Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713

Money at the problem and it solves one part of the problem. We are seeing an absolute synonymy of selling. Hitting every single asset class out there. Asia is down between five and 10 . You are getting Circuit Breakers triggered in korea and the philippines. Yvonne this is what makes things a little bit more real for people. We have dealt with this before with sars. But outside the region, this is uncharted territory. Trudeau nowhie testing positive for coronavirus. The pga is canceling its players championship. The ncaa is canceling march madness. Things are starting to disrupt daily lives. David absolutely. Lets have a look at your movers right now. Not that it matters. Our team crunched the data. The stocks that are getting sold off the heaviest right now have the week balance sheets. That is way you dont want to be. Youre getting more cyclicals as well getting pummeled. It is a day that you dont normally see. We will leave it there for now. The coronavirus handed wall street its worst session since black monday in 1987. 27 below records. A state city declared of emergency after President Trumps action plan fell flat. European airports are being overwhelmed after the president s ban on travel. Passengers are paying on norma sums to change flights. Apple is reopening all 42 of its stores in china. 38 stores were operating as of last week. The final four will remain later friday. Also closed all 17 of its stores in italy. Disney is closing the Disneyland Resort. The move comes after california bandnor gavin newsom banned assemblies. There have been no reported cases in the park. This could depend on the state of the market. 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. Yvonne lets recap that breaking news. The coronavirus disrupting the world of golf. The playerseling championship. List ofjoining the cancellations we are seeing in the sports world. Even disneyland is temporarily shutting down. Not a whole lot of fun out there. Want the last thing you to do is crowd a bunch of people into a stadium. The chelsea club in london has said one of its players tested positive. Start. Know where to managementout risk and the credit crisis. Things we wished we did not have to worry about again. Just remove whatever you can as quickly as possible. You are seeing people respond just to preserve cash. We dont really know where this will go. Yvonne what part of policy measures to ease we need to see . You see these moves. Emergency cuts. It is not really doing a whole lot. We think there are two things going on here. You have the policy responses from the Central Banks and governments, which still seem a little bit uncoordinated. We saw the bank of england come together. That is as close as we have seen to a core knitted policy. Not many other countries have come forward. We are not getting other countries taking the coronavirus as seriously as china and south rea and some of the countries in asia. We need to see a stronger response from other countries around the world. They are playing on the fear of the people. There is not a big enough response being shown in the monetary field or the virus field. David it really makes you think about how different the decisionmaking structures are in a lot of countries. Your point. Is to when you look at how china response to economic problems, it brings in the whole team. I want to ask you about the fed. They are expected to cut. If they dont, who knows what this market will look like. What is the biggest implication zero . Ed rate near or at down, thatngs calm will be a huge boost to liquidity. We are nowhere near that situation. Fedill have to think about rates getting closer to zero. How long will they stay there . The fed could be looking at leaving the rate near zero for several months, possibly even more than a year. They are probably not even thinking about changing them for a very long time. As the Economic Data starts to improve, maybe in the second half of this year, we will start to see containment in the virus. Maybe the data will start to look a little bit better. Looking at the liquidity saying we have zero Interest Rates in the u. S. , japan, europe. That is a great backdrop for buying risky assets. We are nowhere near that yet. But at some point it will be very helpful. David thank you so much. You guys must be extremely busy today. Thank you so much for joining us. Are any of these moves you are seeing right now rational . I think overall what investors are pricing in is fear. That uncertainty that comes from a shock to demand and supply that is not necessarily all based in financial or economic indicators. Obviously it is the covid19 situation. It has an economic effect. We are seeing that most significantly in china where we have the most information about what exactly happened at the height of the outbreak. Speaking, what investors are doing are trying to price in. That leads to volatility. Morning. Od in their view, what is happening right now is you are getting a saying tok managers reduce risk exposure as much as you can. Is that is what is happening at j. P. Morgan . Seeing in the conversations i have with is everyone is uncertain and afraid. That is leading to quite a number of investors wanting to stop the pain. To get out while they can. That is the prevailing attitude. Moreyou talk to sophisticated investors, and some of us who have been through these downturns, we know that is exactly the wrong move. Investors who went into this more diversified have the wherewithal and ability to basically hold tight and have the guts to ride out dislocations like this. And not make the emotional decisions we are all prone to making in times when we are afraid. Those investors end up in a much better place. Things to move in cycles. There is a lot unknown right now because this is a health situation. Eventually there will be a rebound. We will start living our normal lives again. It will not be comfortable. Wherewithal tohe withstand some of these prices, you often dont make emotional decisions. If we are looking on the horizon to the second half story when things start to recover, how do i actually art to position start to position myself or any kind of rebound . As an investor, what you want to be looking at is maintaining cushion in your portfolio. Thosent to hold onto holdings. We saw a lot of movement in those markets. What youre going to want to do is wait until you have some indication that things are starting to resume. That we are seeing and a pickup in economic activity. We will see how that is priced globally. At that point, we could gain reality. Evaluations will still be modest and well supported when it comes time for a turnaround. David are you concerned at all that the Central Banks are running out of bullets . Now, alltwo weeks from the major Central Banks will have their policy rates at zero. Is that a proper risk for longterm investors knowing that when the next time comes, they will not be there to back it up. Seen over the past full cycle, Central Banks can get quite creative. Central banks running out of ammunition to fight a downturn is not something im concerned about. As investors, we need to get comfortable with the idea. It is not a particularly pleasant thought. A monetary response does not fit. It can help. Can provide a little bit of liquidity. But when rates are starting from a very low level, fighting a pandemic with a fully monetary response is not going to do a whole lot. To get comfortable with this might not help. We will leave it there. Out. more news coming this is back in china. This could be concerning. This conversation around a restart. Yvonne you have to wonder when other countries and their trade partners are all dealing with this virus and they cannot perform in a proper capacity. This is just another thing that they cannot get back to normal. We also want to mention about indonesia. Andks lighting their 5 another trade halts today. Hang seng features earlier today triggered a stock Circuit Breaker. News starting to become when the market does not had a Circuit Breaker. Yvonne still ahead, we have the travel ban on europe. Another blow to the travel business. David plus, asian banks facing spiraling losses. This is a conversation you will not want to miss. This is bloomberg. David breaking news continues. Hong kong may step up order patrols due to europe. Border patrols to and from what. We could be looking at similar steps that a lot of countries have taken. Yvonne we are also hearing from american airlines. They have been really hit by this travel restriction that President Trump made on europe yesterday. They said they will continue flights to and from europe for up to seven days. The restriction is supposed to take place at midnight in the u. S. The coronavirus is being billed by the french president is the biggest epidemic in the last 100 years. Lets get to the latest. Tell us what is the latest happening in new york. It seems like that is where we are seeing most of these closures. The fact that sports leagues are canceling games. This is feeling real now. U. S. , when sports cancels, when disneyland closes, and when broadway, that is when you know it is real. Sports is often the last thing to go in the u. S. Of the majorall leagues, followed by hockey, march madness, which is huge for sports and culture in the u. S. Isor League Baseball delaying opening day, stopping springtraining. It really is heading home. New york city declared a state of emergency. Partly to be able to control large crowds. Also the campaign trail. They will have their debate on sunday in washington without a live audience. David other american cities, there are they expected to follow suit . What power does declaring a state of emergency give . It allows them to control big crowds, events, shut things down. I assume we will be seeing this with other major cities. We are seeing school closures. New york has started closing schools. We are seeing that across the country. The u. S. Was obviously slow to this. It did not happen like it happened in asian. In asia. Japan closed its schools for a while. The u. S. Is not set up for this. They did not have the experience of sars that Asian Countries did. Sars did not hit the u. S. That is something they are figuring out. Fauci is saying they are not set up in the medical system in terms of testing. This is all happening very quickly now. Governments are having to respond quickly. I think we will see a lot more of this in coming days. Encouraging employees to work from home. Twitter has than that now. We will start seeing a lot more of that. Come ups will have to with their emergency plans pretty quickly. David thank you so much for that update. Lets talk about airlines. A hammer blow to the airlines. 113 billion in lost revenue. Lets bring in our transport team leader. What can you tell us about this . That number was estimated before the u. S. Have this ban. Most likely the number will be more than what we know now. They are working on a new estimate to take into factor what the west has done. Transatlantic travel is very heavy, that will hit the airlines. That number will only balloon. Is there anything that governments can do to relieve what has been going on in the sector . Some say these travel restrictions are not effective and it is really hurting the airlines. What singapore has done is they will have to look to the government to provide some relief package in terms of financing. Or referral of payment. Deferral of payment. They have to save cash wherever they can. Deferrals of airport fees will be one. Any other sort of deferrals that they can think of. Given this tough situation. They are in talks with all of their vendors to see if they can defer any payments so they can reserve cash. I think that is what airlines will be doing during the situation. David thank you so much. Our asia transport leader. We are minutes away from the japanese session going into the lunch break. Cannot get there soon enough. 8. 3 down. Looking at the damage. Several markets have hit Circuit Breakers. I am having trouble remembering. I am losing count. Indonesia, yes, that was the latest one a couple of minutes ago. Talking a we are little bit more about the credit side of things. Asianvirus could cost banks up to 100 million. Through all ofu these Market Actions here in the next side of this break. This is bloomberg. It is 10 29 a. M. In hong kong. Singapore as virus cases spike. The city state is preparing a second support package. The government tapped reserves was in january in 2009 and a credential the financial used the funds to ease tax burdens. Iran says that Virus Outbreak could be part of a biological attack. Is calling look, he on armed forces to lead the fight on diseases. The virus has already claimed more than 400 lives in a ran. He said there is evidence that raises the possibility of the outbreak being a deliberate biological exercise. The virus has hit broadway. Governor andrew cuomo is banning public gatherings of more than 500 people. The theater district of broadway is a revenue earner for new york. It generated 1. 8 billion last year. Venues will be closed until at least april 12. The return to work of chinas power plants shows the economy is only slowly getting back on track after the virus. Early signs of a pickup in entry pickup in energy. The road to recovery has barely begun. Limburger economics reveals china was operating at 80 as of march 6. The return is patchy at best. 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. It is busy. Every newsroom across the world is busy on this. Have a look at this. The hot headlines. You all know about the market moves. Everything from Circuit Breakers getting triggered. Youre getting more hot headlines on high profile cases coming out. Scroll up a little bit so we can see what happened. A little bit higher. There we go. Thank you so much. Triggering a trade halt we sell out of indonesia as it fell 5 . We joined the likes of the philippines. Central banks of the worlds biggest stepped into ease liquidity concerns. We are joined by the asia correspondent. Lets start with the fed. It seems like what they did in what they promised did not do much for stabilizing these markets. It was a bit of a reprieve and that was it. It did not stabilize the equity markets. Talking about an extra 500 billion now. There was an Immediate Impact in the repo market. The overnight repo rates, which gauges the cost of that market they had dropped to the fed. There are two takeaways. The road those there are those when they were criticized of being slow to respond and another economist said it was the equivalent of bringing an Aircraft Carrier to a knife fight. This one seems to be having some traction where it is needed most. Bring in more of the cavalry. Talk to us about the ecb. They had a scheduled meeting overnight. What did they announced . Did it work and what else did they promise . The drama came after the meeting. They announced they were going to buy more bonds. More loans for the businesses who need the money. That is seen as a positive step. Ae ecb president said made point that her job is not about suppressing spreads in the credit market. That caused quite a ripple effect. Italys economy and government are among the most. Vulnerable a classic case of the Central Bank Official misspeaking. Say it was ats step in the right direction. Others saying it is nowhere near enough. Theecb in this regard is fact that some of the political leaders including president macron said it was not enough. The ecb had been pushing a line that physical needs to take it easier. If the government is saying the ecb has more work to do, than that is probably what probably not what she was to hear. Yvonne it seems the Central Banks are signaling they will not bail out this market. Thank you. The coronaVirus Outbreak may add a hundred billion dollars. Hundred billion dollars in credit losses. That is according to s p global ratings. Chinese lenders will bear the brunt of the damage. The head of the asiapacific credit research. Good morning. Our viewers are not going to believe this because you look quite young. You have been in credit and finance for close to four decades. Can you help compare the current episode with the previous crises . How bad are things looking right now . Ok. The difference from the previous the last crisis it was financing. This is a combination of fundamentals and financing. The fundamentals has to do with the virus. In terms of people restrictions and fears, crimping consumer business and economic activity. This is hitting the top line revenue and the cost earnings. Ofond is the concerns lenders and Equity Investors is that if earnings are going down, we should pull in the valuation. You see governments and regulators. You see the regulators handing the financing part. Governments are losing fiscal programs to make up for the drop in demand. Yvonne we saw in the u. S. Investmentgrade debt went through its worst two days since the financial crisis. How are you viewing what some could say but some are saying this could be some type of credit crunch . The concern is that lenders and investors are trying to pick and choose. Theyre looking to see which sectors might be hit hard. If they start to withdraw the usually start to withdraw at the lower rate. Also highly leveraged entities. They are going to pick and choose. It will not be a blanket. We understand they are quite selective. We can see where they are going to focus their efforts in terms of pushing down their exposure to the particular sectors and companies. Report, it is quite long. One of your conclusions is this will eventually come to bite the banks that are expected to bear the brunt of this. Debt is not a problem until you have a credit event. Warning overeen chinese debt for as long as i can remember. What is the extent of the damage seethink we will eventually on the banks . How bad will it get . Upour estimate is it will go 6 of nonperforming loans. That is a dramatic increase. En is not surprising giv they are the epicenter. David ok. I think we just switched feeds. He is probably still talking. We will try to get them talk get them back. That is a market that had a Circuit Breaker. 2. 1 drop there we go. 14 820. U. S. Dollar. I believe we have terry. Terry, are you there . Still here. All right. Please continue your thoughts. I was saying that with the chinese banks having to forbear understandably and china being the epicenter of the virus, we expect nonperforming loans to go up 6 . David instead of yvonne instead of that, we are seeing the corporate debt market in china, it has been a busy month. What you are still seeing in the private sector the things that led to these record 2019, that 2018 and has not gone away. To what extent is the chinese debt market insulated from what we are seeing globally . Market tendse debt to focus on the upper ends, the state owned enterprises. The area we need to watch is the small and medium enterprises. One are two months of nonactivity, nonrevenue chain for some consumers, no wages. That is going to take a hit. The bigger players. Are more likely to be able to ride through the storm. David david speaking about the airlines, you have a separate report on that. We were talking before on our transport reporter. Is it a question of which airline defaults in its debt and which names come to mind for you . Obviously 90 down. Probably a lot of potential on the downside. We are in contact with various airlines we are reaching. A lot of them are activating plan b. We need to understand how they are going to manage. Are they going to start retraining people . Also, there is a bit of a cushion. That will take time to float through. The oil price has gone down. That is a plus for the airlines. That will take time to flow through because they already have contracts in place for fuel. David lets mention it depends on how they are hedged. If they are hedged back up, they are going to pay for that. Thank you very much. Yvonne just wanted to move on. Some lines we are getting out of american airlines. They are cutting International Capacity for the summer by 34 . Delay raises and uppers of unpaid leave. Cutting International Capacity by a third. Coming up, as the coronavirus wreaks havoc on indias markets, the Prime Minister Modi Government is willing to do whatever it takes. Yvonne yvonne some of our earlier guests. The dramatic music hit home. Lets talk about india. Policymakers are pledging to use their record currency reserves to stem the wealth that further threatens a sluggish economy. David authorities are estimating the virus will shave about 30 basis points. The 30 basis points. Come on, man. That seems low. You might probably be right. Right now, that is the initial prognosis. Withinrent worry policymakers is the volatile rupee and the weakness we are seeing in the stock markets. That is rattling them what they are saying that is rattling them. What they are saying is they will do whatever it takes because that is the one thing for both politicians and the bankers and Financial Sector really is worried about ca. Deficit is account 0. 2 of gdp. Plus, you have reserves that cover 10 months of input. Is the rupee is the problem is that comes at a time when oil is also down. Something is not good. Portfolio investors are taking money out from this country. Yvonne there is so much anticipation the r. B. I. Could be the next to have an emergency meeting. If we continue to see weakness, how much to they have to take rates to cut rates . I think they will do for a deep cut. Right now, that is not on their agenda. I spoke to two Monetary Policy committee members. The impression i get from them is they are going to do what they are going to do is tackle liquidity measures. That is what they are going to do. They say if they are going to cut rates, it is going to show they are panicking. They do not want to be seen as panicking. Have buckut has to for the back. Buck for the bang. When amy in april, they will go for a deep role when they go when amy and april, they would go for a deeper rate cut. Yvonne at least inflation is cooling a bit. Thank you for joining us. More breaking news. David more Circuit Breakers. The cash market is in a lunch break. Hitting afutures Circuit Breaker. 13 minutes after Index Futures hitting similar Circuit Breakers. Japan as a complicated one. Yvonne and denisha resuming trade indonesia resuming trade. We are seeing that drop extending to 25 . David not looking good after this trading halt. I am tired should we are counting down i am tired. Standing by for us to give us how things are shaping up how bad is this looking . It is friday the 13th. It has a pretty ominous ring to. T down about 1000 points. We get our First Circuit breaker. That is the open lower this morning by 59 points. Yesterdays session was a and a half percent. 9590. We were talking about a 200 a week moving average. Slipped through that. Thanks have seen one of the biggest drops since october of 2008. Sectorsas a few other like pharma. The biggest drop ever. Fall since 2008. That, we were talking about the currency, which is likely to hit record lows. 74. 39. We will have to keep a close eye on the currency as well. Yvonne thank you. Joining us with what looks like a pretty rough session in mumbai. We are all kind of in the same boat. You are also looking at the philippines. David absolutely. Now imposing a 60 day price freeze any the capital. No business disruption during the lockdown. The president came on National Television and an end and announced a lockdown in the capital. To prevent the curve of the virus. The finance chief was asking the pension fund to step in and support the market. Done six and a half percent as we speak dow luna six dow lorna six and a half percent. Similar story. Pick what is falling the least. Thailand market opens up early on. That hit a Circuit Breaker. Vietnam doing quite badly as well. This is bloomberg. Yvonne if you need any kind of i guess you could call it good news we are getting the numbers out of china with the latest additional coronavirus cases. Only eight for march the 12th. Most of them came from hubei. Five additional coronavirus cases. That is a small positive. Single digits when it comes to new infections. More signs that perhaps things are looking a lot better. David took them seven weeks. They of course put their measures in place. We will leave it there for now. Markets are doing quite badly. We are talking sports. Nba, yvonne nhl. David possibly maybe summer olympics. We will see. At the moment, organizers say that is going on. Yvonne lets bring in the head of the sports business desk. Despite what we are hearing, you continue to hear japan ministers be adamant this is going to go on. Why do you think that is . It is a massive event. They have been planning this for a decade. The budget is close to 6 billion. They have a ton of sponsors and broadcast partners and 11,000 accolades. Tourists counting on these games. We do not want to cancel. They do not want to cancel. David what is really puzzling is almost every day, you are hearing them come out and without i would imagine anyone asking, they are volunteering the information that nothing has changed. It is a money issue. It is definitely a money issue. Lots of people are asking. There have been reports swirling around. People close to the movement speculating about the possibility of a postponement or when they might need to decide. They have been extraordinarily stubborn in saying everything is going ahead as planned. We are not discussing a postponement. We are not discussing a cancellation. It is impossible to know. The olympics has only been duringd three times world war i and world war ii. A postponement is extraordinarily difficult. These are hotel rooms that have been poked a year in advance. Booked a have been year in advance. The logistical nightmares of canceling out right is a huge disaster. Hard to say. Yvonne we are supposed to know by may. That is the latest, right . That is what one olympic official said would be the timeline they would have to decide by. Given the way things are going, i would not be surprised if he started to have accolades having an opinion or other people to have athletes have an opinion. Yvonne great stuff. Joining us from our bloomberg sports desk. Coming up, we are going to dig into the Market Action ahead. Not saying much when it comes to let up when it comes to these equity markets, bond markets as well. We will see what she has to say about what to do next. David if some of the comments from the earlier guests was were any indication, that people are scared. When you do not know what to do, you are doing nothing. And the thailand market opens next. We had a Circuit Breaker yesterday. The growing number of exchanges that have done so. Japan is not a lunch break. We are opposed for the we are poised for the youre watching bloomberg. Ed is almost 11 00 in singapore. Yvonne we are entering the last hour of the morning session in hong kong. Here are the top stories. Markets in freefall. Worst week since 2008. Investors doubt policymakers can stop this virus. Sweepsa the fallout the growth. Tens of millions are in lockdown. The u. S. Admits testing measures are failing. Yvonne the saudi russia power play russias on karen both sides are ready to flood the market. This is Bloomberg Markets asia. Haslinda a broad selloff in asia markets. Taking a look at where we are right now. Take a look at the board. Red across the board. Circuit breakers triggered. Korea and japan and indonesia. Investors pretty much spooked. Not confident all of the measures including the likes of the be ok, the boe. Not enough to stave off the potential recession globally. Investors spooked. Downg a look at the nikkei 8 , extending losses set for the first week since 2008. The topics taking losses. Members discussing the need for a special meeting. Manila down by six and a half percent. Index falling as much as 9. 9 at the open. Yvonne last time yesterday, we were seeing similar losses. That triggered the trading halt. We will see if that happens. Trading holds in multiple markets today. Futures,look at india it is going to be pretty much the same. Nifty set to follow according to 6 . Res some this is after we saw the last close for the nifty. Some say we could be testing the 9000 level for the nifty. The rupee continuing to see some more weakness and hitting record lows. Does that give enough space for the r. B. I. To cut if there is any type of emergency meeting we could be seeing from the central bank. The 10 year yield, 623. The r. B. I. Holding a 3. 8 trillion rupee reverse repo auction today. Downnda we have the as et from lets bring in the head of equity asia who remains under eight global equities. This is about fear. The economics of fear has taken home. Absolutely. The markets are trying to price in fear. The way we have been looking at is like a series of soft of shocks. China evend19 in one it was not called covid19. We have the covid19 spread globally. We have had the oil shock, which adds to the demand problem in oil with a supply problem. We are probably pricing in a credit shock. If you put all those together, it is a black swan event. The first in 10 years. If you look at them individually, it is not so much 2008wn as it was back in and 2009. Haslinda thailand is down 43 . It is looking at a trading halt. If you take a look at the volatility, 40 overnight. We are back to volatile times. Everyone wants out. Even gold is being sold off. Is that a Fair Assessment . If you take that one step further, selling gold, which is normally a hedge against these this isis evidence forced selling markets at the moment. Could go much lower, but there is a reason behind what is happening. No one is going to say we are trading on fundamentals. We are trading on fear to get back to where we started. Yvonne local media in hong kong, hong kong reporting its fourth coronavirus death. Relatively speaking, still quite low compared to other nations we have seen. Hong kong reporting its fourth coronavirus death. We will see if we can get a full confirmation on that. Havensseeing the selloff. Bond yields are taking higher. It does not seem like these are the textbook plays you should be seeing. You sense this is something that is technical or is there something more fundamental here when it comes to the problems in financial plumbing . I think it is fear. Everyone wants to go to cash. Part of that is driven by margin selling. Much of trade is driven by algorithms these days. Approach toward a safe havens would make sense. The fact it is not points to this is much more technical and margin driven selling that is happening. It will eventually bottom up it is hard to call that at the moment. What are you looking for when it comes to policymakers . What can be done to stop the bleeding . It is going to be very tough. The first thing i would say is there needs to be an integrated monetary and fiscal approach from Central Banks and governments to provide support for the real damage what is currently happening is going to be doing to the economies. From the fed emergency cut last week, the market is not convinced this is the way to go. We have futures pricing in up to 100 basis points cut next week or sooner from the fed. If this is not accompanied by integrated sorry, fiscal targeted policies by region, then it is unlikely to provide any support or soothing for the markets. Haslinda more than anything else, this has become a liquidity crisis. Levels, haveese they priced in the liquidity for crisis . We are pricing a credit shock. Haslinda the full extent of it . Hard to say. We have not seen the credit shock yet. One thing that is much different from the last time ed felt like this, the global banks are much more highly regulated. There should be very little concern over capitalization of the globally systemic important banks. Event willredit probably stop at the banks instead of the system should that is one thing to look forward to. Haslinda we can take confidence in the fact that the big banks are not feeling the kind of stress we saw in 2008. We will know better come april when they will have to reveal the results of the stress test. Correct. In april, they have to submit the results of the stress test. It is going to be june when the fed resilient when the fed reveals its own results. Every year, they modify the conditions. That should give a bit of comfort to the fact that the banks are highly capitalized and regulated. They will feel pain, but not existential risk. Mentioned when it comes to corporate earnings to watch china. Why . Was first into this. We are going to see some Economic Data in the next few days. It is going to be bad. We think china is going to be the first out of it. We cannot say that is a blueprint for the rest of the world because due to its political system, it is much more able to take ricardian measures in terms of to take truck county and measures. Biggest part of asia, the biggest part of e. M. , it is going to be important to see what happens with the corporate earnings in china. Yvonne in terms of stimulus from china, do you think that is a little more effective in putting a four on these markets than what we are seeing from global Central Banks because you have to admit that when it comes to develop central bank, they do not have many left. Of course. Because of the political structure in china, they are able to direct the economy much more than a capital system a capitalist system would be able to. The government is the central bank for example. These kinds of things are much more effective in a system like china. Haslinda babies being thrown out with the bathwater. How do you protect your assets . Us, heading toward the end of last year, we have been emphasizing what we call an asymmetric approach. We have been underway cash equities. We have also been what we call asymmetric exposure. We have been using products that give us access. That is not to say we are not also feeling the pain. It has been offset by some of the products we have been able to add into portfolios. We are in a little bit of a position where we are trying to look at, where are the opportunities . There will be damage. Esse orchids will be l damaged. Yvonne we have to leave it there. The head of Equity Research for asia. Lets get to the first word news. Apple is reopening all 42 of its stores in china after the coronavirus forced a closer last month. 38 stores were operating as of last week. The final four will return on friday. The company also closed all 17 of its stores in italy this week. Disney is closing the Disneyland Resort in anaheim through the end of this month as the coronavirus continues to spread. The move comes after governor gavin newsom banned public gatherings of more than 400 people. Park employees will continue to be paid. There have been no reported cases of the virus at disneyland. Disneyland singapore may tap reserves. Ae city state is preparing second support package. The last time the government tapped reserves was in january 2009 when the financial crisis spread a recession. Handed wallrus street its worst session since 1987. Monday in new york city declared a state of emergency after president flats action plan fell european airports are being overwhelmed. Social media reports passengers are paying 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. Haslinda still ahead, the oil well gets worse. Driving Energy Stocks to 10 year lows. Plus, how low can you go . Policymakers are slashing rates amid the uncertainty. We will consider what happens when the dust settles. This is bloomberg. Yvonne the coronavirus is being billed the academic the epidemic of the century. Lets get to the latest with our Senior International editor. We are starting to see the u. S. This is getting serious especially when you have sports leagues canceling games. This is when you know i get to real in the u. S. , when you have the nba, National Hockey league, baseball opening day being postponed, disneyland closing its the march closing its theme parks. Broadway is coming to a standstill. The concern at this point is the u. S. Has not prepared much for this. They did not have the experience of sars. Yvonne they had a whole month really. They did. The testing system apparently is not ready. Places like new york are canceling all leaves for dr. Personnel. They are saying they are not sure they will have the capacity they need if they get a large number of cases. There is starting to be reaction from state and local governments about closing things down. Schools are shutting in maryland and ohio. San francisco just said its schools are shutting down. Places like new york declaring state of emergency, saying they cannot have large gatherings. I assume we will see more and more workplaces close. Yvonne it seems like at this point it is very much in terms of local communities making these declarations. You mentioned new york city under an emergency. Now we seen it sell it in new york, which has had a fair number of cases in the suburbs. It is a cultural hub of the u. S. Dear concerned about large groups of people. They are concerned about large groups of people. There de blasio said anything with a 500 person venue. Will with less than 500 have to operate at half capacity. The idea that large groups are what could facilitate the spread of the buyers that they know is spreading across the u. S. Bloomberg Senior International editor. Japans minister of finance saying it sees nervous moves in the markets. The nikkei extending losses to 10 . Nervous movements in the market. Lets get an update on the developments in asia. We are joined by reporters. Lets start with the philippines. On president has put manila lockdown. Surely this will have implications on growth going forward. The president has put the philippine capital on lockdown for the next month after the spike in coronavirus cases and some numbers of his own cabinet being exposed to infected people. So far included in that lockdown, they are barring entry for all foreigners who have traveled through countries that have localized transmission. They are suspending Domestic Travel in and out of manila. How will are going to implement the lockdown is still up in the air. He has said he will use the police and military. The Capital Region is a million is a region of 12 million people. Many of whom regularly move in and out of the province. The stock market has not taken well to the news. We have triggered the Circuit Breaker only five minutes after trading after falling more than 10 . That has prompted the finance chief to order state Pension Funds to support the market. It remains to be seen what the market what the lockdown will do in terms of containing the virus. Haslinda we have the p, down 6 . Hang tight. Lets turn to singapore. We heard from the Prime Minister he is willing to tap the reserves. This would be the first. They do not do that in normal times. It really takes these cries like conditions. Singaporean officials are defending against the charge they are excessively prudent in using those reserves. Last month when they rolled out then4. 6 billion, they said this is what we say four. That is why we have this mindset of being prudent about the reserves, to rub is out in big measures to stimulate the economy. This is what they are hoping for this time. We are expecting that could be even bigger than the first. They are going to help finance that through tapping the reserves is what they are open to. Yvonne tell us what is going on in india. The country seems to be a little more isolated from the rest. We have seen some tough measures from the government in the last 24 hours. India had its first death from the virus yesterday. The number of infections are still quite low at 74. The government has effectively closed the countrys borders to foreign tourist in a bid to stem the outbreak. Apart from this years size, concern a particular because of the density of its population and the fact that its healthcare care spending is among the lowest in the world. Hold, virus were to take the overcrowded hospitals would quickly become overwhelmed. Rupee the central bank is looking at measures including using indias 480 billion foreign currency arsenal to stem the market. We are hearing the Prime Ministers office is exploring the need of higher spending to prop up growth. Yvonne thank you for the roundtable. Thank you so much. Some breaking news coming through in indonesia today. Announcing its second fiscal stimulus package. Add saidd round is to the aggressive moves you are already seeing from the central bank to counter the impact of the coronavirus. A new trench of fiscal measures. Was ao 725 million that not up to 725 million. This is adding to the first round. Plenty more to come. This is bloomberg. Check ofne a quick the latest business flash headlines. Caterpillar is offering further signs of distress. Reporting its biggest decline in global Machine Sales since the end of 2016. The results indicate how the coronavirus is dragging on vital industries. Concern has sent caterpillar almost down 40 . Fiat chrysler is having office staff dried work from out office staff worldwide work from home. Personnel are being told to work remotely including 14 thousand people. Fiat has temporarily shut plans in italy. Ford motors will likely be forced to cut a dividend. Rbc Capital Markets says the infection is affecting the auto industry. Falling as much as 50 in the u. S. Ford has assured investors it will maintain its dividend. Says the virus will prove too much of a burden. Haslinda markets in melbourne. We are seeing the biggest decline since black monday. Indonesia down. Indonesia announcing tax breaks for 19 sectors. Someenact import taxes on goods. Those details are coming fast and furious. Circuit breakers triggering left or right and center. Losses seem to be mounting. In japan, the nikkei extending losses. Kyoto reporting the Government Holding an emergency meeting on the stock exchange. The be ok discussing the need for a special meeting. More to come. This is bloomberg. Haslinda friday the 13th. Not looking good. The sti down 11 . In the middle of the trading day, so far this week, the sti down 15 . There is a beneficiary. The exchange is benefiting from the frenzied buying and selling of assets. The sti down i more than 5 . Lets get to the first word headlines in new york. Reservesore made tap to alleviate the crisis if virus cases spike. Eady allocated the last time the government tapped reserves was in january 2009 in the financial crisis eatened recession kid threatened recession. Irene says the Virus Outbreak could be part of a biological attack. The ayatollah is calling on armed forces to lead the fight on the disease. The virus has already claimed more than 400 lives in iran and he says there is evidence that raises the possibility of the outbreak being a deliberate biological exercise. Broadway dimming as lights. Giving its lights. Is banningdrew cuomo gatherings of more than 500 people. The theater district of broadway is a revenue earner for new york. They will be closed until april 12. Workaltering return to shows the economy is only getting slowly back on track after the virus. A pick up on energy use has raised hopes. Economics reveals china was operating at 80 as of march 6. The return is patchy at best. 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. Yvonne thank you. Lets get a closer look at markets on this friday the 13th. Hard to knowly where to start. You are seeing circuit triggers across asian markets triggered in the legs of south korea, philippines. The nikkei has plunged by as much as 10 . Currently down 8. 9 . Stocks holding at four year lows. The asiapacific index dropping as much as 6. 7 percent after wall street posted its worst session since 1987. The dow futures triggered as well. You look at other futures indexes, it does not look like there will be any reprieve. This is unlike other market meltdowns because this is not a 245 movement we are dealing with. You are going to have more virus headlines breaking. Investors filling from everything. Everyone is going to cash. Look at the big jump in yields. The yield on the philippines 10 year note that by 41. November 2016 lows. The asx 200 having its worst week since listing in 1992. The trigger and a was reached. The hang seng holding at january 2016. It is only the csi 300 holding up ok. Focusing very much on the crude market with the volatility. The supply shock. The oil shock. Every energy stock in asia is being heavily sold off today. It is holding at its lowest level since listing in 2006. Haslinda lots of comparisons being made to black friday 2008. Dropeading for its weekly since 2008. No signs of shows abating. Lets bring in the director of the Energy Markets research firm. Is this a price war or a word for market share . It has all of the trappings. There was really no turning back. We were already coming to grips with demand destruction from covid19 virus, which is catastrophic. We did not know how long it would last. When opec plus met last week in vienna, we expect them to put a floor under this. The opposite happened. Instead of the normal gamesmanship, suddenly they break up. There is no turning back. Theirudies slashed selling prices. Behind them, i would be fell in line announcing increases of one million a day. If you question their commitment, look at the tanker market. The saudis have gone out and fixed 19 very Large Crude Oil carriers. That is signaling, where is the oil going to go . It is going to move into markets or float offshore. This is a price war like we have not seen. What it brings back memories of is, remember in 2014 when they had the vienna meeting, the minister this was his strategy. At that time, they were taking on u. S. Independent producers. Lets see how low they will go. In, said solomon came this is not working. The fellow lysed his job. We are in the throes of a price war. Yvonne how long can we expect the pros were to go on . Cannottioned the saudis turn back. Even in the most optimistic case if minister novak suddenly things, i better go back and try to do some damage control, what can they do . I think there is going to be a massive loss of face. Who is going to blank first . 19 vlcu go out and fix sees and youre going to load the crude, you are going to be creating an overhang of supply. That would suggest it is going to be extended. It is not only the saudis fixing vessels. When you have prices collapse like this and you see what we call a tangoe structure. It is cheap on the prompt basis. You see it is more viable. The spread between the front month and six months out is six dollars a barrel. That is roughly a dollar a barrel a month. That is very inviting. This kind of margin provides an incentive for traders to buy oil, to stash it into a storage tank or on a floating vessel it is going to be a windfall for terminal income. Thinkking care because i the qs to lease storage are going to go around the block. We have seen the tanker rates jumped to 300,000 barrels a day. The oneyear spread of brent and said about 10 bucks a barrel is at 10 bucks a barrel. This is the level we are going to. How much is this does this undercut the u. S. . It is going to undermine it because that independent sector they are already facing a lot of pressure. Unhappy shareholders who want to see share buybacks. They want the income. The model had been, we will increase our reserves and production. Once the value of the reserves plummet, they plummet below breakeven levels. For a lot of people in the permian and eagle ford, may be toto 45, you plummet down 30. Suddenly that is a money loser. You have to overhaul your business model. You might see the fallout in credit ratings. He might see some of these firms, under tremendous pressure. That is the other thing that is going to be playing out. Haslinda you talk about default, are we looking at at 2014 and what happened in the price war then, we had the bottom matt 27 brent on february of 2016. Hat had a knock on effect that was successful in the sense that u. S. Oil producers lost about 1. 2 Million Barrels a day. You had companies become insolvent you had a few companies who were very proactive. For the most part, they were the walking wounded. Ceot sheffield, a respected of Pioneer National resources, he was quoted as saying we could see a 20 loss of production. We were supposed to peek at 13 million a day. Take away 20 and you are talking a fair amount of oil. Haslinda everyone is asking who will blink first. The other question is which Oil Producers are most at risk . Nigeria, iran . Iran is a special situation. They probably have some incentives to produce more oil. It is the higher cost producers that are going to come to the greatest pressure. Looking at algeria. The saudis set a target on their budget of 80. Algeria, angola, they have different breakevens. The ones who are the most vulnerable outside of opec are the independent producers. They do not have the resources to weather this storm. Right now, i think the whole signal from the opec producers is they have put up with russia for long enough. Russia has been the slow compliance. They are going to open up the floodgates. We will see an additional 4 Million Barrels a day of production coming out in april. Yvonne the saudis are unleashing a wave of crude toward europe as a signal to undermine russia. What does that mean for asian refiners . Will they continue to be left out . When the saudis slashed their official selling prices in the wake of the breakdown in the vienna talks, they did take steeper cuts in europe. That did send a signal to the russians. There is a battle for market share. Even though the china market has shrunk with its virus, there is a big risk for market share between the saudis and russians. The saudis are going to stake their claim. Theyhave already announced china. G more oil to look for the market share battle in asia to continue being between russia and saudi particularly in the biggest market in the world, china. Haslinda one final question. With oil so cheap, can we just forget about looking for sustainable, cheaper alternatives . That is a longterm proposition. I am in the fossil fuel business. I am kind of a fossil. I have a traditional view. Europe amongast in some of the majors, this conscientious attitude toward zero carbon emissions. More open to renewals. Maybe exxon mobil. It is a beauty contest. Diversity of opinion on that. Yvonne we will leave it there. John driscoll of gtd energy services. More breaking news. It is a busy breaking news day. Australia, when it comes to the number of infections of coronavirus cases, a 24 rise in the last 24 hours. That brings the total of new infections to 156. We are expecting to hear from the Prime Minister any moment speaking in sydney about this latest spike in numbers. Perhaps that is why we did see the big stimulus worth of fiscal measures from the government earlier this week. When it comes to the rupee, we are seeing this dramatic drop in the currency to a record low. 7448 against the dollar. We are awaiting the latest lines out of australia. Lets kick to indianola. Counting down to the opening of the session. Moments away. Record low for the currency. Sinkinge are seeing it 6 . This is bloomberg. Haslinda stocks plunging in asia. Lets get right to mumbai. How bad is the damage . Day is turning out to be a carnage now for the world equities. We have had a gap down opening today. We breached the mark of 9000 for the First Time Since march of 2017. Nifty is open with cuts of 740 points. The nifty drops around 950 points. We will be monitoring that closely. Centex, cuts of almost 20 points. Markets, the nifty 500 index, the markets extremely weak today. Down about 8 . Indian rupee has hit a record low, surpassing the previous lows we had seen in october 2018. A the currency markets, it remains to be seen if there is any sort of intervention. Which stocks are you tracking in the opening . Tracking stocks, but it is actually a carnage. All of the stocks are in the red. Especially the heavyweights. 20 see bank is down almost to 20 . They have cut the target price to 1380. They see 22 earnings cut. That is the reason that has led to the cut in target price. Lower crude prices. They tend to lose because of lower prices. Negativelybe impacted. Earnings estimated by 38 and cut the target price, 78 from an earlier target of 110. Haslinda thank you so much for that. We are awaiting for australian Prime Minister morrison to speak in sydney. Reported in australia gaining 24 . Shotan sang a stimulus will not revert a recession. We are waiting to see of Scott Morrison will shed some light. Scott morrison has resisted pressure to order cancellation of mass gatherings. The asx does not have any Circuit Breakers like those employed by other markets. Joining the slump across pretty much asia. More to come. This is bloomberg. Haslinda welcome back. Some headlines to tell you about. Isme minister trudeau obtained selfisolate due to his wifes illness. It was announced earlier she had been exhibiting flulike symptoms. Mr. Trudeau saying he will selfisolate. Ae market turmoil is sending world of low rates even lower. Country,than one Malcolm Scott is here. There is no stopping this from happening. It seems to be. The market moves, especially with the treasury market, suggests bond traders are pricing in now that the u. S. Had one haven that was offering a bit of relief and is no longer. Joining japan and europe, it is going to be stuck in this low yield, ultralow policy rate era. This is also stirring talks about the be og the boj reviewing policy. That is meeting next week. The problem for the boj is there is not in of a lot more they can do. They already have the negative rate. There is some talk maybe they are going to be more aggressive in their language about their etf purchases. Globally, these Central Banks are looking close to tapped out. There is the u. S. Fed meeting next week. The emergency cut from last week did not seem to do much for the concerns of investors. That limited scope to move. Going forward, this ultralow yield curve environment creates some interesting balances because we have on the one hand, it drives this need for tapped out Central Banks need the fiscal authorities to step in to do something. Maybe it helps them to do that because it reduces borrowing costs for the government. It makes the big deficits a little bit easier to service. Oft could be one of the kind bright spots of this theme. Haslinda Malcolm Scott. Thank you for that. Something to tell you about good india halting tell you about. India halting trading. Locks of Circuit Breakers being triggered in asia. Loss is continuing to mount. The nifty, the r. B. I. Saying it will use reserve to limit decline. Boosting spending in the economy. Broadbased capitulation that we are seeing in the country. India stopping trading after the 10 slump. Lets dig deeper into the markets. It is capitulation. Blackot of comparisons to monday. Havew the dow and s p 500 their worst session since 1987. Hra showing you what kind of a week it has been for asian equities. The Msci Asia Pacific index, which is down by 5. 6 , it has dropped nearly 7 today. Youre similar to what seeing in global stocks as well. This is not something traders really want to be waking up to in the legs of europe. The futures markets. Stocksman dax suggesting will follow either 4. 3 . S p 500 futures down 3 . We did see the Dow Jones Futures earlier hit limit down. When it comes to tokyo stocks, hit as much as 10 . You mentioned the number of Circuit Breakers triggered in asia including india. South korea, the philippines. Trading is halted. South korea was halted after following by 8 . Downang seng index is 8. 6 . 70 superlatives and it comes to these markets. In australia, you have the asx 200 on track for its worst week since the index was launched in 1992. You can see when you look at the bond market, there is no reprieve. Looks like everybody is going to cash. You have huge moves coming through on yields. Have a look at the 57 basis point move on and in ages 41 basis point rise. It comes to currencies, these em currencies getting led by the rupee. On track for a strong low today. Movessting to see some coming through in these commodity currencies. Traders have told bloomberg that is due to thinking to thinning liquidity. Traders are trying to get out of all of their positions but moving into some of the commodity currencies. Crisisa liquidity staring as in the face. Just to recap, those lines out of india. Trading. T stocks triggering a circuit that is happening for the First Time Since 2009. Trading is for 45 minutes after the circuit breach. Plunging,ia, stocks Trading Halted for a second day. You can see this is a putting a lot of pressure on the government to stop the losses. The region has pledged more than billions of dollars. It has cut Interest Rates. Circuit breakers triggering pretty much this week from bangkok to manila to jakarta. Investors spooked of course. They are not confident about the emergency moves being taken by governments and Central Banks including the fed, the ecb. They are questioning if that is enough to put off the global recession. More to come. This is bloomberg. [ fastpaced drumming ] [ fastpaced drumming ] the following is a pre a played a paid program. The opinions expressed do not reflect those of bloomberg lp, its affiliates or employees. 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