1000 globally. Inwidens along infections china. Weekis set for its best since 2011. Holds a oil minister crunch meeting with opec allies. Couldrtel warns it abandon cuts altogether if the country does not join in. We are live in vienna. Undergoes emergency heart surgery. The bank says he is recovering well. Under one hour away from the start of cash equity trading. Lets take a look at futures after the route we saw yesterday. Play ad catchup to play. Even u. S. Futures are falling after 3 drops yesterday. We still see red arrows almost almost for s p futures seven hours away from cash trading in new york. German factory orders are coming out, up over the estimates. Is aurse, that backwardslooking figure at a time when figures look so backwards they are of very little use. We have the Coronavirus Impact at the beginning of january, so the most recent look at factory orders is very different. Anna indeed. We are getting jobs data later. People are talking about how that can feel stale. Will talk more about the job story after the u. S. Later. Monitor,thing we will but could be a failure in the markets eyes. 2 on down by more than the asiapacific in the, down on the nikkei hang seng, and asx. So extensive selling across the market and ongoing concerns about the virus and the damages could do to the Global Economy. Notwithstanding the human disaster, of course. The indian rupee has just dropped off as the state took control of the fourth largest lender. Lets have a look at the other side of the gmm. It is the friends that matter here. Will russia decide to join in with cuts . Oil is part of the commodity selloff story. What you see is a great deal of appetite for sovereign debt. We have alltime low yields in australian debt well below 1 . That is the obvious play right now. We ask how long it can go on. Matt global central bankers are cutting Interest Rates, in some cases beyond crisis era lows. It underscores the hit from the economy, even as investors. Uestion that Monetary Policy we are now going to have an interruption with a severe deterioration. We are coordinating with the treasury to make sure that initiatives we undertake are complementary and will collectively have maximum impact. A strong sense that we are all on the same page. Allhe bank will take necessary steps to support the economy and financial system. It will help to mitigate the inevitable tightening of financial conditions. Of theome of the words worlds leading central bankers responding to the outbreak. Lets get a markets update with our mliv managing editor in london. Lets talk about what Central Banks are doing. Maybe we need a conversation about how much needs to be saved tofor later if we start appreciate this crisis will last quite a time. Im not sure. They need to start acting as soon as possible. It does not matter if they deliver it now or in six months. Either way, rate cuts are not the most effective method to prevent a pandemic. We already have liquidity in the system. Necessary but not sufficient . Thats a good way of appraising it. Its definitely not and im not even sure it is necessary we would see the surge into bonds regardless and this marginal support, im not even sure it is necessary. Matt what do you think about the drop in oil prices . We go to vienna a little later. Are they falling too far too fast . The history of these meetings is a little bit of backandforth. Eventually, they reach a compromise. I still think we might see that the jump to 55 a barrel. Overall, backdrop picture is still very negative. I am very bearish on oil longterm. Night not would right off opec plus reaching some sort of agreement. Anna our sovereign bonds the main story in town . It seems so obvious. Weve done it through trade tensions and now through the coronavirus tensions. A pointlleague made provide certainty. You know what you are going to get from your assets. In equity, you have no idea. Know where dividends will come. Bonds provide this brilliant income that cannot be gotten anywhere else. Anna i guess comparisons are meaningless when you are expecting earnings to be cut. Aired garfield made the point that its not about the levels of yield, but about the facts. They are certain and thats why they will continue to be soughtafter. Think abouto you the longerterm question of inflation . Saying it was a possibility yesterday. Supplyside issues are driving prices up. Concern, and what central bankers have to do a 180 . Possibility. S a i dont think it is a major risk. Risk. Sly, it is a tale a very, very small tale risk. Yes, we are getting a supply Chain Disruption and tail risks that lead to a spike, but there are so many structural disinflationary pressures. I would worry about the inflation environment that is staring us in the face. Have german factory orders which look backwards and the jobs data will be the same story. Absolutely right. Say, it is a nonfarm payroll day where the data is irrelevant and yet might react in the market. It is a traders market. I cant tell you now how it will react. Actionnds on the price and it might squeeze out vulnerable positions. We are going into a weekend where we might get more news flow so it will be the most vulnerable squeezed out. Remember, you can get involved and send us your thoughts if you want to get in touch with the markets live team here let me tell you what else is coming up aired up next, a look at the stoxx to watch. Says the coronavirus will slow down eyeglass sales. Radio isber, Bloomberg Live on your mobile device. This is bloomberg. Matt welcome back. This is the european open. We are 47 minutes away from the nbct of cash trading futures pointing lower to end the week. Lets get your stocks to watch from around the newsroom. Annmarie hordern is looking at ney on, are slow the saga arcelor. At u. S. Re looking concerns. Annmarie National Security officials are urging donald trump to block this deal. They are looking to take over cyprus in a 9 billion deal. They say it poses a security risk, which is why officials are trying to get him to block this. Twomp has already blocked foreign takeover deals and we see it is already down 1 . Anna what is going on with this business . They came out with earnings. Revenue was up 4. 4 last year, which is a pickup from 2018. For 2020, they are looking at growth of 35 , assuming the coronavirus outbreak subsides. They have got a lot riding on this and the forecast hinges on this outbreak. The company has plans in italy and china. Plants in china are running below capacity right now. This is the first full year for the Company Since the merger that created it. Interestingly they still do not have a ceo. They said it may be by the end of this year. There is this longrunning dispute. At a time when they are dealing with the outbreak, theyre still searching for a ceo. It will take them well before the end of the year. Matt you can get all of your stock stories by typing into your bloomberg terminal or mobile app. Lets get leighann gerrans first word news spec in london. Back in london. Medical workers are warning of supply shortages as hospitals are uncertain when they will able be able to test cases. Russias oil minister is returning to vienna for crunch talk with opec allies. Of 1. 5up proposed cuts Million Barrels a day but says it could abandon them if russia does not take part. If this backfires, the price of oil could crash. There has been another cease fire in syria. President putin and erdogan are looking to patch up the increasingly frayed relationship. The pact fell short of what president erdogan was actually after, failing to establish a new zone of control. Global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Anna thanks very much. Reacts are continuing to to the spread of the coronavirus as the number of cases approaches 100,000. The global rally has broken more records and there has been volatile trading. Joining us from geneva is the global head of fx at lombard. I want to start you by asking about the dollar. I have a chart that shows this oversold at this point. Where do you see the dollar heading . I will be honest. In the shortterm, it is oversold. I think the situation is so unpredictable in the shortterm. New cases in china are being announced the markets remain jittery. It makes any shortterm framework out of the window. Head,eds to keep a cool acknowledging a great deal of uncertainty. View hasediumterm been that this is a year for dollar downside. What has changed this time are these massive drop in yields. What i think about it, 10 year paper in the u. S. Is giving you 80 basis points. This is over 100 points of decline in just two months. So that is bound to start accepting some further downside. Matt you live in the fx world. When i look at Dollar Strength or weakness, there are a million things that could be driving it up or down. What leads most to Dollar Strength . Pairs, switching to dollars to buy 10 year yield . What drives it for real . It is a combination of things. Thing isall, one major the growth rate differential. Especially if you look between the u. S. And eurozone or the u. S. And emerging market growth. This is typically correlated with the dollar, meeting the u. S. Is outperforming the rest of the world. It means to get flows into equity and fixed income. But what has happened and has has been thatinct most major Central Banks have gone negative. Is distorted done the traditional relationship of Interest Rate differentials. Intoen the countries went negative, what really mattered was only the absolute level of positive yield they were taking. That is why the dollar looked very overvalued. But of the shortened currency did not really matter because it was in negative territory. Anna do you suggest investors hide out in the swiss franc . Can you repeat the question . Anna do you think it is a good time to buy into the swiss franc . No. I do not buy into further swiss franc strength. I think the euro swiss appears to have found a floor around this area. At the same time, we still think the National Bank is going to stand by the statements made these past months. They have been intervening and we can see that in the data. We think that if pressure for appreciation is going to accelerate, they will most likely follow up these attentions with additional rate cuts. The cuts may not be much, but it signals the markets are not willing to tolerate a sustained swiss franc from here. Matt we will keep you with us. Theres a lot to talk about today. Coming up later today, fancy a bet on the growth of the Robotics Industry . We bring you the details at 9 30 a. M. London time. This is bloomberg. Matt welcome back to Bloomberg Markets. We are just about 35 minutes away from the start of cash Equities Trading on a day when futures are pointing down after drops in the u. S. Exceeded those in yesterdays trade. It looks like the indexes have a little catching up to do. Us. Guest is still with affect is people running for safe haven assets. The yen with 8105 handle. N it how much strength do you think the japanese currency could attract . The samenomy has issues as european economies. Yeah, but one thing you need to take into account is the safety of the yen has largely been driven by the fact that japan does not have as much credit. So when you get events like that, residents tend to repatriate a substantial amount of money. Thats why see such a big appreciation of the yen. This has certainly been the main driver of the main downside and the dollar aspect. Going to later, we are get out of this environment and potentially start trading more on the underlying fundamentals. If we are right in terms of dollar downside. I think the yen will continue to be beat. But this will not come from the environment but the dollar downside. The other thing we need to take into account is the massive decline in u. S. Yields. Let me just spend one minute here. Traditionally, you get inferentials. Over the past five years anna just briefly. Sorry . Anna i have to jump in. We will continue that thought another time. Thank you so much. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. It looks like it could be a very down day. You see futures off more than 2 across all of the major equity indexes. Anna lets get a Bloomberg Business flash in london. Anna President Trump has been urged to block the proposed purchase of cypress semiconductor. Theyre concerned the deal poses a National Security risk, but it was not clear why the German Government has been trying to persuade the u. S. To green light the takeover. U. S. Regulators have finalized reviews of the boeing 737 max and expect pilots to test fly the plane. Boeing hopes to get the plane backed by midyear. It has been grounded for almost 12 months. Hsbc has concerns an employee in china has been infected by the coronavirus. It comes after evacuating the office. Ceo sent a note saying the employee is in self quarantine and recovering. Chinacks says business in is getting back to normal. The results will be temporary and profits are down by as much as . 18 a share. Fall 50 e salts may year on year in the second quarter. Thank you very much. Governments around the world have pledged over 54 billion to fight the spread of the virus. Europes spending is almost entirely confined to italy, which has been hit the hardest. , maria tadeo joins us from brussels. When theany sense of virus is going to peek . Peak . Italy seems to have a head start. Exactly. That is the question the markets are asking. Seemata out there does not to be pointing that way. We had italian numbers which have not seen the comedown, but it is not just italy. I point out france, which had a big strike yesterday. There are over 400 cases. Macron manual president macron say people should be prepared to see those numbers increase. The bottom line here is that the numbers are not pointing to peek virus. Today, Health Ministers our meeting to figure out what next step we will see. Eu is saying we are seeing coordination, but each individual nation is doing their own rules and testing. Seeing aill not coordinated fiscal response. Extra. Hat about the extrahe idea spending in italy. What is the idea . Both,y are trying to do which was the message yesterday. They are doubling the amount of money floated at the start of the week. They are trying to kickstart the economy its difficult to see how this could help italy over the short term. Gdp and exports being restricted by the virus. Secondly, the amount of damage , itsas done to sentiment difficult to see how to patch this quickly. Economists do predict a technical recession. Its difficult to get an idea because the data is backwards looking. To some extent, we are flying in blind. Matt maria, thanks. In brussels talking to us about the coronavirus and the attempts to hold back. The fed surprise on tuesday with its own attempt to cushion the economic impact. One of those who voted was Robert Kaplan speaking exclusively to our economics and policy after Kathleen Hays. The situation has changed pretty meaningfully. If you asked me two weeks ago, i was saying to see how this will unfold it was too early to comment. What happened once the virus got , for korea and then italy me at least, probability of a material deterioration increased. It was to the point where i agreed we would need to take action. Then, i felt the situation was i thought itapidly would be wiser to act now and act boldly where it could make an impact. Mean, its not going to help with the number of diagnosed cases or get people to want to go out. Not going to do anything about the containment reaction. What will do is if we enter a time where we have a severe slowing in the economy that lasts for some time, accompanying that is likely to be a tightening in financial conditions. If we go into this with somewhat believe ititions, i will help to moderate or mitigate some of that inevitable tightening of conditions that will happen as a result of this spike in cases. The judgment of the wisdom of this is more looking ahead in the next 68 weeks. Regard i feel confident we did the right thing. One other thing. A number of people had a reaction because the market sold off. I will tell you that if the markets had gone up, it would have given me no comfort whatsoever. Conditions,about its not about the current stock market. It is about mitigating a tightening of financial conditions and increasing the likelihood that as we come out of the situation, we can come out more strongly. Kaplanhat was robert , evenng to Kathleen Hays us and explain for the emergency rate cut saw earlier. A highstakes poker game is playing out between russia and opec area we get the latest in vienna. This is bloomberg. Anna welcome back to the european open. European futures suggest we will be continually weaker at the start of trade. Jobs report will provide a snapshot of Market Health before the outbreak. The jobs report is tallied using surveys other for month could better perfect reflect better conditions, but what do some of our guests think . One guest says the Coronavirus Impact is likely to be reflected in march. Investors is abn that the beige book has noted some impact on tourism and leisure which could reduce payroll contributions and the upside risk average hourly earnings. Moodys says not to wait for Monthly Employment but watch weekly initial claims. Another view is that the pace of payrolls is on a general slowdown trend due to moderated Economic Growth. So, a full wrap up of what some of our guests have been saying about jobs reports and their usefulness. , where ano brussels economist is joining us. Went through a few takes on the job support and what data we should be looking at. How useful will the report be to you today . I dont think the report will be useful at all for market strategy. That said i think the report will be strong. Mentioned, its mostly passed indications of u. S. Labor Market Health. Report will be dismissed as such the bad report will look like we knew the economy was already slowing. Instead, we are looking at fast indicators, including the spread of case volume. Matt do you ca deterioration in some economies . Can you compare and contrast the u. S. With other economies . From an investment perspective, the u. S. Was on strong footing before the coronavirus hit. It also means it has further to fall. At ising we were looking not just of the impact of the coronavirus, of which there are implications, what really a global factor. So the underlying strength of those economies is still pretty important. Example, weaker Economic Growth prospects were leading up to the virus. Ultimately, its not just the virus, but those underlying conditions and evaluations that will dictate the most attractive opportunity. For now, we are not buying the dips. So drawdowns in this market are not an indication. Seems you are looking at the illness itself, the having an impact on economies. We are also looking at containment measures to work out to must just how much impact this has. How far out does this analysis take you . For now, it only takes us to the end of the first quarter. Speaking, impacts like this will be transitory, even if severe. The challenge for analysis is that being late cycle as we were , we dont know how bad the impact unless transitory factors will be. Mean if Profit Margins have been under pressure for quite some time, then virus impact could actually cause defaults because companies do not have a buffer against that risk. We dont know yet how entrenched that impact will be, its difficult to say if this will be transitory. Your point, we are still taking things day by day. It is not a buying opportunity yet. Matt what are the best ways to hedge here . Strength selling into and building flexibility. In some circumstances, that means cash, other circumstances, it means security. Expensiveh quality is , a value generating strategies when youarkets are looking at a volatile environment, those can still be the smartest places to be. When we do get any indication of the potential for a cyclical to be playingant in cyclical securities, but we are not there yet and so quality is still the name of the game. Much forren, thanks so joining us. Lets dive into our need to know segment. Jamie dimon has undergone emergency surgery and placed his lieutenant in charge of the largest u. S. Bank. Annmarie hordern is in new york with the latest. Annmarie it was caught early and surgery was successful. That is what jp morgan has said in a statement. He felt chest pains before work and checked himself into a hospital. That may have saved his life. He is the most prominent executive in global banking, so investors were concerned. Shares fell about 1 in postmarket trading Jp Morgan Says it has placed others in charge as he recovers. He added that jp morgan has perhaps the deepest encz when it comes to north american thinking. Encz bench when it comes to north american banking. Matt a highstakes diplomatic poker game is happening in vienna today that risks a price crash. Manus cranny is there for us at the meeting. What have you got . It isood day to you highstakes. Plus had this marriage that would last for an attorney. Here we are. There is a slight crisis of confidence. Alexander novak arrives here in under a couple of hours. Will russia get on board with the proposed cut . Here,l minister is saying essentially saying we are not prepared to act unilaterally. The secretarygeneral is talking about the importance of the union. Meetings an informal which was how do you get russia on board . How do you get russia to realize their position on the global affect a sling swing affect. But the markets need the confidence that there is a galvanize agent to action by opec and opec plus. Anna why would there be hesitancy from the russian side . All of the players have Different Levels in mind, i suppose. Why would the russians stand firm . We have watched brent drop below 50 a barrel. Think of it this way. They are all galvanized now. The risk is it is coming closer to the breakeven in the lower 40s. I think there is this moment of realization. Is this really what we signed up for . To have this swing producer state. They joined to save the market from implosion. But was all about shale, here we are in a different context. Risk game from russia . One things for sure, putin likes to be seen as a world leader and we are waiting. I am standing in the rain, waiting for the russians to come. What is the word for rash yes in russia . Da. Da yes. James is a very good producer on this trip. Matt james, thank you. Mantises in the rain, following the russians and sallies. Citi shoots down the vshaped wall street recovery theory, for those of you who still believed that. We have the morning call next. This is bloomberg. What i would say is we are now going to have an interruption and severe deterioration. We are coordinating with her majestys treasury to make sure that any action we undertake is complementary and that we will have maximum impact. A strong sense that we are all on the same page. The bank will take all necessary steps to support the economy. It will help to mitigate some of that inevitable tightening financial conditions. That is the worlds leading central bankers responding to the coronavirus out rick. Outbreak. Matt time for todays morning call. Vshaped recovery theory will not be easy to achieve. Annmarie as we have been hearing on wall street and even on bloomberg, we have been debating this for weeks. Citi says this is not going to happen. They said they have been absolutely clear that the rate cuts will not lift some boats. Risk is the most at israel, russia, and chile. We have gone from talking about what shape. Maybe a w. I definitely heard w the other day. Lets check out futures markets. We see equity futures suggesting some real weakness. Cac and dax futures are down more than 2 and u. S. Futures also look active. Of course, we will keep an eye on these havens. We are seeing futures indicate a risk off day. Future opens the markets open in just four minutes time. Anna good morning. Here are your headlines. Near 100,000. Ses new infections in china and korea. Gold closes in on 1700 an ounce and is set for its best week since 2011. Russias oil minister holds a crunch meeting with opec allies. It could abandon output if the country does not join in. Jamie dimon undergoes emergency heart operation handing control of jp morgan to his lieutenant. The bank says he is recovering well. Matt we are looking at european futures pointing lower this morning more than 2 are the drops and futures after u. S. Equities fell yesterday more than 3 . Europe has catching up to do this morning. We should see equity indexes thanout of the gate lower we saw the close yesterday. What are you saying as the numbers role in questio . Anna risk assets as we have done in the context of the coronavirus going global. Euro stoxx getting into its stride down 0. 5 . By a percentnc up or so. The u. S. Treasury market very much at the heart of this, the haven many have been drifting to. Down to 1. 4 , new alltime lows for u. S. Treasury yields. European equities, the dutch market down by 2. 2 . The French Market down 2 . The ftse 100 down 1. 9 . Opening in market is the crosshairs down by 2. 5 . It seems indiscriminate, selling risk assets and equity markets that had been beat up this week with the coronavirus. Moments of optimism are shortlived. Matt we should look at the individual stock movers. You will see mostly down stocks. 479 moves to the downside, and gainers on the stoxx 600 index. You do not need an individual reason today, almost all stocks are down. The only gainers we see on this chart, weiner birder is up this upning weiner burger is this morning. Otherwise as far as loses are is leading the pack down in terms of taking the most points away. Airbusuitton, hennessy, and really everything is falling this morning. You do not really need a reason to do it. European markets opening lower as nervous investors mondor the theures monitor measures. Governments pledged 54 billion dollars to soften the blow, and it seems we could see more coming. Ours go to jim mccormick, guest cohost for the hour on exactly what to expect. What do you think . Do we have more visibility than a month ago . Are you in a better place than when this busted out . Think we are. Not we have seen stabilization in china but it looks like things are spiking there. Everything outside of china, how many infections will there be . We have not seen what they impact on growth, which we think will be significant. A number of seen places try to get a handle on numbers. The Asian Development bank saying the Global Economy will damage in7 billion of terms of gdp numbers. Asiapacific, everyone is trying to find something. What is your assessment of how much damage this will do, or how would you assess it when numbers become available . Growth, the 2020 weakest expansion by a longdistance. Recessions in italy and japan, and the u. S. Just missing recession in the first half of the year. These are big Growth Numbers to the next couple of quarters. Matt what do you do . Sucho not by the dip with little visibility. How do you hedge these risks . Jim firstly on the risk assets side, we have been clear that risk assets have diverged significantly from underlying fundamentals. This is a growth shock, you do not want to buy the dip. Interestinglyis low relative to other markets. Goodolatility provide hedging opportunities. Anna what is the most interesting thing for you . More thanre attention ever before around this subject. It is interesting how wideranging Market Participants have to be. When you look at how china is handling it, is there anything you are looking for . The rate they are going back to business . The threat of another outbreak . It will be interesting where this goes in western economies. Jim what is interesting is it cycles, the china cycle is first and the rest of the world going on now. China gives some room for comfort in the sense there is a thel you have to shut down economy for a short time. If you do that, you can get control of the infection. If china rates stabilize and china starts to ramp up activity, we can look three to five months and see where the world will be going. Anna we have not tested in western democracies the moral implications of what you are saying and what people will and will not put up with. That will be fascinating to see unfold, possibly devastating. Jim that has been the concern, once it goes outside of places like china, it will be harder. We are seeing that. Seeing quickare spreading and a lot a lot of activity around it. I worry about what will happen. Matt you are the global head of strategy in those markets, but you have a number of roles on the street including developing markets at Lehman Brothers. The do you think about change in todays trading . With more people going into we ave investing, are larger group of sheep going the same direction . Is that a danger . I think passive is a danger in and of itself. The driver of passive investment is price and price momentum. The lastave seen couple of years is asset prices have diversion from underlying fundamentals. You can see a Virtuous Cycle switch to a vicious cycle quickly. That is the concern i have at this moment. Anna good topic to pick up later in the program. Jim mccormick, global head, Natwest Markets. He stays with us. Up next, the u. S. Jobs report is usually a big day for investors, and amid the coronavirus outbreak, could the report have already gone stale . We will share what economists have to say. That is next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Off. Y looks set to be risk we already see 10 minutes into the session equity indexes down more than 1 . The size of the move in the indexes, how many stocks on the indexes are down. Of the stoxx 600 index there is only one gainer right now. We are looking at getting the only gainer, and it is not adding many points to the index. Everything else is down on the stoxx 600 index. U. S. Futures down as well. We are getting headlines on the coronavirus cases here in germany surpassing the number in france. Germany, from a previous total of 400. More and more this is spreading through the heart of europe. Countries are boosting the tonding that they can contain the virus, and trying to stimulate the economy from the damages of that containment. Maria it is good you pointed out that headline, we are seeing on a daily basis how those numbers are continuing to increase on european countries. Germany has 500 cases. A big spike yesterday in france, and saying theyre going to put 7 billion euros on the table to stimulate the economy. That gives you an idea how much of an issue it is for europe. It is clear we are not at peak virus. When you look at the economics of this, in brussels they are saying italy and france will fall into a technical recession in q1. Italy is in a perfect storm receipt Consumer Sentiment dampened by the virus. Geographicthe location of the coronavirus, and fact the economy was week weak. Much. Thank you very normally on a day where we get u. S. Stocks reports, that would be jobs reports, that would be the focus. What some of our top contributors are looking for. Is a solid game, they see coronavirus hitting Business Confidence but not the pace of job creation. Is there willabm be some impact on tourism. We could reduce Services Payroll topensation and upside risk hourly average earnings. Of 195,000, that judgment based on the warm start to the month than the coronavirus outbreak. Lets get the thoughts of jim mccormick, global head, Natwest Markets. Is this a stale number . Will offer us anything useful . It is old news. We had a slightly below consensus number. I do not think it will matter for the developed world and the u. S. It is the march numbers and there on we start to care. I do not think anyone will pay much attention to these numbers. Matt i was thinking in terms of the oil price, it is not so interesting until we understand the effects of the coronavirus. Do you see that with a lot of data points . The coronavirus is more important than anything else . Jim yes, it is allencompassing. It is a growth shock that is different than anything we have seen in recent years in the western world. This will have a big impact on the engine of growth which has been consumer spending. We do not know how big that impact will be. Anna what do you think the fed is going to do . The level of expectations still in the market despite what the fed did on tuesday. There are expectations that will be another cut to come. Will the be wise for it to come so soon . Jim we think the funds rate is back to zero by april. It will be a fast move. You when it sees disruption problems, it needs to cut rates quickly and get to zero as quickly as it can. There are more rate cuts coming, whether it is zero bound by april it is unclear. Anna the fed likes insurance cuts. Jim it is unlikely to take them back when things start to improve. Matt will we get any fiscal spending out of congress, or will they resist that preelection . 8 billion does not seem like a lot for the u. S. Economy. Jim it is tricky in an election year, but risky to push back on spending for this virus problem. To the ideaed up you will see some fiscal spending, but it will not be a bazooka fiscal spending this year ahead of the election. Us, you will stick with jim mccormick, global head, Natwest Markets, our guest cohost for the hour. Will blockt trump infineons purchase, officials are concerned that 8. 7 billion deal poses a National Security risk. It was not clear why. The German Government is trying to persuade the u. S. To greenlight the takeover. Jamie dimon has undergone emergency heart surgery, he is temporarily handing controls to his lieutenant. The bank says the surgery was successful. He is awake and recovering well. Hsbc is concerned about an employee infected with the coronavirus, it comes a day after it partially evacuated its london offices after another employee tested positive. The employee is in self quarantine, stable, and recovering. Thank you very much. Up next, we bring you the stocks on the move including european banks falling to the lowest level since 2019. The sector beaten up, of course. Also get the latest on the oil sector, opec and Friends Meeting indiana. This is bloomberg. I opec and Friends Meeting this is bloomberg. Matt welcome back to the european open, 20 minutes into the trading day and looking at more than 1 declines once again for european stocks after big drops in the u. S. And in asia overnight. The coronavirus concern is driving investors out of risk assets. Lets look at the individual movers. Are seeingning, we massive movers today moved to the downside. A handful of stocks are moving up in the green. The Banking Sector down about 2 , the lowest level since 2009. That was in the depths of the financial crisis. Italian Cable Manufacturing Company did not meet the 2020 guideline. The ceo saying it will be uncertain times. Ryanair down 4 . Bloomberg intelligence is saying airlines may have decent numbers in february but we will see a march given the surging numbers of coronavirus cases around the world. Much. Thank you very a highstakes diplomatic poker game in vienna between russia and opec. A price crash if it backfires. Opec told russia if it does not join them in cutting output to offset the impact of the coronavirus, the cartel could abandon its reductions altogether. The uae oil minister was optimistic saying he expects an agreement. Jim mccormick, global head, Natwest Markets is with us. I am looking at a chart that says how russias Oil Production has stayed flat since 2016, whereas the saudis has come down. This is an uncomfortable relationship. Jim it is very uncomfortable, and this reminds me of a meeting in 2014 where the world was expecting opec to sort it out, said we will not in theonly cutter market. I have seen numbers on demand and if the coronavirus continues , it is horrific in terms of demand for oil globally. Is it a Silver Lining that we have this drop for everybody else during this Coronavirus Crisis . Does it provide stimulus . Yes, i have said oil has a in the 45 to 55 range. The world operates nicely within that range. Once you go below that range, you start to really fit oil balance sheets, and we could 20152016we did in worried about the energy sector. Anna what about commodities more broadly, this does not bode well for global growth. You are more areas or less concerned about . Jim i think industrial commodities, we said from day one, will not recover until we know the extent of the gross damage. We do not know that yet. Chinese numbers in february are pretty bad. Precious metals are a safe haven and do well when yields are going down. A lot of yields are negative. Anna less opportunity costs. Fed and you expect the funds rate to hit zero. Does that mean gold has further to gain . Moments, it is a perfect in the sense that the world is scared about a lot of things. They want to get their hands on a safe haven, and with global yields plunging below zero, it looks that much more attractive. Anna where do we stand on the inflation debate . I was joking with mark cudmore, that when it comes we can say we talked about it. A stock clock is right twice a day. Jim or once every five decades or so. We have had a debate that is a tough one. Headline doubt inflation is going lower and will not pick up for a long time. When you start disrupting supply chains, whether or not there might be core inflation. We never really came to an agreement on debating it, but i think the core story is an unknown. There is a demand shock and a supply shock at the same time. Inflation will be a lot lower in the coming months. Matt it is fascinating, the debate and the idea you can compare the effects of the coronavirus to the effects of the Oil Supply Shock of the 1970s, how likely is that . Is an abrupt stop in global growth. Frankly, with the china model, it is the right approach. In order to slow infection, you need to shut the economy down. We have seen it in china and we are seeing elements outside of china, but not enough of it yet. Anna thank you for joining us, jim mccormick, global head, Natwest Markets. He will continue his conversation with matt on Bloomberg Radio at 9 00 a. M. U. K. Time. Program, thethe coronavirus continues to spread. We will look at the outbreak has affected european budget. This is bloomberg. Anna welcome back to the european open. On anna edwards at our european head odors headquarters. Matt lets take a look at the story for equity markets. It is a down day. The stoxx 600 is falling. 600, only nine and most areining gaining very little. Everything else is down. Losers. You can see Industry Groups are off as well. Stocks as wellch as banks and basic resources, basically everything is off more than 1 . Result, you are going to see futures down for the u. S. , even after yesterdays big drop. Lets get to bloomberg first word news in london. The number of reported coronavirus cases is nearing 100,000. Died and people have 55,000 recovered. Is World Health Organization worrying countries may not be doing enough to fight the upright. Are warning of supply shortages in the medical system. Lawmakers are warning the government will fall short of its goal to test one Million People by the end of the week. Russia and turkey have announced another ceasefire over the deepening crisis in syria. Erdogan aretin and hoping to patch up the relationship. The pact fell short of what president erdogan was after. A new zoneresettle of control for refugees. Global news, 24 hours a day on air, on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Anna thanks very much. Markets are reacting to the spread of the coronavirus is the number of cases worldwide approaches 100,000. 30 year treasury yields are sliding a 1. 5 for the first time ever. Joining us is the head of Global Equities at hearings bearings. We see a flight towards fixed equities. Do you have any idea for how long the are in that path for . The markets are doing this is because visibility is very low. Nobody can predict the progression of the virus and markets are worrying about the extent of demand disruption. Looking to get a handle over how much of the earnings will be deducted from Companies Going forward. Selloff,terms of the you run equities for bearings. Are there Industry Groups you are more likely to favor during this kind of selloff . What is the safe haven of the equity Industry Groups right now . The thing to do is look through this and try and find organs for longerterm. What happens is everyone has one trait in mind. You need to look longerterm and look through this. Day, you willthe end up with the virus either stoppingts course or expanding in terms of new cases. But you have companies that are amazing in terms of Growth Drivers and balance sheets. For me and for our companies, we are looking at such ideas to try and find the companies we will be comfortable owning one year from now. Anna in the shortterm, i was drawn to this chart by my colleague in new york. Retailers onood the s p 500 divided by the hotels, resorts, cruises and the like. This is a function of two different responses. One, i dont want to go on holiday and the other is perhaps i need to buy more food. Are there shortterm opportunities you are focused on . There are people who think they can beat the market going for shortterm, but that is not how we invest. We dont look for shortterm opportunities. We look for vulnerabilities in companies we own that would make us unhappy owning them over a long time. When you do is look at portfolios and find structural fissures you have not anticipated. You sell those and you go for good, strong franchises. Opposed to secular areas which might be because of this. Anna remote working. Exactly. We dont look for shortterm winners. Valuations were getting pretty lofty before this. I guess european valuations did not feel that that. That bad. What do you think about valuations now, and what point do you start to dollar cost average in . Good question. We have been advocating moving away from the u. S. For a while now. , we are in favor of emerging markets, where the valuations look extremely attractive. Catching the proverbial knife always looks scary if you are not tethered by something. By companiesed that have structural growth stories and are good managers. Changes areal ,orming in the Service Economy tech sectors, automation etc. What you dont want to do is by value the sake of value, because that never works. Adir, thank you. Recordingsnthly job is usually a big day for investors. Today, it wont account for the coronavirus, at least not in the main. So we will be sharing with you views from Top Economists on how much relevance it really has. This is bloomberg. Matt welcome back to Bloomberg Markets europe. We are 41 minutes into the trading day and looking at drops of even 3 across European Equity indexes as visibility for the coronavirus remains low. Lets get the Bloomberg Business flash. The German Government has been trying to persuade the u. S. Green light this takeover. Jamie dimon has undergone emergency heart surgery. Lending control to his lieutenant. He is awake, alert, and recovering well. U. S. Regulators are finalizing reviews of the boeing 737 max and expects eyelets to testify test fly the plane in a few weeks. Has been grounded for almost 12 months. Anna thank you. On tuesdayprised with an emergency half point Interest Rate cut. One of those who voted was fed kaplan. He spoke exclusively to our politics and policy after. Editor. The situation has changed pretty meaningfully. Ago, iasked me two weeks was saying we should see how this unfolds, its too early to comment. Once the virus got to south korea and italy and it was clear there were cases in me, theed states, for probability of a material deterioration increased to the point where i came to the view we would need to take action. Then, i felt the situation was i thought itapidly would be wiser to act now and act boldly where it could make an impact. Its not going to help with the number of diagnosed cases. Its not going to get people to want to go out or do anything about the containment reaction. What it will do is if we enter a time where we have a severe slowing in the economy, accompanying that is likely to be a tightening in financial conditions. What Monetary Policy can do is, if we go into this with easier conditions, i believe it will help to mitigate some of that inevitable tightening of financial conditions that will happen as a result in the spike of cases. The judgment in the wisdom of this is more about what is going to happen, not what is going on right now. Regard, i feel confident we did the right thing. One other thing. Reactionpeople had a because the market, on the day we did it, sold off. And if markets had gone up, that wouldve given me no comfort whatsoever we made the right decision. Nor bite selling off did we know it wasnt the right decision. This isnt about the current stock market, its about mitigating a tightening in financial conditions that will likely happen some weeks from now and increasing the likelihood that we can come out more strongly. That was Robert Kaplan speaking to Kathleen Hays. February, the jobs report will provide a snapshot of the labor market before the coronavirus outbreak. The jobs report is tallied using data through the middle of the could so other surveys better reflect evolving economic conditions. But what do some of our top guests think . Well, simon french things its more likely to indicate the impact of a pause in the trade war. Berenburgd Economist Says the Coronavirus Impact is likely to be reflected in march. We think theis pace of u. S. Payrolls is on a due to slowdown trend signals from leading indicators such as job openings. Our guest is still with us. Ghadir, what number do you expect is the number we normally ask, but what importance the place on it today . Ghadir the number is not the issue today. The issue is that the number is backwardslooking and would tell us things are improving following the impasse in trade relations. It will not tell us anything about what will happen Going Forward and when a slowdown will come because of the coronavirus. Us, job number usually indicated action in the Central Banks. We know Central Banks are already showing us favorable monetary conditions. Other banks are talking about cuts, pboc has cut. Singapore and other countries are talking about monetary stimulus. Think the markets will completely ignore it. Anna i was looking at suggestions of highfrequency data that might be useful here. Some are suggesting ism manufacturing will be a better place to look to see how the economy is coping. What is going to be crucial data for you to look at . Can keep counting cases of death rates and we are mindful of the human stories behind those numbers, that might stop being useful in terms of the economic story. Ghadir thats a good question. Method,se the historic looking at what happened in china. Startedese market recovering in february when the cases peaked. I dont see why that wouldnt be the case outside of china. Looking at how the cases are ,preading in the time of fear if you look at data and see when , thatsart pinching off saying wets start should look at the numbers. Remember, the chinese data today looks awful because february showed a massive slowdown because Economic Activity pretty much stopped. But our team on the ground is telling us some factories are setting up, that there is more and more people in the streets of hong kong. People are going back into offices. Its becoming more business as usual. We are ending up with a situation where we had easy Monetary Policy and good evaluations. You are able to buy companies at cheaper prices and Economic Data will rebound strongly. Thanks so much for joining us. We really appreciate your time here. Cooper is the global head of equities at barings. European banks falling to their lowest levels since 2009. This is bloomberg. Anna welcome back to the european open. 53 minutes into a very negative session. Stoxx 600 down 2. 7 amid ongoing concerns about the coronavirus. Lets get to individual stock stories and sectors setting new records. Sectore every single across the stoxx 600 is in the red this morning. I want to kick it off with travelleisure. That sector has been down 25 since the start of 2020. This is as employees are being asked to stay home, flights are grounded, and tourists are canceling their trips. 7 . World is down another this company suffered theessively due to the fact James Bond Film is being pushed back. They say they dont see Material Impact just yet but they dont have certainty of impact. Finally, european banks are down 3 today. We have not seen that level since the aftermath of the Lehman Brothers collapse. The Banking Sector is down for a seventh straight consecutive day and entered a bear market, down 20 from the peak in february. Anna lets get to the oriole story in vienna. Lets listen in. How under pressure is the economy with the coronavirus . Far had at, so considerable effect. What will you do if you cannot reach an agreement with nonopec members . If there is no plan b, what is the result . We are trying to find a way. Thank you very much. Goodbye. Matt all right. So that was a quick doorstep opportunity there at opec in vienna. Groundranny is on the covering that meeting and waiting for an agreement between russia and saudi. Lets take a look at whats moving markets with laura cooper , our mliv macro strategist. Clearly, it is the coronavirus. What does market capitulation look like here . Laura i think we are not going to see that in the near term. Markets are aggressively pricing Central Banks to cut Interest Rates. Easing is likely to come through next week. For hiskets are begging some kind of coordinated fiscal stimulus. That is likely to put some reprieve to this and we have not seen that come through. Totalthe boj is buying a of ¥101 billion of etfs today. It is the second time this week they have bought this much. These are the other stimulant of measures thinks could use. Laura absolutely. Limitation of how effective price cuts will be. For the ecb, it will likely be limited and we will look for other measures. Matt laura, thanks so much. This is bloomberg. Markets spooked. Stocks slide and bonds served on the coronavirus outbreak. Stoxx 600 separates third street we could decline. Coronavirus cases near 100,000 lovely. Globally. Andwho claims to name shame nations who are not doing enough. Jamie dimon undergoes a heart operation. The bank says he is recovering well. An