Cable. T to highlight you could argue we are not really going anywhere. Poin the 50 basis point cut to be already priced in. We get more coming out today on the 10 year. Yields down by about 10 basis points. Crude continuing to rollover. Time now for global exchange, where we bring you todays market moving news from all around the world. From london to rome, to hong kong and new york, our bloomberg voices are on the ground with this mornings top stories. The bank of england cutting rates to help keep credit flowing amid Economic Uncertainty over the virus. Bank of england governor spoke earlier in england. Carney the bank will take all necessary further steps to support the u. K. Economy and Financial System consistent with its statutory responsibility. Ago, that was a few hours and then we wait for the budget. Absolutely. A fine display of cooperation from monetary and fiscal actors. Weve heard from the monetary side. We wait for this fiscal side this morning, coming around an hour and a half. What we heard from the bank of england today being described by them is a big package. It includes a 50 basis point cut , and a programes to push out lending to smaller and mediumsized businesses. Theres acknowledgment that we make to the pressure of the coronavirus biting hards and biting fast. This is designed to push lending into the real economy and support growth in the economy. Bank says this could support growth to the tune of more than 1 of gdp. The bank is keen to play down similarities with 2008, saying this could be very different. Mark carney hoping Financial Services can be part of the solution rather than part of the problem here. That is a lot of what i said this morning is designed to promote, to promote the lending. We now move from monetary towards fiscal. We wait to hear for the new we wait to hear from the new chancellor of the exchequer. He will try to get the u. K. Economy ready for the socks that lie ahead. Alix thank you so much. Later in the hour we will have jim oneill, former secretary to the treasury. The government is finalizing a stimulus package to shield the economy from the virus outbreak. Joining me from rome is bloombergs italy economic reporter. What do we know . Reporter the country, as you know, is under lockdown. The situation is so serious from the coronavirus that the government has decided it needs to act strongly because theres a strong impact. As you say, 25 billion euros. The government plans to spend that amount. Pass aay, they will package for 12 billion euros for mortgage payments, to have a moratorium on mortgage payments, loans for small and medium size businesses, all meant to boost the economy. The economy is at a standstill. That means that one of the most indebted countries in the world is going to be spending a lot of money. The plan to go up as far as debt to gdp is concerned, but say we need to do whatever it takes. The eu commissioner, the former italian Prime Minister, said he agrees with this procedure and will try to do whatever it takes. Alix thank you so much. Just to keep on that whatever it takes theme, german chancellor Angela Merkel also saying germany will do whatever is necessary to face the crisis. She says the eu does have the necessary flux ability for the crisis, and she will lock and germany wont block the eu crisis spending planned. Now we turn to asia. The number of coronavirus cases exceeding 118,000 come with the rate of infection slowing in china while cases are growing in europe. Joining me from hong kong is stephen engle. Sarah thats right stephen thats right, the china confirmed rate going down. That is a good trend for the chinese. However, they are also stepping up their controls at the borders in the major airports like beijing to keep in downed infections from going up. Beijing announcing today it is going to require a 14 day mandatory quarantine of government facilities for all arriving international passengers. Select it was just for countries, like japan, iran, and other places having a surge in overseas coronavirus infections. That is definitely hurting real airlines hurting Regional Airlines area Cathay Pacific not putting out a warning. Despite the trade war and ongoing protests in hong kong, the coronavirus seems to be the biggest problem because capacity down by 9 . This is a company that gets half its revenue from the market, so Cathay Pacific definitely having a problem. All ofpacific cutting their problems to japan. Alix thank you so much. Now we want to turn to oil, where the escalation in the battle for control over the Global Petroleum market has crude Falling Crude following a rebound. With me is annmarie hordern. Annmarie more shock and awe the oil market. It really looks like Crown Prince Mohammed Bin Salman is not abating in his price war with russia. They are boosting their Maximum Capacity for aramco in a directive from the kingdom to the state owned oil company. Ive been to the aramco facilities in tehran. Years andtake billions of dollars in investment. Dhabi National Oil Company are boosting their april production to the market by 4 Million Barrels a day. February, they were 3 Million Barrels a day. Thats a huge amount of oil theyre going to spring under the market in a short amount of time. Weve known they have been building up capacity, but they havent tested yet given the opec cuts. One thing for sure, this price war is escalating, and the world is awash with crude. Alix thank you very much. In the u. S. , futures dropping this morning. Putting me was a quick update of the market is taylor riggs. Taylor what a wild ride it has been. We had a strong finish at the close yesterday, and today reversing that, heading back lower by about 2 or so. You havent had backtoback gains in the equity and bond market since february 12. That certainly seems to be the case again today. Lets talk about the bond market. The 30 year, eight basis point rally today area thats good, given the 30 year yield is still about 1. 20 or so. Rally,seeing a strong but still 20 basis points above the record low of 0. 5 that we got on monday. I want to flip to the dollar. Rates, youe cutting are seeing a weakening of the dollar today by about 0. 2 , but the dollar has been all over the place as investors digest a weaker dollar with the rate cuts and a stronger dollar with the safe haven dollar. Alix thanks so much. We end on u. S. Politics. Former Vice President joe biden further widening his lead in the democratic nomination race. Mr. Biden its more than a comeback in my view, our campaign, to come back for the soul of this nation. This campaign is taking off, and i believe we are going to do well from this point on. Take nothing for granted. Alix joining me was more, david westin, anchor of bloomberg balance of power and wall street week. David a big night for the former Vice President last night. He won four of them, including the state of michigan. Michigan had a surprise victory for Bernie Sanders four years ago, and donald trump won there with a slim margin. It is expected to be key to who wins in november. Especially when you consider the next set of primaries include florida and ohio, where it is generally understood that biden night, he saidt we really specked and admire and thank Bernie Sanders supporters. Please come over to us. Finally, may be as important as the results last night as why people voted that way. In michigan, they voted provide an for two reasons they voted for biden for two reasons. One, they really think he can beat donald trump. Two, they really think he can deal with a crisis. Alix which has been the white houses big fear. Thank you very much. One other trend i am watching is the bounceback we saw yesterday and markets. You had a big rebound tuesday, attempting to halt reason volatility. Authersg opinions john says dont get too comfortable. You have to have complete hopelessness in order to have that rally. He says, it takes a while to adjust for that. Saw inte line is what we 2003, the purple line is what we in 2013. He says, we are not quite that pessimistic yet. Coming up, more of your news, your morning trade and analysis of the markets in todays first take. Goldman sachs downgrading their profit forecast once again. In. Will take it this is bloomberg. Alix time now for bloomberg first take. Joining me from our inhouse team of wall street veterans and ofiders, Mike Mcglone Bloomberg intelligence, and also sarah hunt, alpine woods portfolio manager. I want to start with the Goldman Sachs note that just came out. Someone there wrote they are revising their profit forecast down in a 5 decline. Is that it . Is that true, or is this peak hopelessness . Sarah think about the best of times, worst of times. Four weeks ago, equity markets were looking at the best of times, making new highs almost every day. I think the hard thing with earnings right now is we dont know what they are going to be. It looks like it could get bleaker longer, and we dont know how long this is all going to last. Its a hard thing to say it is not going to be over. Right now we dont know about a lot of things, but certainly the ness ofe oblivious the equity markets seems to be over for now. We have to see where we go for earnings and also how long this takes for things to start normalizing. I think right now, that is really challenging. Mike i think the s p 500 needs to take out that low from 2018. It was very suspicious, happened too fast, and everything trickled down from there. We all see what is happening. But the vix is popping. Look at the 50 week average, the 100 week average. It is still historically very low. They have to go back. They always do. The bond market says they are going to go there. From there, crude oil says it is probably going to happen. Natural gas, going to happen. The bond market, take off your tick the bond market, off your boxes. Sarah earlier this year, i was saying, how is it these things two diametrically opposed ways . I think it is very challenging for a variety of reasons. Portfolios, retirement, all of these numbers on bond yield is also very disconcerting for a lot of people, and for everybody investing as well. Mike we had our lehman moment this week. The real yield reached the lowest level ever. The last time we had that was around 2008 when lehman went under. The key thing i still have a problem with come of the s p 500 on a 200 week basis is unchanged. That doesnt make sense in this environment. Alix one is the diversions between europe and the u. S. The divergencebetween europe and the u. S. Now you see the yield compression narrowing like this. We are not even that far. We dont have that appeal anymore, right . Where doyou ago you go, and how do you find the support we need for the equity market . Sarah theres a lot of problems from the investment side right now. The bonds are telling you that things are going to get worse, so you are a little worried about going into equities. I think what is going to end up happening at the end of what looks like the end of the bad news, when headlines stop getting worse, i think people start saying i am still stuck with bond yields locally, so i have to go somewhere, so you will probably go into equities, but at a lower multiple than today. Alix what multiple . Sarah what are my earnings . [laughter] sarah i think that is the challenge. Now, everyone is pulling guidance because they just dont know. So then we start looking at 2021 much faster than we normally do. Become to guys also alix im waiting for it. [laughter] fed will do whatever it takes. I look at the massive amounts we have to increase our debt, we have to stimulate our economy, and you have to think that gold appreciates in this environment. Alix in the same way that we get the 50 basis point rate cut from the boe, nothing really happens. Fours there are down basis points. All of that is either already baked in, or the market is telling you it is not going to do any good. Sarah or they are saying it would have been worse if you didnt do that. It is very hard right now, and i agree on gold. Everyone says it is an inflation hedge, but if ive got negative rates all over the world, why is it wrong to think that gold is interesting here . Its not to me. Gold and farmland values. It is like gold, very highly correlated. Alix but arent farmers going to get hurt . Mike they are, but that solid physical aspect, taking a piece of paper that is being distributed indiscriminately and using that to provide an asset. Alix if we take a look at the price action today, can we see the u. S. Continue to diverge from europe on the downside . It used to be can we outperform. Now, can we underperform what europe is doing in terms of fiscal measures, in terms of the actual equity market . Canh i dont know that we honestly outperform if we get cyclical measures. There was the whole idea we were going to get a stimulus package yesterday that we didnt get, but we need to Start Talking about, ok, we will help Small Businesses if you have a problem. That is going to make people feel less concerned about , im going to lose my job because everything is slowing down. Thats a problem. If there starts to be some underpinning to that, something where it seems like we are going to get through this, i think the u. S. Comes back better. Europe still has a lot of structural issues that the u. S. Doesnt have, although the banks start to have similar structural issues that they have in europe. Mike a lot of it is just mean reversion in terms of volatility. You look at stimulus, the fed is going to have to issue access stimulus. On asesident should err much stimulus as possible because he needs to be able to look back from the election and said i did whatever we can. Ofah and thats the benefit not having a lot of political alignment right now, it is a lot harder to do something in a crisis. Alix the vix is having a big jump, and then the blue line is the move index, what we are looking at for treasury volatility. It is outpacing the rest. Does the rest of the market catch up . Mike the bloomberg market index is the highest it has ever been. Theres not a left room best theres not a lot of room left theres not a lot of room left. Sarah the hard thing is you cant use treasuries like you would normally look at fixed income. I think youve got place was a reasonable dividend yield places with a reasonable dividend yield. Right now, they are not bad places to be because i dont think any of this is going to really change defense spending. Discretionary is a little trickier. I would like to see Interest Rates stabilize before we see equity markets stabilize. Alix all right, guys. Thanks a lot. Sarah hunt of alpine woods sticking with me. They seen sachs call, 2450 at the downside, but a rebound at the end of the year all the way to 3200. Any charts we use throughout the show, go to gtv on your terminal and check them out. Gtv. This is bloomberg. Viviana you are watching bloomberg daybreak. The coronavirus may worsen trading conditions for one of the most liquid assets, u. S. Treasuries. Banksgan says overwhelmed could be flooded with an extra 300 billion dollars worth of u. S. Government debt. That could pose a challenge to a vital part of the Financial System plumbing. Eddie just says in china adidas says in china, the coronavirus will cut First Quarter profit by about 500 million. Also says it cant estimate the fullyear impact. Sales last month, sales in china slumped 80 . Cathay pacific expecting substantial losses for the first half of 2020 as the coronavirus outbreak hurts travel demand. It is adding to the pain for the carrier after last years prodemocracy protests in hong kong. That is your Bloomberg Business flash. Alix thanks so much. One other story we are following is the market volatility, what it means for Pension Funds. They may find themselves in a bad position. On stocknomics depend market returns and bond yields, both of which are getting creamed. This chart shows s p 1500 Pension Funds had already seen a status fund drop. It is a lot worse now. Crisis also for states. This is bloomberg. Bloomberg. Alix this is bloomberg daybreak. Goldman sachs culling the end of the bull market. They see downside to 2450 in the s p, and a rebound by the end of the year to 3200. Nonetheless, big call coming out from goldman. The underperformance to me in the u. S. , with equity futures down about 2. 5 versus europe, public comes down to stimulus. You get potential budget boe,lus out of the potentially more out of italy, while the u. S. Doesnt have any specifics yet. If you can switch of the board, you can see what is going on. Excusen in europe me, up in europe. Selling in yields, still down here in the u. S. The curve continues to flatten slightly. 20 billion in notes coming out today. Crude off by another 3 . The price were getting deeper and hurting even more companies, as well as all of their debt. Christine lagarde issued a warning this morning and told european leaders on a Conference Call tuesday that europe will see a scenario that will remind any of us remind many of us of the 2008 financial crisis. Failure to act boldly right now would risk your economies. Does this feel like 2008 . Sarah it didnt feel like 2008 to start with because this was more of an Economic Activity is going to slow down, youve got issues and bond yields, youve got all of these problems. I think the oil issue added a whole level of uncertainty on the debt situation. Youve got a lot of highyield companies in the oil markets. Now people are starting to worry about those. It wasnt a credit crisis, but it is being exacerbated into a credit crisis. Think that is why people are picking up on the parallels between now and 2008. This is something we were looking at as an economic slowdown, and therefore you had to worry about stimulus. I think you through a giant wrench and the work with the oil problem. To me, its not subprime. The assets of these companies could be good. Theres just too much debt, which is different than the underlying mortgage is bad. Does that make a difference in terms of how it filters through . Sarah it is a problem. Commodity prices are so low. The whole economy is down. If i had some oil fields worth something since months ago, that number is different now. The question is, if youre going to get into a fight with big producers, you dont see how you bleed off that inventory to get back to higher prices. Its further time away. I think it is the ancillary knock on effects of the Energy Sector in the u. S. Its been a big job creator. Worry aboutore a knock on effect for the u. S. Even though it is helpful to consumers, it is not so helpful when everyone is saying if you can stay home, stay home. Theres a lot of factors going on. Alix that brings me to the liquidity point. J. D. Plugin jp morgan had a note out. Liquidity overall could also suffer, with emergent stress already transparent and costs significantly higher. If you all work from home, literally liquidity cant be what it is. What are you noticing . Sarah i think the big swings in volatility are telling you that one, the liquidity is not huge. Alix that would dampen your outlook. Sarah also, i think people just dont know. You have a lot of Program Ratings we didnt used to have, to the extent that we dont know. Ow much of that is it is very hard to tell when that happens and how much of a fact that has on the markets. Until you see things like treasury yields with a 10 move in a day, that a son unusual that is so unusual. It is hard for people to go this is a spot where i can get in. Even if i am early, people would rather be late and lose a little once you see stabilization. But theres no stabilization. Theres nothing i can hang my hat on and say this looks like a good entry point. Alix it seems like you are saying it is not the absolute price. It is ranges getting more palatable that will help create a floor. Sarah yes, and i think it will start with Interest Rates. They have been so more volatile than we have seen, and people are so worried about where that goes. Until it feels like theres some , this may be where we stick for a while. Then other things oriented around that. Alix we have a question from a viewer. Using treasury yields could go negative soon . Do you think treasury yields could go negative soon . Sarah sadly, i think the answer is yes. Look at europe. When you had negative rates, thats the kind of conversation you would have around the table and people said it couldnt happen. The problem is it has happened. I would hate to see that happen here because i would hate to see the u. S. Have a similar amount of stress in the banking system. Plus, all of the relationships based on Interest Rates dont work when rates are negative. We are patching together this thing and hoping it doesnt get worse. We would much rather see it go the opposite way. Alix i know its not time to believe trigger here, but what would you start penciling in on your shopping list. Europe tradingin right at book value, which is where we were in 2008. What do you need to start being like, ok, lets look at the entry point . Sarah i think Balance Sheets are critical. Refinancing has become a much bigger issue. Facilitiesa bunch of , we understand that right now, this is a crisis. We dont seem to be having this kind of conversations. Lets have some facilities in place so that if Energy Company a or b needs refinancing, they can get it without imploding. I think if your balance she did reasonably good, people are buy again. But if i can sit on this for a couple of years, im not too worried about it. If youve got a 12 month time horizon, even people calling for lower markets now are calling for a better look in 12 months. So your time horizon isnt very shortterm. You have to appreciate it is going to be something where, in four weeks, you might love it. I think you have to be a little bit careful about how much you are putting in as opposed to saying i am willing to invest some here. Alix do you have to hedge year Duration Risk now with treasuries . How do you do that . Sarah thats a question for somebody in the fixed income markets who understands that better than i do. Think that is where all of people say utilities look expensive. Not if bond yields are 1 on the 10 year. But the hard thing for that is if you are having a slow, theres also the question of do you care about the earnings on utilities . I dont think Economic Activity slows so much, but you just saw what happened in the oil patch. Those yields people thought were very stable, and it became unstable it became unstable very quickly. People worried, but now with oil where it is now, how do i know whether or not they can pay back dividend . Everybody who has a Credit Facility now, the banks are looking at that too. I think it sort of calm things down. Alix sarah hunt of alpine woods is sticking with me. We didnt want to give you headlines out of the business world. Viviana hurtado is here. With first word news viviana a 50 basis point is here with first word news. Viviana a 50 basis point cut bank of england meeting. The bank is also introducing a new funding scheme that includes incentives for small and medium businesses. Now to italy, set to double the amount of fiscal stimulus to tackle the coronavirus. It is increasing the amount of money on offer for the fourth time in a month after the European Union agreed to stretch budget rules. Italy is looking at up to 16 billion euros of additional spending. Iran urging the u. S. To ease sanctions, affecting the imports of medicine and food, as it battles a major outbreak of the coronavirus. Tuesday, u. S. Secretary of state proceedseo saying iran to release americans who have been detained. Has 9000 cases of coronavirus after china and italy, the thirdlargest hit country. Democratic president ial candidate joe biden winning michigan, the biggest prize of tuesdays primary. Missouri andn mississippi. This further widens his lead over Bernie Sanders. Next week focuses on ohio, and illinois. 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. Im viviana. This is bloomberg. Alix thanks so much. We turn now to wall street be to cover three things wall street is buzzing about this morning. First up, is the market chaos a boon for jp morgan and citigroup . Some of the biggest banks have added rid of the new have added revenue from equity derivatives trading. And deal disruption spreads. The market taking a toll on dealmaking, with some back ipos said to be delayed. Joining me with more is sonali basak. I feel like this whole thing is the winners and losers of the last couple of days. On the one hand, equity derivatives, awesome. Trading, go. Volatility2018, the really rocked investment banks. It was gap volatility. This is showing that 2020 is not 2018 for the big investment banks. Colleaguesy my showed that jp morgan and citigroup brought in about 500 million from the rout. Some of this is as easy as s p options. A lot of my sources were talking about people buying puts and options and whatnot. The net effect of all of this turmoil, we wont know until closer to Bank Earnings season in mid april, but this is one bright spot. Alix does that change if they have to do it from home . Sonali probably a little bit. There are a lot of risks associated with trading from home. Remember, the banks have been very skeptical about some of the technologies like Cloud Infrastructure associated with doing everything remotely. The big regulators, finra taking a look at this, working closely with the banks. Handling volumes like that is a question. Alix do you like banks . Sarah i think it is very difficult for banks with Interest Rates where they are right now. I think that makes it very tough. At a certain point, yes, because theres a lot of fee income coming in. I think the other problem is that until you get some sort of stabilization, it is hard to see whos going to win and whos going to lose, and in some of these massive volatility movements, somebody is on the wrong side. And as is h2o fund. They lost 26 on monday. It is hard to pick one day and then hammer them, but the idea is you have to lose less than everybody else. Yes, 30 in one day is pretty significant, especially because its had a couple of rough years already. Remember, they are not the only fund firm that is experiencing difficulty. Lazar this morning said they had. Ost a lot in february but you have others that it did really well. The macro funds that have had a lot of issues have been showing gains in this route. Brevan howard being one of them come arising about 7 through march. According to my colleague, other tail funds are really benefiting from these outlandish events. Meanwhile, even some of the more traditional funds have seen gains through april from Traditional Technology holdings. I feel like this is a good test for what passive funds do. The concern is they are going to be in illiquid assets, and if everyone was to exit, it is going to cramp up the market. Do you have a read on what the result is yet . Sarah theres a couple of small funds that had to close, but assets were so tiny that i dont think we were in are mostly meaningful. I dont think we really know yet because a lot of moving is the liquid stuff anyway a lot of whats moving is the liquid stuff anyway. It was just like, well, that moved so much that we can no longer honor that. For the big passive stuff, i dont think thats as much is one as much of an issue. You have the ceo of macro complaining about liquidity, so it is not just funds shutting down. People happy with how they are trading, and are they getting liquidity . Sarah stocks are pretty liquid come but if most of the holdings or bonds, you dont have the same ability to say we should close out this position today because rustic with a bunch of bonds the dont trade the way stocks trade. Alix really great conversation. Appreciate that. The boe spring into action, delivering an emergency 50 basis point rate cut. We want to go now to westminster, where anna edwards is speaking with jim oneill, Chatham House chairman and former treasury of the u. K. Former secretary of the u. K. Treasury. Anna we were waiting for this big fiscal news, and then we got this coordinated stimulus. Using discounts is a big deal . The whole package . Jim i think the second part, which is less glamorous in the details about making the couple of rules for the banks a little bit less tough and encouraging them by supporting them helps more businesses, perhaps even individuals, with more and more people challenged by this coronavirus, i think all of that is really important. Cutting rates is a complete waste of time. Anna you think so . It reduces the borrowing cost at the margins, doesnt it . Jim in 2008, it was smart. But for many of the past two years, each time the banks cut es, it was more importantly, i think the past decade came to an end, all this issue about actual and , we ared inequality constantly reacting to financial conditions, which means propping up more than equity prices. Unless the transmission mechanism gets into the real economy, it is not helping other people, so dont know why the bank has done that. Anna this is designed to encourage lending. Does that encourage borrowing, though . Jim no. This is the other thing about why it is so strange. We are to liberally encouraging people to not do what they normally do. Out asravel, dont go much as you need to to get to work. Thats normally the mechanism of how Interest Rate cuts work. So how on earth is this going to function . Lastly, we dont know yet quite what the impact of the economy is going to end up being because we dont know how bad it is going to be. Why not wait . What is the big rush to cut Interest Rates so quickly. The fed did it, and we some of the consequence was. So i dont get why they did that. Anna what makes it a better story is it looks like coordinated action from physical and Monetary Policy joined up thinking. Does that matter . Jim i dont think it is sensible. What is going to be really important about dealing with this is what we are going to get in the next couple of hours on fiscal policy, and as part of that, the whole issue about what countries do to improve the the quality of the disease prevention, a lot of the stuff i have done on problems coming down the road, what this really demonstrates is the sort of gap between economics and finance and Health People is just superficial, at this is demonstrating in spades. We need to be much more serious in all you in member countries. All you in all un member countries. Anna the bank of england talked about the government will bring forward targeted fiscal measures. What kind of things can make a difference to tide business over . Jim i would imagine this notion , orome type of tax holiday supplication or ease of tax payments, is very likely to be something. Perhaps reducing national insurance. To make it easier for the owners of businesses to allow their people to take time off so they can isolate more easily without worrying about whether theyre going to have to enough money on the table to eat. Anna do you expect recession as a result of this. Is that something on your radar . Jim i dont know. Frankly, how anybody says they do come out get them off the tv set. What i would say is the circumstances and the timing of this infection is dreadful. We already had significant slowing of the World Economy last year, which is seen as a little bit of evidence for china to deal with it. They essentially cut their economy and half in the month of february. But thats a time where chinas influence on the world is five times more than it was, so it is not a very good start. All the countries that are locked into china, germany already close to recession, italy almost definitely. Edge,are bringing on the but if we have a really persuasive, active, targeted fiscal response here, the states, germany, then we could avoid it. Ofa is that where parallels 2008 break down, because there is something we can do . Christine lagarde seems to be drawn those parallels to try and get organized action. Jim i think there are parallels, but it is worse. It is linked to what i said a few minutes ago. I know from my time of doing the , shouldntresearch you be speaking to Health People . They are not trained to think about things that arent conventional, and 2008 tested economic policymakers because it unconventional even within it. This is outside of it. On top of that fact, we dont really know from the Infectious Disease specialists quite what this bug is. We dont really know. Theres a lot of experimenting going on all over the place. Clearly, some western countries dont want to go down the path of shutting everything down my china has done. Down,has shut everything but it is not clear to me that they actually have. We need smart out of the box thinking to deal with this. Anna so you dont see this has a shorterterm shock rather than a structural issue . Jim it could be all of those things. One of the very few things i learned in close to 40 years of finance is never let a crisis go inwaste, and how we respond the market is how we could how good we are as people and policy makers. Think ase need to policy changes about the right thing to do, and never let an opportunity go to waste. This do things that make our systems much better for future issues like this because theres going to be more coming, as i know from my antibiotic research. Thank god this isnt the point that we talked about on that, where we have absolutely no antibiotics that worked, because that would be a lot harder to deal with. Anna we heard from the fed already. The fed has done something. Theyve acted. Youve argued that policy that Monetary Policy is not what you need right now. Does President Trump need to do something . Jim of course he does. They need to be able to allow without fancy, Expensive Health insurance to get tested. Here in the u. K. , there were 10 times more people already tested and there have been in the states. The u. S. Has got five times as many people. That doesnt sound very good to me at all. So the u. S. Has to think about policies for Infectious Disease spread in a completely different way than it clearly has done ahead of this. On top of that, it needs to do some of the things that i hope we will hear in a couple of hours about supporting small business, making it easier for employers to allow individuals and note right thing worry about having no income. Is i thinkre if there is a comfort out there, the evidence suggests that quite a few Asian Countries seem to be getting control of it. It has sort of become fashionable around here to say that the u. K. Is where italy was two weeks ago. We are also where south korea was two weeks ago, we dont have to end up the way, unfortunately, how italy appears to be currently. Thats true about japan. So there is some evidence out , after some colossal mistakes early on, that it seems like it is getting it things under control. Anna that rate of infection seeming to collapse. Jim and the number of deaths. If you take all the numbers, obviously theres issues about data everywhere, but if you look at the death rates in some of the big populated north Asian Countries, they are quite low. Anna a positive note, hopefully. Thank you very much. Jim oneill joining us from u. K. Am house, also former secretary to the treasury. Back to you. Anna really shake that interview. Great to get his insights on the day. In the markets, the s p rolling over around the lows of the session. 2. 7 is where we are lower, despite the fact that we had the biggest rally yesterday since 2018. Because of that, european equities losing some of their shine, and bond yields continue to be very appealing. You can see yields continuing lower in the u. S. In the currency market, all about a weaker dollar for the most part and a move into the gold market. Coming up, mark mobius will join us, Mobius Capital Partners cofounder. Where is he finding value right now . This is bloomberg. Hi were glad you came in, whats on your mind . Can you help keep these guys protected online . Easy, connect to the xfi gateway. What about internet speeds that keep up with my gaming . Lets hook you up with the Fastest Internet from xfinity. What about wireless data options for the family . Of course, you can customize and save. Can you save me from this conversation . That we cant do, but come in and see what we can do. Were here to make life simple. Easy. Awesome. Ask. Shop. Discover. At your local xfinity store today. Alix welcome to bloomberg daybreak on this wednesday, march 11. Lets take it from the top. Gov. Carney the bank will take all necessary further steps to support the u. K. Economy and Financial System. Alix the boe follows the fed with a 50 basis point emergency rate cut, saying the coronavirus will damage Economic Activity. The banke heard from of england being described as a big package. Also, dropping the countercyclical buffer, and a program to push out lending to small and mediumsize businesses. U. K. At the same time, the puts an end to austerity. Ecb pleads time, the thats the boe all of our Health Care Companies have agreed to waive all copays. Alix Vice President pence tries to reassure americans, while the administration publishes Administration Promises stimulus despite President Trumps noshow. At some point in the near future, we will outline in more detail at package for you. Alix Johns Hopkins now puts the u. S. Cases that over 1000. The door may be open. In the meantime, saudi arabia boosts output capacity for the first time in a decade to 13 Million Barrels a day. We have seenost them do in a decade, and it really looks like Crown Prince Mohammed Bin Salman is not abating in his price war with russia. The u. S. Looking into ways to help oil companies. Its more than a comeback in my view, our campaign. It is a comeback for the soul of this nation. I believe we will do well from this point on. Nothing for granted. Alix joe biden takes the michigan primary, further widening his lead in the delegate race. Why is michigan important . Number one, Bernie Sanders had a surprise victory over Hillary Clinton there. Number two, donald trump won by a near margin. It is considered to be key to who is going to win in november. Biden also won in missouri, as well as mississippi. Goldman sachs calling in into the bull market. Now see earnings down your on your in 2020, the second revision in just a few weeks. When he for 50 is where they see the s p midyear, but rebounding to 3200. In the markets, we are seeing divergence between the s p and europe. More fiscal concrete measures coming out of europe, not in the u. S. That is weighing on s p futures, down by 2. 6 . All of that means a rotation into gold and into u. S. Bond markets. Yields move a bit higher, and crude getting totally pummeled. How long can people hold out until they have to trim all their production and go home . Going there for the hour is michael mckee, who i hate because he just spent four days in florida on the beach, away from markets, away from the virus, away from everything. Welcome back. Michael i was at a conference, actually, and nobody is shaking hands. Alix did you do the elbow thing . Michael i try to that. People said do the star trek thing. Alix i literally cant do it. It is so hard. Michael everybody wants to know what is going to happen, and nobody knows. Former goldman vice chairman jim oneill was just on the air, and his quote was if anybody tells you they know what is going to happen, get them off television. Thats pretty much where we are. Alix lets ask somebody whos going to put some money into the market. Joining us is mark mobius, Mobius Capital Partners cofounder and partner. We are really pleased to get your take today. Where are you puttin money right now . Lookingght now we are at all these markets because some of them are down substantially. We are seeing incredible opportunities. Our focus is on india to begin with because there are lots of things happening there. This Oil Price Decline is very good for india, good for china, good for all of these Oil Importing countries. Things are looking good and some of those areas. But of course, now is the time to be buying like porcupines make love. [laughter] michael i think thats a good way to put it. Timing is the real question. We just heard jim oneill talking about the fact that it appears Asian Countries may be getting more ahead of this than western countries. Obviously, you spent a lot of. Ime in asia there still risk . Things move very quickly ,o try to prevent infection etc. We have to be very careful with the numbers, so it depends on how money kits are available, how many tests have been taken. I think the reason why you have high numbers in korea is because the koreans are very good at testing people and having the kits available, and doing the job to detect the coronavirus. So i think, yes, asia is in pretty good shape. Michael but is it time to start putting money to work . You are identifying things you want to buy, but are you buying . For is the risk still out there, and you want to hold off a little bit . Market those stocks that we have not been too excited about for one reason or another, we are cutting, and then adding to those stocks that we are fundamentally much more confident about. It is really a question of buying and selling, but actually more buying rather than selling. Does that mean you are taking on more risk or shifting where the risk actually is . Market shifting away from risk, actually. In other words, looking and saying these companies, we are not so excited about them. Lets get rid of them now. Pace andll quicken the use the money to buy things we really like. It is a Good Opportunity to make those switches. Michael how are you finding Market Structure and liquidity these days, particularly overseas . Many people wonder if we will see a 2008like scenario. Market you will be lucky to find a stock that you like that is doing a turnover of 2 million or 3 million a day. Youve got to live with it and go in slowly, and when you want to get out, youve got to do it slowly as well. Alix you mentioned that you like india. What other areas sectors do you like right now . Deserves think turkey mark ilook because think turkey deserves a close look. Speaking, there are terrific organs in turkey right now, so we are looking there, particularly in the consumer area and companies not affected by the fall in the turkish lira. They are exporting. Thats one area. The other area would be indonesia. Indonesia is quite interesting. Benefitil importer will from low oil costs, and there are lots of consumer stocks look quite interesting. Michael across asia, how is china and its economy being perceived right now . Is the worst over, and the knock on effects and other Asian Countries starting to behave . Or is that still going to be a lasting issue as people try to get past the halt in the chinese economy . Mark it is still going to be an issue, not only for asia, but globally as well. China is a major producer of rum materials for pharmaceuticals. I was looking at numbers for india. 70 of their Raw Materials come from china. These are real problems in the supply chain, and they are going to impact everybody globally, but particularly Asian Countries. Weve got to expect a month or two months of this before china gets going again. As you know, china is trying to get people to work as fast as possible, but they know they will lose market share if this continues to go on. I think that is going to be the key going forward, but expect a month or two more of pain on the supply chain side. Alix really pedestrian question, are you buying gold right now . Gold, as you know. Ive got enough myself at this stage, but if there is a price correction, i might add. Alix booking some nice profits . Mark i wouldnt be selling at this stage, no. Michael is gold a worthwhile investment for other people to make at this point . Its been very volatile, surprising some people who thought it would do nothing but go up because of whats been happening. Mark i think the situation with fear,s, again, with this people want to get into cash, so they sell everything, including gold. But i think the trend for gold is going to continue to go up for a number of reasons. First of all, money supply is going through the roof. If you look at all the other currencies being created on the internet, you realize that nobody knows where the money is. Number two, you are seeing lower and lower Interest Rates. In europe, we are a negative territory already. But where do people put their money . It doesnt make sense to be putting it in the bank, where you have to pay the bank to keep your money. I think those are good reasons to have gold. Alix mark, really great to catch up with you. So good to get your perspective. Joining mike and i hear onset is michael crook, ubs head of investment strategy. Ive been talking all day about from goldman in the short term. Do you agree . Whether or not we get down putting percent, it is a possibility, but we are going to bounce around here. The real question is do we have a recession or not that hinges on a response to coronavirus . That is going to determine where we actually go. We . Ael m where are two days ago, the headline was this has all got to be capitulation. Apparently this morning, it is not. Taking c i think we are this more seriously. Corporate america is taking this more seriously. We see some of these large cancellations of festivals and conferences and things like that. When i talk to my neighbors, the kind of understand the seriousness of coronavirus, but not yet. I think we have to see that on main street before we start to see the real capitulation. We are not anywhere near that in the u. S. Yet. Alix what are you telling your clients . Michael c it is certainly not passive, but we cant day trade this market. For investors that have gone , treasuries have done it sort nearly well. On the flipside, you can sell some treasuries, by some equities, take it vantage of the move. Portfolios havent done all that poorly because one side is protected expert nearly well is protected extraordinary well. I dont think you make large changes right now. Honestly, we havent seen a whole lot of panic, and that could be because treasuries have held up so well. Michael m do you go into things like gold or other Precious Metals or other alternative investments . If you could do refis for people, you would be making money this week. Michael c that is a bigger question, but if we dont have a recession, we will see certain parts of the economy on fire. The Mortgage Market is going to be part of that. Real estate in general will also be part of that. I think it even shows up in some of the performance data. Date outperformed the Broader Market pretty substantially, really on a bet that coming out of this situation, we will see outperformance. We do here interest in understanding hedges from our clients. I think right now is probably not the right time for most people to start adding those to the portfolio. To become more expensive. But a lot of investors have become overweight in equities because of the bull market. They got to dig about what they do next coming out of this. We will have another crisis at some point. To the extent that bonds are no longer going to provide that protection, weve got to find a way to solve that. Alix thats what i know we reached the bottom. We are not there yet. Coming up, joe biden winning the michigan primary, taking the biggest prize of yesterdays vote, widening his lead over Bernie Sanders. More on that next. This is bloomberg. Mr. Biden its more than a comeback in my view, our campaign. It is a comeback for the soul of this nation. This campaign is taking off, and i believe we are going to do well from this point on. Take nothing for granted. Alix former Vice President joe biden speaking to reporters after winning the michigan primary over Bernie Sanders. Joining mike and i is david westin, and michael crook of ubs Global Wealth management is still with us as well. Just looking at the odds, its been a really tremendous week for joe biden. You can see the difference between the two. Where are we at . David people who follow this say they dont remember this kind of turnaround and political. It has been really quite extraordinary. The delegate lead is under 200, but we now have florida and ohio coming up, and they are likely to go as well for joe biden. Looks increasingly like hes got it sewn up. The question is, does Bernie Sanders under that does Bernie Sanders understand that . Thus far, Bernie Sanders has not capitulated. Michael m it is not just Bernie Sanders, but Bernie Sanders supporters. We heard him and those were marks really reach out and say i enthused say i commend your enthusiasm and passion, but those bernie bros are not happy. They are young, they are angry, and they do not take defeat well. Michael m supposedly his those young people, supposedly his secret weapon tomorrow not voting. David his claim was i can get out a whole group of people that are not voting, and that did not happen in this primary. It feels almost like donald trump to the same base. The question is, can they bring the Party Back Together when it comes time . Will those people show up and support joe biden if he is the nominee . Alix the question is how all of this is playing into the market. Rating versusoval the s p, they seem to be tracking each other. When you look at this and factor in a potential biden candidacy as well, how do you think about the market . Michael c i would start by saying people who say they havent seen a turnaround but this forgot the last president ial election. I think what we are going to see here is the election is a long way off, so this to some extent hinges on the economic response we are going to see. If we are in a recession. This is going to be pretty difficult for the Current Administration to handle and create a compelling narrative. On the other hand, if we work through this, we have a decline in coronavirus cases for the summer, it is a different environment. David the question is, what does the administration need to do. We were promised a fiscal plan yesterday. I asked Larry Summers how big would fiscal stimulus have to be. He named a really big number. We better have an apparatus in place that will enable us to be spending at a rate of above 500 billion a year by the end of the summer. David that will get your attention. Thats a lot of money. That . Would we even get lets say you need it. Are you even able to get it . Can actually get anything . David thats part of the president s problem. The president said we will have a payroll tax cut. Even republicans are saying that is going to cost a lot. Staye are still having to home because of the coronavirus, theres attention on the hill right now. Its not tear with the president can get through. Michael m they are going to have to get something because nevers of congress will be running for reelection as well. They dont want to go back to their districts and say, sorry, we couldnt do anything. We may see democrats take the lead here because trump doesnt want to talk to nancy pelosi, but she can go out and demand things from him because he knows he needs them. David at this point, President Trump needs something. Theres no doubt about it. If the democrats take the lead, im sure he would let them run with it, but we expected something sooner than this. It is not clear we are going to get it. Congress goes out of session next week. Alix thats what i find interesting about the price action as well. We had europe outperforming, up one percent for some of the european markets, and then you have a downdraft in u. S. Equity futures. Is that what that is . No fiscal, yes fiscal . Michael c uncertainty around physical, recognition that this is going to take a while. It is probably not going to be large enough, whatever happens. Andreality is fed rate cuts fiscal policy doesnt stop the rate of coronavirus. Ofid we have the bank england budget, we have madame lagarde coordinating with fiscal authorities. Here, we can coordinate with ourselves. Michael c i think thats true. And coordination on that side of the problem come on the apple side of handling coronavirus, that is a situation we are in. It doesnt mean we are going to be there for the next two or three months. Right now, the market is not sure about that. Michael c does it matter, michael m does it matter, and the since you said earlier . Get ahead of we the disease and still have a recession, not a great outcome. If we do some fiscal stimulus, we shore up the economy a bit, we dont get ahead of the disease, not a great outcome. We need to do both. David we heard the head of hhs yesterday say we have enough testing kits now. If anything, we have more than what the doctors need. If we think we have our arms around it, maybe that will deter some of the economic damage. Michael c we could also spread out some of the economic damage to make it easier to handle. Alix unless it is airlines, and which case it is a whole different story. David westin, really appreciate the reporting. Michael crook of ubs staying with me, as well is michael mckee. This is bloomberg. This is bloomberg. Alix time for a check on some of the biggest movers right now. Bnp and Occidental Petroleum down. Occidental got a price target cut at pepper sandler, as well as wells fargo, and cut capex. Marathon also cutting Capital Spending by 21 . Norwegian cruise lines lower by nearly 6 . Airlines like american also getting hit this morning. Industry still awaiting details on what type of help may actually come from the Trump Administration for the sector. We will talk more about what the government can do to help them later. Comingup come with up, we talked to Michael Feroli of jp morgan. This is bloomberg. Alix this is bloomberg daybreak. I am alix steel. The latest rate on cpi for february in just minutes. After its for the s p biggest rally yesterday since 2018. Now we are almost 3 . Other Asset Classes a broadly weaker dollar story. Yield still down between nine and 10 basis points as the curb flattens. Crude rolling ever. Now we are all 4 . It continues to get ugly for the oil producers. The data coming up any second good we have average Hourly Earnings cpi. Basis,a month by month coming in. 1 a year on year basis. 2. 3 . Both stronger than estimated. On a sequential basis the year on year read is lower and month on month is in line. We are still waiting for the core. Inre on your cpi coming cpi comingr on year into. 3 coming in 2. 3 . Average Hourly Earnings up. 6 . Mike, what you think . Not enough detail to make any assumptions on what this means. This was expected. Comparisons to the same month last year are much better. The fed expecting Inflation Numbers to go higher. You have to remember the fed does not look at cpi as much as they look at personal consumption expenditures index, which runs five to six basis points below cpi. It does not look like theres anything to worry about besides the old data. This is february data. The commodities price drop and all that goes into it as well. We still have michael crook onset and Michael Feroli of jp morgan is joining us. Michael feroli, you have an aggressive call on the fed. 100 basis points worth of cuts. Walk me through what you see. Michael f. most people would agree the situation right out the economy warrants further easing by the fed. If the fed would ease 50 or 25 basis points the next meeting that would put the fed funds rate below 1 . You are already within a close distance of the zero lower bound and there is some research that suggests once you get that close you do not want to save your bullets, you want to expand your firepower to stimulate the economy as much as possible. There is a good chance you will be constrained by that zero bound Interest Rate, you might as well deliver as much stimulus as you can. We believe that was the course of action the fed took in december 2008 and we think at this juncture it is probably warranted given the headwinds facing the economy. Michael m. we do not know exactly what will happen to the economy. We know after the fed cut rates 50 basis points in a surprise move, the markets tanked after. What do they cut . Michael f. we do not know what is going to happen. You have to make a forecast and i think the fed sees things as we do that are quite worrisome about the economy. If that turns out to be too pessimistic, it is easy to take it back. It is a lot easier to raise Interest Rates. Michael m. what they do that in an Election Year . Michael f. i do not think the election factors in but i would be surprised if the economy bounces back quickly enough and inflation bounces back quickly enough. As a point of argument, if you are concerned this is too aggressive from an inflation perspective, then you should take comfort knowing it is reversible. In terms of the Market Reaction last week, i think the fed was set up given the g7 announcement to work for something as much as they did. In some ways the fed was left without any action by other actors around the world. 50 basis points last week was the minimum the market was expecting. Some of that disappointment may have been related to expectations being too high. This is not about want a reaction in the markets. This is about providing what you can and by no means can the fed solve the problem by itself, but it should do what it can do. What it can do is help the sectors of the economy that are interest sensitive, which are not travel and tourism, those are getting hurt regardless. You have to do what you do and hope the other actors in government do what they can do. Michael m. the markets basically see if your way in price in the rate cuts. The other question is what else can they do . Any other programs for the markets, a lot of people within the fed saying we do not see the issues we saw in 2008 so we do not need to bring back all of those acronym programs. You see the fed doing anything else besides cutting rates . Michael f. not really. As you say, there are not a lot of problems in bank funding. We do not see problems in issues like that. Can do forwardly guidance and quantitative easing if they decide longerterm Interest Rates are too high. That does not seem like it will be a problem. If the fed really wanted to get aggressive and how they interpret the Federal Reserve act, it is possible they could create facilities that could make Funds Available to Small Enterprises that may be distressed. That would be stretching the boundary of the fed agreement and is probably more appropriate for the treasury to take the lead on. Alix michael crook, way in. Tiffany wildly had a note out and said if Monetary Policy is forced through long and variable lags cannot stop the spread of the virus and is not effective at addressing supplyside shock. How do you view the fed . Michael c. both of those are correct. The fed is worried about the demandside shock, not necessarily the supplyside. We agree the fed will go to zero. We think they might take a couple steps to get there. A lot of economists would say if youre going to go to zero, go as fast as possible. It is a reasonable place for them to take. The question is if it is enough, and it is not without the fiscal measures we talked about. Alix how is your investment thesis change if you have a fed rate of zero . Michael c. from a portfolio standpoint, we are back in a situation where cash has a negative real return associated with this. Bonds become increasingly challenging, but they already are. We have to think about that aspect of it. What we know is most investors went into this way too overweight in cash. A lot of investors have 20 or 30 allocations for cash. This could be an opportunity for them to start thinking about putting that underproductive assets. Michael m. Michael Feroli, i saw analysis that said with the europeans getting into the game with the u. K. Cap today and expectations for the ecb tomorrow, it could mean the fed might be able to wait because there will be a lot of global liquidity. As the amount of liquidity the fed can add to the markets, kanata the economy at this point as important as the psychological aspect of an announcement next week . Michael f. i do not think liquidity is much of an issue right now. Last week we had disruptions in the repo market. That seems to be moderating. Right now this is about psychology. The fed can do their part. One of the beneficial side effects of last weeks action is it did open the door or maybe give a push to other central bankers to act aggressively so their currencies would not appreciate and the fed will not be the only guy easing in town. Liquidity is not the issue. The fed has to do with a have to do and some of that is psychological. Some of that has to be messaging. Thisowell said last week is about supporting a strong economy. Alix Michael Feroli, when we reach the zero bound in the u. S. , how do you look at the differentiation of the Monetary Policy here versus in europe. If the narrative was we have a lot of room to move in the u. S. , if that narrative goes away, what is it . Michael f. the narrative changed. We have room and we will probably use that room. That is a benefit we have been enjoying. You see that in housing markets and interest sensitive sectors of the economy. Then we have to change the narrative and realize here, like in europe, fiscal policy has more of a role the Monetary Policy. Central bankers do have a role. It is a supporting role. Alix Michael Feroli of jp morgan, michael crook of ubs, thanks a lot. One michael is still with me. The bank of england follows the fed and the boe delivering an emergency 50 point cap. You are also seeing the u. K. Chancellor of the exchequer present in the budget in parliament. Joining us in london is anna edwards. Is he delivering on the budget . The we are just hearing chancellor of the exchequer starting his delivery of the budget. We have not had any striking headlines. Interesting in itself he started buying knology the key challenge by acknowledging the key challenge, not the only challenge, the coronavirus. The key challenge. He says he wants the house to come together to try to deliver something on coronavirus. He acknowledges there will be disruptions to the u. K. Economy. Capacity will be reduced, but he says the impact will be temporary. It will exist, but the u. K. Will get through this. That is the message we expect to hear from the chancellor at this point. It is a tricky budget because he has to address the immediate the immediate concerns. Much of the talk is about coronavirus. He also has to reflect on the priorities set by the election. They were about addressing the growth picture across the country and delivering growth outside the southeast of england through infrastructure spending. That had been the plan. Things had been thrown off course by the coronavirus. They stuck to try to address for that narrative. Michael m. a broader question is how this affects the negotiations over the trade deal ability toand the put everything into place to keep the u. K. Economy going because of the brexit issue. Anna it is amazing. Exit has had so little mention in the u. K. And the media in recent weeks. Certainly in recent days. That because of the increasing focus on coronavirus. The brexit negotiations are still happening. Over are question marks the ones still to come. We just heard from a leader of a lot of the brexit conversation on the u. K. Side. He said it will be foolish to bet against the Prime Minister sticking to his timetable. That timetable looks tight when you added all of the uncertainty around coronavirus. Many arguing whether this will be a substantial enough reason for Boris Johnson to say that because of this we need x time. That is not what we are hearing at the moment. As it stands, it looks as if the government will keep discussing until the end of june and based on those discussions make a plan for passing a deal by the end of december or preparing for a no deal situation and trading with the eu on wto terms. Alix thank you very much. Anna edwards joining us. We want to give you an update on what is making headlines outside the business world. Viviana hurtado is here. Viviana italy is set to double the amount of fiscal stimulus to tackle the coronavirus. It is increasing the amount of money on offer. For the fourth time in a month. That after the eu agreed to stretch its budget rules to help Member States fight the outbreak. Italy is looking at additional spending of 16 billion euros. Iran is urging the u. S. To ease sanctions affecting imports of medicine and food as it battles a major outbreak of the virus. On tuesday, mike pompeo saying iran first needs to release americans who are being wrongfully detained. Overnight, iran reported 63 new virus deaths, bringing the total to 354. The country has 9000 confirmed cases of coronavirus. After china and italy, it is the third hardest hit country. In the u. S. , president ial candidate joe biden widening his lead against Bernie Sanders. The former Vice President winning michigan. That was the biggest prize of tuesdays democratic primary. He also won in missouri, mississippi, and idaho. Biden and mr. Sanders will face off in a debate sunday at without a Live Audience because of coronavirus fears. Tot week interest turns indiana, ohio, and florida. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Alix thanks very much. Opec monthly report is out. It does not look pretty. Opec is saying Global Oil Demand this year, their growth forecast is growing. Cut their growth forecast by 920,000 barrels of oil day. Slashing their growth forecast, although that winds up with uncertainty in the market because no one knows how bad the virus will get. In terms of supply, the saudis pumped 9. 6 8 Million Barrels of oil in february. If they get to 13 million, it is in a normas ramp up for the market. Itshe same time, opec cut 2020 nonopec estimate by 490 thousand barrels of oil a day. That is rapping in shale. Coming onhe deals already in south america it will come on as is. Crude is below the session. Virus fears hitting airlines and their suppliers. We take a look in todays bottom line. Bloomberg users, interact with us at gtv on your terminal. Browse all of the features. Gtv. Viviana i am Viviana Hurtado coming to live from the principal room. Coming up later, Nouriel Roubini. Brooke sutherland of Bloomberg Opinion joins us now. I am watching occidental, that is unique case. It is only a matter of time until the board has to out the ceo. That has to be brutal. That is a microcosm of what is happening in energy. Brooke the shareholders were not happy about that anadarko purchased at they did not get to vote on that deal. There is a call about pointing out that the normal shareholders are getting a dividend of half of what is going to Warren Buffett who provided financing for the anadarko deal. At the. i am looking cruise industry. If you want to go somewhere, do not go there. That is the general advice everybody is giving. That is bad for the cruise companies. If you look at carnival, royal caribbean, norwegian, they are all taking a big hit. Stocks are down 60 since this started in january. The question is what happened. Goldman sachs says they are going to lose earnings of 50 this year. There is no help for the stocks. The president said he is working on help for the cruise industry. Like david westin said, there are no plans. What they could do is some sort of physical Lending Program to companies and industries that are in trouble. You will be looking at people like the cruise industry and the hotel industry. Alix like energy. Michael the question is how far is congress willing to go to help these people out. Brooke you are seeing people board cruises. The miami port there are thousands of people to get on this boat. I do not know if you could pay me enough to do that. Where people are not necessarily booking is flights. We had a number of airlines presenting yesterday at the j. P. Morgan industrial conference that was moved online because of coronavirus fears. They were still giving their thoughts ever the webcast and it is dire. United laid out their worstcase scenario, talking about a 70 dropoff in revenue in april and may. 60 . Even in november and december seeing sales down 20 . It could take 18 months for demand to recover. Those are drastic situations. This would be worse than 9 11. There are airlines bracing for an end of times type of task. Have they done enough in the intervening period to make their business more resilient . They say they have. We will find out. Michael if youre going to bet on it industry to get some sort of help, it would be airlines because they are so essential to the u. S. Economy. We saw that after 9 11. If people do not go on cruises, it is terrible for the shareholders of the companies and the crew on the ship, but the Airline Industry showing down hurts the entire economy. Brooke that is what i am keeping an ion and terms of Aerospace Suppliers and also boeing and airbus. Boeing has had issues with the 737 max. That plane will be coming back to the market in mid 2020, which is right around when airlines will probably least want a bunch of extra new plans. You already have a bunch of them talking about parking aircraft. What happens to demand for the planes . If you look at the comments from airlines and what is coming out of the Aerospace Suppliers, there is a disconnect. The airlines are being very alarmist and concerned about what they are seeing in their business and taking immediate action in terms of cutting capacity, parking planes, cutting capex. Part of that is a timing issue, it will hit the suppliers later. I think eventually some of the numbers will come down. Saffron, united technologies. You will see guidance cuts. Alix wait until energy. Brooke sutherland, thank you very much. Michael mckee, great to have you for the hour. Thank you. I know im not like a beach in florida but thank you for joining me. With a littlerink umbrella and it. Alix pretty much. Breaking news. The chancellor of the exchequer is speaking in parliament announcing additional fiscal loosening of 18 billion pounds for the u. K. The total stimulus is 30 billion pounds. They will be restating their estimates with projections for 2019 as well. 30 billion of extra fiscal 30 billion pounds coming from the u. K. Also downgrading productivity as well. A look at the table right. Doing nothing. 1. 29. S p futures sinking after equities saw their best to yesterday since 2015. Support around 2800. We will break that down in technically speaking. This is bloomberg. Alix time for technically speaking. Bill maloney joints me now. Listen to bill every day if you type in squa. Yesterday monster rally, today not quite so much. Bill yesterday we did talk resistance and now we will be talking support. First support around 2800. Below that, big support around 2747, which we held yesterday. The 61 retracement of this move. 2734. Your big level is 2747 and 2734. Alix energy not going to have the same kind of effect on the s p it did. Xle cannot catch a break today. Bill energy has been a disaster this month. Down again today. Looking at the energy etf. The chart has support back to 2000, in this 30 to 35 range. Around fails, 2002 lows 19. 30 to 35 is the next support. Alix brutal for energy guys. Bill maloney, thank you. Withg up on the open jonathan ferro, Nouriel Roubini will be joining him. The s p had its biggest rally since 2018. We are now off over 3 . European equities getting dragged lower as well. The move into the bond market continues. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] jonathan from new york city for our audience worldwide. Im jonathan ferro. The countdown to the open starts right now. Jonathan coming up, futures lower. Investors waiting for the white house plan. The United Kingdom showing what policy coronation looks like. 2008 stylens of a crisis unless europe acts. Good morning, good morning. Heres your wednesday morning price action. Equities down. Negative three. 5 on the s p 500. The euro stronger, the dollar weaker. In the bond market, the bid is back. 70 basis points on tens. Down 12 basis points today alone. Global Central Banks stepping in. We are at the beginning of the next wave of rate cuts. The bank of england. The fed typical follows an emergency cut with another pod. This is not about cutting rates. Wasting valuable ammunition. It is about injecting liquid