Going to be a strong enforcement of quarantine. You have to have separation. You have to have separation or this thing takes longer to go away. I think you could said this for your country and a lot of countries, it goes away. Away with very, few few desperate very deaths. Relative to other countries, we have very few cases. I think we have the greatest doctors in the world. We have offered iran assistance. Iran is having a tremendous problem. We have offered iran assistance. If they would like it, we will help. [indiscernible] i would rather not say. Lets put it this way. You will see. I cant say. I was working on that last night, also. Determinedbeen fully it was iran. It was a rebel group. It did look like it could be backed by iran. We will see what the response is. [indiscernible] pres. Trump i always want him to return because he is a friend. We started off both new to the job that would always like to see him. There are other people i get along with really well. This is a very special guy. We would like to see you back in ireland again. [indiscernible] President Trump and any american president is always welcome and ireland. [indiscernible] pres. Trump i did hear something about that. We had dinner together in florida at maralago. With the entire delegation. We did nothing very unusual. We sat next to each other for a period of time. He is doing a terrific job in brazil. We will find out what happens. [indiscernible] i am not concerned. Yesterday we heard from an Emergency Room Physician in houston who had a patient showing symptoms of something, tested negative for the flu. This position wanted to test for coronavirus and got caught in what was called as an infinite loop of stupid trying to get through to Public Health agencies in houston to get permission to get the person tested. Is there something you could do as the president . Pres. Trump they have one million tests out. Over the next few days, they will have 4 million tests out. Frankly, the testing has gone very smooth. If you go to the right area, you get the test. With that being said, millions are being produced. It is a brandnew thing that just happened. Millions are being produced. If you go back and look at the swine flu virus and what happened with this wind flow, you will see how many people died and nothing was done for a long period of time and people were dying all over the place. We are doing the opposite, we are much ahead of everything. You are talking about one case. I could look into it. I watched scott gottlieb, i respect them, he was talking about how we have in some cases in california, we have too many. We have done a good job on testing and it is very interesting. [indiscernible] i wont be going. I have other things to do. I am very busy. [indiscernible] pres. Trump sure. It is possible. It is possible i could also say we could ended early. I thought it was an important thing to do because of what is happening over there. [indiscernible] pres. Trump the democrats wont be having rallies but nobody shows up to the rallies, anyway. My rallies are very big. They are very big rallies. We will make a decision at the appropriate time. The next on the schedule is for will haven tampa, but to seat whether or not we go. I will not do it if i think it will be negative. We will make the turn, the question is when. The question is, how many people will die . I dont want people to die. I made a tough decision last night and a tough decision along time ago in result with china. I dont want people dying. Weather it affects the stock market or not, very important. But it is not important compared to life or death. I had to make that decision. Frankly, the people who are professionals praised the decision and it was something i had to do. You will see the end result is very good. It will take a period of time. The rally, we will make that decision. I was going to las vegas, i was going out to nevada, as i said. I was going to colorado. He is doing a great job, he has done a fantastic job. We postponed that. I think we will have him coming in here on friday, we will do our event from the white house. We have a lot of things we are moving around because of what is happening and i want to be here. I want to be right here. I dont want to be flying around in airplanes all over the place. I want to be right here. [indiscernible] people said, you are dealing with people maybe you dont want to deal with. [indiscernible] they have not. It is common sense. Senseof it is, use common washing your hands, keep a little bit of distance away. That is why the sporting events are tough. You have people in small seats right next to each other. What happened with the nba is pretty incredible. Europe, andr in their big soccer matches were canceled. It is amazing when you think about what happened. There was one country, there were four countries, i am reading this list every week. Then it was 13, than it was 22, and now it is over 100 countries. It is an amazing thing how fast this spread. Spreader. Very fast any more thoughts about the Tokyo Olympics . Pres. Trump the Prime Minister is a great friend of mine and i wish him luck. The venues are incredible. He was showing me pictures of what they had done the last time i was with him. I said what a job. They built it very well. They built it under budget. They are beautiful facilities. [indiscernible] possiblemp it is very that for the olympics, i just cant see having no people there in other words, not allowing people. Maybe they postpone it for a year. Maybe that is not possible. I guess it has never happened with the olympics. Although there was interruption. Meeting withtrump the irish Prime Minister and speaking with the press, making some comments regarding yesterdays meeting. Thatid bankers thought payroll tax cut would be a good thing. He said he would use Emergency Powers if he needs to. President trump has not done that yet. ,e made mention of markets saying they will bounce back in a big way. Markets are not fine. The Dow Jones Industrial average is down 9. 3 . Is lower and the entire index is down 8. 5 . We had Circuit Breakers trigger this morning. 13 ould need to get down before another Circuit Breaker is triggered. A quick look at the 10 year yield, 78 basis points. Crude is up 31, down 6 . This is down 7. 03. As you can see, the Airline Sector in the u. S. Is down nearly 14 . We are seeing similar numbers in europe. The airline is under pressure. At least those exposed to the transatlantic traffic. Basically a reaction to President Trumps ban on europeans visiting the u. S. The International Air transport association ceo, he is the former ceo of air france. Thank you for being patient with us. I would just like to get your reaction to what the president has announced. What are your thoughts . Usually we are not in favor. We understand that for this reason, you make certain decisions. The decisionmakers everywhere the u. S. Are not the only ones that have made these types of decisions to comply with the who recommendation for these types of decisions, which are exceptional, proportionate and permanently reviewed and they are restricted. Additionally, with regard to the decisionmaker being well aware of the economy. Connectivity,no the potential that we all hope will happen after the outbreak will be slower and lower if there is no connectivity. We have to do everything to maintain connectivity. You said there will be an economic effect, that will fall on the airlines. Do you think good airlines will fail as a result of what the president announced . Alexandre we hope not, but we must be aware of the negative and serious consequences. U. S. Has not been the only country to do it, but these decisions have a Strong Negative impact. I think the airlines their operating over the atlantic, we urge governments everywhere in north america, the United States strongope to engage Financial Support meant to help the industry. Vonnie it sounds like you are lobbying for a bailout, potentially, or what form would that help take from various governments . All, are first of decision to reduce some obligations we have. Instance, everywhere in the world. Reduce theng to delay of the consideration. Area, we are advocating for governments or airports to reduce airport charges, including fees. Or any taxation on passengers on flights. Financial package, credit lines for airlines,o help our to bridge the gap financially. Airlines are stronger than others. Would you be advocating on behalf of each airline or will airlines turn against each other . Will there be consolidation . Will there be efforts to take market share in this difficult environment . Alexandre the major priority now is to advocate in favor of the industry. Facing an exceptionally difficult situation that are among the worst we have had in the last 20 years. We need an exceptional set of regulatoryinancial, and costreduction measures, to help us. We could see a consolidation due to the impact on the airlines, but the second step, we are working on the first one, how to survive. Think airlines in places like United States and in europe will be at a disadvantage to airlines and other parts of the world . Andmight look at the gulf other parts of the world where governments will support the carriers, for governments will inject money, for governments make it Crystal Clear to everyone that there airlines will keep flying. Will you be put at a disadvantage to those carriers . Alexandre i dont think so. Governments ony this planet that has no interest in its airlines. Whatever the situation is, and whatever the ownership is, no government can have no interest in its airlines. U. S. And in the europe, the financial situation of the airlines was better than their counterparts in asia, or in the gulf region. Balance sheet was stronger. They have more financial internal support to bridge the gap. I would be verydemic, it is n j confined to asia, china or italy. Care becoming increasingly clear that many of the have significant economic consequences. Likee same time, it seems the response, things like Interest Rate cuts or talk of fiscal stimulus, what we really need is a credible Transparent Health response first and then all of the other things come second. The key thing people are looking for is some kind of transparent response to containing the pandemic. The u. S. Introducing a travel ban from europe without coordinating with europeans is something that scares lots of people. Guy is the u. S. Making things worse . Is the president making things worse . The speech did not go down very well. We lay some of the selloff at President Trumps door . Ise politics in the u. S. Very dysfunctional perhaps the most dysfunctional it has ever been. Ould say last night, the question gop is rejecting Nancy Pelosis plan. I think the big issue here is when you look back at the financial crisis, there was a big economic problem centered in one sector of the economy. The government was able to focus on the big banks of the world and Insurance Companies like aig. Over a muchersed wider portion of the economy. I think the government in europe and the u. S. Will eventually have to bailout the Airline Industry. You also have to think about the restaurant industry, the hotel industry, on and on and on. The effects are everywhere you look. A lot of what we have seen in the u. S. Over the last decade, the restaurant and Bar Industries have been a tremendous source of growth for employment. It is part of what has kept employment number strong in the u. S. If you think about the momandpop restaurants, the smaller players who will be facing empty restaurants, potentially ghost restaurants, and hotels, tourist destinations. We are looking at a travel ban between the two continents, the potential damage to the economy is spread out over a very wide portion of the sector. The government will have to start taxing things piece by piece. Maybe the Airlines First and then the people who will be filing jobless claims. It is the state of the government and the politics, they dont make anyone optimistic. Urgency is really important right now. I dont think the president necessarily helped that there is more to it than his speech. Not he is going to be meeting with other industries. Not for the democratic bill. Can i move you to the markets for a moment because the doubt is down 9 , the s p is down 8. 2 . We wont see another Circuit Breaker until it goes down 13 . Michael this week, we have started to see impacts with the functioning of the markets. A lot of concerns have been growing in the back of peoples minds and they are being forced to the front right now. The worries about liquidity in the bond market, they have gone from being in the back of the mind to front and center. We are seeing etfs that are trading at huge discounts to their net asset value. Etfs are dropping faster than the actual assets. That is a big issue. These are very troubling signs for the market. And the on itself situation and the volatility we are seeing. If you look at the traditional safe havens like gold and treasuries, some days they are behaving like you would expect, other days it looks like they are being used by customers to liquidate position because there is a major dollar funding stress. Vonnie we are waiting on Boris Johnson to speak. There is a meeting ongoing in britain. What about the European Union . We will be speaking with the economic commissioner in a little bit. Does the European Union need to back the ecb and come up with measures . Bilal itink would bes important for them to come out was something coordinated on the fiscal side. From the meeting we had today, it does seem to imply we dont have as much consensus on the fiscal policy side across europe. Time will tell if we will actually get that. The numbers we see in germany are not at the level we have seen in italy. There might not be as much natural. Need for somea kind of coordination on how the movement will occur across countries within the European Union, how travel will occur across the European Union. There are not just fiscal issues. There needs to be some form of consensus. Vonnie stick with us, both of you. Our thanks to bilal hafeez. Have a look at these markets. Down 7. 6 . Every single group is down 5 or more, several are down more than 10 . The stoxx 600 has never seen a day like this. These are the basic markets in europe. We are down 10 , 11 , 12 . Down 15 . T is we saw ptp. The european close is up next. This is bloomberg. Guy 30 seconds to go until the end of european trading. It has been brutal, absolutely brutal out there. These are the days you remember. Remember 1987, 2008, a day like today. What we have seen is indiscriminate selling across the board, everything on offer. Whether its in equities or bonds, everything has been sold out today. Stoxx 600, we have never seen the scale of the Downside Movement in europe today. Down by nearly 11 , and at session lows, and its been on big volume, and its been one direction through the entire day. Some contacts in terms of what the month has looked like, an idea of where we started. We were north of 400. Today, we are south of 300. That is really significant in terms of the scale of the move we have seen. 31 percent of the value has been knocked off the stoxx 600. A third of the value nearly of european and these has been lost. Stock e had only one i would have to check that was positive in the stoxx 600 today. Me show you from one end to the other, ftse 100 down 10 . These are comparable losses to 2008, not comparable to 1987, where we saw 12 off of the ftse 100. Obviously, a lot more valuable now as it was then. Today has been about italy in so many ways around europe. Christine lagarde did italy absolutely no favors. It may have been a slip of the tongue, but she talked about the fact that the ecb was not there to narrow spreads. Pause and digest that. Thats an important statement. The spread story is part of the transmission story. Its about what is happening in the eurozone. The aggregation of the eurozone together. For Christine Lagarde to say that, in many peoples minds, was a blunder. Down by in the land is 14 health care. Defensives. The sectors are done by 8 , 9 . Bottom end of the market looks like this. This is where the real pain has been felt in europe. The car sector down by 14. 5 . Insurance sector off by 14. 5 . Down by 13 mazingly today. The Banking Sector done by 13 . These are brutal numbers being delivered in europe. Started last night with the president , i dont think lagarde helped. Lets take a look at some individual names. City world, a quarter of its value lost today. People do not want to go out to the cinema right now. Funding remains a factor for Many Companies now. This is where things get interesting, nestle. They are aaa, they produce food. They were down 6 today. Byn siberian gold, down 12. 5 . Inre was one stock, psg europe, i think in positive territory. The other thing i want to mention is what is happening with sterling. It has been battered today. The euro has been a focus, but Pay Attention to the sterling. On the cable rate, down 2. 2 . Really tough day for the british pound. We are waiting to hear from Boris Johnson, im looking at a live shot on the other side of the studio. We will hear what the Prime Minister has to say shortly. Vonnie norwegian will lay off about half of its staff amid flight cuts coming this as we get difficult headlines from the Airline Industry on the frontlines of the cutbacks and restrictions on travel. Norwegian cutting 50 of its staff which looks to be about 5000. We will get back to you on specific numbers. We will have to see what kind of fiscal response will help workers like this, potentially contract workers. The Airline Index is down 14 , just not good news across the board for airlines, and it is not confined to one country. We were speaking to an organization that represents 85 nations, and the picture is bleak across the board. Says governments will have to step in and do something for these airlines. Not necessarily a financial bailout, but something in terms of charges at airports, helping them draw down credit lines. Gapped lower at the open, and then shot down. Second market shut down this week. We have been trading since then, have not triggered a second Circuit Breaker, but we were down more than 9 on the doubt. On the dow. We have some stability in the treasury markets. That we areange trading, but still at about 78 basis points. Crude oil Holding Onto Gains above 30 a barrel, but we are down another 6 in this session alone. Lets move into the s p 500 index and look at how down the sectors are. Down across the board, most of them those are the individual stocks. Three stocks out of. 00plus guy lets bring back in the panel. We are waiting to hear what Boris Johnson has to say, we will get to that. Thats carry on the conversation with the guests in the studio. Today . Nificant is it we are seeing a bit of this it on the u. S. 10 year, but here in europe, bonds and stocks have been on offer. One is meant to balance out the other. In europe, it is not. In many ways, this brings all of the problems in europe to life. Lack of fiscal coordination, weakness, theic eurozone at large is tied to the Global Supply chain, so all of these forces weigh on the eurozone. You mentioned this earlier. , has beensome extent left to deal with this. There hasnt been much support from germany on this. Needs to be a response. , has been moreover, europe has been through numerous crises, so they have a template on how to respond, but they have not activated the playbook. People dont quite appreciate the gravity of the situation were in. Markets are telling you to something now. Btps, 50, 60 basis points today. What will it take to convince europe that italy needs help . If italy doesnt get help, are we back to the existential question about the euro . Absolutely. I think we will return back to that question. The support will come when germany or france starts to get some of the case numbers and vitality that italy is experiencing. As we saw in previous crisis, it is only when the core countries feel the pain, they feel general generous enough to support their other countries. Mike regan, i was looking at the high spread indices, much wider than where we were, water than a couple years ago, but not as wide as the financial crisis. Is that at least providing a glimmer of hope . Mike i dont take it much as a glimmer of hope. The rate of change of the spread widening is almost unprecedented. You look at energy highyield. It went from six Percentage Points to almost 16 at this point, as of yesterdays close. Doubling toyield 6. 5 Percentage Points. This is just over a few weeks time. That rate of change is important. It causes the credit markets to seize up to some degree when you see that violent repricing in the risk in these markets. The question Going Forward is how are companies that need to roll over debt going to be able to do it in this environment. It is not clear they will be able to without some major government backstop program. That gets us back to the washington, d c dysfunction. I think back to the original tarp vote during the financial crisis. Congress voted no initially to the program and you saw a nasty reaction in markets, one of the worst days in the credit crisis was after that vote. They quickly changed their minds and got back together days later and put it again. On, the pressure and scrutiny of government grows greater. That goes for Christine Lagarde, too. My think she would like to have a do over on those comments today. I am sure that her phone is ringing off the hook with people talking to her about that. The government needs to react quickly to all of this. It is hard to imagine some government effort that could put a lid under risk assets, a floor under them permanently, but nothing something is better than nothing. It is really crucial that we see some sort of cooperation in d. C. And european governments to stop the bleeding. Vonnie the ftse 100 down 10 , sterling weaker against the u. S. Dollar. That is after we got the package of measures from britain which we had fiscal. Nd monetary what can Boris Johnson say now that will help matters . Bilal i think the experience of the u. K. Tells you something very instruct the. Policy makers, looking back to the Global Financial crisis, using that playbook to tell people what they should do today. They should cut rates and so on. But this is not the financial crisis. This is a health crisis, pandemic. The precedent we have is more like the 1918 spanish flu, 1968 hong kong flu. You have to look at how the country do with pandemics. The way you deal with it is isolations, school closures, border closures. Taiwanre, hong kong, have all done what you should do around pandemics. That is what we need to see from governments. The first action has to be something to contain the pandemic, and then you do all of these other measures to soften the financial blows. That is what markets are telling you, they need visibility. Testing in theot United States in the United States to the same degree that they did in south korea. To the sameesting degree in europe as we have seen other countries. We dont have the data to have a clear understanding of what is going on. That uncertainty is weighing on markets but also the general population. There is a lack of information. Bilal absolutely. It goes to the heart of the matter. You can make all of these announcements, but the average person is worried about if im going to get infected by the next person on the train. They have to be transparent and tell people, this is a pandemic, you should be doing all of these measures. Ireland that today, decided that they would close schools today, and the u. K. Have not announced measures, make people nervous. A related point to this, people have increasingly lost trust in government officials. That has been going on for a number of years now, and erosion of trust. Somebody has to step forward and be the Credible Authority to tell people in a very transparent and accurate way. Tests, it is serious, and then we will get a resolution to this. Vonnie 50 of staff laid off at norwegian. Sure other airline ceos are looking at this and looking their chops. Will we come out of this with a different corporate landscape, whether it be in europe or the u. S. , or Certain Industries like airlines, like oil and energy . We are in the first wave, likely to get something in the first part of the year. This is here to stay. I think we will see larger layoffs. Theres been a number of Technological Developments in place for a number of years now. Whether that is to promote working, the growth in the Digital Economy and so on, which will start to see much bigger growth Going Forward. That will bring you to question whether older analog things will survive in this environment. Rather than people going abroad on holiday, people may instead use more virtual forms of entertainment, rather than engaging in travel. On the education side, rather than going abroad to study, may rely on Online Education tools. All of these forces that we have seen will pick up. The more be some of enduring implications for the economy. Vonnie stick around, we have a special interview coming up. Guy absolutely. Lets take another angle on this story. We are taking a trip to brussels, joined by the European Commission. Commissioner, thank you for spending some time with us. Christine lagarde at the ecb came up with a package of measures today. We have seen equity markets fallen sharply. We have seen bond prices under pressure. The markets are signaling globally that we need a fiscal package, policy measures to be announced, both in the u. S. And in europe. , whats your going to do are European Finance ministers going to deliver in terms of a fiscal package that will stabilize the Financial Markets and economic story we have in europe . Definitely, what happens in the markets shows that we need two things. Take corrugated action in europe. Second, to be united, europe, u. S. , the whole world, in facing this outbreak and pandemic. Coordinated action in europe. Division and an action are not helping. Tomorrow, the European Commission will present its own , the economic answer to this crisis, and im sure this to our will give citizens, consumers, the , reinsuranceunity on our commitment. There is a feeling that italy is not being given enough help right now. The president of the ecb did not do any help today for italy when she talked about the fact that she was not focusing on spreads. Is italy being given enough help . Is europe acting as a single voice at the moment . It does not feel like it. Well, europe is more of a chorus than a single voice, but bringing europe to be united and going in the same direction. A chorus italy decided in recent , not only measures to contain the outbreak of the virus, but also an economic package 25 billion euros, which is a relevant economic package both to face the difficulties in the Health Care System created by the virus, and to begin to guarantee liquidity to small and medium companies, to help workers difficulty. I think italy gave a good example, and now with coordinated european action that we will present tomorrow, and deliver with the finance minister of the European Union on monday, i think we will give the strong answer that is needed. Vonnie our condolences to you, it is a difficult time for you as an italian even as you speak with a european voice. For those countries experiencing a major rise in yields, can they , to keep thisow virus from creating even more economic damage, particularly when yields in germany are becoming more and more negative . That spread is getting wider and wider. What we showed in these days, confronting the package, decided by the italian government, the European Commission, immediately 24 hours later, answered, said that the package went in the right direction, and that this package will be considered influencing the ratio of the italian deficit to gdp. This same attitude of go to ally will Member States. ,hat is crucial in these days in the country that i know best, my country, is the Health Care System to be helped, to face this situation. I can tell you the italian Health Care System is an excellent one, and the sacrifice that is now imposed to my fellow citizens will have a positive consequence. I really believe that all over europe we should follow the example of these restrictions. Needed, if were want to contain the spread of the virus. Vonnie you are meeting with eu finance ministers monday. How do you, as a group, convince markets that you are willing, along with the ecb, to do whatever it takes . Christine lagarde today did not have that effect. But if you dont reassure markets adequately, will we be facing another leaving Lehman Brothers moment . I think that it is in our hands. We should know that this is the moment to act with coordinated fiscal policies, with important investments from Member States, and with a common framework at the european level. Want to give liquidity especially to small and medium enterprises, if we want to keep avoiding losing jobs in this and if we want to tweak our rules on state aids to make Assistance Available to the sectors that need it, in Public Health, this is what we will decide, the commission tomorrow, and the ministers on monday. The message will be very clear, we are acting together, and we want to act in a multilateral with our american friends. Unilateral initiatives are not the ones that are helping at this moment to face this crisis. Guy what did you make of President Trumps travel ban for europeans . What do you think of that . Well, i regret, frankly fact that this decision was taken without even consulting europe. Understanday, i decisions of Member States about travel, these are legitimate decisions, but consultation, cooperation are absolutely crucial in this moment. That acting alone we will be more able to face this emergency, we are totally wrong. We face this emergency if we act together. Borders are not solving the problem of the outbreak of coronavirus. Guy do you think President Trumps threats against europe in the trade war will make it harder, his decision to approach the world from a unilateral point of view will make it harder . There is history to this now. Do you think therefore that the world getting coordinate policy action together is more difficult than it was before President Trump started making these moves . Also,hink that we should , toeassure the markets avoid excessive volatility, we have to maintain and keep our supply chains as they are. We have to take measures to contain the spread of the virus, but at the same time, we should not affect our supply chains, we should not affect our trade relations because this will make the situation more dangerous, not less dangerous for the economy. Vonnie commissioner, what do you make of the fact that banks now have a lower capital ratio requirement . Is this something that will cause more problems down the road across the Banking Sector in europe . I dont think that the the sectortor is most affected by this crisis, not at the moment. If we compare at least in europe the situation we have now in the Banking Sector to the situation oft we had in the crisis 2008, 2010, the Banking Sector is now much stronger in europe. This does not mean that in the mediumterm, if the crisis we cannot have difficulties in this sector are. But i dont think it is in the front line of difficulties. In the front line of difficulties we have sectors like aviation, travel industries , Automotive Supply Chains in general. Difficulties we have sectors like aviation, travelthis is tho avoid, to make these problems even more serious with unilateral decisions. We have to cooperate, especially the u. S. And europe. Guy we are going to leave it there. The Eu Economic Affairs commissioner. Thank you very much for your time. Vonnie lets check u. S. Markets, almost halfway through the session. A session which by the way, saw another shut down this morning right after the open. Andre well off our lows still love 6. 5 on the s p 500, 7. 2 on the dow. The next is at 65. The 10 year treasuries yielding 70 basis points. Stay tuned. Monitoring u. K. Prime minister Boris Johnson. Alix commodities crash, oil threatens to slip into the 20s, gold sinks as investors sell everything. Energy equities are crushed. News andou through the give the analysis and the investment opportunities. Im alix steel. This is bloomberg commodities edge. First, we kick it off with spot on, our take on the big story. Today, its oil around 30 a barrel. I spoke to one of the pure in
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