Countries. We are continuing to see the corporate fallout, we will get more details on airlines. Delta saying it is suspending u. S. To china flying routes through april 30. Asked theirsoft staff to work from home. Amazon as well. The longer it takes to test anybody, the greater the risk they will be spreading the disease. Mike pence saying most cases are mild and they have flulike symptoms. Compared to the tests the u. S. Have carried out, 2000 by the end of last week, compared to 140,000 in south korea. In the u. S. We are seeing 11. Lities rising to this is having a concerning impact on the markets. Lets get to the Market Action. Speaks,president pence we see markets accelerating losses. Now trading at the lowest level since september. The chinese equity come back facing a roadblock. Seng headedg hang for its lowest level of 2020, and s p 500 futures extending the trading session losses, closing down 3. 4 , now off 0. 8 . Earlier futures were moving higher as much as 0. 7 , so quite the reversal. Noticeable moves in the fx market, the aussie dollar on track for its best week since september, but going lower today with risk off. 1. 05 handle. Ith a strongest against the u. S. Dollar in six months. We see fresh record lows for two year. Just a couple minutes ago, we did see 10 year bond yields moving to the lowest levels since 2002. Lets dive deeper into the markets. We are joined from singapore. It is a lack of uncertainty in the market playing out at the moment. Definitely. It looks like markets did not like the comments from Vice President pence. If they have not done a lot of tests, there might be more people who have the virus, and they do not know it yet. Those people might be going around and doing other things. Hopefully that is not too much of the case, but it did not instill confidence that this will be a short vshaped recovery or over anytime soon. Haidi we are seeing the topics extending losses and falling more than 3 at the moment. This would be the lowest level since december 2018. These are losses we are seeing in japan, the nikkei is down 2. 8 . What about china . They have been resilient so far, but not much today. Joanna china did come back a bit because there were expectations of stimulus. People feel like the case numbers are decelerating. Thingss optimism that will start to improve in china. Downu have the s p 500 3. 4 , you have other things going risk off. China will have a hard time being immune from that, they may be caught in the draft as much as anything. What are some of the other indicators investors would be looking at at the moment . Joanna we are definitely looking at the credit markets right now. In the u. S. There are signs of uncertainty, and people are pulling money out and spreads are widening a little bit. Thising for the fact that is not much of a panic selloff, we are not seeing much panic. We are seeing orderly, and the s p is at levels from october. Watching to see if you get wide gaps and that sort of thing, but watching to see if we get any panic days. See the Public Health issues, if that can get under control, if we can see where there is more confidence in u. S. Testing that this is under control. Thank you very much for the latest on the markets. For the latest on the Virus Outbreak, lets go to Tom Mackenzie in beijing. We are seeing a stabilization in new cases and deaths numbers within china, but numbers in the u. S. Continue to rise. We will start in china, 143 confirmed additional cases, up marginally from yesterday. Ubeideaths remain in h have decreased slightly. 30 compared to 31 yesterday. Imported is on infections, that is the first announced here, 16 imported from italy. Officials will step up quarantine measures on people returning to china. In south korea you have an additional 500 cases, the total is about 6300. Terms seeing a step up in of people being tested. That will be part of the mix. The u. S. Is a new concern, given what mike pence is saying, 150 confirmed cases. Washington state is the front line in the battle against the virus. It is clear the u. S. Is struggling to get testing kits out to people. They will not meet the target of a million test kits by the end of this week, that is troubling. Ineurope, increased cases countries like france were you have 400 confirmed and six deaths. 400 confirmed in germany. Italy, 4000. Of themains an area concern. The World Health Organization is pressuring governments to step up their game in containing the virus and suggested publishing a name and shame lists of governments they say are not doing enough. We have confirmation the visit is being canceled to japan. Has there been much fallout . And sounds like a lot of wrangling between japanese and chinese officials over the last week whether or not this visit would go ahead. It would be the first time a innese president in japan almost a decade, and closer ties between the countries that at eachally have been others throats. You politically it was significant. The chinese say they will try to appropriatet an time. In terms of economics, shifting focus to what is happening on the ground, a lot of focus in terms of businesses getting up and running. There is an Investment Bank tracking productivity, they say it is looking like production in china is back up to 71 , a positive. Bloomberg economics says in terms of capacity, back to 60 , still far away from full capacity. But activity is picking up gradually. Globally we have had the attempt inpump the fiscal levers terms of fiscal commitments in governments ranging from thailand to most recently the United States, 8 billion agreed in fiscal support. Those measures are coming down the pipeline to offset economic damage. Mackenzie there in beijing. We will look at how this is playing out in the market. We are taking a look at a session of red across the region. Now extending losses. Thee are markets on mainland, quite a lot of resilience. Backhave managed to flip into gains for the year. We are seeing some of that given back today. 1. 9 lower in hong kong. Here in australia we are seeing losses to about 2 . Thats get you the first word news with su keenan. Su jp morgan stocks slumped on has undergoneon emergency heart surgery. The bank says he is awake and alert after he suffered an acute Aortic Dissection thursday. Has been ceo since january, 2018. We are told the operation was a success and he is recovering well. The European Central bank is asking Single Market lenders about their ability to keep operating if they are directly affected by the coronaVirus Outbreak. It has written the banks asking for plans and the resilience of their infrastructure. They insist that great is focused on the Operational Impact of the disease spread, not the potential economic fallout. Saudi arabia has announced a major shakeup in government. Is beinginister removed from his post and will be replaced by the finance minister. The change was released in a royal decree. Far given no explanation for the move. And u. S. Politics, now senator Bernie Sanders has canceled a friday Campaign Trip to mississippi. Votes inctively cedes the south to joe biden, instead sanders will focus on michigan whose primary is tuesday. This follows bidens Strong Performance in the south on super tuesday. Elizabeth warren and in her president ial campaign after a poor showing super tuesday. She says she will likely endorse sanders or biden but has yet to make a decision. 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 su keenan, this is bloomberg. Still ahead, too little, too late, we dive into the oil outlook and hear why goldman says opec should have access sooner. Currencies under pressure, more on developing nation market. Sarah emerson this is bloomberg. Shery further capitulation in the markets, looking ahead to the u. S. Session, u. S. Stock futures extending losses. P 500 down by 1 we are seeing the extension of losses in the japanese market. Yieldaland 10 year bond dropping 10 basis points to under 1 . Nifty Index Futures in the mumbai session plunging 3 . Shery we continue to see the risk off move in the commodities belowas well with brent the 50 a barrel level. This as the worlds leading Oil Producers have agreed to slash output to offset demand hit i the virus, but only of russia does too. We were told opec should have access sooner. Argue regardless of the size, it is too little too late. The forward curve is pricing the inventory build Going Forward. How do they mitigate the build in inventories as we look toward the end of the year . Downside risk is there, we are comfortable with our april target of 45 a barrel on a brent basis. In seanets bring taylor, lets bring in sarah emerson, managing principal, Energy Security analysis. As we look at saudi arabia and russia to do more clear it is not entirely they need to do a lot more. What they suggest is aggressive. Opec saying they would cut by a Million Barrels a day. Saying theytime would extend this cut through december, that is an aggressive response. Shery do you think russia will join this effort given the highstakes diplomatic poker we are seeing at opec plus . Sarah i do not think russia is the center of the story at all. A little 2019 did cut bit, but a couple hundred thousand barrels a day. Saudi arabia will be cutting over a million. Perception of russia participating is important to the saudis and opec, but they are not that key of a player. They willmatic way sign on to the agreement, but i am not sure they will do much. In the meantime given the pressure we are seeing in china on the outbreak, we are seeing more suppliers implementing force majeure. Is there any way out of this . Are the people who are dealing with china to try to get those contracts . More force majeure implemented across china because of this demand hit . Sarah i think it is a case of demand weakening. I do not think you can force someone to buy something if they will not consume it. I am not sure that is the centerpiece. What is happening is we have weak demand and plenty of supply, and opec is responding backat saying, lets cut supply. I am not sure how to answer your question. Shery i am curious why you think what opec is asking for is such an aggressive response given that the demand destruction out of china is welldocumented, that this will be only the fourth time in the last 50 years or we will not see any growth in Global Oil Demand . Sarah i do not agree with that view. I think we will see growth in Global Oil Demand this year, a year is a long time and we have a crisis in march. My expectation is that at some point by the end of the second we will know more about this virus and how fast it spreads, how it spreads, we will know more about prevention and care, and to take the china situation and extrapolated forward is a little bit ineffectual because what is happening in china is a surprise. Here in the United States and in europe and parts of asia we have more information. We will hopefully combat this virus more effectively each week, each month we gain more information. Can you have it spread and forad and create the demand ever . I do not think that will happen. We will come up with solutions and you will see demand balance back in the second half of the year. Demand balancounce back. At the end of the day if they cut by a million or a million and a half and they hold through december, that is an aggressive response, and we will have higher prices at the end of the year. This is a situation in the middle of the crisis, it is a difficult problem, but i believe at some point we will find ways to combat this crisis. As that happens, we will look at the supplydemand, it will be tighter than it looks today. Shery how much pressure on u. S. Shale . Sarah pressure to do what . Shery do they wait and see as well . Sarah u. S. Shale is already screeching to a halt. Even though it grew at the end of last year, it will grow on an average basis for the year, the growth from here to the end of the year will be minimal. That is a result of things unrelated to the virus, a result of costs and issues replacing legacy production, etc. To make the going situation worse. If anything it is reducing the growth and supply a little bit. Shery thank you so much for joining us, sarah emerson, managing principal, Energy Security analysis. You can keep uptodate on the coronavirus story on your bloomberg. You will find the quick take landing page with global figures , andthe bloomberg newsroom how Companies May be exposed. Haidi President Trump is being urged to block infineons acquisition for reasons of National Security. Ae 7. 8 billion deal poses risk, though not clear why. The German Company is trying to persuade the government to reach an agreement. Infineon has substantial revenue from china. Boeings troubled mac 737 is a step closer to her return with it head of the faa saying could be a few weeks away. The regulator says the Software Reviews are almost complete and pilots would test the planes soon. It was grounded a year ago after two crashes due to a malfunctioning safety device. Names are pulling out of the southwest festival because of the coronavirus. Are thed netflix an latest to walk away. Apple was to debut three new projects at the april 13 meeting. Netflix has canceled five movie screenings. Amazon, facebook, and twitter have also pulled out. Shery lets get a quick check on markets, we are seeing futures at the moment falling the most in a week. Cfi 300 is falling for the first time in five days. Every sector in the red in korean stocks as south korea reports more than 6000 confirmed cases of coronavirus. , as we continue to see Downside Pressure in japan with the nikkei falling 3 . Coming up, emerging markets are caught in the middle of rate cuts, rising inflation. We will discuss. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. What i would say is we will have an interruption we will have severe deterioration. It is likely that it may last a quarter or quarter and a half, we do not know the magnitude or duration. We continue to see concerns rising over the coronaVirus Outbreak, we are seeing the japanese yen at the strongest level against the u. S. Dollars since september, as we hear from airlines around the world cutting more flights. Japan airlines is cutting domestic flights, 684 domestic toghts starting march 13 march 19 on coronavirus concerns. We heard earlier from delta they are suspending flights into 30. A through april a closer look at the Market Action, we are joined by sarah. What a week it has been. Historicalthis into context, how volatile has it been . Sarah this ranks as one of the most volatile weeks in history. If you look at the s p 500, the last nine trading sessions, six bye closing above or below more than 3 , and what this has look at attend a measure of volatility for the s p 500, the highest level since 2011, a really rough year when the u. S. Had its aaa rating taking away. 30, thatght days of of has not happened since 2011, and among high trading volume. Sharesan 10 billion changed hands, that has not happened since the financial crisis. Safe haven assets tell us about risks . Sarah it is unbelievable, the safe haven bid is extremely strong. Gold up more than 5 , at the highest level since 2013. We see a fade today. The 10 year at record lows, 83 basis points as we move below 90 basis points. The 30 year below 1. 5 for the first time ever. Chinese 10 years touching the lowest level since 2002. Not out ofyou we are the woods yet. Clearly investors are not optimistic. They are piling into safe havens. Aheadeans maybe do not go and buy just yet because it is likely we will see more volatility. Thank goodness this week is almost done with. What should we watch out for next week . Sarah watch fridays u. S. Trading session, it has been a trend to see weakness on friday as traders try to tidy up going into the weekend in case we get coronavirus headlines. The cap for more stimulus headlines. We will get the Unemployment Rate and jobless numbers in the United States friday morning. We will get Inflation Numbers in the u. S. And china and japan as well. And in south korea, the Unemployment Rate next week. Haidi we are not quite done with the selloff this week. Joining us now is sean taylor, cio apac head of emerging market equities, dws. Great to have you. What do you make of this selloff . Extraordinary levels of to safety, the fleeing havens and treasuries and gold. Where are you opportunistic given how much we do not know about how the story will play out in the weeks and months to come . Has been pattern similar to what happened in asia. To sixed out a month weeks later. The expectation would be to see more cases and volatility, but within that we have seen a huge market adjustment in developed markets. Maybe part of that was attributed to politics. Since the massive adjustment we have had a volatile market where people try to get a grip with the virus news. Clearly the virus is spreading, that has been the case in china, that is slow down. Now we are seeing it come down, but until we have that peak, it will make markets trade lower. Fear. Ggest enemy is fear of the unknown. If you look at the data and what is happening in china, we are work, andple back to migration is getting back to work, factories are at about 58 . That is pretty positive that the virus comes quickly, peaks, starts to go down, and then people get back to work. Terms of expectations with the china recovery, i want to show you this chart with the Economic Forecast quarter on quarter for the First Quarter, with economists expecting zero growth in the First Quarter. Do you agree with that . Bearishhink that is too or if we are in for a vshaped recovery . Sean i do not think it is too bearish. Have set down, part of the country was in quarantine. On inwas not much going activity, so yes, i would have thought economists are realistic or even too optimistic. People are looking through that in china and saying, what is the recovery rate . We have had this supply shock, and by the end of march we will get production back up to 100 . Rawquestion is whether materials are available. Issue, is there still demand there . Demand. A loss of virus continues over the next month, that might delay things. The last couple days to see the policy response from china, and there was a Committee Meeting two days ago highlighting infrastructure, and not just oldfashioned infrastructure. Probably see up to double digits, maybe more depending on what the First Quarter number is. It has more to do with how businesses get back to work, and the real issue in china with the virus was small and medium businesses did not have the capital or cash flow. Ae government is putting in lot of support, and we are seeing evidence of that from a company level. Shery is that enough to keep Chinese Markets afloat . They have been performing incredibly well this past week, but today we are seeing the pressure. Sean if you were away on holiday and had not looked at your screens are bloomberg over the last three months, you would have thought why is china not down more . Because of thee response. Companies last year, the revenues were growing, so they were trying to cut costs. Earnings will clearly go down, we lost a quarter of gdp effectively and it will take more time for confidence to come back. Even though we have production coming back by the end of march and beginning of april, i see people i cannot see people going out and flying, going to movies, going to restaurants, that will take a long time to get back. What is really not held up is the cyclical side. And whether it is turkey or south africa with domestic issues helped the currency go lower, but places like russia were you have oil price shock. And recently brazil. Maybe this recovery in china, which will take some time, the lower the gdp the higher it will come when stimulus comes in. Maybe the right way to play it is on the cyclical side than the consumer side. The cyclical side has been oversold and could bounce back. In the u. S. And the growth there spreading, you have to be patient because we are in a risk off environment. What about economies dependent on china like south korea . We have seen upside for these, particularly companies with coronavirus testing kits, a reflection perhaps of the capabilities in complex manufacturing. Do those areas in that market have some potential despite all this uncertainty . Overall you look at the gdp of markets like korea, taiwan, thailand, they will be affected by chinese tourists. That will affect certain sectors. The economy is already week and will get weaker. The domestic economy will be under pressure and i would expect some will be asked to do government service. Has one side we think of the best potentials to bounce back. One thing to highlight on the Positive Side in the last four managed that they have to control the virus or are beginning to control the virus control the virus quicker than people expected. On the tech side, once things area to, that is the look at. In places like thailand, maybe not reliant on company earnings. The marginal buyer in thailand is the chinese consumer. That will also suffer. Maybe a little bit in indonesia. Shery sean taylor, cio apac head of emerging market equities, dws, thank you for your thoughts. Lets get the first word news with su keenan. Su we will start with the latest on the reaction to the coronavirus. Governments around the world are opening fiscal taps to tackle the spreading outbreak. More than 54 billion have been set aside with cash handouts, tax breaks and transfers. Most asian nations have allotted funds while europes spending is a most entirely on italy. The u. S. Has earmarked 8 billion. The World Health Organization had warned of complacency. We are concerned in some countries the level of political commitment and the actions that demonstrate that commitment do not match the level of threat that we all face. This is not a drill. Up. Is not the time to give this is not the time for excuses. Su the Airline Industry is being warned the virus could cost them more than 100 billion in lost revenue due to falling travel demand. Travel Association Says transport Association Says, urgent Government Support is needed including some including waiving some fees. A 9 loss in Global Passenger revenue. Patients with 10 or more cases account for 80 of airline income. Final results in israel show Benjamin Netanyahu again fell short of what he needs to form a new government. That extends the political gridlock that has gripped the country for a year and weakens netanyahu as he tries to avoid a corruption trial. His coalition winning about half the knesset, and netanyahu had mistakenly declared victory. 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 su keenan. This is bloomberg. Shery coming up, the indian , wernment has stepped in will have the details next. This is bloomberg. Haidi we are seeing india futures capitulating. Nifty index thinking 4 as we get into trading in india. The government has seized the troubled lender yes bank. The government pledged a rescue plan within 30 days, forced to intervene. Our Bloomberg Finance reporter joins us. What will happen next to yes bank . Event for yes bank, it is buying etc. Day. By next saturday. Theould be one big reason bank of india had to step up their efforts to bail out the bank. If the results are not good, there would be a crisis in the Financial Sector. Is the reason whatever measures the r. B. I. Took is the first time in the last 14 years they proceeded forcefully. Hat could be one big reason what does this mean for the broader Financial Sector in india . Back ahink it is dialed little bit. Yes bank is the fourth largest lender in the country. Have the highest exposure in corporate well. , we understandxt from sources, the government run with all come together consortium and take a big stake in yes bank to bailout the bank. It gives confidence to the depositors, and there is no big crisis in the Financial Sector. It is already reeling from the shadow Banking Sector over the last 18 months. Affordulators cannot another big mishap in this sector which can erode public confidence. Next we see is a majority stake the Public Sector banks might take to bailout yes bank. Thank you very much for that. We are counting down to the opening of the session in india. Futures thinking almost as much as 4 . Needless to say it is going to be a tough start to todays trading session considering it is not just going to be about volatility, but the matter of yes bank. It may have some systemic implications, which is why we are expecting a week start to trade. We are bracing for volatility in the Banking Sector. We are not expecting a strong start to this trading session at this point. Haidi thank you so much. It is looking like an ugly start to the Indian Trading session. An update from hsbc confirming an employee in china has the coronavirus. Reuters has started an internal memo. The banks interim chief telling employees he has sent an internal memo. A case ofad gotten the coronavirus in london. Y have set up spokesman for hsbc has confirmed the contents of the memo. Have an employee who tested positive for the coronavirus. Hong kong companies have taken a severe beating in the past few months, but it sees a strong balance back. Bounce b ack. This is bloomberg. Haidi Mandarin Oriental that you are you occupancy was markets, and aor Luxury Hotel Chain says Coronavirus Impact will affect results significantly in the first half. We spoke exclusively to james riley, ceo, Mandarin Oriental hotel group earlier. James it will be significant but the key question is the length and duration of the impact of the virus and the measures taken to restrict movement of people globally. Occupancy rate when it comes to hong kong and china, what are you seeing . Are your hotels in china back to operation . James they have never stopped operation. We have ensured our Hotels Remain open, and we continue to provide the service we are proud of. Occupancy in the mainland of china during february was in single digits. The same was true in hong kong and macao. And elsewhere in east asia, a number of properties we are seeing occupancy levels around half of what we would normally expect to see. What is the impact you are seeing Going Forward . Hong kong and macau is 40 of your total revenue. This is not just a Coronavirus Impact which will pass in the coming months, we have had a year that has been disruptive and damaging for the hong kong economy anyway. James that is true. I would note the performance of our hotel in hong kong was encouragingly good in terms of a relative performance. Looking to 2020 there is a risk it will impact for a number of months. We should remember the opportunity that exists for a sharp correction and a revival of markets when the issues around the virus past. Having had a difficult period, i andptimistic the timing issues around the virus past, as they surely will, we will see a strong bounce back in the markets we operate. 60 of theare about 2018 peak volumes, is there anything you can do to boost that situation . Emphasize isint we our asset value this year was up , the dividend we held for 2019, and the longterm perspective for the business i believe remains extremely encouraging. Luxury travel is a rapidly growing area of business. While the virus is having an impact and will impact results for the first half of this year, i continue to be optimistic about the potential for Luxury Travel globally for all market. It is a strong area of business to be in. Shery that was james riley, ceo, Mandarin Oriental hotel group speaking to us earlier on bloomberg. Lets get a check on the markets. Down byifty futures almost 4 , and that is tracking losses elsewhere in asia. Hong kong stocks down close to 2 . 1 . Downside of over we continue to watch Market Action on this fridays session. Asian stocks continue to selloff. This is bloomberg. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. Inching ever closer to the weekend poll. 8 30 a. M. In mumbai. I am haslinda almond. Im paul allen in sydney. Here the top stories. Stocks slumped across asia. The topics at a 15 month low. Treasury yields are at unprecedented levels. World issiness increasingly feeling the heat. Starbucks sales collapsed in china. Global aviation faces a 100 billion hit. President las fed tells bloomberg Central Banks officials are watching the situation. The immediate future is unclear. Is we arewould say now going to have an interruption where we will have severe deterioration. It is likely, and may last a quarter, a quarter and a half, we dont have the magnitude or duration. Haslinda its not looking pretty in the markets. Lets get to the Market Action. Sarah ponczek is with us from new york. Looking at the sewings it is not for the fainthearted. It is not pretty at all. Growing concerns about the containment measures around the globe. The u. S. , particularly. The nikkei 225 off by more than 3 . The lowest levels in six months. The csi 300 off of more than 1 . Still on track for the best week in the year. That speaks to the strength of the comeback we have seen in chinese equities. The hang seng also under immense pressure. Back aboveity index 27. Than 1 . Es off by more this after earlier they were higher by. 7 . A very strong reversal to the downside. At the same time, we see immense safe haven bid. You look at the race markets and fx markets, dollaryen now sporting a 105 handle. The yen is the best performing g10 currency today. Strongs level versus the u. S. Dollar since september. At the same time, treasury yields at unprecedented levels. Two year, 52 basis points. 10year close to 80. Now we have 30 year treasury yields below 150. We are not just seeing this in the u. S. , we also see record low bond yields in australia. Back to you. In new york,onczek thank you for joining us. Lets get an update on the Virus Outbreak with Tom Mackenzie in beijing. What is the latest . Vicewe heard from president mike pence about an hour ago talking about the situation in the u. S. , confirming it has about 150 cases in that country. 70 in washington state, which is at the frontlines of their fight against the coronavirus. The situation needs to improve in the u. S. , they have plans for testing kits getting out to at least one Million People by the end of this week read they have failed to do that. There is still pressure to ensure they are getting enough people tested. We should expect the infection rate to rise as more of those kits get sent across the country. Europe remains a focus, almost 4000 cases. 400 or so in france and germany. Six confirmed deaths in france. Iran has a lot of concern, about 4000 confirmed cases. In south korea, the total rate looking like 6300 and an additional 500 confirmed cases in the last 24 hours. They have been testing at a rapid clip. In china, you see a slight tick up in the daily confirmation rates, but the death rate continues to slow, about 30 confirmed deaths in the last day here in china. You have had the Party Secretary saying they will ramp up quarantine measures for people arriving in china for the first it had 16eported reported infections, all of which from italy. The World Health Organization called on governments to step up their action against the virus, that not enough governments are doing enough to combat this. A government approach is needed. They have also hinted they may publish a list, a name and shame list of the countries who are not doing enough. Cancelingxi jinping his state visit to japan, what is the fallout . Paul china correspondent Tom Mackenzie in beijing. We have unfortunately lost the connection to you. Lets get to our next guest, he theimates the impact of Virus Outbreak will last until at least may or june. Hes a t. Rowe price aipac head of multiasset solutions. Im not going to be able he wont be able to see this chart im bringing up, but it illustrates ive never had the sensation of being amused by our chart before, but one of the most volatile indexes within the s and p may mean low volatility. Volatility is we have seen some disconnect on the fx volatility, volatility to equity. We have seen it complex. You have to look out what the starting point was. To your point about low volatility factors within equity, that was in high demand up to the crisis. Evaluation was quite excessive. Not arise it is surprise, given the repricing on the future earnings is going on, that these companies would have some volatility impact with their portfolios. Volatility is spreading. There is still some to take on, giving you have some disconnects across asset classes. There are definitely things we expect to continue for the near term. Paul you do see some opportunities. The best approach, is it to look for opportunities, or preserve capital . On your investment horizon. We look at six to 18 months. That gives us some of the benefit of time. Potentially looking through the worst of the Virus Outbreak. Mind, we are adding risk to the portfolio. But again, this is because of our longterm horizon and for indexes with a shorter horizon, we were not encouraged to buy it. Newsuld be different coming from policymakers from the future in early q2. We have earnings being released. All of that needs to go through the repricing of the market becomes more efficient and you can place with more confidence. If you have a longterm horizon, it may be time to conservatively add risk in your portfolio. Haslinda we are seeing swings both on the upside and downside. Pen you take a look at the s we see 3 swings. What do you make of valuations. How do you do this . Is notree with you it something you can base your investment on traditional metrics. To look at the good old pricetobook, because thats something you can trust more. It is something you should look for in the longterm horizon to trust these type of metrics. With that in mind, there are still some potential downside risks, because prices on the s p might still be about 20 higher than a couple of years ago. Downturntill have some in the shortterm. Manager, what we look up is bottom up opportunities, looking at companies. We saw highmargin and free cash flows. Then they will outperform the market. Its at the time where you have high volatility on indices and you want to be more of a stock breaker. You talk about risk, how much has been priced, and how much of a proper recession has been priced at these levels . At the yieldk curve with the action of the fed, we have seen the yield and the now steepening two to 10 year spread is back to positive territory. This has been used as an indicator of future recession. It probably could have been 30 or 40 . Now the steepening with the spread is a lower probability based on this indicator. Of course, if you look at the type of indicators, like economicuency, the activity in china and other markets, you can see we are not there yet, in terms of production. We are at the risk of supply and demand shorts. Likely that you could experience the technical recession, especially by countries like japan, where you have already negative majority gdp growth. It is highly likely you will experience another one this quarter. Technical recession, which is two consecutive quarters of negative growth, is likely to spread across the countries. What you will have to see is past may and june, whether you see early signs of rebound in Economic Activity, and if you can avoid a bigger recession across. Paul we are talking about recession. We have seen a flight to haven. We have seen the 10 year yield sinking to never below seen lows. You mentioned a minute ago your selling bonds. Where do you see the bond for the 10 year . Have very stage, you strong forces on the downside in the yield. Definitelym is pushing yields lower. With what is priced for future fed action, it is basically to go back to zero Interest Rate policy by the second half of this year. You can definitely assume yields will remain low for the near term. Isn what we would expect looking six months ahead, hopefully there will be a rebound in Economic Activity that would warrant highyield 10 year bond. Today what im looking at is the stepping steepening of the yield curve. The yield curve going lower and steepening, that means risky assets may be challenged in the near term. If you start to look at the Economic Activity, then you can see the bear steepening, yields going higher and steepening on the curve. Maybe you can be more confident in that risk has passed and you can allocate more to equity. Haslinda before we let you go, just a look at oil. The opec plus meeting on friday includes russia. Reasonable, it is said. Price, these discussions at opec. I would not make a comment on that. What i would say is if we renamed around 45 and drops between 40 and 50, it is still manageable for a wide range of Energy Companies to go through that period of crisis. The front as be on the passive. I would say Energy Companies are definitely being hit. Look at the markets. If Oil Prices Remain between 40 and 50, it may create opportunities for bottomup investors to take a position in credit and the equity markets, as well. Haslinda thank you so much for your insight. Lets get the first word headlines from su keenan in new york. Su we will start with the airlines. The whole industry is being warned the virus can cost more than 100 billion in lost revenue due to the falling demand. International air travel Association Says they need urgent Government Support, including waving some taxes and fees. The warning is based on an estimated 19 loss in Global Passenger revenue. 10 or more cases of the coronavirus. It accounts for 80 of their airline income. Opec is taking a gamble by recommending further Oil Production curves. This is amid the coronaVirus Outbreak. Thats without gaining the support of russia first. They seem to be trying to push moscow into a corner, warning if it doesnt agree, opec will not act at all. Thats something analysts can say contrary say can trigger a price crash. If russia is not onboard, they say there will be no deal. Stumbled and its stock in late trade on news that jamie dimon has undergone emergency heart surgery. The bank says he is awake and alert after the procedure, which came after he suffered an acute aortic infection earlier on tuesday. He has been jp morgans ceo since january 2018. The operation was a success and well. Recovering copresident s daniel pinto and gordon smith will be temporarily recovers. Until dimon the International CriminalCourt Approved an investigation into war crimes in afghanistan. It has to do with crimes allegedly committed by the afghan army, u. S. Forces, and the taliban. The ruling puts the court on collision course with washington, which is not recognized is jurisdiction. The u. S. And its allies invaded afghanistan back in 2001 following the 9 11 attacks. President trump has criticized the move and wants to bring the troops home. Global news, 24 hours a day, on air and that could take on bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im su keenan, this is bloomberg. Haslinda thank you so much for that. A couple of headlines out of japan. Kyle allows saying it is weighing the sale of an automaker. Its seeking up to 400 million in a stake sale in the company. Its picking an advisor for the potential estate sale. To come on bloomberg, it. Opec amid a debate on production cuts. Also now, where both sides stand, and if theres any chance of agreement before the talks end in vienna. Paul up next, the coronavirus and the federal reserve. What the dallas fed president , robert kaplan, has to say about this months fomc meeting in our exclusive interview. This is bloomberg. The fed surprised on tuesday with an emergency halfpoint Interest Rate cut to cushion the Economic Impact of the coronavirus. A lot of those one of those who voted was robert kaplan. He spoke exclusively to bloombergs Global Economics and policy editor, kathleen hays. Situation has changed for the last couple of weeks. If you had asked me two weeks ago, i was saying publicly, lets see how it unfolds and i will make a judgment at the meeting. It is too early to comment. What happens once the virus got to south korea and italy, and it was clear there were diagnosed cases in the u. S. , the a material of deterioration in the u. S. Economic outlook, the possibility probability increased to the point where i thought we were going to need to take action at the fomc meeting, and i felt the situation is changing so rapidly that it would be wiser, and i will explain why, to act now and act boldly, where it could make an Economic Impact. With the going to help number of diagnosed cases, it will not also get people to want to go out. It will not do anything about the containment reaction if the diagnosed cases spike. What it will do, is if we enter a period as a result of containment where we have a slowing in economy, a company that is likely to be a tightening and financial conditions. Ist Monetary Policy can do if we go into this with somewhat easier conditions, i thought, and i still believe, it will help moderate or mitigate some of that inevitable financial tightening conditions that will eappen as a result of this spik in cases and the containment. So the judgment about the wisdom of this is more looking ahead to what is going to happen in the next six to eight weeks, not whats going on right now. Asthat regard, i feel confident we did the right thing as i did on tuesday. The number of people had a reaction because the market on the day we did it sold off. I will tell you if the market had gone up that day, that would have given me no comfort whatsoever that we made the right decision, and by it selling off, it didnt make me feel it wasnt the right decision. This is not about conditions now, not about the current stock market, its about mitigating a tightening of financial conditions that will likely happen some number of weeks from now. Increasing the likelihood that as we come out of this situation, we can come out more strongly. Kaplan speaking to our Global Economics and policy editor kathleen hays. Plenty more to come. For oille 24 hours markets as russia maintains its standoff with opec on supply reduction. Details are just ahead. This is bloomberg. Oil prices falling about 1 after the first day of opec plus meetings gave little hope that russia would agree to a saudi led plan to cut production. We have not heard from russia since opec adjusted that cut. What are chances of a deal . Thats a one milliondollar question. It is really hard to tell. We have to start from the market reaction. If you look at the prices, they are falling. That means the opec plus decision regarding this new output cut is not well received at the moment. Overnightk at the market reaction, the prices initially rose after the headline saying the new output cut deal was at the highend of estimates, which was good news. Eventually, prices ended lower, because it is all contingent on russia. A lot depends on russia. Oilussia says no, prices could collapse given all these unprecedented hits from the coronavirus crisis. If you look at saudi arabia, their budgets require little more than 80 80 per barrel oil prices, which is a lot requirementrussias of 40 a barrel. There are a lot of mounting pressures out there, especially on saudi arabia and the opec producers. But as you can see, russia hasnt actually rejected just yet. Some people are expecting that. There is some sort of room for them to reach an agreement, anyway at the end of the day. But the thing is, we dont know. It remains to be seen. Any guide, given their cooperation history in the past, i think there is still room for agreement. The question is what sort of agreement they will come to. Sungwoo, thank you for joining us on the upcoming opec meeting. Lets assume there is a lastminute deal that allows russia to agree to the cuts. Seems to be what has happened in the past. Lets take a look at the Chinese Markets before they take a lunch break. The risk off trade extending to china today. We had the csi off by 1. 3 . The shanghai composite off 1 . The markets are faring slightly better. Stay with us. We have plenty 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. Haslinda we are looking at live pictures out of the lion city. We are in the middle of the trading day. Lineenchmark down 1. 7 in with the rest of asia. Singapore assessing how the Virus Outbreak might impact the timing of elections due by april next year. Largest just news out of south korea. South Koreas National Security Council saying japans debts are deeply regrettable. It is talking about japans quarantine plan. The south Korean Office says has made those comments after the National Security meeting. We will bring you details. As they come in. Lets get the first word headlines with su keenan. Su as governments around the world are opening the fiscal taps to tackle the coronaVirus Outbreak, more than 54 billion has been set aside in a mix of cash handouts, tax breaks and transfers. Most asian nations have allowed funds while europes spending as i entirely on italy. The u. S. Has earmarked 8 billion. The World Health Organization had warned of complacency. We are concerned in some countries, the level of political commitment and the actions that demonstrate that commitment do not match the level of the threat we all face. This is not a dream. This is not the time to give up. This is not a time for excuses. Su the European Central bank is asking Single Market lenders about their ability to keep operating if they are directly affected by the coronaVirus Outbreak. Plans asked for staffing and the resilience of their infrastructure. It is focusing on the Operational Impact and not the potential economic fallout. To saudi arabia. The country has announced a maker shakeup in government. A major shakeup in government. The Prime Minister is being removed from his post and will be replaced by the finance minister. The change was released in a decree. Riyadh has so far given no reason for the move. To u. S. Politics. Senator Bernie Sanders has canceled a friday Campaign Trip to mississippi, effectively the south to in joe biden. He will focus on michigan, which hold its primary on tuesday. His decision follow former Vice President joe bidens Strong Performance on super tuesday. Senator a live with warren ended senator pain after a Elizabeth Warren ended her campaign after a poor showing. 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 su keenan. This is bloomberg. Thanks very much for that. We are seeing a lot of risk off around the region. We are seeing wields seeing lds continued to easi continue to ease. Lets get over to Sarah Ponczek. Sarah it has been a hectic week. Today is shaping up to be an ugly one for this friday. The Msci Asia Pacific index down. After four days of gains, still higher on the week. Japanese equities arent the most pressure across the region. The nikkei to at the lowest level since september. Yields continue to track lower. 10 year treasury yields nine basis points lower at 82. Below same time, 30 year 150 for the first time kid how volatile has this week been . If you were to look at 10 day volatility for the s p 500, it is at the highest level since 2011. That is when the u. S. Losses aaa rating. This has come on extreme trading volume. Nine Straight Days with more than 10 billion shares traded. That has not happened since 2009. Cross assets reporter Sarah Ponczek in new york. Chinas efforts to restart its economy are moving forward. Just how quickly that is happening is unclear. Here is what we can gather using data from the energy sector. Demand for coal is at its highest since january 24. That is normal for this time of year. Suggesting much of the east coast heartland remains idle. Dioxide initrogen the atmosphere have picked up. That is a sign the industry is back to work. Full capacity is not back online yet. Lets have a look at oil refineries. They have slowed down amid falling demand. That has led to larger stockpiles of crude. There are signs of life. Natural gasiquefied are picking up, approaching the same levels before the crisis was made public. Haslinda the upright has not just disrupted the industrial sector. Alsopread of infections is raising challenges for corporate employers around the world as they look to ensure continuity. The next guest has been a beacon experience has significant advising clients. Good to have you with us. This caught everybody by surprise. To date, how have companies reacted . Have they taken the right measures . We have been seeing Companies Taking interim measures and longterm options as well. We do see there is a distraction to the Global Workforce in terms acrosslity of workforces the region and the country and locally as well with the advisories coming on workplace restrictions and the ability of employees to come back into their workplaces. We have seen Companies Taking the option of finding alternative arrangements. Leveraging technology. Innovation. Making sure the workforce can get back to work as usual. That is one of the Key Solutions we have seen companies doing. Haslinda companies are also freezing bonuses. There are risks to taking those moves as well. In the midterm, what we are seeing companies do is they can adopt certain costcutting measures around reductions of the workforce. What we are seeing is companies are adopting a temporary approach where they have either reduced their workforce temporarily or adopted costcutting measures like pay reductions. I think a good move on the part of Many Companies is they have adopted a topdown approach. Have seen executives at the Management Level taking the lead in terms of taking a pay cut to they are taking a pay cut. They are cascading the message down to the workforce. Transparentre is communication between the employers and employees. Paul do you anticipate an upswing in disputes between employers and employees the longer this drags on . Of course. As i mentioned, they are temporary measures being considered. In the long run, what we are looking at is where there is a prevalence of advisories coming on. With the are grappling issue of, how do you implement those advisories and restrictions . In the interim, we will see disputes around the balancing of employers and employees rights. If an employee is asked to stay at home, can an employer say, stayathome on an unrelieved on an unpaid leave basis . That is one of the areas that will come up kid in the long run, where businesses face challenges in terms of cost and companies have got to take stronger measures around redundancies and possibly terminations. That is another key dispute area that will come up in the horizon. The difficulty now with many they have toies is manage the risk locally and across Different Countries and jurisdictions. More the risk becomes pronounced is that different jurisdictions have different employee and employee laws employer and employee laws. In terms of the flexibility of an employer to implement layoffs or redundancies, the risks vary from jurisdiction to jurisdiction. It is difficult to manage that on a consistent basis. Paul is there also a difficulty around what is the definition of a safe work place during a coronaVirus Outbreak . Yes. We do obviously have health and safety issues. The general position across jurisdictions is an employer would have an obligation to ensure the employee has a safe working environment. Where the safety and Health Issues come about is in relation to the expanding definition of a workplace. Qtips is tod implement work from home arrangements. You are not only talking about implementing health and Safety Initiatives in the workplace, but we see an expansion of the work ways to beyond a traditional workplace to the home. If an employee is asked to work from home, do you need to ensure the home environment haslinda let me jump in here. Coming read a headline from south korea unhappy about the quarantine plan. How do you manage crossborder issues . Perspective,yees for an employees perspective, where the issue is now is Different Health and labor authorities are coming up probably not consistently. At a different pace as well. Where you are managing a Global Workforce, you would not only need to keep an eye on local jurisdictions youre looking at. You also need to consider the average how the average jurisdictions are in permitting their advisories. In south korea, if you have it workforce in singapore, you have to consider the competing considerations in the two jurisdictions. Haslinda challenging times. We are counting down to the opening of the session in india. We had the nifty futures sinking as much as 3. 8 . Details coming up shortly. This is bloomberg. Paul lets get a quick check of the latest business flash headlines. Southwest Airlines Says following bookings will hit First Quarter revenue, compounding evidence the coronavirus is affecting u. S. Air travel. The carrier says it has seen a significant drop in recent demand. Southwest expects as much as three and dollars impact on the First Quarter operating revenue with seat revenue per mile falling 2 from a year ago. Lookss troubled 737 max a step closer to a return. A certification flight could be a few weeks away. The regulator says the last few Software Reviews are almost complete. Pilots will test the plane sing. Dime backs was grounded a year ago following two fatal crashes. Is rejecting an unsolicited takeover approach from xerox. Undervalues the company and disproportionately benefits xeroxs shareholders. Desperation to address its continued business decline. At xerox of her values hp 24 billion and expires on april 25. Pretty much a risk of day and asia. Lets get right to mumbai. When you take a look at the nifty futures, at was pointing to a little as low as 3. 8 . Yes, it is not a great start to this afternoon. Not a great way to end the week. We have already broken the psychological mark. We were watching out for nifty. We are below the recent low we have seen. It is a cut of omar of over 400 points. Nifty is down 4 in trade. This will be the biggest percentage we have seen in recent times. Ranking stocks are in focus, down about 5 . For the broader markets, it is a fall. The broader markets are down. Have the highlight we indian rupee, which continues to slide. The rupee is inching closer to to psychological mark of 74 the dollar. It is depreciating for the second day. Down 1 in trade. Onl we are keeping an eye yes bank after the r. B. I. Seized control of it. How are shares trading and what else are you watching . That is the biggest news of the day. Late evening yesterday, r. B. I. Had put yes bank under a moratorium of one month. R. B. I. Has superseded the vote of yes bank. We are seeing cuts of 15 . This comes after bloomberg reported r. B. I. Will be leading a consortium to invest in the bank kid sbi informed the stockades change the board of directors had given approval to exploit the opportunities. We have a host of brokerages. Haven stanley, all of them maintained their bearish stance. Jp morgan has given at a target of one indian rupee on yes bank kid on yes bank. Haslinda yes bank down 15 . Thank you so much for that. Lets stay with india. After years of small divestments, Prime Minister modi planned a 29 billion privatization drive that would help prop up the economy and some of the nations corporate icons could go on the block. Our economics editor is with me. This is a long time coming. He was supposed to do this sometime ago. Exactly. I think what we have seen here is direct pressure from the budget. This government is struggling to finance its huge budget deficit. It is widening to 3. 8 gdp this year. The economy has slowed down quite fast in the past year. Revenues are under pressure. The government has to find ways to finance the budget. What they are planning for in the coming fiscal year is to raise up to 29 billion u. S. Dollars from asset sales. That is unprecedented. It will be the biggest asset sale in the history of india. The big question is whether they can succeed or not. Prize theybiggest are going to be selling this year, it is a Minority Stake in Life Insurance core. It is a company that has a million agents. It is well known in india. Of a surprise. T it is expected to raise 900 billion rupees. Helpinggo a far way to fund the budget deficit if it can actually proceed as expected. You did mention a key question. Will it be successful . Governmentste the chances of achieving this goal . This is going to be the big question. I think if you look at the past experience, they failed to get the sale of india done. They were able to also divest the stake in the petroleum. It does not look very optimistic. Also, when it comes to how i see, the strong opposition from the labor unions. We have spoken to some labor unions who said this is the goose that lays the golden egg for india. Why should we be killing the goose . There is a lot of anxiety about job losses. In an economy where you have unemployment at a 45 year high, give theou going to workers enough confidence, the rest of society confidence you are not selling off your assets at lower prices . To investors looking in any of these state asset sales, they are going to be watching closely how that opposition pans out and also, they will be there will be reforms of the measures the government will have to take before it can proceed and get the kind of investment they need from these asset sales. Haslinda when it comes to funding this budget, are there other options . It is slowly running out of options. At the moment, what the government is estimating is that from the divestment, it is going to get 7 of its total receipts. That is up from just over 2 five years ago. You can see it is betting more event more of its receipts coming from divestment. It is going to look to borrow more possibly if that does not take place. It is going to need to look to the bank of india to provide those dividends from its capital reserves. Much for that. Ry we went to check in on a couple of things about yes bank. The r. B. I. Taking control of that lender. We are seeing a profound reaction. The stock price slipping at 15 . The state bank of india shares, we see also shake also shrinking. They are up by more than 11 . Recouping as some of those declines. We have plenty more to come. Things going south for the Airline Sector with the coronaVirus Outbreak showing no signs of slowing outside china. We will assess the latest forecast for aviation next. This is bloomberg. Haslinda welcome back. The Airline Industry could see as much as 113 billion in lost revenue this year as the coronavirus deals a blow to the Global Travel demand according to the International Air transport association. Lets bring in our asian transport reporter. We had the estimates earlier. That could be way too low now. The coronavirus is still spreading. Theirhey came out with initial report before it did china beyond asia pac, showed some signs of trouble coming back, but i think we are far from seeing the end of this. It could spread further beyond asia pac at the moment. Tol it is such a hard thing judge the end of this. When does it all finish . It will eventually. What sort of timeframe do we expect to see the industries have a recovery . Think a lot of people take reference to sars. Ta said there estimate is based on things starting to show some meaningful recovery by third quarter. The impacte saying from the coronavirus is much deeper than what we have seen during sars. How Airlines Come out of this, we do not know for sure. Haslinda the question really is what airlines can do to minimize their losses. They are trying to cut costs wherever they can. With a lot of flights being canceled, they are having some of their staff take unpaid leave. A lot of the executives have taken pay cuts as well. They are trying as much as they in to cut costs to remain operation when demand does come back. Haslinda thank you so much for that. Our transport reporter. Lets take a look where we are to india seeing massive selloff. 15 on the r. B. I. Also thinking more than 11 in mumbai. Add to that reaction from the indian rupee dropping 1 . The lowest since october 2018. The r. B. I. Seizing control of failedk following the attempt to raise new capital. That could be a flight to safety to government bonds. On that. Eping and i that is it from Bloomberg Markets asia. Paul i am paul allen in sydney. Stay tuned. Plenty more to come. 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. Welcome to the best of bloomberg daybreak middle east. The fed steps in. Tempo delivers an emergency 50 basis point rate cut, which he says was needed. In the gulfbanks follow suit. Saudi arabia, United Arab Emirates match. Saudi arabia is planning to sell more of its stake in aramco. An International Listing could face hurdles. First, the