Transcripts For BLOOMBERG Bloomberg Markets 20240713

Rebounds, even as saudi arabia turns up the heat. The kingdom is now threatening to flood the market next month. Relisting into the White House Briefing on the coronavirus. Larry cutler is currently speaking. We had a lot of momentum in the First Quarter. I recognize the challenges, and that is why we are proposing to combinel measures with monetary measures that have already been taken. The president intends to bring the full power of the federal government to deal with these health and economic challenges. And a word from the surgeon general, jerome adams. Evening, everyone. As surgeon general, whether its opioids or cigarettes or the coronavirus, i job is to help the American People understand how to live a healthy life. I am imploring all of you to help share my prescription for america to overcome this coronavirus situation that we are in. Watching awere just press conference at the white house. Were listening to larry kudlow speak about measures from the federal government in order to support the economy as the government deals with the fallout of the coronaVirus Outbreak. We have seen that sort of speculation sending markets higher in todays session. U. S. Futures are Holding Steady, after the best day since december of 2018. The ly coming after this after a really long session throughout the regular trading in todays session. We saw a rally in the final two hours of trading with a lot of speculation what would happen to those stimulus measures promised by President Trump. Crude gaining. 7 , this coming after oil already saw the best day since september. This following the worst day since 1991. Take a look at the dollar again at the moment. A little more upside for the japanese yen the u. S. Dollar, but this coming after the dollar surged the most since 2013 against the japanese yen on optimism about potentially more stimulus measures coming from the u. S. Lets see how things are shaping up in the asian market. Have pledgesso regarding relief in japan. Along with the u. S. Happen to drive some of the gains we saw on tuesday. Today were seeing a mixed bag when it comes to futures. Regional shares in asia remaining mired in oversold territory. Some upside in new zealand this sinceg, jumping the most august 2011. Jumping into the terminal, we did see on tuesday the number of oversold stocks in australia moving back below 50 . We are far from being out of the woods, Goldman Sachs saying we could see a drop of 25 in global stocks before this is out. Shery lets return to that press conference with like president mike prince taking q a with Vice President mike pence. Larry kudlow also giving a briefing. We are now seeing all these measures coming from the federal government. A blend cdc has called of not only containment measures, which may be past its timeframe, but also mitigation efforts. What is standing out to you . Its a complex situation that is changing really rapidly. Theres a lot of things to consider, as you are pointing out, from getting testing to people who need to working on treatments. Weve seen a lot of efforts from biopharmaceutical companies, but a big thing emerging right now, the key trend has been testing, and not having that Testing Capacity to meet the demand. Also we are in the middle of cold and flu season. A lot of people are really worried about this, and for good reason, but we have limited building upcity so the Testing Capacity in light of some initial blunders with the testing rollout. Haidi i think it has been acknowledged that the full window for containment has been missed in the u. S. Given that we are ccing community transitions. A key factor to consider has been u. S. Hospital capacity. If everyone gets the virus around the same time, not everyone is going to have a severe case, that we want to consider what u. S. Hospitals can bear in terms of beds and other factors. So that has been kind of an important focus and why youre seeing so Many Companies now in the u. S. , in areas like new york , announcing work from home measures. Tory we were listening larry kudlow detailing some of those measures. Lets listen in. Opening up the Energy Sector and doing things nobody thought we could do, weve had pretty good economic results. We are in a challenging period now, i get that. With respect to your question on the specifics, i think there will be a big growth payoff. I think it will help deal with whatever challenges occur in the next few months. , think beyond that ameliorating the tax burden on the middle class, the socalled bluecollar boom that i talk by the bit about, that is what this is aimed for. Thats what the payroll tax principally about. By lifting the burden of the middle class folks, i think we will get a big growth kit. We had a terrifically strong labor market, as you know. Im speculating on the challenges on the health side, but i think over time, we will make it up with much better Economic Growth. I will remind also that later on, way down the road, probably later this summer or early fall, we will unveil another package of tax cut and tax reform proposals. This is a bold president , and i think it has paid off. Social security and Medicare Part a revenues are 1. 23 trillion. We are not talking about medicare at this point. Yes,e way, the answer is you can backfill it, and that has been done before. We have done other payroll tax cuts. You mention one in 2010 or 2011. So the answer to that is yes, and the answer is we will always maintain a solvent Social Security system. But tax reform is very important. Economic growth is very important. Incentives for middle and lower income workers is very important. In terms of the boldness of this president s policies, despite what some of our critics think, its actually the middle and lower middle people that have done the best in wage growth terms. This is absolutely consistent, it lifts tax burdens on the middle class. It is consistent with the earlier policy. Isthe other piece of this what the doctors have said to us , what the experts have said is if you are sick, if you have reason to suspect you may have coronavirus, we want you to stay home. Working with is congress and using his executive authority to ensure that hourly have thatntly dont have paid family leave, will be able to stay home and be confident they are not losing a paycheck. We will work forward whether we do it legislatively or the president has some resources in his executive authority to act and work to make sure that hourly workers dont feel like you have to go to work sick because you are risking a paycheck. Stay home, take those couple of weeks to get better. Want to drill down something larry just said. Generatedyroll taxes figurent an enormous in 2018. Larry, you are suggesting you can make that up from general revenue. Where are you going to get a trillion dollars from . Let us put the proposal out in concrete details and flesh that out and we will have much better details. Right now i want to stay in my lane. The health story is very important here. We will do the best we can to give you specific plans and details on these questions. The increase Testing Capacity, we are still seeing reports of rationing because of limited supplies. It is close to impossible for average americans to get tested. What can the american when can you make and people expect to see these test kits that doctors and urgent care . I will have the secretary stepped forward and address that. Let me say we have made great progress over the last week. A million tests are in the field. Every state lab in america can perform these tests. If you are concerned that you have coronavirus, your doctor can contact the state lab and have a test in process. By the end of this week another 4 million tests will be distributed. But to your very important question, we are working day by day with the largest commercial labs in america. Had some good discussions today with outside experts as well. We have said that when the president brought the commercial labs in it was exactly the right thing. It is those Big Companies that have Logistics Infrastructure all over the country and laughs all of the country that can distribute and process the tests , whether its quest or lab core. We believe that in the days and weeks ahead we will continue to availability of tests dramatically rise, and we are dropping forward every day. Driving forward every day. By the end of this weekend we had 1. 1 million tests that were actually shipped previous another one million are either in transit or waiting for orders. As a Vice President said, by the end of this week, there will be another 4 million tests. The tests are out there, in every Public Health lab in the country. I think there is a false premise in your question, which is the notion that just because i as a person say i would like to be tested for the novel coronavirus, i should be going to a Minute Clinic or some other facility and just walk in and say give me my test, please. That is not how diagnostic testing works in the United States or almost anywhere in the world. If there dr. Or Public Health physician believes they should be tested, it needs to always be clinically indicated to receive a test. So it is a false premise, go to your doctor call your Doctors Office if you believe you may have the novel coronavirus. Call the clinic, call the hospital, call the Doctors Office so that you dont just walk right in. Follow their Infection Control procedures for doing that, and then they will decide with you whether a test is appropriate to be done. But there are millions of tests out there now and as the Vice President said, with quest and lab core getting it and the Doctors Office swabbing, there is to reason transport system will be an even better, closer to the patient experience. Dr. Burks has done a tremendous job bringing our commercial labs to bear on this. Us toesident directed essentially change the criteria that cdc was giving labs around the country. We heard from governors around the country that people that were only mildly symptomatic were being told that they couldnt be tested. We changed that description, so as the president said, anyone under a doctors order who wants to be tested can, at a doctors indication, be tested now. We are working to fill that need and we are making great progress every single day. But i wanted dr. Burks to speak to it as well. I just wanted to talk to you andfly about what happened decreasing barriers. Ive been a lab person, a vaccine developer, dr. P read ive been all those things, but i never in my lifetime of Government Service have worked with the cdc in a way that every time a state or local government calls and says i have this barrier, i need a modification to the regulations, that has happened almost daily. The reason we have commercial labs willing to step in immediately is because the fda has created that ability and posted it on their website. System,elievable waiver and a clear definition, every single hospital, every Single University can utilize this testing algorithm. That is highly unusual, but it is also what is bringing this the Super Large Companies to the table. This has been unique for me to be able to see this unbelievable dialogue between what states need, what local governments need, and federal government being responsive to changing these regulations. That has been really wonderful to us. Ask, the to administration has touted the success of the travel ban to china and iran. Why hasnt it expanded those to south korea or japan or italy . Has administration shifted to mitigation versus containment . I will let dr. Burks speak to that. Question, we would be in a very different place a President Trump had not suspended all travel from china. And i suspect we would be in a very different place if we had not issued travel advisories for portions of italy, portions of south korea, and initiated screening of all passengers on all direct flights into the United States from both of those countries. We had a veryu thorough discussion today on the prospect of recommending to the president additional travel advisories. Is followingoing going to, and we are bring those recommendations forward in a timely manner. The let me tell you, it is literally a daytoday consideration and we will continue to put the health and safety of america first. Did you want to amplify that . I think that was perfectly said. There was an oped that said recommending that schools be shut down for at least eight weeks. What does the administration say about that . There be a turning point in the next 10 days or so . The recommendations that you have and every american now has at coronavirus. Gov apply to every jurisdiction in the country, every state, irrespective of whether there has been a coronavirus case established. I will tell you that we are working very closely with california, washington, new york, and florida to develop community specific recommendations for those areas where we have had what is known as Community Spread. A number of coronavirus cases appear to be transmitted in the community. In the next 24 hours, working with those states, we will be publishing the cdc recommendations for what ought to be done, but i want to turn it over to the doctor to tell you, we think the most important thing here is we continue to bring the facts forward to the and that ourle, proposals and our recommendations, all of these apply to everybody in the united helping it will reduce the infection rate of the coronavirus. Those communities that are being develop, we will specific recommendations that will make the most sense for them. Can you wait until there is Community Spread to make some of these you can start to see multiple generations. But getting to individual question, everything is on the table for consideration. Fora that we are not the country right now to say going to close all the schools in the country, i dont think would be appropriate. Uponl closures, depending not whether you have already the horses out of the barn. Say thatorrect to everything has happened is bad and lets close the schools. Its incorrect to say lets just blanket close the schools in the entire country tonight. I dont think that would be appropriate. But i do think it would be appropriate to carefully try and do things, theres other things besides closing, to do real mitigation some time before you think you really need it. That gets back to what i said a few moments ago about being where the puck is going to be. But you dont want to be so far ahead that you overshoot. On this sign up here it says you should stop handshaking at your workplace, edger school and commercial establishments. Should the president said that example . What do you think of that . Is that necessary at this point . Is the president has said, in our line of work, you shake hands when someone wants to shake your hand. I expect the president will continue to do that. I will continue to do it. What this is is a broad recommendation for americans. But a really good recommendation is to wash your hands often. All the experts tell me that while people want to get the various sanitizing lotions, washing your hands with hot soap and water for 20 seconds is just as good as any lotion you can buy. A is it a plan to coordinate response with all the countries on the continent i know they spoke about a broad range of issues and im confident the coronavirus was discussed. Our i can tell you is that focus is on the health and wellbeing of the American People. We will continue to communicate with nations across this hemisphere and her close the country. What the president has given us as a mission for the White House Coronavirus task force is to continue to make recommendations to assure the health of the American People. State made a request of a strategic stockpile [indiscernible] they received half of that. Secondly, on cruise lines, are you looking at a bailout for cruise lines . They got half the shipment from the Strategic National stockpile initially and when the president went out to the date of washington, thats when the second half of the shipment arrived. Ive spoken with the governor and we have a superb working relationship. He has informed me there are some additional personal protective equipment needs a couple of hospitals have and were working through the Strategic National stockpile to make sure we are fulfilling shipments as needed. I want to echo again our gratitude to governor inslee and all the Health Officials in the state of washington. Our teams are working very closely. Together we will follow up on said, in the next 24 hours, we will be working with Washington State, california, new york, and unveiling our recommendation and the cdc recommendations for those areas that have been impacted by Community Spread, and then will continue to do everything in our power to mitigate the spread. Let me just say again shery you been listening to Vice President mike pence with his task force dealing with the coronaVirus Outbreak. In the u. S. We have almost 800 cases across the United States. The Vice President talking about potential paid leave for workers across the u. S. Economic advisor larry kudlow talked about more tax proposals to come later in the summer or fall. Azar saying there is a surplus of tests. Thanks for sticking around. The secretary said the tests are out there, but weve heard from new York Governor Andrew Cuomo disputing that. What is the situation right now . Emma it is a complicated thing because we are hearing different messages from different stakeholders. We heard from andrew cuomo that there are folks that believe they should be getting tested based on exposure to the virus and they just are not getting tested. I reported over the weekend about a woman whose mother had been on a cruise in egypt and there was a case, a confirmed case on the ship, and her mother was denied testing initially, even as everything was changing on getting tested. This woman was able to get her mother tested eventually and the case. D have a confirmed but what we are hearing is that as the situation is changing so rapidly, were expecting Testing Capacity to change a lot, but we are not sure that is happening quite yet. Even though you hear reports of a million test kits and things like that. Haidi what about preparedness when it comes to Broader Health care and Hospital Systems . Ive seen modeling that looks like the type of support that some of these severe cases will need, and theres a question as to whether the u. S. Has enough hospital beds or ventilators for that kind of scenario. Emma its an important subject and we are just not quite sure. A lot of the focus has been on mitigating the spread so we can see what will play out here. Hospitals have been trying to prepare including by their own testing infrastructure and things like that. Its something people are watching very closely. Aidi thank you, emma daybreak to come on australia. This is bloomberg. You are watching daybreak australia. Italy may lose its power stimulus package for the first for time in among. As much as 18 billion, the number of confirmed cases topped 10,000 with the whole country and locked down. Has closed its country to passing traffic. The market awaits a big call today when Cathay Pacific announces fullyear earnings. The Hong Kong Flagship has been hit by month of antichina protest and now the coronavirus. It has lost about 1. 5 billion u. S. In market value over the last year. The virus has hammer demand for travel. Harvard is asking students not to return to campus after the spring break because of coronavirus concerns. The university aims to transition completely to virtual classes by march 23, the day students were do to return after recess. Tonceton is also moving online. 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. Check of howget a markets are doing this early part of the session. One of the analysts morning saying this is like march madness, surprising losses and comebacks and twists and turns at every moment. Sophie business is trying to find a floor for markets. Anticipating losses of 25 . Today were seeing a topsyturvy session after that strong move on wall street overnight. As. Futures under pressure we learn more details about the u. S. Coronavirus situation. Lets check in on the yen this morning. A boost in the japanese currency, the yen gaining ground against all g10 peers but 05, afterbove 1. Following the most against the greenback overnight since 2013. A quick look on the aussie dollar as we hear from the rba Deputy Governor this morning in a q a session following his address on the virus in the economy. Were getting a little bit more insight into the central bank spew when it comes to unconventional Monetary Policy. For now it looks like there theis looking to aussie dollar not doing too much. Still trading at lows that we saw back in march of 2009. Thing there is one volatility investor wants you to know, this is not the end of the world. He joins us here in new york. Great to have you with us. Today definitely doesnt seem like the end of the world, there was a huge rebound from that selloff we saw. One thing that worries me is this chart on the bloomberg, despite the fact that we saw the indices rallying, the lows seem to be getting lower, especially in the russell 2000. Hinting that buying is still weak. The market will continue to find new bottoms over the next few weeks. This is not the bottom right here. What we had today with the announcement of potential, and theooks like we will have payroll taxes suspended. Subsidies for those in new york who have Small Businesses that have been moving money, really important, Actionable Solutions that made the difference to the market. There was Short Covering going. N, and we saw some volatility we were green, we were red, then we were off to the races and had a great ending. Futures are down and we have yet days evolve. E we are still at the beginning of the coronavirus contagion. From 90 toruple in 350 cases a day. But it hasnt become yet widespread. The real issue is its going to throw a wrench into the economy because the economy depends on every single day being productive, moving things through. Stock buybacks, barring for dividends and financial maneuvering. People are extra sensitive to this. When you have Consumer Spending starting to falter thosecontagion fears, stocks will position with cash flow, what were seeing now is Energy Stocks really suffering. Hilary a lot of the growth companies, especially as you call them disruptors, they are really built on the expectations of meteoric growth. They could falter a lot faster and we may see some of these value plays come back. There may be something lurking in the banking industry. Yesterdaywas down 12 , Goldman Sachs down 10 . But these are very strong banks. Its not about them. Obviously it has to do with the credit. Everything is interrelated. The oil shale business in the United States was built on the credit markets. I want to get your views on opportunistic kind of strategies at the moment. I want to throw up this chart that makes the case that bear marlett bear markets make for great rallies. Because of the extra volatility, if youve got the stomach for it, then surely there are opportunities out there. When you look at treasury market that have just fallen through the floor when it comes to deals over the past few days, they are not interesting. If youre talking about stocks that chased the yield, what are you talking about . Hilary there are so many that are phenomenal, especially those that dont have so much debt on them. Nott of all, youre catching it falling by going for bowing down to 440. It is down over 47 in the last 52 weeks. There is new management in there, theyve got a turnaround, and the stock continues to fall. I love boeing, you can get the dividend yield there. Also there are Companies Whose stock prices coming down. Texas roadhouse, that is casual dining. It is a cheap check. It has everything that a local place needs, the opportunity to grow five times over. Companies like that at 49, down from 72, and a 3. 6 dividend yield, and a 3 billion market cap or going to emerge very well. I love horror male, now it i. Ove hormel Consumer Staples are seen as a safe at. Continues to acquire companies. Skippy Peanut Butter which is flying off the shelves. Expandinggreat job the universe of organic Peanut Butter. They have applegate farms, organic sausages. You want a company like hormel, they are going to do well when the market is down and when the market is up. They have a great balance sheet. You also want to look at Companies Like olin, this is hydrochloric acid, winchester hasnition, and this stock just been falling. Its in freefall and its based on the point that shery made, the russell 2000 stocks. Around for 200 years and is a workforce of the of a company. The Russell Companies have been thrown out like the baby with the bathwater. So we want to take a look at Companies Like that, and certainly the companies that know how to whether every single storm. General mills is one that has really brought their act together. Have also been able to create the healthy snacks food market and take up entire andions of the supermarket makes very smart acquisitions as a Marketing Team that knows what theyre doing in terms of distribution. Another one, get that 3. 5 dividend yield and the opportunity to see your stock go up 10 20 . What you dont want to be is to to be into the Value Companies that have to deal with lots and lots of debt. How does the oil story add complexity to how you are investing at the moment . Does it make you more concerned given the credit space is coming under pressure . Hilary it does. They have gone through it before, the cycle that happened in texas, but this time is going to include oklahoma, the dakotas, parts of pennsylvania. The shale business, unless we can get the price of oil back up over 50 a barrel, they were teetering. We are going to see bankruptcies, and it is really a shame. We are going to see the larger players come out just fine and there stocks will bounce back. Like chevron specifically. Bp was down 25 at one point yesterday. Thatbrings in the fact there are concerns with what the banks hold. Jp morgan falling precipitously, but they will do fine. Place to do dividend yield and get safety and diversity and globalization, that is jp morgan and Goldman Sachs. That might be the potential. Kramer, thank you very much. Coming up, Rayna Mcintyre talks to us about the hope that remains for australia to contain the coronavirus. This is bloomberg. Haidi im haidi stroudwatts in sydney. Shery youre watching daybreak australia. President xi jinping has visited the heart of the coronavirus ,whuan, china. How significant is the president s visit . Signalends a powerful that beijing believes the worst of the outbreak is over. His visit has been highly anticipated is a sign that the party thinks the situation is under control. Media, youfrom state see dedicate hospitals bill specifically to treat the virus. Hes wearing a mask while speaking to medical staff outside the hospital. Also images of him standing in a rather empty room videoconferencing. Wuhan has been quarantined for more than a month. Slowing down quite dramatically, and he said during his visit that the outbreak is going to hurt the province in the shortterm but that it shouldnt affect the fundamentals of chinas economy. In the Commons Party leading up to this has been struggling to control the narrative on the outbreak. A lot of domestic criticism that china failed to contain the virus or silencing whistleblowers. The party unleased propaganda pointing to xi as the leader leading the charge, and glowing commentary seizing on the missteps of the u. S. And western countries to paint chinas hardline approach as the right way forward. Haidi in the meantime, japan released more stimulus measures. What is that telling us about the recent response thereto the outbreak . The recession signals have been mounting in japan. This is the second set of emergency measures in response to outbreak. Help struggling Companies Main act tested credit and offer support to medical professionals that often impacted by school closures. The package doesnt include fresh spending be on already budgeted funds. Overall the backdrop is that even though japan hasnt seen a surge in cases like and south korea, the overall response to the crisis has been seen as very slow and bureaucratic. Government waited until february 1, only a tiny fraction of cases were tested in the early days. And they only moved last week to quarantine arrivals from china as china starts to see its containment measures work. So not including the more than 700 patients the people that were infected on the diamond princess cruise ship, japan had imported about 519 cases in on tuesday, nine deaths. Experts say the limited testing means the true size of the outbreak could be far larger. Are outelina wang they of beijing, thank you so much. Here in australia the government has announced 1. 16 and help funding to protect against the coronavirus. 116 million. , great to see you again. We heard the doctor talking about the situation in the u. S. Is having missed that window of opportunity or complete containment. Theyre now working on the assumption of mitigation as a strategy. Is that the case as you continue to see Community Transmission in australia . I believe there is still a small window of opportunity to contain it. China, which only had a tiny fraction of the population infected, if you assume that more than 100 times more of the cases that were reported actually occurred. Vaccine there will still be a lot of people susceptible to it. With all the measures that were the sociale, with distancing were seeing with the closure of schools, the travel ban, even overseeing domestic , and that hopefully will delay the peak and reduce the total number of cases we will see in australia. Has the Public Health advice been coherent . Depending on which avenue of authority, the advice seems to be different. People are being told you can only get it if youve been in contact with someone with covid19 arqule and overseas or been in china recently. Other advice that has come through says you should be tested if you have cold and flu symptoms. We are working hard to scale up the testing capability. With each week that passes, there will be more and more of a case for more widespread testing because this is a genuinely epidemic disease. The doubling time is estimated to be six days. That means every six days there will be double the number of cases if we do nothing. I think theres a case for more widespread testing once it becomes more established. I think we are still in that window where we could throw everything at it and hope to reduce the impact and delay the peak of the epidemic in australia. Shery how much more vulnerable could the of stray and population be compared to china, just given the demographics . China has a high rate of cardiovascular disease because of the high rates of smoking has heart australia disease as the top cause of death in austria. We have comparatively more older people in our population. Thats what we are seeing in italy as well, which is very hard hit. Italy has one of the most aging populations in the world, italy and japan and countries like australia and the u. S. Are not far behind. Shery here in the u. S. We have heard from the Vice President , and from the cdc that perhaps the window for fully containing the coronavirus has passed. Its a mixture of containment and mitigation as well. What do you think of what is happening here in the u. S. , given that we have such a high mortality rate, considering the number of confirmed cases still remains pretty low. Raina i think the high mortality rate is very much skewed by the nursing home outbreaks in Washington State. A lot of the cases have been connected to those nursing homes. Age care outbreaks are clearly a high risk, and were seeing one in sydney as well. I dont believe the window for containment is closed. Mathematically when you work it out, i dont believe it is everywhere. I think it is still localized. The question is, do we have the resources to implement the nonpharmaceutical decisions that we have made, which are to find every case quickly and isolate them, and to track all the contact. We need to track roughly 10 times as many contacts for every case. If we are serious about trying to contain it, we need to look at innovative methods to do that. As the image app as the epidemic doubles every six days, we dont have the Human Resources to do that. We need to think fast and think on our feet. I think its worth trying our damnedest to contain it. Shery great to have you with us, thank you. Get our roundup of the stories you need to know to get your day going on daybreak. You can customize your settings so you only get the news on the industries and assets that you care about. This is bloomberg. Haidi a quick of the quick check of the latest business flash headlines. Promising two weeks pay in the event of a coronaVirus Outbreak spread. Accounts for only about 5 of the u. S. Total with the rest franchises. War hashe oil price forced occidental to slash its dividend for the fourth time in three decades. Incurred in the takeover, the payout being cut from . 79 to just . 11. Capital spending will fall by about 32 this year. Days ago, occidental said the dividend was the defining characteristic of the company. Haidi hilton has withdrawn his previously announced First Quarter 2020 outlook because of the effects of the coronavirus. A negative impact to be worse in the First Quarter. Hilton has more than 6000 Properties Around the world with nearly a million rooms and 190 countries. Shery coming up in the next hour, more on the Global Economic fallout from the virus with an international economist. Will be getting all the action on daybreak asia next, including the start of trading. Well see if the relief market is being carried through to the asian session. This is bloomberg. Markets haveng just come online. Japan and south korea opening. I am in new york. I am Sophie Kamaruddin in hong kong. Welcome to daybreak asia. Haidi our top stories this wednesday, the coronavirus spreads with at least 10,000 cases in italy. U. S. Health Officials Say containing it in some areas is beyond control. China says the infection rate on the mainland is slowing. Oil rebounds. President trump has a plan. Saudi arabia turns up the heat and plans to flood the market next month. Breaking news out of south korea. We are getting the jobless rate for the month of february coming 3. 3 . This is a lower Unemployment Rate than what we saw when we had a little spike right there. Disruptionsted some to supply chains because of the coronavirus affecting employment rates. We were not expecting an uptick but we are getting the jobless rate for south korea coming in at 3. 3 . That is lower than we expected, 4. 1 . South korea is now pushing for that 9. 8 billion budget. We know that job creation has been supported so far by government measures that have been implemented even before the coronaVirus Outbreak. The be ok this headed to hold off on cutting rates. We are looking ahead to another meeting. The jobless rate declining to 3. 3 . Now lets get a quick check of the markets with sophie. We have u. S. Futures under pressure. Nikkei futures also off by 1 . We are seeing stocks in new zealand to gain ground. As much as 2. 5 . In sydney, the moves we are seeing shares open. A little change after that jump on tuesday. The terminal amounts to get a bigger look at what is going on. Energy stockssome on the up. Seeing resource players here. Evolution mining is off 1. 9 . We will keep a closer eye on airlines today. Cafes earnings are on the radar today. Earnings cathays are on the radar today. We will see if this will provide a lift or if it will snap a today drop. It is still under pressure. Given the rise, Bloomberg Economics forecasts by the First Quarter gdp growth will slow to a decade the. Stricter rules in south korea in place for three months until june 9. A lot of volatility going on. I want to throughout this chart that takes a look at what the opportunities are if you have the stomach for it as an investor. History tells us that bear markets like what we are seeing across a number of markets are producing huge rallies. Is it an assumption that will continue to see this we will continue to see this backandforth . That is very typical. Markets at this point are waiting for any headline, any piece of information. We can expect a lot of volatility. Even as we hopefully calm down from this a little bit. This is not atypical. , we have movesys likely up or down. Continue to see this volatility across markets. Be the actualill volatility gauges. Still close to 50. Multipercent moves today. It will not get down to the 12 or 15 range we were enjoying. Another thing that is interesting, momentum traders actually have very low confidence in the market right now. That precedes very big gains. We have some corners of the market that are really down right now. We might eventually be able to see things go back upwards. Thank you very much for that with the latest on the markets. The u. S. Economic stimulus plan was not unveiled in the White House Briefing in the last hour. There were promises that would be revealed at a later date. There was the reputation of more stimulus measures coming through. What will be here at the press briefing what did you hear at the press briefing . White house officials held their press briefing today. President trump was not there. He held a News Conference today to give his economic stimulus ideas. He said there would be more details soon. The heart of the idea is a payroll tax cut. In the briefing, we heard from Vice President mike pence. We also heard from larry kudlow. He said that trump would like to see that payroll tax extended through the holiday. The details are not quiet there but theyre being hammered out. We can probably expect more soon. Pence saidhing, mike the administration is trying to make sure that hourly wage earners can make sure they can stay home if they are sick. Those are a few things to look for. We aree are speaking, seeing images from the port of oakland in california. Aresands of people departing the grand princess cruise ship. It is interesting as we talk about mitigations. What do we know about the level of preparedness if containment is a close window and parts of the u. S. . Over the hospital system, the Health Care System and the availability of therapeutics . That is right. That indirector did say some communities and places in the United States, this was not beyond containment. Maybe admitting the damage was not a priority. The federal government is working on that. They are making sure to contain this virus. Mike pence said they would release guidance for communities that are becoming hotspots like florida or california. We know there are things happening on the local level like classes moving universities moving classes online. Several states including ohio and localities in california canceled big gatherings. This is even affecting the literal sphere. Bernie sanders and joe they would cancel rally today. There does seem to be this mitigation effort now underway in the localities as opposed to containment. Haidi Greg Sullivan in washington dc. Lets turn to europe or italy is preparing to boost stimulus for the fourth time in a month. Our International Government executive editor joins us now on the line from london. Get us uptodate with the latest. We have heard reports that a minister had been affected with a u. K. Cted with minister had been infected with the coronavirus. She tested positive and is now selfquarantining. That raises the obvious question about contamination within the parliament itself. Also, the question about whether parliament will need to shut after some time. There is no official word on that. There is a real sense of elevated crisis spreading across europe. 10,000 cases in italy, the first country on the planet to attempt a national lockdown. The outbreak in spain, the Czech Republic and poland. European leaders speaking by phone today for 2. 5 hours and talking about what they can do to protect their economies. Italy in particular asking for ways to bend the fiscal rules of the eu to extend their Stimulus Program to 18 billion. That said, even though eu leaders said they will use all available tools at their disposal, they stop short of declaring the kind of corrugated program that the italians and french are demanding. As the because Germany Economic powerhouse of the eu has been very conservative about whether countries should be allowed to turn on the fiscal cap. Tap. Haidi do we see anything coming from the ecb . It is interesting. Languagesing strong saying that they need to do whatever it takes. Sayingne responded by in will look at things certain sectors. She said that governments need to take action to support economies. A shot across the dow. Be cant expect the ecb to doing the lifting alone. That kinda of language is very provocative. They pushed back a little bit. Entirely should not be on the shoulders of her central bank. You for joining us from the latest with the latest from europe. Jinping has xi visited the center of the coronavirus in wuhan. A clear sign that china wants to signal that the threat is diminishing on the mainland. The World Health Organization says people with wild illness recover in about two weeks. Three quarters of the 80,000 sufferers are showing improved health in china. Cathay pacific announced its fouryear earnings. The Hong Kong Flagship has been hit by months of antichina tests and now the coronavirus and lost about 1. 5 billion u. S. Dollars in market value over the past year. The airlinely industry is suffering as the hurts travel. To pledging this was higher than last februarys production. That put them above sustainable capacity. This led to the market with as much oil as possible in as short a time as possible. Quibble news, 24 hours a day on air and on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Haidi why the coronavirus is different from any other Global Health emergency in the past. We will have our guest joining us next. Plus, democrats winning the three staten, primary post closing in less than an hour. This is bloomberg. Odds are 80 of that we will have a recession. The markets have long woken up to the sad reality that we are probably headed into a recession. People are using this rally as a way to derisk. The probability of a lower Economic Growth trajectory is high. We are not seeing a catastrophic environment so we have not fully derisk. It is important for investors not to panic. Dont run to a safe haven. Fiscal policy to is probably appropriate. If the fed will not be hiking rates anytime soon. We are more confident that something can be done on fiscal policy coin quickly. Some of our guests commenting on the outlook of u. S. Economy and fed policy. Global Health Emergencies tend to have shortterm impacts on markets and the economy. This time, may be different. Great to have you with us. Give us Historical Context of global emergencies. What happens once they are done . This timeime could be different . Usually, you tend to see a down leg going into the World Health Organization announcement. In other words, it is a pretty short impact. Think this time is quiet different. Especially for two main reasons. This is the worlds secondlargest economy. China is the Largest Global contributor to growth. It has been at a standstill for a month and a half. This has an impact on the Global Growth number. Also, local supply chains. We think it is different this time because coronavirus or at least Market Reaction to it was a reason for concern. When we were visiting clients last year before the virus hit, people were wondering what is the source of upside for market . We are in a really long economic expansion in the United States. Evaluations are stretched. At least at the time, it was expected that the world Central Banks would engage in a lot of easing. Add in the expected risk of coronavirus. We continue to see oil under pressure at the moment. If we are looking at the Economic Impact of all of this, will cheaper oil help in providing some sort of monetary cushion . The u. S. Economy, that is one economy we are focusing on. In the past, Lower Oil Prices boon have been a boom for the u. S. Economy. Saw within this slow down when Oil Prices Crashed in 2015 and 2016, we saw a different reaction to the u. S. Economy. We are one of the largest producers of oil and we could see a downside in capital expenditures. The boon thatly exists. We are looking at the chances of u. S. Recession over the next 12 months and it is over 50 right now. I would like to get your views on the policy response. This chart i want to bring up on the bloomberg showing that markets are also pricing in 75 basis points more at the march 18 meeting for the fed. There is some criticism that Monetary Policy is a pretty blunt tool when it comes to addressing a slowdown that will because by a global pandemic. In terms of Monetary Policy, it can happen very quickly. Monetary policy cannot and the coronavirus. There needs to be some sort of fiscal support. We are looking at two things. Is going to be fiscal support in terms of adding more testing kits . Giving free sick leave to people if they take time off because they have symptoms, that is something that would be proposed. How does it affect sentiment . Is this going to be the biggest driver for the u. S. Recession . Say that theady to u. S. Will go into recession. It has been holding it up is strong housing. If the consumers stop spending, service could deteriorate. If we look at the amount of people that are employed within leisure and hospitality and brickandmortar retail, this is 25 of the private workforce. Feedback is pretty negative. There has been support for small and mediumsized enterprises. There is obviously proposals for reducing payroll taxes. It is a fairly regressive tax. This would probably help the middle class. Quickly, what are the applications for global trade and the phase one trade deal . Think the i dont particular goals signed by china will be met this year. There is a clause in the agreement that implies that if something catastrophic happens, they wont have to meet the goals this year. Longerterm, there could be implication on overall supply chains. The coronavirus not being the main one. I think the coronavirus further emphasizes that. She is joining us. Thank you so much. Bloomberg subscribers can go today. It will be right there on the mobile anywhere app. This is bloomberg. This is daybreak asia. I am haidi stars mark haidi in sydney. Forecasted his 2020 a look because of the effects of the coronavirus. The ceo says he expects the to make for a slow start. 6000 Properties Around the world with a million rooms and 119 countries. Fears of the coronavirus are health stocksany to stay away from the office. Is telling thousands of staff that they should work from their own home until april 10. They are tightening scrutiny about the virus and research. Chinas top conglomerate resumes operations amid the outbreak. Say they are at. Ull strength the grocery chains are at 100 . They employ millions of delivery staff and handle about a billion packages a day. Coming up next, there will be we will be discussing the Cathay Pacific results. The airline is among the least preferred Asian Airlines by analysts. They announced airlines projections today. We will discuss the outlook, next. 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. How you watch it does too. Tv just keeps getting better. This is xfinity x1. Featuring the Emmy Awardwinning voice remote. Streaming Services Without changing passwords and input. Live sports with realtime stats and scores. Access to the most 4k content. And your movies and shows to go. The best tv experience is the best tv value. Xfinity x1. Simple. Easy. Awesome. Xfinity. The future of awesome. Hearing fromt Scott Morrison speaking to media, saying the government will announce the coronavirus economic response on thursday. Anticipation of this fiscal package has had some resilient when it comes to trading aussie stocks. This could be a multibilliondollar stimulus package, looking at blunting the impact on the australian economy that is badly exposed given the reliance on tourism. Heard theis week, we government saying that this could be worse. We are getting the Consumer Confidence index. Are getting a reading of 91 point nine. Lumping from 91. 5 92. 5. Ozzie markets have been trading for a while now. Aussie markets have been training for a while now. Lets get to sophie. We are seeing a pickup in volatility for the asx 200. We are seeing the aussie dollar just slightly lower. Cashing. Nds are would target yields rather than mass bond buying. Chicken lets check in on some sectors moving in sydney. Energy shares are just slightly higher. We are seeing oil prices steadier this morning. Crest is off 6 . This after cutting its gold output. We are seeing qantas shares under pressure. We saw this grounded a380 fleet. Qantas shares are down. 4 . Travel to italy from estrella commenced foras the day. We are getting a better look at how things are doing for that airline. They are releasing the results later on today. Will be kong carrier down for 2020. Along with all major aviation groups. We heard from qantas just yesterday. The expansion of the capacity cuts. Cutting every part of their route availability. This has become a u. S. And european problem. Pacific, these airlines have been so hardhit. Even before this, we had the impact of the ongoing government protest in hong kong. That is a double whammy for Cathay Pacific. They were struggling in the last half of last year. They had a great first half last year. We are going to see the results for that second half come out later today. The outlook got even worse. It has gone from bad to worse for Cathay Pacific. Capacity is down 75 . It is going to be pretty bad for most of this year. Theill take a while for Hong Kong Market to recover and Cathay Pacific is at the center of this issue with the protests. It is at the center of this coronavirus issue, mainland china. They are very exposed. They are significantly impact. Impacted. We are getting this breaking news, saying that Cathay Pacific is seeking a replacement for its longstanding cfo, martin murray. Considering external candidates for that role. They have already started to headhunter surge. Ceo is the first time the hasbeen installed a cfo been installed from outside. Is this the right way to go as looks toathay revitalize their look . It does not hurt. A position like cfo, it is a financial position. It is not like an Airline Strategy position. You can go either way. That position is a little bit different. Cathay pacific had a lot of turnover already. They have had a lot of changes. It is not exactly the best situation or the best timing for these kinds of changes. Deepare very organizations. Better place to have this kind of turnover. Have things changed since he took over as ceo in august . It is too early to tell. Capacity, itced was by any small amounts, single digits. Strategy had to be changed. They had to rely on traffic because the inbound numbers were so down. They were able to maintain load factors. Yield is reduced by about 1012 . Nobody would have predicted this. To have what he is experiencing now, it is tougher any new airline ceo. This came on the heels of the protest, in the middle of that time, it stalled. It is such a difficult situation for any airline ceo. This as we continue to see more travel restrictions around the world. SayingScott Morrison that australia is extending that travel ban through all of india. Italy. Everybody knows that cathay will have a long term hard time a hard time in the shortterm but what about the longterm . Especially given the situation in hong kong. Brendan it is the same situation as several months ago. The longterm position and strategy is relatively strong. That is assuming the hong kong turns it over. Cathay pacific has a very strong hub. Hong kong is a good transit airport. One of the leading airports in the world for that business. The people willing to go to hong kong,nd transit in hong then Cathay Pacific is will wellpositioned. This issue has been going on for several months. There could be a solution very soon. Hong Kong Airlines has been a week competitor. That has benefited Cathay Pacific to some extent. Are they going to be purchased by another airline . Are they going to go out entirely . Depending on what happens there, it could impact cathays longterm position and outlook. It boils down to whether hong kong recovers at all. Happens, everybody is going to be impacted in hong kong. Not just Cathay Pacific. When it comes to the Virus Outbreak itself, how has cathay reacted . How quickly compared to otherlines and Asian Airlines and airlines from other regions . Brendan i applaud Cathay Pacific and qantas for reacting very fast. Impacted. More in china, we saw the first impact of this coronavirus issue. They were very fast at reducing capacity and implement think voluntary leave, closing lounges, cutting cost. Have other Airline Groups been slow to do that. Qantas extended their group to 22 theyre cut to 23 . Their cut to september. That is a good move. They keep on changing every week. It is not a consistent flight that has been canceled. They could increase, they could decrease but it is consistent. They were faster and reacting to them. You look at these other airlines, the u. S. Carriers, the they put arriers, significant capacity cut and response. Some of the airlines have been very slow. Thank you for joining us. Us. Was Brendan Sobie with lets go to the first word headlines. President trump was a noshow at the White House Briefing on the coronavirus. Despite promising a day earlier that he would announce a major stimulus package. He made brief remarks and took some questions after meeting republican senators on capitol hill but did not give details of any virus stimulus plans. The president repeated that you will be hearing about it soon. Will stay on as much and later 2036. He reversed his asian opposition, scrapping term limits and made it clear that only he can be relied on to guide the country. Party gave himia a longer. His term ends in 2024. North korea has released pictures showing kim jongun attending a military drill. The images cannot be properly verified however, they come as the north resumes missile testing, firing a series of gentiles over the east bay toward japan. Kim wants to make his Artillery Forces feared by all. Well a news, 24 hours a day, on quick take by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. We will get the latest on the democratic primaries next and senator Bernie Sanders, facing off with joe biden in six states. This is bloomberg. This is daybreak asia, i am haidi strathmore in sydney. Six days are Holding Democratic primaries with some polls set to close at the end of this hour. Its head over to Kevin Cirilli for the latest updates. We just heard from the dnc that there will be no Live Audience at their march 15 democratic debate. How is the coronavirus changing with the campaigns are doing at the moment . In the past two hours, the campaigns for both senator Bernie Sanders and joe biden announcing they have in fact canceled their rallies this ning on many super tuesday minisuper tuesday. They will be speaking to their supporters via prompter and cameras. Isaddition to that, cnn canceling the media filing center. That typically has hundreds of reporters from all over the world and in the media spin room. Oftentimes, the candidates themselves speak to the reporters. They canceled that and they also canceled the Live Audience out of caution. Nce likewise, President Trump and his Reelection Campaign have said within the last several hours that they are taking their decisions on a casebycase basis. They do have an event scheduled for launch of sorts for a Campaign Style rally. What about polling places and pulling procedures . Provisions have to be made in light of the coronavirus issues . You,re is what we can tell Washington State headed to the post today. That is a state that senator sanders must carry as he is expected to win that particular state. He wanted last time against hillary clinton. That has been one of the focus points of the coronavirus in the United States. It will be interesting to watch to see whether or not turnout was impacted by that vote tally once the vote tallies come in. One of the key states to watch out for is michigan. Biden is leading thereby double digits but the democratic strategists told me that pulling suggested that clinton was going beatle to be eight sanders in 2016. 125 delegates at stake. From michigan standpoint, the expectations are that biden would be able to win. Barring an upset, this is looking like a strong night for the former Vice President. Hearing that President Trump could be pushing for a payroll tax holiday to move through until the november election. How could this change the president ial race landscape as we see President Trump looking pushing for more tax cuts . I will be blunt. Tax relief and tax to point out 2. 0been something tax has been something the administration called for since the first tax package. This is the second point i would make, this broader economic stimulus plan does seem to have support for there to be some type of tax relief as it relates to the coronavirus. Economicof broader stimulus right now, they are talking about it all day. Tomorrow, i can tell you the top executives and ceos to be at the white house today. President trump visited capitol hill earlier today to meet with senate republicans. Democrats are taking a look at this. Regulationalls for from democrats. There are so many different conversations. If it sounds like it is a multi pond economic conversation in washington dc, it is. There does not seem to be a cohesive economic vision. I would anticipate over the next 72 hours that potentially, you could start to see some nonpartisan consensus form. Thank you so much. Michael bloomberg, the founder and majority owner of bloomberg lp sought the president ial nomination. He endorsed joe biden on march 4. Coming up next, shinzo abe unveiling steps to combat the coronavirus in japan. The question is if it will be enough. This is bloomberg. You are watching daybreak asia. Lets get a check of the latest business flash headlines. Fornalds is said to open offer staff two weeks of pay in case an outbreak spreads. For onlyations account 5 of the u. S. Total with the rest being franchisors. Activists are calling on mcdonalds to offer paid sick leave to all of them. Oil prices are slashing dividends for the first time in three decades. This is in an effort to conserve cash. Goingarterly payout is from . 79 to just 11. Said the dividend was a defining characteristic of the company. Telco Huawei Boris Johnson has been resisting u. S. Pressure to bar huawei and face rebellion from hardline conservative rebels. Several lawmakers demanded weiurances that hua equipment will be removed from British Networks within five years. Has saidese government batchould set the second battle thens to crowbars. How effective will the economic response to the virus the given how much of an uphill battle it forbeen for policymakers the bank of japan . Just to slightly get out of deflation. It is kind of perplexing. A response to the coronavirus from an Economic Perspective has been quiet limited so far. Much in the same way that the initial response to the coronavirus itself was met with a limited response by the japanese authorities. Had a 430 billion yen package announced. What is important is this is not renewed spending from the abe administration. Additional sales to fund this new spending. It is nothing more than the what themakers japanese lawmakers already authorized. Dailyare stepped up purchases of Exchange Traded funds. At this point, there is no indication from the bank that there will be anything in the chapterome massive new on the state of using or Interest Rate cuts. In the meantime, we are hearing from an official at the ministry of finance in japan. And say the stability markets is important, volatility is not desirable. Saying they have to keep closely watching the markets. They can say that market volatility is low. Although you are saying that they will not intervene or the boj will not intervene. What happens if the market volatility gets worse . This is the latest ratcheting up with regard to the Exchange Rate. It is interesting that the Exchange Rate has moved so sharply in recent days. Yen depreciating to its lowest since 2016. The boj will not cut but the Federal Reserve cut is taking action. Thank you very much for that. We do have the latest out of south korea for the first stage 10 days of this month. Exports following 2. 5 yearoveryear. This after we saw the first rebound in export numbers for the month of february. Lets turn to sophie. Sophie we are bracing for more volatility. Treasury futures are gaining ground. Toward is moving back 100. The korean exports, we want to highlight the employment numbers we got earlier. We had a surprising drop in the jobless rate. Hiring is slow. Putting pressure on policymakers. The news indicating that the government may look to expand its scope package. Fiscal package. This puts pressure on businesses and the pressure is mounting on the economy. That is the countdown to the open. This is bloomberg. Morning. Good just open for trade. Good evening in new york. Toin hong kong, welcome daybreak asia. Top stories this wednesday, asian markets face a while day as u. S. Futures slide. Investors are concerned that President Trump may not have a plan for the coronavirus. U. S. Health Officials Say containing it in some areas is beyond control. Arabia threatens to flood the market next month. Most of my credit primary polls have closed. We will have more in about 10 minutes. The ap announcing that joe biden won mississippi mississippi. Was against Bernie Sanders. We have seen mississippi closing polls and ap joe budden a winner. We are expecting results from five other states, but joe budden winning the Mississippi Democratic primary in missouri. Emocratic primary we will have plenty more when we get them, but for now lets get to market action. Aversion, japanese stocks continue to decline. The topics remaining in bear market territory. The most, it chopped since 2013 against the u. S. Dollar and we are seeing the 10 year yield of by two basis points as we wait to see more pledges. , off about 2 10 of 1 as we address the jobless figures. Some surprising moves. The 10 first days of march, two and a half percent decline. Off 1. 5 . Ares kiwi stocks, the rise of tuna , the decision to check in on bonds, we have bonds as the Deputy Governor when it comes to the potential for an unconventional planetary policy Monetary Policy. Andee the 10 year yield of for the markets, crude up when it comes to that drop in this Holding Steady above 37 a barrel here, looks like volatility is on the radar. Assets bring in jpmorgan management, volatility definitely on the radar and i want to throw this chart, wanting to get your view on the opportunity, given that we know greathe markets produced rallies and we are seeing that emerge now. People are still very much reluctant to call the market turning a corner. Where would you be looking for opportunities to buy . Volatility is here to stay and the rebound yesterday, potentially going back down today. The thing is it is clearly being , to say it is the bottom is a tough call from here, everything is outlook with a potential outbreak and Something Like those, earnings multiples might start to rise again and so if we think about the opportunity of the marketing market, it is probably not just equities yet. Gettingmany investors into the january peak of the selloff and the opportunity is around providing that diversification. Whether that is through highquality fixed income or whether it is alternative assets , i think that is the direction. In addition to the 50 basis points, we are expecting it to get pretty close to the point of for what qe would look like. Time, you have japan, australia, potentially the u. S. Launching some kind of fiscal stimulus takei to deal with the coronaVirus Outbreak. All of that enough for the markets to rally . Thehe question about sustainability, we saw a relief rally that had been sustainable, because you did need a few factors to come together. I think the first one is the coordinated response of the fiscal policy and the detail that comes with it. Markets are looking for action that will have a real effect pretty quickly in the more they delay, the the more you might that is a much more difficult story to try to reverse and see growth later in the year. We had cuts around the world with potential banks to ask, but every mitigated for the fact that Interest Rate are so low, but certainly it could come back the qb is onzero, the cards later in the year, but that will not be enough to underpin markets. It has to be that commendation theeaking in the spread number of daily cases we see a virus is spreading around the world. What are you expecting in terms of earnings given the extent of the outbreak so far . Season innings australia, we softer january and ever it was not that bad. The bushfires, i think the earnings will have to come through with analysts trying to quantify the impact. The biggest will be in the you haveindustry and not seen guidance for many of the Companies Come through. Earnings were looking optimistic at the start of the year and then it came down quite massively so it brings back the question of the margin you see later in the cycle and the volume that will be created in equities. Downy put, they have come a long way, but they have not creative enough about it to think about the risk for the outlook equities and if you come back to the time horizon, if you have the longer time horizon in terms of what you will invest, it will make a difference. We are expecting Scott Morrison to come out with their measures. What do you need to see in order for the Australian Market to be supported . I think what we need to see detail around what they will actually do. They are one of the few countries that have the fiscal expand. He policy to to payn continue supplies and the workers, they wont start when people go and actually are people and that will be a long way to mitigating the Economic Impact. Payroll taxes could be through howlatory action around companies are paying people. Again, it comes to how quickly it will impact the economy and how quickly that money can be spent in the Services Sector because unlike the trade war, this is a much more serious demand in the pentup for thee same way manufacturing cycle. Thehank you very much for Market Strategist with us. Now lets get the first word news. President trump was a noshow at the White House Briefing on the coronavirus despite announcing he announced a major stimulus package. He made brief remarks and took some questions earlier after meeting republican senators on capitol hill, but did not give details of any virus stimulus plan. Virus simasost its package for the fourth time in a month. Billion as he pleased for eu support. The number of cases have topped 10,000 with the whole country in lockdown. Presidency keeping visited wuhan, a clear signal that china wants to signal that the threat is diminishing. The World Health Organization says people recover in about two weeks. China says almost three quarters are shown improved health. The market awaits a big call today when Cathay Pacific announces for your earnings will stop the Hong Kong Flagship has protests. Y antichina global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Thank you. Coming up, joe biden takes missouri and mississippi in the next big primary test in the u. S. Why tonight is so crucial. What do you have for us . A mini are calling it super tuesday. Down. Ak it all more next, this is bloomberg. Asia inis daybreak sydney. Missouriden has one and the mississippi primary. The former Vice President a step closer to the democratic nomination. Cirilliad over to kevin for the very latest. We have mississippi and missouri , but if joe biden gets michigan and washington as well, it to be over. I think that is a good way to put it. I am joined by two political allstars. Former and advisor of the obama. President washingtonthink state is where senator sanders has the best chance, but levels forn many michigan will be the most significant. Struck last cycle and not really for by come of the expectation that biden carries michigan and carries it significantly. Hashis crystallization really happened the last week or in michigan were sanders performed well is the inertia that might be unstoppable. One of the sleeper narratives that is developing the absence of any kind of bomb for coming in second or third. In every other cycle you can e the their place finish public char clover char got a boost. There has not been that lift that is associated with coming in second or third. This is a choice of two futures, there is no modeling muddlingodeling between the two. Theres not really a middle ground. Thats exactly where i want to take this conversation. When you look at how wall street has reacted since super tuesday were biden over performed, significant number of candidates dropping out, they recalibrated and now the expectation is it is almost inevitable that biden the nominee. Is there anything that could happen tonight that could change that . If you see growth for sanders , heh is his biggest problem has underperforming his numbers from 2016. Look at other regions or constituencies and proof he is surmounting some of these hurdles that he has with either demographics or socioeconomic groups, then he could possibly take from this some kind of indication he is either having momentum or seeing get and as we move west, if he performs really well in Washington State, which hashe best chance where he a statement, that could also scratch that as well. I have been following the data coming in in the exit polls ofm nbc news, 84 africanamerican voters in mississippi backbiting will stop that is significant. I guess in some chatters, it was the democratic establishment. The real question here is not just africanamerican voters, but were young people go. I think that would be the other answer to your question, if we see young people turnout in these states, that they had not on super, that would give sanders more hope. When they show up, they vote for sanders. From republican circles, now that biden essentially feels like the inevitable candidate, and that could change, but now that it starts to feel that, is there an angst in the reelection effort for the president question mark i dont think so. It is the same criticism we are seeing from democrats. He is part of the establishment that did fail to take down trump, so what is the new offering that will give them to turnout in a way that is significant . I dont think biden answers the question. The coronavirus is impacted, the dynamics of the race with them debate coming up, the Democratic National committee saying that the spin room is ,oing to be canceled, Biden Sanders campaign each canceling their rallies and speaking to cameras as a result. Washington state has been a focal point. Could that impact turnout or could it impact the future states and future contest as this continues to drive home . The answer has to be yes because if you listen to governor cuomos press conference or any responsible government leader and they talk about d dense a fine, like new you go froming so to nap million to one halfmillion with you bring down the numbers, so it stands to reason you look at where people will be congregating and additionally, it is specifically interesting conversation for the states that have caucuses which is a spec to is the caucus system even the long in the 21st century question mark in might a caucuste pivot from to a primary. We will have more numbers to crunch for everyone as the night progresses. I will have to leave it there for now, the haidi we believe it back to you. Founderel bloomberg the of bloomberg lp rally that we and with a wall street session wish with. We are also seeing some relief when it comes to treasury yields 0. 75. U. S. Tenure at and weaking a breather are seeing an uptick when it comes to the korean won. Cases asnue to see well as china in the coronavirus and also watching some of the or related currencies when it comes withinongoing situation opec. Lots more to come, this is bloomberg. This is daybreak asia. Webster you a quick check of the business flash headlines. Corporate i was of existing timeses offers five paid pod days off the year. [indiscernible] outlookdrawn its 2020 because of the impacts of the coronavirus. He says expect the negative they have be worse in more than 6000 Properties Around the world. Coronavirusthe increasing, telling staff to stay away, google is the latest, telling all employees in north america to stay indoors. It is telling thousands of staff they should work from their own homes. Google is tightening information about the virus on search and on youtube. Alibabas as chinas top conglomerates resumed outlook. This a they are at full strength while the grocery train says they are at 100 . They handle about one billion packages per day. Next, prison xi jinping visits the epicenter of the coronaVirus Outbreak. Just 19 newfter cases were reported yesterday. This is bloomberg. Were going to see some disco stimulus. The market is screaming for quality action. There is a whole government approach. The field is misguided. We have heard Central Banks stimulus. Netary we have not really seen it in most places around the world. The incremental effect is going to be very limited. That is why the physical piece is so critical. Talking about the need for a fiscal stimulus, but Central Banks are not completely off the hook. We are waiting on the policy decision next week and we have local media and japan reporting that they are spending the buying program. The jobless numbers hiring growth and we saw the two in half percent of decline for the first 10 days of the month and the caution is when you take a look at the bond market, we are seeing bonds catching the 10 year yield by about six basis points while stocks are under pressure and asian stocks being led lower, with the regional still very much in, but as our colleague points out, we could see a recovery in the region potentially with stocks in the price evaluation at 2003 lows. Checking on the topics this morning, we are seeing a reversal for the index earlier by about 1 and it could move out of bear market territory. That. Nk you for for more, lets bring in mark. Japaneseart with the yen, it is gaining strength, but. E have seen what a wild ride what is going on with the volatility there . Is recapturing its suggesting that the yen was the no longer the best currency to go to. What we have seen is people realize the yen is just an effective as it ever was, but now looking back, see how the yen in that time the markets were going through turbulence and the yen is coming out pretty well. Ishave artie seen and it already shaken out longterm players as well, but when you consider we are coming to a very significant time, we are seeing huge moves helping to drive the uns stronger as well. Massive losses in japanese equities, could be the first fourthquarter since 2008. Those are huge losses that need to be covered. Usual for bigger than it to fly back. People who are looking forward will probably not give up on that, something that is really there in the headlights for them and they will look towards the 100 level as a real possibility. What about usd rates . Are they headed toward zero at this point . Future is the way the curve is priced. It is something that the futures curve is considering by the end of this year. We have another fed meeting coming up. There is talk there could be other cut even though they hit the basis points. The way the treasury markets, the yield as well and when you consider the bank of japan, they already have negative rates, it is not inconceivable that the fed could get close to that. Dont forget we basically had zero rates from the fed before as a result of the financial crisis, so for it to get there is not a huge thing of the imagination, it is just happening quicker. They will be looking for fed rates and the possibility that the whole curve is very close to zero and maybe flatter than we have ever seen a before because we really have 10 year yields certainly a very flat yield curve by the end of the year. You can follow more on this story and all of the days. Rading action on the Bloomberg Markets are in a state of but keith scott says it is an opportunity for investors to keep ahead. He spoke in london. I think yesterday was driven by pure panic and we have stock prices and bond prices at the moment effectively discounting a global recession and potentially some deflation. Whether it turns out like that or not is going to depend on the Economic Impact of these supply shops. Recession and do you find it helpful question mark i think it is in similar territory. I think it is very different because we are not looking yet at a Financial System which is under threat, and what we are looking at is to supply shocks, one from the virus and the other from the Oil Price War. One of the things ive learned is dont see around too many corners. If the virus is controlled and if it is breaking up, we could see the stronger second half and bounceback in economic activity. Actually, it will be a much tougher environment. Prison gigi things is it, the first visit in a very big show of confidence. Remember yesterday, we had 19 new cases reported. Selena, there has been lots of criticism that the president had visited until now and now that he has, a lot of people saying this is very much a signal that the coronaVirus Outbreak is under control in china. This was highly anticipated as a sign that the virus is under control, said they managed to spread domestically and it sends a strong signal that the worst of the outbreak is over in china. You solemn visit one of these two dedicated hospitals built to treat the virus. You can see them wearing a mask speaking to medical workers and patients through videoconferencing. Andtiming here is positive restrictions have been slightly east for travel and during his visit, the outbreak will hurt the economy in the short term, but does not expect it to affect the fundamental. They have been struggling to control the outbreak. In recent weeks, you see the Propaganda Machine amp up to try to focus on the leadership here as well as try to validate the hardline approach. Japan, thecomes to amended minister saying it is important to hold the games as planned. Been to theresponse outbreak . Signals have been mounting for japans economy, a second set of emergency measures releasing. The new package aims to help struggling countries gain access overall, even though japan has not seen a surge of thes like in south korea, response to the crisis has really been criticized for being slow and the government waited until favorite first and symptoms only tested a tiny case thatnly suddenly on top of two months confirmed his first case of the coronavirus, finally setting up a Legal Framework to declare a nationwide state of emergency. Thank you very much for the latest on the coronavirus. South koreas Unemployment Rate dropped sharply in february even as hirings began to slow. The jobless rate fell from earlier and slowing growth signaling the coronavirus maybe signaling companies to scale back. Korean businesses are suffering from we demand exasperated by the outbreak. Saudi arabia is escalating the Oil Price War with russia. The hike is more than 25 higher than last februarys production and put saudi aramco above the capacity. Present putin has set the stage to stay on as russias leader to at least 2026. Only he can ber relied on to guide the country. They are calling for constitutional revisions to give sixyear two more six year periods. [inaudible] issues thathlights could put the countrys relationship at risk. They say it raises questions about whether american executive can work comfortably in japan. Global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Coming up next, how singapore is managing coronaVirus Outbreak and the tougher [indiscernible] this is bloomberg. You are watching daybreak asia. Singapores handling of the coronaVirus Outbreak has been praise as an example of an old government approach. Right now, there are no deaths. The message from the government is there is no room for complacency. Aces. Lk about 166 thes get perspective from minister. It seems to be contained, but there is a huge spread globally. They may implement further measures and singapore. Move . E what you said is correct. I think we cannot be complacent. We are discovering new things everyday in terms of the spread globally. I think you have to look at it a three fronts, there is social response and there is also a response of information and communication to make sure a certain level of resilience and we have been working with all three fronts. Our primary messages we have to action and and take to minimize the spread in the community. What prompted the move . Not too long ago we were talking about a recovery and everything would be ok, but not the case now. I think you cannot stay in certainly they would reinforce this. Certain next rotations based on past experience, but what we want to do is signal we want to be prepared for the response part of the getthat is why in order to out population accustomed to the idea, some of the changes may have to be in place for longer. Why are singapore ports still open . Would you consider closing up . That is something that is being reviewed, but if i take the analogy of travel advisory and so on we have to go by evidence. For example, we had trouble advisories to china and then expanded it to all of china. Similarly, we extended to iran, south korea and northern italy when the evidence supported it. I think whether it is cruise weps for airlines, i think have to respond in a manner that is proportionate to the situation. Enacted the socalled fake news law back in october. How effective has that been in safeguarding the news . Think ae start, i health Care Challenge and a communication challenge in it is a test of the residents of society. Importantgard, it is information, how transparent so that people have a sense of confidence in why the measures are taking place in that is our inmary rejected objective terms of not just what we are doing, but why we are doing get. Doing it. Especially in a time like this can cause fear and panic and we have to act decisively to quell. There have then the likes of facebook saying it could impeach indeed free speech. We have to see action and it has been a correction in order, in other words you carry the truth. Cantruth next to it they decide. They did not comply and in fact, the result of the trading falsehoods, they are also benefiting from it and it is up with this. Hat was one site [inaudible] you have to go by the evidence. We have used it in every case. Instance, theular order tosuch tools in be able to deal with online falsehoods quickly and decisively has been demonstrated. Rollout in singapore, has that been delayed at all. The regulators are evaluating the proposals. Is itteresting point allows for business continuity, so that is taking on a new focus in this environment and we are working in order to Carry Forward the digitalization message and make sure all industries are prepared, but also for the long run. There. Ave to leave it we are just getting breaking data out of china out of the latest coronavirus cases, saying ,hey have 13 additional cases 22 new deaths. The death toll in china rising to over 3000. The chinese cases seem to be turning the corner in terms of coming under control. We see president xi think making his first visit to the virus epicenter of lujan. Lots more to come. This is bloomberg. We will see a strong bounceback in most of the markets. We dont see this is something that has an effect. How will we reserve service to that region . Coronavirus is spreading is the wrong thing to do. It will accelerate. Opportunities to have organic inwth play a part consolidation. Cathay pacific will show us how Much Airlines are suffering from this outbreak. Sophie is at. He wall with the previous they have softened considerably to say the least, came in at 174 million in the fortunes certainly took a hit. Guidance likely to be graham. Thessive headache given huge headache and they expect the demand to fall by as much as. 0 lost theice has why on this chart here, the third lowest among stock analysts. Thee are just getting latest numbers out of china, china saying 22 new coronavirus and 13 confirmed new cases and china saying the national confirmed cases rising over 18,000. We have seen a slowdown of the have and most outside shared the imported cases coming back. Up, the outlook amid its removes we have seen. He says theres no Recession Risk right now. The start of trade. 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Our top stories today, japanese markets swing, u. S. Futures fall as investors wonder it President Trump has a plan for the coronavirus. Oil recovers, but saudi arabia turns up the heat and threatens to flood the market next month. Be the want toto be as early reports say he has won missouri and missed is to be