Transcripts For BLOOMBERG Bloomberg Markets 20240713

Damaging as the financial crashes. Italy is taking steps to contain the worst infection rate outside of china. All businesses and pharmacies are ordered to close. Shery lets get you a check of the markets in the u. S. We had the dow fall into a bear. Arket territory, falling 20 the s p 500 a hair away from the 19 lower than the previous high. We had every group on the s p 500 sinking more than 3 . The nasdaq down 4. 7 . U. S. Futures under pressure. We have seen no more details on the substantive stimulus that President Trump had promised. In the afternoon, he said at one point that the u. S. May not need the fiscal measures. That did not sit well with the markets. U. S. Futures gaining 2 10 of 1 . We will see how we do without how we do throughout the rest of the session. News and headlines dominate market sentiment. Sophie a lot of caution. A she futures pointing lower despite the global stimulus engine being revved up. In new zealand, a fiscal response is being considered. The rbnz may have to look at unconventional territory. We are seeing stocks under pressure. Off more than 12 . We are looking at a tough open in sydney with futures pointing to an open lower by 3 for the asx 200. Moves ineing australian bonds ahead of Prime Minister Scott Morrisons fiscal stimulus announcement. We have the bond yield curve steepening with the aussie 10 year yields jumping as much as eight basis points this morning. A dislocation in treasury markets. We have elevated volatility. People are working from home. The fed throwing the kitchen sink at the repo market. Even treasuries being sold off during a choppy session. Out, securities points this is not a normal functioning market. More companies drawing on credit lines. All this happening, that is putting renewed focus on credit quality. Haidi sophie in hong kong. Lets get you the first word news. Credit growth slump in february as the coronavirus weekend was already a historically slow month for lending and the economy due to the Lunar New Year holiday. Finance increased compared to the median bloomberg estimate of almost twice as much. The pboc said the stock of financing expanded by just over 11 . Bernie sanders is vowing to stay in the race for the president ial nomination display a series of defeats to joe biden. He is planning to carry on at least until sundays oneonone debate. Even after losing four state primaries on tuesday. Sanders was one of the front runner to challenge President Trump but lost in a wide range of regions. The house of representatives has voted to restrict President Trumps ability to take action against iran. Comes after an airstrike killed a top iranian general in january. The president says he will use his power of veto if the measure is passed. U. S. And canadian jets intercepted two russian aircraft in the alaskan coastline. The russians never Left International airspace but did come within 80 kilometers of u. S. Territory. The Royal Air Force scrambled fighters earlier when russian planes flew near the u. K. Coast. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Haidi we are just getting some breaking news on earnings out of ai. The largest pain asian earnings group. We are seeing a disruption. The Group Reporting value of business for the full year missing the analyst estimates. Up 5 . The estimate was for seven and a half percent. Coming in at 7. 54 billion. 93 30 versus 84. 8 hong kong sents. Theave been expected to see expecting to see the impact not only on the virus but after the political unrest in hong kong as well. Citigroup saying the growth in hong kong could be affected by as much as 20 Percentage Points if we see the same pattern with ekrona virus as we saw with the 2003 with the coronavirus as we saw with the 2003 sars virus. Shery President Trump is said to address the nation in a few hours. We are awaiting details of his stimulus plan. He may announce a response to the outbreak in europe. The World Health Organizations top official declared the virus a pandemic and said the outbreak has taken a drastic turn. We have never before seen a pandemic that can be controlled at the same time. Who has been in full response mode since we were notified of the first cases. We have called every day for countries to take urgent and aggressive action. We have rung the alarm bell loud and clear. In thelets bring Bloomberg Opinion columnist kate it is not like there a columnist. Its not like there is a numerical threshold to declare a pandemic. Why did who do this before . Some time, they were hoping that with containment efforts outside of china and travel restrictions, there might be a leveling off. Withhave seen the opposite cases in a bunch of different territories a bunch of Different Countries starting to surge. Italy and the United States increasingly. Evidence there is uncontrolled spread wide enough that pandemic is not the kind is the kind of word you need to provoke a. Esponse that will be necessary haidi even as we have the who putting a pandemic tag on the outbreak, it seemed like there are World Leaders still dragging their feet or refusing to face up to the fact of the impact that we see from this virus. The message of the who is even though this is a pandemic, it is not time to throw in the towel to assume there is nothing that can be done to stop the spread of the virus. That is something that the whole world will be looking to tonight from President Trump. He is going to potentially outline the steps of the stimulus in addition to heading off the Economic Impact. He could also do a lot to stem the spread in the United States by boosting Hospital Capacity and making it easier for people to stay home when they are ill by potentially providing childcare if schools are canceled. People who work in have the Health Care System in the Health Care System can still go to work, which we will need them to do. The pandemic label does sound diary. There is a lot that can be done in the weeks ahead. Shery we have seen a spike in new coronavirus cases. Singapore had been very good at contending this virus. We continue to see rising cases in south korea. Is there a risk there could be a new wave of infections coming through these Asian Countries where we thought the narrative had been things had started to stabilize th . These countries really have done an excellent job of being able to trace contacts and do a lot of testing rapidly. Unfortunately, the lesson we have from south korea is one uncontrolled case that ends up in a religious gathering can. Ead to many more it is going to be a lot of stops and starts. You can have a lot of confidence these countries are doing an excellent job relative to some other countries in keeping the spread of the disease under control. Of this idea of flattening the curve depending on how high up the curve you are, the more extreme measures have to be taken, is the window of opportunity closing for some of the less draconian measures to be impactful . We are at a stage in a number of countries where containment may no longer be possible. You may need to move to mitigation. Flattening the curve what you are going after is making the peak a little lower. If things drag out a little longer, the goal is to prevent any Health Care System from being overwhelmed. There are measures you can put into place that can do that. That will be the most important thing Going Forward. While the window for containment may be passed, there are these can beeasures that impactful in reducing the longterm impact of the outbreak. Haidi thank you for joining us. Have special coverage of President Trumps address on the outbreak at 9 00 a. M. In hong kong. If youre watching in new york, that is 9 00 p. M. Italy is one of the countries taking drastic measures to limit the spread of the virus. The Prime Minister has ordered the close of all shops except for groceries and pharmacies. Lets go to more on this move. The new measures are going to alter almost all economic activity. Life will be bear down to the basics. Only groceries, pharmacies and other shops will remain open. Almost all other retail including restaurants will be closed. Companies are invited to let people stay home or work from close units that are not essential. To halt theesperate spread of the virus. Shery we have seen a raft of stimulus measures coming from across the world including centralbank action. The ecb deciding Monetary Policy next. There is a warning of a Major Economic shock. She has been calling locally for leaders to take fiscal areon because Central Banks ecb rates are negative. Monetary policy can do something. Feds clear after the convened, the ecb once it still. Wants it still. Thank you very much for that with the latest on the coronaVirus Outbreak and potential stimulus measures and ecb action. We will have coverage of the bank. Decision by the ecb you do not want to mess it. Take a look at wti right now. We are seeing an upside for oil prices. This after oil faces a volatile week. Warontinue to see the oil as collating. The uae promising more supply. This as opec expects there will be no growth in Global Oil Demand this year. This is bloomberg. Shery investors are watching closely for policy responses from around the world. Get used tost says the volatility until the virus is under control. The chief investment strategist frank uma, a division from p jim med. To put a perfect time tosion put attention diversification is key when it comes to Investment Strategies basically . Today, the treasury market sold off as stocks sold off. Inr the past month or so this tremendous volatility, if you held a ballast portfolio with stocks as well as treasury bonds, you have done ok. You live to fight another day. Shery we are expecting President Trump to speak in less than two hours. What sort of things does the market need to hear to find the floor to the plunge we have seen today . I think we need to take stronger steps on the health front as well as the fiscal policy front. Administrations instincts have been to downplay it a little bit so as not to cause panic. I think the market realizes this is a serious problem. Greater efforts coming from the federal government whether it is increased testing, maybe even restrictions on large gatherings, i think if you look at Lessons Learned so far, acting quicker and harder and tougher is better than acting more slowly. You have to go through the things italy is going through. A stronger response now on the health side and fiscal side will be welcomed. Haidi we are starting to see italy being forced to deciding to take the china style, more drastic measures. Do you think if those measures were implemented in the u. S. , even if that means detriment to the economy in terms of economic activity, is that something investors would welcome as a sign of confidence the administration is taking control . I do think the markets would welcome that. They might have not felt that a few weeks ago, but stronger action would be positive for the markets. You are seeing that come out of the private sector. The ncaas action today. Many companies have banned travel or conferences. There is already action being taken. A Stronger Leadership from the federal level would be welcomed as opposed to panic in the markets. Haidi i want to throw up a chart taking look at the dow. Fast and furious toward a bear market. There is been so much volatility. Volatility here to stay is probably the easiest call. We know that there markets produce some phenomenal rallies. If you were to be opportunistic, what would you be looking . Of the things that have not been working before this might work well if we start to get a floor into the market thed i am not into market. I am not expecting that to happen anytime soon. There is some real value being created in the marketplace. Value stocks have been out of favor for a long time. You might start to see them get so cheap they represent good opportunity. When we do find a way of establishing a floor, which will happen when we get a stronger policy response, there is some good value created. Even though the next few quarters are going to be tough, you may find it given opportunity to precipitate at the market at an attractive level. Haidi thank you for joining us. Daybreak to come on australia. This is bloomberg. Haidi this is Bloomberg Technology global link. Emily chang in san francisco. Lets get you a look at the top global tech stories of the day. Emily apple is closing all 17 of the Retail Stores in italy until further notice that looks to limit the spread of the coronavirus. Alle had previously closed 42 stores in china on the crisis was at its worst. Apples decision came shortly before todays announcement by the italian Prime Minister to close all shops apart from Grocery Stores and pharmacies. Uber and left tumbled in new york as investors worried the coronavirus might make people stay at home. Chain shares 12 under more pressure after the World Health Organization named the virus a pandemic. Tesla has passed boeing as the most valuable Industrial Company in the United States was almost 200 billion a year ago. The coronavirus triggered goings triggered boeings plunge. More than 10 billion below teslas value. The personal fortune has risen 27 . Those are the top tech stories we are watching. From representatives google, facebook and twitter were among those who joined a teleconference with white house officials to discuss combating online misinformation. For more details, lets cross to our reporter who joins us from washington. Did anything concrete come out of this . This is just the beginning of the conversation. The main goal was to foster more collaboration between the white house and federal agencies and these Major Tech Companies as they look to fight misinformation about the virus. Google has made some unprecedented moves this week to impact the rankings on its website and prioritize Mainstream Media stories about the coronavirus. Is there any indication or any pressure from washington to take a more active role in that kind of page ranking Going Forward . There has been pressure for a long time on all the Companies Including google about citing misinformation. Google has shied away from trying to be an arbiter of truth. This was a significant development. It is prioritizing content on the virus from mainstream news organizations over the content from more dubious sources. Other companies are jumping in as well and enacting their own policies to combat misinformation. Shery have we seen any coordinated effort to manipulate information . I think the jury is still out. We are seeing companies that are flanking misinformation. Twitter is alerting, sending people to the cdcs website when they are searching for information about the virus. Facebook is alerting people when they do come across content that is misinformed that this information or this post has been fact checked by outside fact checkers. Enact seeing companies more policies like they have taken that misinformation around the election and the u. S. Census. Are these tools they have been developing over the last two years going to be enough to stem the tide of misinformation about this issue . Shery naomi in washington. Thank you for that with the latest on tech executives efforts to control information online. I didnt trump signing an order on the general use of facemask. The white house says the president has signed a memorandum to make facemask available to all Health Care Workers around the United States. Plenty more to come. This is bloomberg. Haidi the market open as just about 30 minutes away. And looks like asian markets are bracing for mower pain going into the start of the session. Sidney futures off by three and a half percent. We had a decline of 3. 6 percent for trading in australia. Dellajor headline, the falling into bear territory. 19 of its february highs, putting an end to the longest but will run into american equity history. Hear thisting to morning from President Trump. We are waiting for details on the australian stimulus package. We are waiting to hear from europe on the ecb. It does look like look really ugly out there. Even though you have all these markets tumbling into bear territory, it is difficult at this date to see exactly what will stop this. We have seen Interest Rate cuts from the fed, from the reserve bank of australia. We are waiting for the ecb. One issue is there is not much clarity around the stimulus package. The argument has been that Interest Rates are not enough given the uncertainty around the impact of this virus. Investors are also scrambling to find out details of the u. S. Packages. That is not something that is instilling confidence in investors. Overnight, you also had bond selloff, which is indicating investors are racing to raise cash. There is a lot of uncertainty. It will take some time for investors to digest whether the stimulus packages are enough and what the details are. That,we get any of sentiment remains pretty ugly. It is hard to call a bottom for these equity markets. Shery we have breaking news at the moment. We are hearing from u. K. Officials that ministers will discuss on thursday a move to a delay phase of how they are handling the coronaVirus Outbreak. They are likely to move to the delay phase. This means moving away from trying to contain the outbreak. They are going to focus their efforts on trying to slow down the spread that could potentially involve School Closures and stop in largescale gatherings. This as we saw the cases jump by over 20 . Within 450 cases already in the u. K. We saw the bank of england cut rates. We also had a 39 billion stimulus package in the u. K. Trying to contain the fallout of this outbreak. Going back to you, all of the uncertainty not surprising we have seen a move toward havens. Japanese yen benefiting. That is right. Touched the strongest since october 2016. Of course, that has raised the prospect the bank of japan my interbeing. The bank of japan would like to see a weaker currency. To 100rency will rally in the next three months. Believebecause analysts the boj is powerless to stand in its way amid the safe haven buying in the middle of the Virus Outbreak. Attached ¥119 earlier. Next three months, there is a view it is unstoppable and that it will go toward ¥100. Haidi you can check out some of the gtv charts in our gtv library. It is on the bloomberg terminal. We are waiting for stimulus measures to be announced in australia. Prime minister Scott Morrison will be deal will be giving the details of the plan. Paul allen is here with what we know so far. I am wondering how much shock and awe we will get. Paul a lot of that could be praised and a lot of what happens in aussie markets is determined i what happens in u. S. Markets. The government does have to act. It is quite significant. The Prime Minister singh this is going to account for 1 of australian gdp. The treasury are putting a park number of 18 billion on it. The main thrust of it is going to to businessesnts with revenue under 50 million. The Prime Minister signaled there could be support for casual workers and cash pay ments. Yesterday. L read expectations around house prices are easing. Consumer confidence worst since 20 14. Seeing a wonder we are growing sense australia may be facing its first recession in about 30 years. Can it be avoided . Paul the treasurer has been working very hard on avoiding saying the word recession. He says the package does offer the best shot of maintaining growth. S p not so sure. Rating. Eping the aaa Bloomberg Economics is forecasting australias first recession in 30 years. The reserve bank is doing it part. We are likely to see the cash rate at a quarter of 1 by the time april rolls around. Droppingtant governor a few hands on what unconventional policy might look like. He said you should think of this in a price sense rather than a quantity cents. Sense. Tity house prices could be next. They generally lag these two by four months. Shery thank you very much. We have an interview with the australian finance minister at 10 45 a. M. In hong kong. 1 45 p. M. In sydney. The cabinet calling for further production. Lets get more from our china correspondent. This came from the state council. What other measures did they discuss . Selina the state Council Meeting had signaled this ratio cut. Are followed calls by actions from the central bank a few days later. This would not come as too much of a surprise. Bloomberg economics had forecast weeks ago the pboc could signal a basis point reduction. This is part of a string of measures the government has ,aken to boost the economy especially focused on the Smaller Companies that have been hit hard by the outbreak and have had a hard time restarting operations. To review the measures on the monetary side, the pboc has cut the one year prime rate. Bloomberg economics is expecting another 30 basis point cut. On the fiscal side, there could be more Infrastructure Spending and targeted support for the most affected areas and sectors. The government could also widen gdp to 3 of 2. 8 of for 2020, which would be the widest ever. This is still pretty measured stimulus. We have not seen any evidence of talks on the scale that beijing put together in response to the 2008 crisis, which signaled 12 of the size of the economy. Some breaking news crossing the bloomberg on expectations as to what President Trump may address when he speaks in two and a half hours. President trump is expected to take a series of executive actions to deliver economic relief. These are looking like they could include paid sick leave for workers as well as the extension of tax filing deadlines. Details couldese change before the president addresses the nation at 9 00 p. M. To providegning them relief to those caring for someone with the virus. Treasury secretary Steven Mnuchin says he supports extending the tax filing deadline. Saying that could free up 200 billion dollars of liquidity into the economy. We will bring the latest as the details come to us. In the meantime in a different phase, china is slowly firing up its factories and businesses. This sense of a new normalization. There is a challenge cannot directly control. In terms of the global spread and what we have seen in terms of imported cases back into china and the diminishing of demand for chinese output, how does that play into the economic recovery aspects . Chinas manufacturers are being hit on all fronts as they start to get back up and online. They face a second blow. As the disease is spreading around the world, they have to deal with the potential collapse in the economies of the countries that are there customers. Electronic components the car wheels. Said that even though they have resumed production, they face canceled orders and few opportunities for new customers. This could be another blow to chinese exporters who have been hit hard. I do also want to point out that on the bright side, the data that economists are tracking do seem to line up with the Government Data that shows that factories are getting back up and running. Bloomberg economics estimating that as of last week, the economy was operating at 80 capacity. In terms of the migrants left stranded, the government said about 78 million have returned to work, which is 60 of those who went home for the holiday. A lot of those workers may still be in quarantine. Factories back up and running. On the downside, they face external demand issues. Shery lets get the first word news. Coronavirus is officially with themed a pandemic World Health Organization calling on governments to step up efforts to contain it. The number of worldwide cases has topped 120 thousand with deaths above 4300. Definition ofrict pandemic and the who had avoided using the term. It says government must ask if they are doing enough. Before seen ar pandemic that can be controlled at the same time. The who has been in full response mode since we were notified of the first cases. We have called every day for countries to take urgent and aggressive action. We have rung the alarm bell loud and clear. Italy as the hardest hit nation outside china. The government is taking tougher steps to try to contain the virus. It is shutting down all manufacturing and all commercial businesses except for supermarkets and pharmacies with the whole country remaining in lockdown. They have sent home all Public Officials who do not have emergency roles in the crisis. Organizers of the Tokyo Olympics have moved quickly to distance themselves from comments the games may be postponed. The body that oversees the events says the olympics are being held and are on schedule. He and the president of tokyo 2020 admit the final decision rests with the ioc. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Next, travel up curve supply chain. The trend toward deglobalization amid the spread of the coronavirus. This is bloomberg. Shery im shery ahn in new york. Haidi im howdy stroudwatts in sydney. On u. S. China trade war is hold. There remains a chilly atmosphere in relations between the two sides. Republicans are highlighting the outbreaks foreign origin. On tuesday, President Trump angered beijing by a retreating a supporter who called it the china virus. You have seen it sometimes, the china virus. It is perhaps not surprising this is the rhetoric think taken up certain members of the Political Class in the u. S. How does this play into the relationship given have had the phase one trade deal . There is blame on both sides. Administration and administration to highlight the origins. If you look at cheney state media, they are criticizing countries like the United States for not taking the extreme measures china has taken. That has taken resentment in washington. You cannot take geopolitics away. Both sides are searching for the best attack. Haidi it has been fascinating seeing the shift in the tone when it comes to state media. They have skipped over the fact there was a delay and cover at least at provincial levels at the beginning. Editorials see these that are trying to shift away from the idea that is a made in china virus. There is the criticism that we did our best to give you the window for containment. You wasted that opportunity. There is a battle of two narratives occurring. From the United States and other countries, they want to highlight the failure of government in china to prevent the virus from spreading. From the chinese side, they do not like that. They are trying to propel their narrative. Efficient,are more clinical, decisive and determined than any other country. That plays into the rivalry between the United States and china. They are the two competing narratives. Shery we had President Trump repeatedly praising president xi jinpings response. My question would be once this with, willl as done the u. S. China relationship, out stronger or more strained . I think it will become more strained because you do have President Trump praising xi have senior you members of the Trump Administration, the secretary of defenseecretary of continuing to emphasize the governments failure of china and why china is not fit for Global Leadership kid that is quite Global Leadership. That is quite entrenched in the United States. Even if there is a democrat in power in 2020, that attack against china will remain. Shery we are seeing the rhetoric heating up with democrats criticizing President Trump handling the outbreak. How will the upcoming residential election and the heated rhetoric affect u. S. China relations going into november . I think we can separate what the democrats and republicans attack eachill other for and where china plays in the election. China is still seen as the comprehensive challenge ted the United States to the night states. The china factor will become more fraught. The republicans and democrats will attack each other on the degree of responsiveness to the virus. Haidi how vulnerable is the leadership in china . Not from domestic insurgency, which has been speculated about since this started, but how vulnerable is china in its dominance on the world stage after this . Within china, xi jinping is vulnerable. I am not suggesting he is about to beat haidi there is speculation about the reason he did not want to go to wuhan was because he did not want to leave beijing. I suspect he did not want to get sick. That plays quite badly for him. It is bad for xi jinping because he has made a virtue of centralizing power around himself. Officials below him blame the centralization for the information not getting out in the first place. All throughtion is china. It is a vulnerable time for xi jinping. China itself it is potentially fraught because chinas model was based on we can build a thousand that hospital in 10 days. Dennis doubt thousand bed hospital in 10 days. Government steps are clear. That is a conversation china does not want. Shery thank you very much for joining us. Hudson Institute Senior fellow coming to us from sydney. We will have special coverage from President Trumps address on the outbreak at 9 00 a. M. Hong kong time. This is bloomberg. Shery a quick check of the latest headlines. Adidas says its profits for the First Quarter will be cut by the coronavirus. Revenue in china is expected to be sliced in half. Adidas would not give an estimate for its full year outlook but says business is slowing in japan and south korea. Shery delta is cutting systemwide capacity by 15 as it looks to mitigate the impact of the coronavirus. The cuts include 10 to 15 reductions in the mystic flights while transit venting trips will be reduced along with 60 of flights across the pacific. Delta has suspended trips to china. Haidi interglobal aviation, which operates indias biggest airline, is the latest carrier came daily ning a warning. Daily bookings have declined 15 to 20 as the kona virus starts to take a hold on the subcontinent. India has reported 60 cases in the past few days. That number is expected to rise quickly. Shery lets turn to sophie. Sophie futures are hinting at losses of more than 3 when trading kicks off. Fell into a bear market on wednesday after closing in that space just 14 days after the peak reached back on february 20. Thanks drag the most on the index along with energy and tech as we saw volatility jumping for the index. There is no sign of pain abating. Cutting itsi targets for the asx 200 from 7000 points on anticipated earnings. This after a weak first half performance. With that elevated to 8 in 2021. There is no place to hide when it comes to bonds given concerns mounting over the Global Growth rest. A 10 year yield climbing 10 basis points this morning. Halting the midweek value we saw in aussie bonds. Haidi Sophie Cameron with a look ahead to the start of trading in sydney. We will be speaking with the cohead of asiapacific fixed income. We will talk about the global stimulus response to to the coronaVirus Outbreak. That is daybreak australian this morning. All of the action on daybreak asia is next. At lows last seen january 20 19. Despite expectations of a stimulus package in the ballpark of 18 million aussie dollars expected from the government later on. That market is firmly in a bear market. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Im haidi stroudwatts in sydney where markets have come online. Shery japan and south korea not open in an hour. Im shery ahn in new york. Sophie im Sophie Kamaruddin in hong kong. Welcome to daybreak asia. Haidi our top stories, the coronaVirus Outbreak is officially a pandemic. Infections have topped 120,000 with at least 4300 people dead. The fear index is at a record. The ecb says governments must do more. She warns of an economic damaging as the financial crisis. Shery italy is taking drastic steps to contain the worse infection rate outside china. All businesses other than supermarkets and pharmacies are ordered to close. Markets have opened for trade. Lets turn to sophie for what to watch. Sophie sidney stocks opening in the red, extending into the bear market territory. Seeing more pain cutting its year and asked to 6100 on expected earnings pressure. Downside moves for kiwi stocks. Extending the decline from its february peak by over 12 with physical response anticipated from the new zealand government, along with other policymakers around the world. The devil will be in the details when it comes to those plans from australia as well as the u. S. Sentiment remain vulnerable across the board. Lets switch to check in on what futures. On with u. S. We are seeing a slight move higher when it comes to emu needs for the s p, dow and nasdaq. This after we saw the dow average fall into bear market over the night. S p 500, teetering on that edge. Checking in on treasury futures, we are seeing them take lower. Flipping the board, this after we saw dislocation and treasury markets overnight. Its all the fed boost its repo operations. We are seeing moves and aussie bonds. The 10 year yield adding 10 basis points. They end just holding steady, remaining below 105. It has moved toward 100. It is looking inevitable, perhaps. A check on oil, we do have crude adding 1. 25 this morning. This with a lot of focus on the supply and demand environment for. The oil market. Haidi Sophie Kamaruddin in hong kong. Lets bring in our editor. Pretty ugly day ahead when it comes to stocks in asia and im really curious as to whether the stimulus is being enough, will it be enough for markets to find a floor at this point . Right. That is a good question. One of the issues you have with stimulus is does it actually affect the things it needs to affect . Because it is hard to figure out in advance exactly where the problems will be. We will see if things match up. Australia is doing it. Morrison will formally announce the program today. We will see if things work. All eyes will also be on donald trump and what he ends up saying they will do for stimulus in the u. S. Shery our hopes for a vshape recovery and equities dead for now . What are strategists saying about u. S. Stocks . Joanna Goldman Sachs came out in the u. S. Session and said we are seeing a negative time for u. S. Stocks. They think things could go down from here. They ended up saying that probably the back half of the year, we will see a rally to 3200. They definitely are pessimistic in the shortterm. A lot of people are saying it may be a ushaped recovery where you may have more downside, but not a lot of upward momentum until you see an end to this. Now becoming even greater in italy and in the u. S. , you have a lot of uncertainty still. It is hard to know when we will be able to see that clarity that markets will look for. But stocks are coming out and saying softbank is coming out and saying we think the back half of the year will see a decent recovery. People are holding out hope for the back half of the year. In the next few months, seeing a lot of that uncertainty and not really a lot of hope for the market upside. Shery what are some of the key levels we should be watching for on the s p 500 . Joanna one that is interesting is the 200 week moving average edges around 2630, 2640, that is a level that has really held for quite a long time as the floor for the market. To watchefinitely one if there is further downside. But definitely, the moves are so of day to day that a lot people are just getting out of the way at this point and trying to wait it out. Thank you. Joanna oz think are of Bloomberg Cross assets team editor, singapore. Out of. President trumps do to address the nation in a few hours time in response to the coronavirus. The World Health Organization top official declared the virus now as an pandemic saying the outbreak has taken a drastic turn. Lets bring in Greg Sullivan in d. C. What are we expecting from trumps address . There has been a lot of conflicting expectations, fiscal stimulus as possible, but then he said maybe they will not have to do anything at all. Thats right. What we are expecting, at least watching for, is for him to put forth a few proposals to address the virus and it spread as well as the economic turmoil stemming from the virus. Theres the question of stimulus you brought up earlier. We heard trump say stimulus wouldnt be needed if the virus goes away quick enough. Several people have called for stimulus. We know trump has economic proposals he is eyeing, such as a payroll tax or hourly paid sick leave. Another thing we will watch will watch for will be he met with wall street executives. Turmoil. Day of we will be watching for trump to put forward some solid actions he plans to take to show he is ready to address this. Shery this Virus Outbreak has been highlighting the divide between american workers, those that actually get paid sick leave and those who dont. What do we know about any plans for that leave and what about we heard something about payroll tax cuts potentially coming . Greg thats right. We know President Trump is likely to do an executive order related to paid sick leave. The virus is very disruptive for hourly workers. If they are suddenly quarantined and unable to work or caring for someone at home who was sick virus, we know trump wants to be able to provide that paid sick leave to those workers to try to stem the economic fallout. We know the Trump Administration is eyeing tax deadline extensions for Small Businesses and individuals. The details on those proposals remain unclear and could change before the address tonight. It is something to watch. On the payroll front, we heard from a senior Economic Advisor saying that trump wants to cut that to zero for a temporary time which would be costly. The trump but trump things it help stimulate the economy. Haidi we heard the president is weighing on travel out of europe and into europe. What are we hearing as the latest on that . Greg thats correct. Trump does appear to be eyeing travel restrictions for travel, nonessential, from europe to the u. S. It could include Business Travel in that. We have heard from people who are familiar with the situation that it is being deliberated. We know cases on both sides of the continents have increased. It would be quite disruptive. President trump, of course, and Vice President mike pence have implemented early shoe show that they have taken initiative. It will be something to watch for in the address and beyond. Shery Greg Sullivan in d. C. , thank you for that. We will have coverage of President Trumps address on the Virus Outbreak at 9 00 a. M. Hong kong site hong kong time. From new york, that is not 00 p. M. Italy taking more drastic measures to limit the spread of the virus. The Prime Minister has ordered the closure of all shops except groceries and pharmacies. John authers is our senior editor. Thank you for coming in. Does that basically mean bringing the whole economy to a standstill . They have asked about they or sobout 20 billion in stimulus measure. Will that be enough . John john probably not. Enough to do what is the question. The damages are a given. Fromlainly, we heard joanna, saying they expected earnings to rebound at the end of the year after the slowdown in activity. That activity is not going to be differed. It is going to go away. Italians who would normally go to their restaurant three times in a week, have canceled it altogether, will not will now go to a restaurant six times a week once the curfew is lifted, for example. The economic effects are still imponderable. It is hard to imagine what the italians are doing, if it will be enough to ever to significant economic damage. Haidi it is the same argument that some people have said for china. That if you cant go to a casino or chinese new year, that they will go more later on this year. To me, that does not add up to a recovery. In terms of what the what Christine Lagarde is saying, she is warning of a massive shock that good the Global Financial crisis. What is lagarde saying that european leaders need to do . John well, she needs to lead what they do about the Banking System in the euro zone, which is extremely weak. Thejust need to look at prices that people have prepared to pay for european banking stocks to see that there is still no significant face in the Balance Sheet of the banking sector. And they are now apparently in great difficulties. That is why i think a lot of emphasis is now going to be on lagarde in the ecb, and specifically on what they can do in a targeted credential way for the banks. Beyond that, what the eu is going to want to try to do is something similar to what the british have just done. Not wanting to sound as though i am some great proponent of brexit, because this is something the british could have done even when they were within the european union, but the british have been able to announce some very, very big fiscal stimulus today at the same time as a 50 faith 50 basis point rate cut by the bank of england between meetings. That is a very big and concerted affect to get something done. It is in the very specific conditions that britain has a government with a very comfortable majority and almost five years of its mandate to run, which basically means it has freedom to act. It can do what it wants to do. That isnt true of more or less any other country in europe and certainly not the case of the u. S. In an election year. Shery john authors, thank you so much for that, we will have coverage of the ecb policy decision in the News Conference as policymakers announced that. You do not want to miss that. Lets get to first word news with ritika gupta. Ritika thank you. Organizers of the Tokyo Olympics have moved quickly to distance themselves from comments that the games may be postponed because of the virus. The body overseeing the event says the olympics are going ahead as planned and are on schedule. Japans olympic minister says a postponement is inconceivable. Although he and the president of tokyo 2020 admit the final decision rests with the ioc. The house of representatives has voted to restrict President Trumps ability to take military action against iran. A bipartisan bill bars u. S. Troops from launching against the Islamic Republic without authorization from congress. And it comes after an airstrike killed a top iranian gent general in january. The president says he will use his power a veto if the measure is passed. U. S. And canadian jets intercepted two russian aircrafts near the alaska coastline. Never but they did come within 80 kilometers of the u. S. Territory. The Royal Air Force scrambled fighters earlier this year when russia claimed that they were close to the u. K. Close coast. Harvey weinstein has been jailed for 23 years for Sexual Assault after decades of abusing his power to target aspiring actresses. He gave a rambling speech in the Manhattan Court before the sentence was handled down handed down comparing it to the anticommunist drive of the makowski era. He faces several Assault Charges in los angeles. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am ritika gupta. This is bloomberg. Haidi thank you. Still ahead, putting Central Banks of the virus may not be that effective. Curry Goldman Sachs jeff says oil has more Downside Risk, highlights from our interview ahead. This is bloomberg. This is not a bailout. This is considering providing certain things for certain industries. Our government understands the disruptive impact the virus is happening having on businesses and workers. Activity is likely to weaken materially in the u. K. Over the coming months. Monetary policy still works. The bank will take all necessary further steps to support the u. K. Economy and financial system. We cannot do anything about what the effects are on the supply, but we can help sustain demand. Our government will be creating a billiondollar covid19 response fund. Haidi the policymakers around the world speaking about what they are planning to do to sustain their economies in the face of the coronavirus impact. Australia and the u. K. Are set to roll out massive stimulus plans to confront the coronavirus. The effectiveness of the plans will be a key factor in the near Term Economic impact of the virus. Jenny zeng joins us now out of hong kong. Great to have you. We are waiting to hear from australias Prime Minister in about 20, 15 minutes from now, to give us details of the stimulus package expected in this part of the world. We are also hearing much of the same elsewhere in europe. I want to throw a chart that shows expectations when it comes to what the banks and the fatter doing. When it comes to the march 18 meeting, we are expecting at least a 50 basis point cut. I think at one point, we were looking at 75 basis points being priced in fully. Does it matter now for markets what Central Banks do . Has that been passed on to governments to be able to do the fiscal heavy lifting that we have been talking about for months now . Jenny the markets around the world are in panic mode because of the unknown and uncertainties. Two things at the moment. One of course is the spread and Economic Impact of the virus. Also as well as the outcome of the oil price between saudi a and russia. The Central Banks are apparently are at the forefront of biting the bar so far. I think as he rightfully mentioned, most Central Banks are ready to cut more aggressively. Some Central Banks like the fed may have more ammunition than others, for example, the likes of japan. The more important question is the efficiency of the rate cut . A pandemic and cutting rates will not directly ease anxiety nor will he get out people from their houses to go and do things. Nor will it make sure the supply chain is functioning. We think it is crucial to boost confidence. We think the central bank is ready to help and it has helped. But what is more important is that the Public Health policy and the fiscals policy into believing the charge here. Haidi does not it is not just physical. Yes, you can through the kitchen sink through the fiscal side. But are investors and the public more generally expecting to hear more decisive, even more drastic containmentterms of and dealing with the spread of this virus . Jenny jenny yes. The nearTerm Economic impact of the epidemic, i think that is what is on investors mind. That is contingent on the government response to the virus. We all know that the fear restrictions in the social measures and the social measures have a significant cost, like in the case of china. There is always a balance between ok, what can the government put out to control the virus . But also what is the cost of those measures . Shery in this environment, how are fundamentals looking in asian credit . Jenny asian credit, we are right now in the earnings season. I think that probably will give investors some comfort around the strong liquidity this company has, particularly in china. We are seeing in china coming year to date, the cost has come down dramatically for corporate in issuing chinese bonds. If you look at the Property Companies that have been issuing earnings, they have been very solid. And hopefully that will give people some comfort around that. Shery how selective do you have to be in your exposure to some of those industries that will take the biggest hit from this crisis . Jenny of course there are always some sectors that are harder hit than others. For example, the traveling and hospitality and the gaming. And in the portfolio, we are very underweight in the sectors and we think those revenues are lost forever and that we will not see a vshaped recovery of those sectors, even after the virus is contained. Is it too early to be opportunistic right now, given how much flux in volatility we continue to see . Thing istually, the the virus situation in china, we can see the Economic Activities that are resuming orderly. Although of course we are still on high alert of rivers spreading into china from outside china. And we see that if there is anything that that there is a fiscal stimulus that could support the recovery of the economy, and if there is any country in the world i can do this best, it should be china. There are specific sectors, we mentioned the properties and infrastructure, those will lead the recovery. And with valuations where they are, we think probably it is time to dip your toes. Haidi his duration still an effective hedge . Jenny that is a good question. Duration has been extremely highly effective for fixed income portfolios. Will that continue to be the case with the rates at the current level and priced in more than 50 basis points of cuts almost around the world . It is an uncertainty. For investors, we probably need to find other hedges. Haidi thank you so much for joining us. Jenny zeng, alliance feinstein cohead of fixed income you can get the roundup of the stories we have in todays edition of daybreak. Bloomberg subscribers can go to dayb on your terminal. Also available on the mobile in the bloomberg anywhere app. This is bloomberg. Is daybreak asia. Im haidi stroudwatts in sydney. Shery shery im shery ahn in new york. Lets get a check of the latest business flash headlines. Apple is closing all 17 of its Retail Stores in italy until further notice as it looks to limit the spread of the virus in europes epicenter. Apple had previously closed all 42 stores in china when the crisis was at its worst. Apples decision came shortly before todays announcement by the italian Prime Minister to close all shops apart from Grocery Stores and pharmacies. Tech joined a toeconference to discuss how combat online misinformation about the coronavirus. Facebook, google, twitter and others were on the call which was led by the u. S. Chief technology officer. They discussed sharing information with the government, coordinating health and Online Education with the new database on the virus. The research will be published soon. Shery the china profits for the First Quarter will be cut by half a billion dollars because coronavirus. Revenue in china is expected to be sliced in half during that period, which saw the worst of the outbreak on the mainland. They would not give an estimate for the full year outlook but says business is also slowing in japan and south korea and the impact could last for more than a year. Tumbled in and lyft new york as investors worry that coronavirus. 12 . Plunged its biggest fall. Shares were hurt after the World Health Organization officially named the virus a pandemic. It hit Business Travel around the globe enforced several companies to offer work from home plans. Shery at the next, major u. S. Firms are drawing down credit lines. Now private equity firms are asking their Portfolio Companies to do the same. More details ahead. This is bloomberg. More details ahead. 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. We will see more cases and things will get worse than they are right now. It is 10 times more lethal than the seasonal flu. The flu has a mortality of 0. 1 . This has a mortality of 10 times that. Sophie the u. S. Official on the coronavirus, and with heightened nerves over the outbreak economic fallout fear is still overtaking greed as the driver for global stocks with the indicators surpassing the lows that we saw during the Global Financial crisis. Switching out the board as we have fears growing over the Recession Risk around the world. Asian stocks are set to extend losses. 1 . Ing lower by Goldman Sachs sees more pain ahead for the topics, cutting its 12 month target to 1600 from 1700. In sydney, aussie shares under pressure, falling deeper into bear market territory, falling 2 this morning. Aussie bond yields are gaining ground, up 10 basis ahead of Prime Minister Scott Morrisons unveiling details regarding the fiscal stimulus plan. And ahead of trump revealing the specifics of u. S. Relief measures. U. S. Stock futures, we are seeing them edge higher. Jumping into the terminal, seeing stress in the u. S. Credit markets very much intensifying. If you look at the chart right now, you can see the high rate spread has widened to levels we saw in 2016. This as more companies are tapping credit lines including at boeing and health insurance. Shery we will have more on that story first soon. Lets get to ritika gupta. Ritika chinas credit growth slumped in february as the coronavirus weekend what was already a historically slow month for lending in the economy due to the Lunar New Year holiday. Aggregate financing increased by 123 billion compared to the medium bloomberg estimate of almost twice as much. The pboc says the stock of financing expanded by under 11 . January. Pace as in italy is the hardest hit nation outside china and the government is taking even more steps to contain the virus. It is shutting down all manufacturing and all commercial businesses except supermarkets and pharmacies with the whole country remaining in lockdown. Denmark has shut schools and childcare facilities and has sent more Public Officials sent home Public Officials who do not have emergency roles in crisis. The u. K. Government is expected to announce later today that it is moving away from trying to contain the coronavirus, and will focus on slowing it spread. Boris johnson may announce School Closures and a ban on largescale public gatherings. Government scientists have saying said it will be counterproductive. A global sport is being hit by the coronavirus with authorities either canceling games or ordering them to be played in empty stadiums. The nba match between the warriors and the nets will be the first in the u. S. To take place with no fans. Europeans soccer is also affected with the Italian League suspended indefinitely. Champions who have entered to say danielle regarding has tested positive for the infection. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am ritika gupta. This is bloomberg. Haidi thank you lets look at oil. We have seen volatility continue in the oil patch. Wti crude currently trading a little bit to the upside. Seven times of 1 after the continued selloff overnight. However, Goldman Sachs head of Global Commodities research has just said there is more Downside Risk ahead for oil. When they flash the price of oil over this weekend, that the likelihood that the demand for the crude is upwards of around 12. 3 Million Barrels per day, that is an extra 2. 5 Million Barrels per day during the month of april. That does not even include the increase the uae has talked about. There is going to be a lot of competition from the refiners for those spot barrels that were already on the market. If you end up backing up oil into the midcontinent of the u. S. , you can see markets like wti, midland, really disconnected the downside. We are far from being out of the woods. We think there is more substantial Downside Risk. Give us an example, one thing of the elasticities around the priced equilibrium of oil, given these multiple shocks. Give us one vignette, for example, of how russia defends itself against the saudi reaction, as they both try to move hydrocarbons to europe. About the we think magnitude of the increases, what it is going to do is it is quick to stress the system in terms of delivery, storage. ,ou are already pricing floating storage outside of the u. S. But you have not gotten to the point that the u. S. Has the potential to actually blowout the front end. I would tend to think that as you start to see this physical crude move to the market, as we get closer to the month of april, that is where you will start to create a real dislocations. That is when you expect to see markets like brent start to potentially trade below 30 a barrel. I cant really understand why there is a price war between russia and saudi arabia. Saudi arabia saying they will put 12. 4 Million Barrels from april. The uae was adnoc, saying they will add 4 million after this time. The timing could not be worse. Jeff jeff i like to say the price war, as opposed to a price war, really is a second round effect of the virus. Meaning the virus had already crippled demand, prices were off. Foreconomic justification those cats never made sense to begin with. Remember, our core thesis going back in 2014 was this idea of the new oil order. Meaning that these lowcost producers like saudi and russia no longer have market power because of shale. You look at the damage these cuts did, they cut 4. 4 Million Barrels per day, opec plus did. You know what it generated . 5. 7 Million Barrels per day. More importantly, the supply cost equity shareholders dearly. We estimated to cost them 1 trillion. This has a huge debt weight loss, it never made economic sense to. Begin with. Haidi breaking news, lets go to where Scott Morrison is speaking to the media. As we confront the challenges of the coronavirus, as it impacts the impact as he felt, not just here in australia, but around the world, jobs are so important as part of our plan to ensure australia moves through this the difficult months ahead. Yesterday, i was here with the Health Minister and we announced an outline for our plans to do it with the Health Challenges associated with dealing with the coronavirus. Some 2. 4 billion. In a series of well thought through measures dealing with everything from the needs of remote indigenous communities to popup planets and clinics and facilities that were available. It is a Health Crisis. Ad it is a Health Crisis with very significant Economic Impacts. We set this out very clearly two weeks ago when i stood here in this courtyard and said we were preparing for a pandemic. Today, the World Health Organization has made that declaration. We called that two weeks ago. In january, we called the coronavirus as an issue that needed our careful attention and ever since that time, we have been preparing and responding with the travel bans on other actions the government has taken. The fiscal stimulus that would be necessary and is necessary to deal with the economic challenges that the country will face in the months ahead has been an important part of our plan for australia to move through the challenges of the coronavirus in the months ahead. This plan is about keeping australians in jobs. This plan is about keeping a business in business particularly small and mediumsized businesses. This plan is about ensuring the australian economy bounces back stronger on the other side. And with that, the budget bounces back with it. Today, we are announcing a series of mission measures. They are designed to achieve those outcomes. They are focused on understanding that it is businesses that keep people in jobs. In those businesses will confront challenges when it comes to cash flow, and demand impacts, particularly in the shortterm that need to be addressed by this package. Im going to ask the treasury to go through the specific measures, but to say that simply that this package over the course of the budget and estimates will inject some 17. 6 to 9 billion into the australian economy in a series of measures which is designed to support tax flow and provide immediate demand stimulus to the australian economy. More specifically, both this financial year, and in the next two financial years, the gross impact of that stimulus is 22. 9 billion. That is 1. 2 of gdp. This is a significant investment. Tohave taken the decision put the stimulus in place that has the obvious impact on the budget outcome for 201920. Australians understand that. Australians know this needs to be the priority. Our government agrees with that priority and that is why we have taken the decision to put these measures in place. The measures deal with supercharging the international right off, backing Business Investment with an accelerated depreciation, which the treasurer will work through, a cash flow boost for employers. This is small and mediumsized employers and making sure that they can get grants for up to 25,000. That will support some 690,000 businesses across australia. Wage assistance for apprentices and trainers. 100 17,000 apprentices who are out there on their tools today will be getting the support of that payment to their employers to keep them in their apprenticeship. That support will run over a period. Of nine months households will receive a stimulus payment of 750 right across the full gambit of those who receive all payments. Enefit the biggest beneficiaries of that will be pensions. They comprise around half of those who will receive those payments. They also will be extended to those in tax benefits which obviously goes to those in earning households. And there will be a coronavirus regional and community fund. They are businesses across this country that will be more impacted than most. And there will be regions and communities across this country that will be more impacted than others. Those in particular in more remote areas. Those who are particularly exposed when it comes to the external sector of our economy, the tourism sector, the travel sector, parts of our export is ar, places where that predominant activity and there exposure, willt be establishing a 1 billion fund which will be led by the minister for trade tourism and investment. That will include things like waving marine park fees and National Park fees and other places. These will be targeted measures and i will be looking forward to discussing that fund. With the premiers and chief ministers when we meet tomorrow. Everyone has a role to play here to get us through this. I particularly want to acknowledge the way big business has responded over the course of this week. You have heard me refer to what the banks did to pass through the rate cut. Yesterday, i was advised that they will be supporting their employees. Should they be in a position where they are affected by coronavirus or self quarantine. Already under our welfare system, a casual employer who would be impacted by the coronavirus and for medical reasons who would need to selfisolate, or contracted the coronavirus and would not be able to work, they can access what is currently called the sickness payment. That payment is going through a change of name, but it is the same payment. What we will be doing is waiving the waiting period for people to access what is currently called the sickness payment. It will be called the job safety payment. Casual employees that would not be able to go to work because they have to selfisolate or have the virus, they would be able to access that payment, normal rules apply to those as they do to these payments, that the waiting time will be waived to enable them to access the payment. And that will provide the support. Many other countries dont have that in the system. The u. K. Has made announcements on that. We already have a system that deals with that. And we are going to make sure that the payment is more readily able to be supported. The treasurer and i have indicated that there has been changes to that is not part of the stimulus package. That is a response to the early decision by the reserve bank. That will also come at a welcome time for the arrangements we have put in place today. It is a comp or hints of package. It is one that we believe is well targeted. Importantly, these measures that do not extend the on the 30th of june next year, and that means that it gives the budget and the economy the opportunity on the other to ensure that we can bounce back strongly. How long the virus runs for . Stills a matter that is scientists and Health Professionals are advising us on. It does have a finite life. There is another side to going through this issue. And it will be stronger on the other side. The Global Economy will recover on the other side. In the treasurer and i and the government want to be in the best possible position for our businesses, holding onto their employees, ensuring they are continuing to train up, ensuring they are maintaining their investment plans. On the others, they are going to do well. We are going to do everything we can to make sure they can bounce back strongly. Thank you, Prime Minister. This is a substantial package in response to a significant economic challenge. The packages is designed to support confidence, to encourage investment, and to keep australians in their jobs. The package is with 17. 6 billion. 11 billion of which will go out 30. Door before june as the Prime Minister said, this is on top of the recent Health Package which we announced of 2. 4 billion in measures. Importantly, three out of every four dollars spent will go to backing business and keeping job. Alians in their three dollars out of four dollars being spent is going to backing business and keeping australians in jobs. There are six key measures. Each measure is temporary. Each measure is targeted. And each measure is proportionate to the challenge that we face. There are two measures that are directly supporting investment. Both measures apply from today and 99 of Australian Businesses. Namely those with a turnover of million. 0 the first is an increase in the instant asset right off from 30,000 to 150,000. Any such person purchase from now until the 30th of june, including a track, can be written off immediately. Accelerateds a 50 depreciation deduction over and above what businesses can already deduct in the first year and is available for 15 months to the 30th of june, 2020 one. These two measures cost 3. 5 million and is designed to keep Australian Business investing as well as rewarding them for investing more. We want to keep Australian Businesses investing in we want to award businesses for investing even more. There are two measures that are designed to boost cash flow, too small and mediumsized employers. The first is a payment of up to 25,000 haidi you are listening and watching the australian treasurer speaking through the details of the 17. 6 billion coronavirus battle plan. The fiscal package that we also heard about from the Prime Minister, Scott Morrison. Lets get to more analysis on what we have learned. Paul i thought Scott Morrisons first words was jobs. That was his first sentence. Is business that keeps people in jobs. We are the treasurer saying that 11 billion of the package will be rolled out before june 30. The total package, 17. 6 billion. The six measures targeted to investments. It will be instant asset write offs for a number of business. Businesses. He wants to award Australian Companies to continue investing. These were really the themes that are emerging from this. Shery how soon could we see these measures implemented and how important will that be, given all of the Economic Data now being under pressure in australia . Paul paul the intention is to get this through parliament as quickly as possible. The deadline really is to ensure it is in place before the next quarter begins. April through june quarter because obviously, the definition of a recession is two consecutive quarters of contraction. And of government is very keen to avoid that. The treasurer, you can see him there, has gone to Great Lengths to avoid even uttering the word recession. He was saying earlier that this package is really the best shot australia has of maintaining growth. The intention is to get this package through parliament as quickly as possible and it is very difficult to imagine them encountering too much opposition from the labour party when they try to do that. Haidi this is probably just the first shot, the more modest package as the government continues to wait and see on what the impact of the virus is. Paul allen with the details. We will get more with our interview with the australian finance minister. They will be joining us later on on Bloomberg Markets. You can tune in at a quarter to 11 00 in hong kong. 1 45 if you are watching in sydney. Shery shery this as we continue to see markets under pressure with asian stocks falling to the lowest level in about two months. We are awaiting the japan and south korea open. As we get the latest on the stimulus measures out of falling almost 3 . Right now in the red, led lower by materials and health care. This as we continue to wait for those ppi Inflation Numbers out of japan. These are the Producer Price Inflation Numbers. Thanare a little later usual. But the expectation was for a slowdown given the economic challenges that its partner, china, is facing. In the meantime, lets talk about the japanese economy. The four months to go until opening ceremony, japan insisting the Olympic Games are going ahead in the face of the spreading coronavirus. Lets get more on this from Senior Research fellow at the japan center for economic research. Great to have you with us. I do wonder, at this point, given how much the virus has spread already around the world, what is the obsession with trying to hold the olympics in july . Wouldnt it make sense to postpone it . Well, there are Great Expectations about the olympics and the Paralympic Games in tokyo. Think that the japanese people would like to have it as planned. In view of the situation that we are witnessing and also the situation, not only in japan, but globally, we have to think carefully with whether we should keep on doing as planned. A second. Y hold on the Producer Price Inflation Numbers finally coming out. They are a little late. The ppi year on year growing 0. 8 , which is missing expectations of an acceleration of more than 1 . Also decelerating from the previous month of january. When it comes to the monthtomonth numbers, we are seeing deflation a contract and 0. 4 . This would be the first contraction in the past six months for the month of february. It is also a deceleration that is bigger than expected. We have seen pressure on Producer Price inflation because of the drop in oil and commodity prices. We have seen a boost because of a weaker yen supporting the corporate by price gauge. Japanese strengthening and headed toward the 100 level. Lets get back to you and talk a little bit more about the japanese economy. All of these economic numbers being affected by what is what it by what is happening with the coronaVirus Outbreak in china and spreading into japan. How is this affecting the economy in japan and what industries are being the most affected . Is hurting thes at the japanese economy very much. The Manufacturing Sector has seen a shortage of supplies coming from china. There are manufacturers in the industry that have to cut down the production. On the other hand, this other sector, because of the sharp decline in demand for their because of a significant drop in peoples activities, they are losing their business very quickly. In a nutshell, i think the japanese economy is heading toward a recession. It has been slowing down last year because of the negative impact coming from the u. S. China trade war. And also because of the negative impact coming from the consumption tax rate that took place in october last year. Hasink this coronavirus given the final blow to the japanese economy. Of a we know that part very big part of the war against deflation rising out of inflation is public sentiment. Really animal spirit. That was such a big battle for the bank of japan. How much of a setback does the coronavirus have in this respect, and i suppose in terms of sentiment, is a better for the government to act with certainty and cancel the big events ahead of time so markets and investors and the public are cooperating with some degree of knowing what is going on . Or is it better to carrying on with confidence that things will get better . The japanese economy was doing relatively well. The labor market was very tight. So we were just waiting for the wages to come up in order to achieve the inflation target. Im afraid this incident has provided a very big negative impact on the situation. The government and the central being,ould, for the time do whatever it can to prevent widespread of the coronavirus. Determination to supporting its economy from going getting worse. I think the government and the central bank is ready to take active measures. Thethe difficulty is that coronavirus shock is a shock on the supply chat side as well as the demandside. It is not easy to deal with both of those. Also, it is difficult for the government in the bank of japan further policye maneuvers is very limited. They have to be decisive and determined. But it is very difficult for them to come up with the appropriate measure. See the bestll outcome of what. They can do. Haidi what is the impact of the labor market given the aging demographics for japan . Jun ok, well, the economy is doing very good. We have very Strong Demand for workers. Time, there is a steep price in the participation rate. Even though the demographics the population was declining, there was an increase in working the labor force. As a result, the labor market was very tight. Im afraid if the slowdown of the japanese economy is going to ofe place, the tightening the labor market is going to recede. Shery jun saito, thank you very much for your insights. Coming up in the next hour of daybreak asia. We will talk to market analyst Margaret Yang about how investors are reacting to the Virus Outbreak. The market open is next. This is bloomberg. Morning. Very good asias major markets are just opening from trade. From good evening bloombergs headquarters in new york. Im shery ahn. Sophie im Sophie Kamaruddin and hong kong. Welcome to daybreak asia. Haidi the coronaVirus Outbreak is now officially at pandemic. Infections have top 120,000 with at least what he 300 people dead. The fear index is out of record. The ecb says government must do more. Politicians say they are listening. Australia announces another 18 billion dollar package. President trump will outline his plan and the next hour. Haidi lets get straight to Market Action with sophie in hong kong. Indexes losing nearly 2 in japan this morning. The yen just holding below 105, again volatility jumping, given options are pricing a move toward 100 within three months. Open andck in on the south korea. Because cosby under pressure, trading at a 2016 low. The Central Bank Says the Rate Decision is not on the schedule and when it comes to stocks in new zealand, kiwi shares are under we digest details regarding australias fiscal stimulus plan, which the Prime Minister says is designed to avoid a fiscal hangover. We are seeing aussie bonds on the move. 10year yields rising by as much as 10 basis points, and you have the u. S. 10year holding about 80 bits this morning. The fed boosted its repo operation plan overnight and treasury futures moving to the downside as well. Jgbs chips slightly under pressure this morning. I want to show you what is going on with earnings revisions. We are seeing some Downside Momentum here and some strategists are dialing back there risk appetite. Goldman, for example, expecting japanese fiscal earnings to fall. Thank you so much for that. Guest,ring in our next joining us from singapore. We continue to see more measures across the country. We have seen the 2 billion fiscal measure from us really are. We have seen japan as well. We have seen the u. K. , 39 billion. We also have the boe rate cuts. Why are markets still falling . Why isnt all of this inspiring some confidence into the markets . I think all these fiscal and monetary measures are probably going to help with the economy, but right now, i just cannot see the equities market in risk assets because we are quickly getting into perhaps the worst global health, Public Health crisis, and right now, not much control has been taken by some key economies to control disparate the spread of the virus. I think right now what is really is traffic bands, perhaps close down some schools in order to contain the spread of the virus. Of course, monetary and fiscal measures are indeed needed to secure the employment market to prevent recession from happening , but there are definitely more urgent things that need to be carried out now. Im going to assume some of the mismatch youre talking about includes the United States. Can President Trump say anything tonight that would comb markets down . Yeah, well, President Trump has mentioned the coronavirus is Something Like a bad flu, but were being told it might be worse than a bad flu. They may have overlooked the severity of the crisis. Look at what happened to china two months ago and what is happening to italy and korea. This is definitely much worse than just a normal flu and more actions need to be taken to control the spread of the virus in the Worlds Largest economy that is the United States. Think of theu narrative that with everything going on and other countries seemingly in control of the trajectory of the virus spread that chinese assets are going to be a safe haven . That is a very interesting scenario. Chinese equities have been underperforming global peers for many years. I think since 2007. Outperformed. As this is fundamentally because the virus is largely under control in china. We are seeing the number of new infections below 50 in the last few days, and the city of wuhan is the epicenter of the virus, signaling china has achieved a shortterm milestone in combating the virus, but it took china a lot of economic pain to eventually contain the virus because they shut down a lot of factories and locked down , soentire Hubei Province people were in a conflict locked on for more than two months, and there are huge disruptions in the supply chain. Places, factory capacity has not fully been restored, but i think economies need to undergo this shortterm pain before they can contain the spread of the virus and therefore stabilize the longTerm Economic outlook. Very quickly, markets from pricing in had cut the fed, but does it matter at this being a clumsy tool to deal with whatever outbreak and whatever consequences the virus has for the Global Economy . The futures market has been pricing in a cut to be carried out on the march 18 meeting. I think it is perhaps reasonable, but it is perhaps not going to help lift confidence because again, this andismatch Monetary Policy, it is like chicken and duct talk, does not really match each other. The market will just go down further from here, and there is a downside of cutting rates too fast at this moment because we are not seeing macroEconomic Data telling us recession is already here, but rates are pointing to a zero interest environment. When the real crisis comes, we will have no more dry powder. Thank you very much for joining us. Lets get you to first word news with ritika gupta. Ecb president Christine Lagarde is morning of a 2008like economic crisis unless policymakers act quickly. She told policymakers that without coordinated moves, the region will be in a scenario that will remind many of the financial crisis. The bank of england cut rates by 50 basis points and says it will take any action required to defend the u. K. Economy. Thelthough the magnitude of economic shock from coronavirus is highly uncertain, activity is likely to weaken materially in the u. K. Over the coming months. Temporary but significant disruptions to supply chains and weaker activity could challenge cash flows and increase the demand for shortterm credit from households and for working capital from companies. Italy is the hardest hit nation outside china and the government is taking even tougher steps to try to contain the virus. Italy shut down all manufacturing and commercial business except for supermarkets. Schools and childcare facilities have been shut down and childcare officials who do not have a role in the crisis. Bernie sanders vowing to stay in the race despite a series of defeats to rival joe biden. He is pledging to carry on at least until sundays oneonone debate, even after losing four state primaries on tuesday. Sanders was once the front runner to challenge president. Rump the house of representatives has voted to restrict President Trumps ability to take military action against iran. An airstrike killed a top iranian general in january. The president said he will use his power of veto if the measure is passed. Global news 24 hours a day on air and on quicktake five bloomberg, powered by more than 27 hundred journalists and analysts and more than 120 countries. Im ritika gupta. This is bloomberg. Shery still ahead, and extrusive interview with david about how coronavirus is affecting the commerce industry, but up next, we look ahead to President Trumps upcoming address and plans for tackling the outbreak. This is bloomberg. Haidi President Trump will address the nation in about an for, giving his action plan protecting against coronavirus. Lets go to Laura Davison in washington. We have been hearing conflicting reports, coming even from the president himself, saying earlier that major, substantive measures were coming, and earlier today saying that potentially we dont need those stimulus measures. What are we expecting . Laura we are expecting something but democrats and republicans support in terms of paid family leave. Trump is also expected to outline some travel restrictions for those coming from europe. He has also talked about delaying payments in the u. S. As well as potentially some sort of payroll tax cut. However, that would be a lot more difficult because it would require congress, and of course, democrats, to get that through. Haidi bloomberg learning some of those eu travel curbs could be to other regions except u. K. , but lets talk a little bit about those payroll tax cuts and paid sick leave. As you said, congress is an issue, right . We have seen that 8 billion spending bill passed last week. Could we see more blanket widespread measures that willess could approve, or fiscal hawks if any remain be an issue here . Quickly payroll tax cut remains a challenge for trump to get through. Democrats have come out and said it is a nonstarter and even republicans have said they are a little hesitant about the idea. Chuck grassley, the Top Republican on the Senate Finance committee, has said he thinks they should wait two or three months, assess the economic situation. This is something that could cost nearly a trillion dollars, to cut payroll taxes all the way down to zero, which some of trumps advisors have said they ant to do, so it is not clearcut thing that will get done and certainly not this week or next week. Shery we heard the president was mulling restrictions when it comes to travel out of europe. We have any update on that . That is still something influx. It looks like the u. K. Will not be affected and that, but this is something that has been under discussion all day, and certainly new regions could be added. Haidi thank you so much for joining us as we count down to the president speaking a little bit later on. The australian president has announced a stimulus package with 11. 4 billion u. S. Dollars in the past hour to support the countrys economy through the coronaVirus Outbreak. There is a comprehensive package, one that we believe is well targeted. Importantly, those measures do not extend beyond june 30 of next year, and that means that gives the budget and the economy the opportunity on the other site to ensure that we can bounce back strongly. Get more analysis. Paul, lets start with you. Give us the highlights. Not too many surprises, but plenty more detail. Jobs was the key theme, mainly through supporting business. This comes on top of 2. 5 billion that was already announced to support health measures. The premise are saying 11 billion will be rolled out before june. In terms of scale, this is about the same size as what australia did after the global crisis. And june 2021, this is to avoid the fiscal hangover scott morris was talking about, but the virus comes on top of drought, on tops on top of bushfires, things that were already weighing on growth, tourism, and education. The implications for the budget the surplus is probably already gone. The Prime Minister very robustly saying there will be a was the shock and awe factor there . James it was definitely a first shock, and it was designed to do with disruption, keeping business is open, keeping staff employed, also helping households. Theres a big component of household assistance payments, helping those households get through as we manage disruptions toh people having potentially stay home from work, schools closed, as the Prime Minister has suggested. Thinking about this is about getting us through that period, where the economy is is something we will have to face in a few months time, and that might be similar to what we saw with the red government when i had the initial stimulus, and these were the circumstances for the Global Economy to have to do that large package. I dont think we should be surprised if we see a second round, maybe not in the may budget, but potentially beyond once it becomes clear how much impact the coronavirus has had not only domestically, but also how well it is recovering. Shery the treasury saying gdp could add the Second Quarter this year. Will we see significant uptick in demand . What were hearing from other guests today is even if you have the stimulus message, it does not necessarily mean that more people will go out and shop twice as much as they would have before the virus. Thats right. We still have things like significant reductions in airline capacity. Theres a whole set of demand we know will still be missing from the economy, not just with the march court or but probably through june as well. Youre right, it is not like you will have two copies now instead of the one. If you are spending that time at home, you are probably going to be perhaps buying a coffee machine, and that might be some of the tradeoff that we see, but this has been delivered to households that are quite income constrained. Pensioners, lower income households, they are ones that do not have their own financial , so it might just keep them spending, and that is really beneficial for managing the next couple of months. What does this mean for parliament . How soon could we see this going through, and also what does it mean for the rba . In terms of parliament, one would suspect it would go through fairly promptly. It would not be politically expedient of the opposition to resist this. One would expect some bipartisan support. Maybe there would be some discussion around the edges, but this would seek to be enacted as soon as possible. In terms of the reserve bank of australia, we are getting close to that lower bound now. The rba typically cuts twice, which means they would expected to go again in april and the conversation turns to conventional measures. When he was speaking yesterday, he talked about buying bonds to get costs down. You should think of it in terms of price since rather than quantity sense, so the reserve bank already softening australians up for what these will endonal measures up being. Haidi we could see more action coming from the pboc. Chinas cabinet moving for further reduction in the amount of cash some members have to keep in reserve at the Central Banks. Lets get more from our china correspondent in beijing. What exactly did the state Council Meeting discuss . Selina the state Council Meeting is signaling targeted reserve ratio cuts to boost lending for Small Companies that have been hit especially hard by the Virus Outbreak. The goal is to reduce their costs and help members with operations, so cuts in the rrr have largely been expected. Asy could be cut by as much 200 basis points. It also signaled it will take steps to signal let two simplify Foreign Trade and investments including raising tax rebates for qualified firms. This is part of a string of measures the government has taken to try to cushion the blow to the economy of the Virus Outbreak. We already saw the monetary cut that oneyear low prime rate. We are also expecting spending, tax relief, and support for some of the most affected areas, so we are seeing policy loosening, but it is still quite targeted. There has not been any evidence of largescale stimulus that beijing took after the 2008 financial crisis. That equaled about 12 of the size of the economy. In the meantime, china is slowly firing up factories, businesses getting back to work, but now, of course, challenges really very much external, so how much of a factor is the global spread of the coronavirus, the global downturn going to play into chinas economic recovery, given that we are expecting to see that negative feedback loop in terms of diminished demand . Thats right. Chinese factories are feeling it on all fronts. As they have to get back to work, they are dealing with spreading disease dampening demand from their main customers. Manufacturing firms from across china have told bloomberg that even though they have resumed operations, they are dealing with canceled orders and dampened demand, and supply are also being squeezed. A capacitor who said even though they are back to work, suppliers of Raw Materials in south korea have raised prices by 50 and delivery time has more than doubled. Thank you so much for us. Plenty more to come here on daybreak asia. This is bloomberg. Daybreak asia. Im shery ahn in new york. Haidi im haidi stroudwatts in sydney. Retail Stores Closing in italy. Apple had previously closed 42 stores in china when the crisis was worse there. The decision came of todays dash cam ahead of todays announcement by the Prime Minister to close shops and stores. A press conference expected from the white house to discuss how to combat coronavirus. Haidi adidas says its china profit for the First Quarter will be cut by around 500 million because of the coronavirus. Revenue in china was expected to be cut in half for that period which saw the worst of the outbreak on the mainland. Adidas would not give an estimate for its fullyear outlook but says demand us dropping also in south korea. We will get more on the corporate impact. 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. Daybreak asia. The coronavirus is now officially being termed a pandemic with the World Health Organization calling on governments to step up efforts to contain it. The number of worldwide cases has topped 120,000 with deaths above 4300. Strict definition of pandemic and the who had avoided using the term even as it spread, but now it says governments must ask if they are doing enough. Seen aave never before family that could not be controlled at the same time. Who has been in full response since we were notified of the first cases and we called every a for countries to take urgent and aggressive action. Bell loudng the alarm and clear. Ritika the u. K. Government is expected to announce later today that it is moving away from trying to contain the coronavirus and will focus instead on slowing its spread. Prime minister Boris Johnson may announce School Closures and a ban on largescale public gatherings. Organizers of the Tokyo Olympics have moved quickly to distance themselves from comments that the games may be postponed because of the virus. The body overseeing the events says the olympics are going ahead as planned and are on schedule. Japans olympics minister says their postponement is inconceivable, though he admits the final decision rests with the ioc. Global sports is being hit by the virus with authorities either canceling games or ordering they be played in empty stadiums. The nba game between the warriors and thats will be the first to take place in the u. S. Thursday. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 27 hundred journalists and analysts in more than 100 20 countries, im ritika gupta. This is bloomberg. Haidi thank you. Lets take a look at how markets are faring. We are seeing risks being taken off the table with moves down 3 , falling deeper into bear market territory. Downsize pressure and we do have stocks and in seoul facing pressure as well as we await what governments and policymakers may plan. We are seeing moves in bond markets because aussie 10 year yields rising earlier. The stimulus plan announced by Prime Minister Scott Morrison. Check out what we are seeing. The u. S. Yield curve flattening with the 30year yield up by about six basis points early in the asia session. Intoe seeing a big move other havens, gold trading steady while yen is below 105 and oil also trading steady this morning. Lets check in on what is going on ahead of the china open. I want to show you this because we are seeing a bit of a turn when it comes to sentiment for chinese stock markets. Utilities are among the best seeing as, but we are rally in chinese tech stocks feigning, so that might give you a sense of what is in for chinese stocks Going Forward. Shery chinas thirdlargest ecommerce platform reporting Third Quarter sales missed analyst estimates but even faced. N added challenge the Vice President spoke with haslinda amin. We also expect the First Quarter to see a negative impact to our growth. That said, we have actually been observing positive trends in terms of Consumer Behavior as china begins to resume work since february 10, so we are roughly a month into the resumption work. We have seen 90 recovery in a Delivery Network and china and we have seen a pickup and activities among merchants and users, so take the end of february as an example. We ran a threeday campaign of our 10 billion rnb subsidy program, and what we have seen. S that we sold 50,000 iphones consumer within the first hours. Consumer demand remains strong and outlook for the year remains positive. A risk fors it smaller merchants . Yes, small and mediumsized merchants are overexposed because of the higher cost of logistics, so we have actually set aside one billion rnb of reserves to provide a subsidy ease that help transition back to normal. Itsinda pbd announced results today, a 90 increase in revenue, but still fell short of expectations. Are you at all disappointed . On the contrary, we are actually very positive. We believe the Fourth Quarter was very strong. First of all, we hit a new milestone in terms of merchandise volumes, so we reached the one trillion rnb market. Secondly, we added 50 million active users in the Fourth Quarter. That is about twice our nearest competitors, so we continue to see more people coming to our platform, becoming more engaged on our platform, and we think that bodes well for the longer term. Monetization or revenue, as you say, is not our focus today. Our priority is focusing on User Engagement and user interactions. Haslinda alibaba is targeting about one billion active users by 2024. Can you do that earlier . We added 50 million users in the last quarter, and that is twice what our competitors have added. Reason that will not continue. Out the Vice President of strategy speaking with haslinda amin. We are joined by a founder of social media agency other is and emarketing training program. Us. K you for joining im just wondering what your nearer and longerterm expectations are because it is one of the companies that was seen to do quite well as the coronavirus and National Shutdown and china. Thats right. We have benefited a little bit within china from this whole coronavirus situation just they can also reach out new audiences, so that was a great thing, but at the same time, they are limited by deliveryply chain and network. Lets not forget this is a young company, just foreign a half years old, so they are still trying to figure it out. Throughout the whole situation, Chinese People were very focused who participates in rescuing people and supporting. They have done a lot of things, creating a fund, donating money, donating resources. They are also implementing the money back subsidies, but alibaba has done even more. The sentiment is good, but they are not over performing when it comes to alibaba and j. D. At this particular moment. In and getng to jump you some breaking news across the bloomberg terminal. We are seeing stocks in australia falling 3 , so extending that drop into a bear market. We will be waiting to see what that market close looks like. It certainly has been teetering on the edge of a bear market all this week and we have seen other markets including the dow falling into bear territory. We are also getting numbers when it comes to Coronavirus Infections out of china, cases were reported for march 11, total confirmed cases rising to 80,793. The Hubei Province, the infection,f the reporting a decline. You. E get back to what are the longerterm challenges going into this new economy, people going back to work, factories getting back started again, supply chains getting restarted, but now facing the demandside issue. Rom outside china is it better place because it is so domestically focused . Fastain, it is developing and is very young. It has a lot of opportunities because the ecommerce of fresh fruits and vegetables is on the rise in china. And a lot of people are going to continue their, lets say, group peoplevior and a lot of are going to downgrade their consumption, so there are a lot of opportunities. However, they are going to lose are users because everybody all focusing on discounts right whicho their advantage, is cheap prices, is being diluted. At the same time, they are not selfg services, operating ecommerce platforms. This is what is going on here. We see that some products are actually performing well. Over these couple of months, 130 , soeased by 120 , i would say it is uniquely positioned. The general trend is really really good. Recovered, but i would say in rural areas, it is still 70 to 80 recovered. The second thing is, of course, and this is longterm, the Consumer Sentiment is not there. People are going to spend less money. People are more stuck at home. People are in general reducing their demand and consumption, which is an opportunity on the one hand, but also a stress on the other, and finally, this revenge consumption everyone was , peopleabout in china will want to really start purchasing, but the weight is probably going to be much smaller than people anticipated. And of course, what we see ,cross all ecommerce platforms they hold up their marketing budget. Which is challenging when it comes to sales growth. 11 new coronavirus deaths in march, this coming down from 22 fertilitys the previous day, also 17 from the previous day. I am inclined to say this is perhaps the lowest death rate number we have seen in china since the outbreak, reporting 11 new coronavirus deaths much 11. We have seen lots of measures from the company itself trying to subsidize necessities, trying to help out merchants and ensure supplies. Will this turn and little bit of trust from consumers . How much good will it do the company eventually, given that they are actually suffering margin pressures because they are trying to help these merchants as well as people so these prices do not go up on daily necessities . I think it will do a lot of good to people, and they know it. In china at times of crisis, people are looking not only at , but also at the people who save the day. When everybody is acting, they also need to be part of that action. As i mentioned, they donated 100 be 100b are in million rnb to the relief fund. Fund basically says every time you make an order or if you are a new merchant, we will make it easier for you to be on this platform. At the same time, they have adjusted their delivery times. Usually, they deliver very. I think what they did really well, what everybody was concerned about was the fact that people, when the crisis hit, wanted to purchase all these masks and protective gear, and they would be really worried about the quality of the product. More than 40 stores with Fake Products that were essentially harming them. It did earn them some trust, but i think alibaba and a lot more goodwill from consumers just because of their involvement. They established the farmers livestreaming. Haidi we are running out of time, but thank you so much for your insights. Up, a substantial loss after facing a double whammy of virus and months of protest. We break down results and what it means for the industry. This is bloomberg. Haidi Cathay Pacific is the latest highprofile carrier to warn of the mounting financial toll of the virus. Sophie kamaruddin takes a close look. Sophie taking a look at 2019, you did have cap a managing to analyst estimates, but the carrier did still see a 28 drop in annual profit to 218 million dollars, and it had forecasted a grim outlook indeed with a substantial loss seen in the first six month of this year. Cafe cathay shares pick up as the chairman spoke of agile. D to remain has wiped oute about 4. 6 billion in market cap and analysts are seeing more pain ahead. For example, Morgan Stanley downgrading the stock to underweight at hsbc, also cutting its view on the stock to hold. Us now is gbs Bank Aviation and transport research senior. Lets result lets discuss the results out of cathay. Markets seem to like it. It was bad but not necessarily disastrous. Can they keep this up . The settled result was slightly above expectations, mainly due to the fact that they had a small profit in the second half. We were expecting a small loss. They beat expectations main the because of type controls. Costs downd to cut the second half perform better than expected. The company itself are expecting substantial losses for the first half of 2020, soy think that is why the market what the market is very much focused on. In terms of capacity cuts, they cut capacity by 30 in february and 65 in march and april and might need to cut a lot further in may and june, so speaking to the company, they do expect for cuts in may and june as much as april, but that will still overall have a big impact on earnings. Much will cheaper fuel and hedging gains help . Hedging losses were actually never were in the second half of 2019. Looking ahead, given that oil prices have fallen off substantially, we are expecting more hedging losses just because they have hedged their positions at effectively 70 a barrel for jet fuel. Jet fuel is currently above 50, so actually, we will expect to hedging forecast in the first half of 2020 if Oil Prices Continue to stay low, but the overall fuel bill should stay lower. If cash preservationist a focus Going Forward, what is the liquidity situation like if cash preservation is the focus Going Forward . There in a strong position. They have excess liquidity of about 20 billion hong kong dollars, so they are still supported strongly by institutions and have the ability to access that, so we are pretty sanguine about their financial strength and excess liquidity. I think that is basically their financial position. At the same time, they are cashg managers to preserve as much as possible. Nonessentialsof we can expect as well, and in terms of managing other costs for example, they start to take , andweek nonpaid leave about 80 of their staff are signed up for it, so that will help them in terms of managing costs. Other measures that will help from the hongt Kong International airport, so hong Kong International airport rebates on packing and things like that, so that will help Cathay Pacific cushion their losses. Outlook a lot less rosy if we expect there will be a longterm downturn . Did we cano business fairly considerably. 2020, we expect to see more lows mainly from a supplyside point of view because a lot of factories in china in february were shut down going back to utilization in march. From a supply perspective, that would actually impact the cargo business. For the full year, i think with the covid19 outbreak looking like it is glowing global, that may affect rural Economic Growth and therefore affect overall cargo demand so that will affect the cargo business as well. So much for you joining us. We will get you a lot more on the outlook for cathay ahead. We are minutes away now from President Trumps address on the Virus Outbreak. We hear he has been speaking with House Speaker nancy pelosi. We will have more on what to expect and we will have that for you live at 9 00 a. M. Hong kong time. A new yorkching where it is 9 00 p. M. This is bloomberg. Haidi in just a few minutes, President Trump is set to address the public on the coronavirus response. Shery President Trump has said he plans to use the full power of the federal government. What could that look like . We are expecting President Trump to come out and addressed the nation from the oval office. This will be a major primetime speech to the nation, a chance for the president to outline his plans, which had been promised a couple of days ago that there was going to be some action taken. It could be something about paid leave. It could be something about stimulus measures including tax breaks, things like that. It could be, frankly, President Trump standing or sitting in the oval office trying to reassure the nation, trying to give people some guidance on what they should do. The bar is pretty high in terms of what the markets would need to hear from the president. I think so, and i think people are really looking for guidelines right now. You are in an environment right now where as we speak, there is an nba basketball game that has been delayed because of unspecified concerns about who knows what. The march madness basketball tournament for College Basketball teams will be played without most fans there. Here are major things going on we are seeing shelves and shelves of toilet paper not available anymore. People, frankly, in a lot of cases are scared. They are looking for assurances. They are looking to know what they should do. Thank you, and of course that speech from trump coming up next. Welcome to the program. You are watching Bloomberg Markets china open. Good morning to viewers joining us across asia pacific. Markets are in bad shape and we are ready for the primetime address from the white house. President trump addressing the nation any moment now on how the administration plans to contain this virus and limit the economic fallout from this outbreak. We are hearing everything from paid sick leave to maybe even extending tax filing deadlines as well as restricting nonessential travel to europe. It is a fastmoving story. The