said, of sand. I found the business at the time when i had just separated from my husband, so it was not from a place of comfort. My last 6,000 and got 50,000 to start the business. Stabilized after six years, i was able to go into construction. Right now, we are doing the dredging as well as construction , with a focus on affordable housing. Haidi what is the significance of an Initiative Like this . Are you confident in the future for female entrepreneurs in africa . , wehe significance would be have very volatile environment in africa, the majority of us. But what happens is every single business has certain moving parts, which if you can control, then you can have a business that runs more smoothly and efficiently. Does is gives us the skills and the tools we need to run our businesses more efficiently. So i think having gone through program, women would have more efficient businesses, we can scale and grow, and perhaps go to other fields that are reserved for men traditionally. I wanted to ask you, in terms of your experience and skill set, as a female leader in the industry you are in, what was most surprising to you that was most useful in guiding an Initiative Like this . So i didnt know what to expect. The first time i did it. What struck me was how practical these women was where. They were fearless. Nothing was going to stop them. Questions that are esoteric like branding, that are theoretical and hypothetical. With these 200 women, they wanted to know what to do, visavis their brand, when they got back to their business one hour later, and how where they actually going to build it . , it was the focus of the women, it was the. Ragmatism they brought to it i hadlly made me think, to think, what would i do . Its 9 00 in the morning now. How would i attack the building of my brand. Shery shelley, you are on the board of blackstone. You were on the board of ge for years. But you are the minority. Inre are not so many women executive positions. Why do you think so many women are locked out of these leadership positions . Again, i think it is one of the things colette talked about, the confidence to be able to operate at that level. I went to business school, there were four women out of 300 in my class. Its a bit of a game of numbers, too. I think we are now at the point where the talent pool is there and now it is just a question of development and desire. We all have to say its important that we have gender equity in the boardroom. And then we can start to figure out how to do it. But i think its happening. I think its slower than i would have expected. On the other hand, you rear really seeing a different. I used to be the only woman in the room. I am now no longer anymore the only woman in the room. Shery shelly lazarus, thank you very much. Also thank you to colette ndi. And ceo. Group founder and shelly lazarus, center for Global Enterprise ceo. Coming up, factory output likely slowed in january while retail sales are set to decline. This is bloomberg. Shery breaking news out of japan. Industrial production at the moment for the month of january growing 0. 8 from a month ago. When it comes to the year on year numbers go, in contraction, filing 2. 5 . This would be falling for a fourth consecutive month. I have to emphasize both numbers are better than estimates. When it comes to retail sales numbers, also better than expected. Year on year contraction of 0. 4 . Month on month growth of 0. 6 instead of a contraction that was expected for the month of january. Of course, the numbers are not as great as the previous month. The january numbers are weaker, weak than much less the numbers on the economists had expected. We have seen Company Production plans in the month of december pointing to a rise when it comes to manufacturing. Perhaps we are seeing a little bit of that. A key question is what happens when the coronavirus outbreak starts slowing all the Economic Activity in china and then japan . Lets get analysis with our cross assets managing editor. We have retail sales numbers. Industrial output for the month of january. Not as bad as expected. Still pointing to a weaker economy. What is your assessment . Thats right. I think the key thing is here to keep in mind that the Fourth Quarter saw a contraction of the economy and what we are seeing even if it is better than expected, continues to soften even before the impact of the coronavirus. Foreems like a recession two consecutive quarters of contraction in gdp is really baked in the cake at this point. Looking at the retail sales numbers, fourth consecutive monthly decline really shows the enduring impact of the sales tax hike that the Abe Administration imposed back in october. Economy inly set the a very sluggish growth mode, even before the coronavirus. Shery of course, all to do with the china coronavirus outbreak. Right now we are getting the latest numbers out of china saying the total number of cases 78,824. En to but of course, what we are watching is the i dish and a number of new cases, coming in at 327. This is a slow down from the previous day, but when it comes to deaths, coming in at 44 new deaths, which is a higher death toll than the night before. We are now seeing total coronavirus death toll rising to 2788. Haidi we are seeing sort of that consolidation or the slowdown in the numbers out of china both in terms of new cases and the death rate as well, which really continues to paint that the concern is spread. China is saying hubei has an additional 318 additional coronavirus cases as of february 27. We are now hearing from the bank of japan. The japanese government speaking watch thets vital to Economic Impact of the coronavirus and that they dont see the need to compile extra new numbers at the moment. There are limitations to what the bank of japan can do further . Reporter thats right. Reporter from the bank of japan side, we heard from a board member who has consistently dissented in favor of greater boj stimulus over the past couple of years. He said that he did not think that the coronavirus risk was a reason to ease policy further at this point. So if you have even one of the most dovish boj numbers member saying we dont really need to do anything, that underscores the mindset of the bank of japan. But we are seeing for fiscal authorities here is to keep in mind that the ministry of finance is extremely powerful and they are very concerned from a medium and longterm perspective about japans debt load. Thats why they pushed through the sales tax hike in october and you can bet the ministry of finance bureaucrats are going to be careful to tell politicians lets not overspend because of the virus. On the other hand, you would expect some sort of popular demand for a response. Japan has been slow so far to deal with the coronavirus risk, both for a Health Perspective and economic perspective. The question is, how long can that be sustainable . We have to look at the poll numbers over the next week or so. Shery thank you very much for your perspective on the japanese economy. We continue to see the latest headlines from the finance minister saying they are watching the Economic Impact of the coronavirus. We are getting the latest hubei death toll numbers. We are talking about 41 new debts in hubei province, which means three deaths have happened outside the epicenter of hubei province. We will have plenty more coming up. This is bloomberg. Hi were glad you came in, whats on your mind . Can you help keep these guys protected online . Easy, connect to the xfi gateway. What about internet speeds that keep up with my gaming . Lets hook you up with the Fastest Internet from xfinity. What about wireless data options for the family . Of course, you can customize and save. Can you save me from this conversation . That we cant do, but come in and see what we can do. Were here to make life simple. Easy. Awesome. Ask. Shop. Discover. At your local xfinity store today. Shery very good morning. I am haidi stroudwatts in sydney. Asias major markets are just open for trade. Shery i am shery ahn. Welcome to Bloomberg Markets asia. Haidi our top stories this friday, a Decisive Point. The World Health Organization says it is time to take aggressive action against the coronavirus epidemic as the number of confirmed cases in china again. The s p forced more than 10 falls more than 10 as the bank of america warns of the worst shakedown since the Global Financial crisis. More south korea records new cases. Korea comingth online. Lets get straight to the Market Action with Sarah Ponczek. Feeding through to japan. The nikkei 225 and the topix are both down near 2 , falling for a fifth straight day. Both benchmarks well below their 200 day moving averages, and with that, we have seen a bit of a return to the safe haven. The yen on track versus the u. S. Dollar for its best week since august. At the same time, we see a decline in yields for 10 year jgb use, yielding 12 basis points. Lets switch up the board. South korea coming online, trading at the lowest level since at least october. The kospi down 1. 5 . See the asx 200 falling for a seventh straight day, extending declines by 3 , closing in a correction down 10 . We see weakness emerging. We do see a little bit of resilience in the u. S. Futures market. 5 , butes up close to this after the workstations 2011. A decline of more than 4 . Att to get you a better look what we saw during the u. S. Trading session, as you can see, the s p closed well below its 200 day moving average. That was seen as a tech call line of support, closing 2 roundand also below that number of 3000. Traders are asking where to . At the end of the trading day, it was the worst. We saw five different swings. We saw more than a 2 decline tacked on but it was already shaping up to be a red day. Back to you, haidi. Haidi Sarah Ponczek taking a look at the fallout when it comes to markets. The coronavirus outbreak remaining our top story as it continues to impact markets first in the u. S. , and now in asia. The potential for more and more Market Corrections in this part of the world. We have coverage from our team on the ground. It would ingles and yvonne man in hong kong and david baker in San Francisco joins us as well. We will be getting the situation in california in just a moment. Thats get to the Market Action first. We are joined by dave in hong kong. David, what are you watching as things continue to unravel . Point towould like to u. S. Futures because this time yesterday, we were seeing contracts on the way up, but we all know what happened overnight. He was on the bloomberg talking about how he priced in the sort of risk that is quite rare, very hard to price. How do you know in the markets digested all the bad news . He said if all the bad news. He said that is not what we have seen so far. When it comes to japan, we have a bloomberg chart which shows you this, and its really, i guess, in a lot of ways, it tells you you thinking right now of traders. You are looking at the price of put options on the nikkei 225, currently at 22, 21 and change. You are seeing prices of protection. You could fall to 19,000 even by next month. Contractsny of these have an individual story by itself, but it shows you the extent to which traders are speculating on the magnitude of the drop and some of them are actually profiting. The Downside Protection in terms of hedging is what seems to be in fashion at the moment. Haidi when it comes to hedging, when you take a look at the chinese market, they are seeing gaping holes in terms of tools. David it is the secondbiggest stock market in the world, and you only have four contracts. In order to hedge. There is a great story out on the bloomberg as well and one of those contracts was up 2800 , and it shows you the mismatch between the amount of money in the cash market and sort of the demand that investors have at the moment because of the gyrations, because of the volatility, because of the uncertainty. You know, theres quite a limited number of tools that they have in order to hedge, and they are not perfect tools as well. It is technical. You dont have the tools. Shery david ingles, thank you. Now, china has reported a further slowdown in the pace of new cases from the day before. Picture to be a similar compared to a slowdown in cases. Thees, and it confirms trend that things are perhaps stabilizing in china. Let me update you with the latest numbers. 300 27 additional coronavirus cases in china, 44 deaths, most of which came from the epicenter of hubei, where they reported thatases and 41 deaths in province, bringing the total amount to 78,824. The death toll at 2788. Thats a lot of numbers. Basically paints a picture that things are slowing down and perhaps the containment is may be going to be more effective now in china. The who did mention we are at a decisive moment right now when it comes to this outbreak and that there is a potential that this could be a pandemic and urging governments to act aggressively, if you do act swiftly, they say you can contain this virus. Italy,e more cases in 520 now, and we heard from the ecb president , Christine Lagarde, saying when it comes to this coronavirus, it may not require centralbank policy yet. The Vice President of the central bank saying it is important not to overreact. Lagarde saying, at this point, they do not see inflation having a longlasting impact from this outbreak. This seems to echo what we heard from analysts and central bankers that perhaps monitoring policy is not the best solution. As we see a slowing in the infection rate in china, the who is saying this is a Decisive Point to fight to contain the epidemic elsewhere. Yvonne right, and it would be interesting to see what we see out of south korea. Now, even the cases in south korea, the fresh cases, are surpassing what we are seeing in china. We saw about 300 or so today in china and we saw 505 cases out of south korea on thursday, which was the biggest daily spike that we saw from that country. The president , moon jaein, has come under heavy fire over the governments response over this, and now, the opposition is now saying his incompetency is going to be the key issue in the april parliamentary election. Theres more than one Million People that have signed an online petition for his impeachment, and so, a lot of pressure for him. And over in japan, we have seen similar scrutiny the government there, given the response to domestically this outbreak as well as the diamond princess cruise ship. Shinzo abe coming out with an unprecedented move, shutting all schools, starting from monday up until the end of the spring holiday. That means at least 13 million kids are going to be out of school for at least a month after we saw cases top 200 there in japan. Much yvonne, thank you so for that. Yvonne man in hong kong. Havehile, u. S. Authorities moved to expand testing for the coronavirus. California says it is monitoring more than 8000 people for signs of exposure. Lets get some more on what we know about this as we hear from the Health Secretary speaking at a white house event at the moment, saying the administration is keeping the risk of coronavirus low for americans paired what do we know about the case reported yesterday and in terms of some of these containment measures and the testing thats going on at the moment . The case that we saw yesterday in Northern California is traveling in that we know very little about how it popped up. We have had so far in the state just 33 confirmed cases of coronavirus. And most all of those people have been in instances where the authorities knew pretty well just how they contracted the virus. The case that popped up yesterday, that does not apply. We do not have a very clear idea at all of how this woman actually came into contact with the virus. She was not traveling. She has not had any contact with any people who are known to be exposed to the virus, and even though there is an air force base in the county where she lives that has some people in quarantine with the virus, she has not had any known contact with that. Though its quite a mystery as to how she came down when it with it and that is what is so worrisome about it. Shery david, what is worse is that, as you said, this infection could be spreading silently across the united dates. States. What are we seeing in terms of testing . David the testing situation has been a bit of a problem. We heard from gavin newsom that the state only had 200 testing kits at its disposal and theres been a protocol in place with the centers for disease control, the federal government, about when you should test people. Its been very focused on just testing the people who have been in situations where they are likely to come into contact with the virus, so if you are a doctor and you have somebody coming to you with flulike symptoms and you are wondering maybe this is the coronavirus, until now, the cdc has not wanted you to actually test that person, so we were hearing today from gavin newsom that he and the state Health Officials have been talking with the cdc about expanding that. Local doctors will have much more leeway to do testing when they think it might be warranted and the cdc is rushing more testing kits to the state so that will actually we will actually have the materials at hand. David baker, thank you very much for that with the latest on the coronavirus outbreak in the United States. Lets turn to the nikkei because we are seeing japanese stocks extending declines, falling more than 3 at the moment, and remember, we have such a big fall already at the beginning of the week. Again, falling more than 3 or around 3 at this point, which would be at the lowest level since september of last year. As we continue to see these broad declines across asia. Lets get to the first word news with jessica summers. Jessica. Jessica thanks, shery. 4. 8ysia has announced a billion dollars stimulus package to counter the Economic Impact of the outbreak. The interim Prime Minister said the money would be used to support businesses, particularly the tourism industry, and he said malaysia may issue bonds if necessary. Malaysias economy is now expected to grow between 3. 2 and 4. 2 , down from an earlier forecast of 4. 8 . May be headingmy for its worst performance since the financial crisis. For a swift rebound from the coronavirus. Bank of america economists now expect to. 8 Global Growth this year, the weakest since 2009. Key Central Banks are holding off cutting Interest Rates, but economists are beginning to join investors in predicting looser policy. Money markets already see three fed reductions this year. Has set a tough timetable for trade talks with the e. U. Boris johnsons government says if the two sides cannot agree on the broad outlines of a deal in four months, they may start prepping for a nodeal departure in january. The u. K. Says it wants something similar to the e. U. s agreement with canada, which removes tariffs on 98 of goods without forcing it to join the bloc. Negotiations on a postbrexit deal begin next week. 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 jessica summers. This is bloomberg. Haidi still ahead, we will have the latest on the violence in new delhi, which has killed at least 30 people. What the Modi Government is doing so far, later this hour. Shery but first, we get the outlook for bonds in china amid the region with the coronavirus outbreak. This is bloomberg. Haidi this is how we are faring when it comes to tuition markets, really taking the lead, not much of a lead come in we got from the u. S. Take a look at the nikkei extending losses to over 3 , 3. 1 percent lower for the nikkei 225 as we are starting to see asian markets, a number of them heading to correction territory, this after we had that terrible day in the u. S. Of course, s p 500 stocks tanking to the tune of 4. 4 , closing at the lowest levels of the day, and we are really not seeing much of a bottom as to this selloff created by this global Coronavirus Spread fear. Jp morgan begins its inclusion of Chinese Government debt in its benchmark emerging market indexes later on today. The move will bring up to 30 billion of inflows into the countries according to the Investec Asset management. He joins us out of singapore. Wilford, great to have you. What is your outlook for asian credit given we are having such strong moves when it comes to global bond markets . Volatilityng so much and price action when it comes to Global Markets overall in the issue of the coronavirus and the potential impact on Global Growth and corporate earnings is one that i dont think even the boldest economists are market analysts have managed to get a handle on yet. Good morning. It is indeed a challenge i think for Global Growth. This is a shock that is affecting both demandside and supplyside of economies i think in the shortterm companies. They will struggle with cash flow issues. Rerating. E of i think, when we see profit warnings, it starts to encourage others to follow suit and to readjust slowly but i also think that, as credit spreads widen martyr for us, its time for us to look at the asset class and engage again. Its probably a buying opportunity. I think we are in the early days of rerating. Theres lots of falling knives and not too many people keen to catch them. And it comes into the inclusion in the jp morgan index for china , is this a little bit of a sentiment boost . What are you expecting in terms of fund flows in terms of impact on the Broader Market sentiment . There are two stories here. The inclusion of china to jake morgans flagship em indices is going to bring in some direct flows given that 300 billion inclusion and goes up to 10 however 10 months. Mechanically, we would see 30 billion enter china over the next 10 months, but thats a very, very small portion of chinas bond markets. Just one part of the story we will see flow going into china and may be some out of the other emerging markets but i think the second and biggest story is that the china inclusion is part of a structural narrative of the mainstreaming of chinese fixed income markets thats been going on already for a couple of years now, and i think the inclusion by major indices, starting with bloomberg last year in april and jp morgan today, is the approval the chinese bond markets are something to be looked at and it is part of the bigger narrative that china wants to develop its own Financial System and to deepen its funding routes and to widen its ability to finance, and that is, i think, the structural narrative that we are trying to paint here amidst all the chaos and volatility in the market. The need for that financing during the coronavirus outbreak might push for the opening of chinas financial markets. I think that just as the covert incident tells us the importance of health, what the chinese are doing with the opening up of the bond market, allowing more competition, allowing Credit Rating agencies needingin, its part of a healthy Financial System and having Foreign Investors come in is part of that step towards more efficiency in a deeper bond market. We have seen record sales of corporate debt in china despite the fact that International Debt markets have virtually come to a standstill. Is this just the expectation of more liquidity injections in government support, and will enough toll it be support the economy . The abilityart of to finance was promoting earlier this year. Are happening online and i think the chinese have different avenues to get financing to happen. Massive cutting of the deposit rate or to borrow cuts, loan prime rate cuts, will they really help . I have my doubts having the aircon on and having more cold drinks, it may help a little bit but it may stop problems further down the road and that is them mentality happening in china. We do need to lose some financial conditions a little bit, reduce Interest Rates and help s ps to be able to finance loans, but you cannot turn on the tap and suddenly go crazy on leverage because thats going to stop problems later. Thank you. Thes get a quick check of asian markets. We continue to see the fall across the board with the nikkei losing more than 3 . Remember earlier in the week, we had a follow more than 3 has also now, we are seeing it at the lowest levels since september. The asx 200 following the most since 2015 while kiwi stocks are down for a fifth consecutive session. Plenty more to come. This is bloomberg. Haidi this is Bloomberg Markets asia. I am haidi stroudwatts in sydney. Shery i am shery ahn in new york. Lets get a quick check of the latest business flash headlines. Starbucks says 85 of its stores in china have reopened for business. Half of the 4300 locations have been closed due to the coronavirus outbreak. Some have been shut down for as long as a month. The ceo made the decision based on the slowing numbers of new cases in china. He is seeing the early signs of a recovery. Forecast nd z is the coronavirus hits profits. The Worlds Largest will drop 10 after fourthquarter profit saw more than estimate. They blame much of that on the biggest jump in Raw Materials in a decade. Shares closed down 11 . Shery aston martin says revenue will continue to slide as it braces for the impact of the coronavirus. The british luxury car company is relying on chinese demand for its new dbx suv to boost sales. The stock fell by as much as 16 on thursday. Deliveries of the companys firstever sportutility vehicle are due to start in the second half of the year. The angst continues in the friday sessions in asia. This is what we see when it comes to trading. The nikkei 225 extending those losses 3. 3 , close to the session those we have seen. The kospi off by test about 2 . We are getting markets, including japan, as well as korea, and australia, creeping like they are on track towards correction territory. We are seeing australian stocks falling. It is the longest losing streak since september 2018 and the worst sixday drop in two years. New zealand also tracking lower for a fifth straight session as the potential economic and corporate impacts of the coronavirus threat continues to weigh. Shery next get a quick check of the currency markets as well, seeingbecause we are strength in the japanese, seen as a safe haven. We continue to see the japanese yen strengthening despite the fact that we saw weakness earlier in the week. The offshore yuan also seeing some strength. Surprisingly, it has been very resilient. It is at the strongest level since august against the basket of 24 Exchange Rates and we are talking about strength throughout the week. When it comes to aussie dollar, also gaining ground. The korean won was steady in the previous session and it is now gaining ground as well. Haidi. Haidi coming up next, lackluster Consumer Spending and risks on risks from the coronavirus. This is bloomberg. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] this is Bloomberg Markets asia. I am jessica summers with the first word headlines. The head of the World Health Organization says the coronavirus epidemic is at a Decisive Point and he is urging effective countries to act aggressively to contain the disease. The outbreak reached an important Inflection Point on thursday when more cases were reported outside china than inside. More than 82,000 people have been infected around the world and more than 2800 have died. Monitoring more than 8000 people for signs of the virus. It is the state where the first known Coronavirus Infection in the u. S. And not associated with previous outbreaks, was detected at all those being monitored have traveled to china. California has reported 33 confirmed cases of the virus. And in japan, schools will close nationwide to help control the spread of the coronavirus. Government says all schools will remain shut until the spring holidays begin in late march. The measure affects nearly 13 Million Students at about 35,000 schools. Japan has more than 200 confirmed infections. That figure does not include another 705 cases, which was spread on a cruise ship that docked off yokohama. Turkeys president held a crisis meeting with his top Security Officials after an airstrike left 29 turkish troops dead in syria. Thursday, the ambush by forces loyal to bashar alassad, its the deadliest attack so far. Turkish forces entered syria in the bid to enforce a defunct truce near the town of it led idlib. 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 jessica summers. This is bloomberg. Shery asian stocks continue to fall, now down for a seventh consecutive session at a fourmonth low as we see more and more markets close to correction territory. Lets get a check with Sarah Ponczek. Sarah the nikkei 225 off more than 3 , and now, in an official correction, down more than 12 off of its record highs. The topix also lower for a fifth straight day. The korean kospi off more than 10 on the highs of this year, but still welloff the highs, record highs seen in early 2018, but clearly, the fears are still weighing across the asiapacific region. Lets also get you a look at those fx and rate markets because we are seeing resiliency in the aussie dollar, moving higher for a second day today. The best performing g10 currency, but you put it in perspective, just rebounding off of the lowest levels since 2009. At the same time, we see some steadiness in the eurodollar, but this after thursday, gaining more than 1 , and we do see a little bit of strength in the offshore yuan, too. This is the sixth day of strengthening for the yuan but also trading on the weaker side. U. S. 10 year yield low 1. 3 . Lets take a longerterm look at the 10 year. Its been quite the ride just this week. The tenyear plummeting this week, down roughly 20 basis points. At one point overnight, it fell as low as 1. 24 , alltime low, and now, strategists are saying the possibility of reaching 1 could actually come. Its a real possibility. On top of these moves in the 10 year, we have seen larger moves on shorter dated yields. The year treasury yields falling 30 basis points this week, the most for any week since 2008. Back to you, haidi. Haidi Sarah Ponczek with a look at the Market Action out of new york. Lets get to india. Itsi is grappling with worst sectarian violence in three decades. The riots, which we can on sunday, began on sunday, injured 200 others in three days. The managing editor joins us now. Relatives of those who died saying . It is in northeast delhi, where a lot of the violence took place. They are saying the police stood by while a bunch of outsiders came to the neighborhood, and basically did not do anything. Anger among the relatives. Why didnt authorities step in when things were small and it could be contained, and it really spun out of control quickly. Aidi especially coming at time when modis party was delhi vote. The how has modi himself reacted . Know, they have got a control of it. Violence, tuesday night, when donald trump was still in so over the and last 48 hours or so, they have gotten more of a handle on it. Modi has been tweeting, saying we need peace and harmony, we need to come together, trying to be a unifier, but many of his critics will say the actions taken on the ground, other measures by parties, the rhetoric coming out of his party, is all actually fomenting this type of violence. Does this play out politically . Its been going on for quite some time. Where does it go from here . Dan modi got a big endorsement from donald trump. Trump was in india. He was praising modi. He was saying modi is very committed to religious freedom. This is all stuff that modi loves to hear, and it gives him cover on the international side, and that gives businesses cover as well. You know, will it hurt modi quickly . People think he is doing this just to polarize the party, the theyry, and ultimately, think it will allow them to stay in power for years to come. At what point will that spillover into affecting whether businesses we are not seeing much evidence of that yet, but if there are ine protests and violence delhi, we might see more of an effect. We have not seen much. Thank you. Lets stay with india. We have seen rising inflation cut into Consumer Spending power in the last quarter and that could impact the latest Economic Growth numbers. Lets take a look at what to expect from thirdquarter gdp with numerous chief economist for india and asia. Nomuras chief economist for india and asia. We have seen stagflation for india for quite some time. These issues not helping. What are you expecting in todays numbers . In our view,mbers, should be a continuation of the trend we have seen in the last 12 months, which is more economic slowdown. I think the broader expectation in india is that growth has already bottomed out and its going to pick up in the Fourth Quarter. We actually think that gold has not bottomed out so we are looking for it to slow down 4. 5 percent. The underlying issue is that domestic demand is still very weak. Direct consumption and on the investment side. You are hardly seeing much in terms of economic activities. It is something we think will reflect. To theexposed is india global value chain centered around china, which of course, we are expecting to get disrupted because of the coronavirus outbreak . Thendia is not part of export driven global value chain. 15 comingnearly from china, which is raw material. There are specific sectors like pharmaceuticals, the consumer durable industry, which to rely significantly on imports from you have forduced domestic consumption mainly for domestic consumption and exports. That particular channel which will impact india. Slowdown broad global because of covid19 will also have some impact on india, although when you compare india to the rest of asia, it would be amongst the least vulnerable. We spoke earlier with the former r. B. I. Governor. We spoke about the limitations of Central Banks, including the r. B. I. In a situation where the driven by a slowdown. Theral banks have come to rescue every time there has been a market selloff, every time theres been signs of a slowdown, but this is really an event that he feels is beyond their capability. He talked a little bit about the policy toolkit that is Still Available to them at this point. Take a listen. Some of these liquidity measures may have modest effect, is the real challenge rectifying the problems in the Financial System by cleaning up these companies and recapitalizing them, and that requires direct attention rather than indirect attention through liquidity provision. Talking about the r. B. I. Taking on some of the more ecb type playbooks. These targeted mending facilities, businesses, and households, and essentially, he was just saying, again, it is a political issue. Note right that there is enough of a political agenda to be looking at doing more with indian banks, and therefore, improving the transmission mode . I mean, absolutely. Limited issue is one of policy transmission what they have announced, giving banks more money, their objective is to get credit growth going because the shadow banks, as you know, over the last 1. 5 years, have taken a step back. That it may not be successful in driving credit growth because the issue is one of week Credit Demand in the economy. It is not a supply of credit issue, and second, you know, the banks, which will actually be able to access this liquidity under the window, actually are the ones which are not wellcapitalized. Ande is a mismatch here, the access liquidity that they are providing may lead to more in hybrid by banks corporate bonds, but it may not lead to amending. Tot boils down recapitalizing Public Sector banks and addressing the risk aversion that is still there because of the spillover effects from the shadow banking crisis. Yes, theres a lot that needs to be done in the Financial Sector as a whole, and Interest Rate tweaking, etc. , is not going to help out here. Thank you so much for joining us. Nomuras chief chief economist, sonal varma, with us. We will have some analysis, next. This is bloomberg. Haidi this is Bloomberg Markets asia. I am haidi stroudwatts in sydney. Shery i am shery ahn in new york. We are seeing the japanese nikkei 53 . This of course follows an earlier decline of more than 3 earlier in the week, so we are down almost 9 for the week. We are seeing the asx 200 lose ground the most since 2015 and kiwi stocks at the moment also falling the most since 2018 for a fifth consecutive session while the kospi is down 2 , haidi. Pain yes, that continuing. And we have been looking at parts of the market seeking shelter in tech, but chinas top internet search engine, baidu, said total sales it expects rate declined due to virus shutdowns. The International Director of equity research. Great to have you. In terms of expectations, is there a sense that baidu is getting ahead of the concern of a coronavirus or is it just not possible at this point to be able to accurately, you know, model what kinds of impact we are going to see in this issue . I think it is still even during the results, i think they mentioned that this could be to assess the impact. What we have to note is that generally, First Quarter is a seasonally weak quarter for advertising anyway. Of firstards the end quarter and even toward the start of second quarter, which has a more clearer idea of how much they are going to spend on Online Advertising. I would say its a little bit premature to assess the impact. Haidi right. What aspect of the business would you expect to take a dive . We have seen a really interesting narrative emerging terms of the changing of Consumer Behaviors and practices in china as the quarantine and the lockdown on the travel restrictions continue to take hold. Is that expected to have a permanent impact on baidus business . Billy the virus is having an impact on Consumer Behavior such as were three and online games. The difference between baidu was that they are generally on search anyway, but there is that sort of intention to use search so i dont think there will be a huge structural change in terms of behavior for the virus. I dont think that the virus will have a huge structural impact on the business right now. Significantve seen impact to their business because of the virus. How does this bode for the rest of the chinese tech sector . Billy in terms of my view, we have probably seen alibaba come out with their results. It will have an impact on their march quarter as well. Online retail will be impacted but it should have a ushaped recovery. What i think in terms of favorable trends for the sector, definitely the online services, so you know, we have seen tencent and a lot of Gaming Companies reporting very strong data because of the Coronavirus Impact, so i think online games is definitely a segment which and think would benefit would be favorable amid this currency situation. Shery what about away from the virus . We have seen baidu struggle with competition. What are we seeing on that front . Billy i think this will continue through 2020. Be channel it is going to even more aggressive in 2020. Apart from them, we are going to see other media platforms expanding. It is going to be a very tough year for baidu in terms of the advertising side as well. Just to go back here question about what the other businesses or growth areas we are seeing that stake in online media doing ok in terms of growth. We are seeing content coming back up. These are very, very interesting growth areas as well. Definitely the Online Advertising side of baidu will be under pressure this year. The key concern or the key thing we have to know is how management or how the company balances the Revenue Growth and also the cost control. What we are seeing in quarter four is they have done really well and cost control. The online baidu offering have been normalized. We have to see what management decides, just balancing the cost and Revenue Growth going forward. Haidi what do we expect the impact to be on fundraising . Obviously, we are not going to see the planned ipo are any major ipos in hong kong for at least the First Quarter. Billy yes, look, i think there will definitely be delay in the sentiment or at least people mocking the amount of people going back to work. First quarter or second quarter, we could see lacking in ipo fundraising, but i dont think that means that this whole entire sector is going to have an issue with fundraising. I think there is still a lot of ipos or even private Equity Financing planned this year. There is a matter of time. Theres going to be a big major change. Shery thank you. At the moment. The dow jones was supporting that cisco is planning a new round of layoffs as the Company Faces the prospect of slowing sales growth because of the growing economic uncertainty. The company has around 75,000 employees. They have not said how many people would lose their jobs, but cisco saying they would and support employees who have been affected. They will be on others for potential impact from this virus outbreak. Haidi. Haidi we continue to see the coronavirus and the Growth Prospects dimming and that is playing out in another selloff after a terrible session in the u. S. Global markets down over 9 , the worst week since the Global Financial crisis. We are seeing losses off session come over 3 when it comes to trading on the nikkei 225. The cpi jobless numbers did not add much to the mix. The cost be in danger of giving up that 2000 level. It could trigger heavy margin calls given the recent surge we have seen in retail beverage in the market. In s p 500 the s p australia plunging the most since 2015 and losses accelerated for that fifth straight session in new zealand at swap. This is bloomberg. New zealand as well. This is bloomberg. Haidi this is Bloomberg Markets asia. I am shery ahn in new york. Haidi and i am haidi stroudwatts in sydney. Lets get you a quick check of the latest business flash headlines this hour. 19 billion in europes biggest private equity deal in a decade. The buyers are a consortium that includes Advent International backed by blackstone and Carlyle Group. As part of the deal, the unit will be kept in germany. The cash infusion will help the Company Restructure its business after years of economic mismanagement. Bayer is painting grim scenarios over its weedkiller. It might have to sell assets issue new stock, or borrow money at an unfavorable rate. It is working to settle claims that round up causes cancer. It has 48,000 lawsuits in the u. S. Haidi Stephen Siegel has been over promotingc a digital coin. The problem, he failed to disclose he was being paid for the endorsement. He was fined 157 thousand dollars and will have to pay the same amount in a disgorgement of profits. Two years ago, mayweather also had to pay more than 600,000 dollars to settle a similar case. Shery lets get a quick check of the markets. We are seeing japan, south korea, and australia all losing. Those are the three markets that are very close to correction territory. Just the nikkei right now falling more than 3 this week, heading for a loss of around 9 . Lets stay on the markets. We are counting down to the opens in hong kong, mainland china, and singapore and malaysia are coming online. Taiwan is closed. David ingles joins us for a preview. David, we saw broad market pressure across asia except for china. Will this resilience continue . At futures looking right now, shery, to answer your question. A 50 futures are down 200 point. It does seem that china will be caught up in this extension of the global selloff right now. I think what is worth noting as well, it is friday, and what has changed for monday up until today is the resurgence of sort of hot, multiple hotspots around the world, and its obviously not in china that we are talking about. It does not mean those markets are not connected. I was trying to do the math earlier in my head. What markets are trying to sort of figure out, it is not as if when cases start coming down that the risk of a resurgence proportionately goes away. All it takes is one, and we saw that very clearly with what happened in korea. And again, it is hard to price in what is happening right now, and by the looks of it, it is not in the cash market. People are hedging put options. Gold, you can get it sold off as well. All bets are off, i would imagine. Ingles, thankg you. We have the latest numbers out of south korea. Morehave confirmed 250 six coronavirus cases. We are talking about a total of 2022. We have seen south korea emerge as a new hotspot in asia with cases concentrated in we have seen the bank of Korea Holding a meeting on these stock plunges across major economies, so we will get more on that later. Haidi. Haidi coming up on Bloomberg Markets, china open, we continue to assess the coronavirus outbreak. Joins us to talk about the viral impact as this global rout continues. This is bloomberg. Shery it is 9 00 in beijing. I am shery anh. Haidi i am haidi stroudwatts. We are counting you down to the beginning of trading in the China Mainland and hong kong. 80,000 people now expected in nearly 50 infected in nearly 50 countries, the corona virus has pandemic potential. Shery the s p 500 falling into the fastest congressional record. The fed is under pressure to act as recession fears rise. Haidi investors could seek solace in the most unlikely