The two handle for wti, the brutal level as the dollar continues to tread lower in the market. Guy . Guy long food, short travel seems to be the trend in europe. Like you in the United States, we are off our lows in your. We did not get the squeeze friday. The stoxx 600 is still down. Every single sector is negative territory. Health care, food and beverage, and basic resources, where we are seeing the least losses. Insurance, travel and leisure, construction are the biggest losses, another big selloff in the btp market in italy and we begin to see volatility pushing ever higher. We are off our lows on the day but european volatility shows no sign of letting up on the outside. Lets get back into one of the big stories weve been covering over the last hour. Proposed,an union has this coming from the European Union Commission President , a temporary restriction on nonessential travel to the European Union for 30 days. She informed g7 leaders of the band during a Conference Call earlier today. Lets get the latest on this with maria tadeo from brussels. A couple of things occurring. Why is it taking so long for this to happen and is it response to what we saw from the United States . But what isuld be, clear is european officials are trying to take more measures to prevent the virus from spreading. They realized that the center for the virus has clearly moved to europe. We have seen those numbers rocket in italy but also spain, france. We are seeing governments take more draconian measures to try to stop it as it moves along those lines. Trying to contain the virus. I do want to point out what ursula von der leyen just said, it is guidance from the European Commission. It could only happen if european leaders agree. The timing is interesting because tomorrow european leaders will have an emergency call. They will get together and if they deem it necessary, they will go ahead with the ban. This means if youre trying to visit europe, planning on getting on a plane deciding to come on holiday in europe, which seemed unlikely anyway, you would be prevented from getting on the plane and coming here unless there is a very strong exception for that. You are thinking health and medical equipment. As at this point it is just guidance. The final decision will come down to european leaders. Alix what is the consensus . How broadly are they discussing this and will they agree . Maria there is a number of issues at stake. When you speak to officials, they are aware the situation is now very serious. They are aware the situation is not just about italy, it is really affecting every member state on a different scale, but the virus has been spreading around europe. They will also tell you the economic repercussions will be very serious. They do see the european economy shrinking by 1 , and they will tell you a recession at this point is the base case scenario. Everyone is keeping a close eye on Emmanuel Macron. He is expected to speak before the french people at 8 00 european time where he could announce a shutdown in france. This is significant because it would be the second, third, and fourth biggest economies in europe shutting their lights off business. That would be a dramatic escalation but at this point nothing has been confirmed. Theres a lot of speculation as to what Emmanuel Macron could announce but nothing certain at this point. Guy how much cooperation is there between european leaders . Every country seems to be doing slightly different things. Italy, france, spain, germany, all taking slightly different approaches. How much commonality will come out of the call tomorrow . Maria it was obvious last week the eu was saying we are working together, theres a lot of cooperation. If you look at each individual nation, they were all taking very different steps. ,ust to be honest and clear Member States thought the italian response was an exaggeration and now they are doing the same a week after. This is what they are seeing the European Commission try to step in and coordinate. You are also seeing Emmanuel Macron push for the g7 call happening today because he was the one who put that idea on the table. The french are willing to see more coordination among Member States if it is not working last week. You are also seeing ursula von der leyen saying let me participate in the call and lets try to Work Together in a way that is much more disciplined. Guy thank you very much, indeed. Maria tadeo joining us from brussels. Alix form on the stock market is ian hartnett, absolute Strategy Research chief investment strategist. Good to see you. Andrew sheets at Morgan Stanley said valuations look pretty good. I may take on a little but of rest. Is this the time to take on risk . Is thist we are saying will be a multi phase down leg for Global Equities. In the initial phase we will try to establish Technical Levels and you can see equities versing bonds looking very attractive. If you look at absolute valuations in the equity market, we are still at a 10 discount on a Global Equities relative to the 10 year average. In2012 we got to 30 and 2008 we got down to 55 . I think we will try to build a rally. There are attractive looking levels. There will be attractive looking stocks after the big selloffs we have seen, i am not sure this is the end of the game if we are right and you have a multi phase selloff on a multifaceted crisis. Alix is there anything we can see from governments that can help accelerate these phases and get a bottom . Ian the key is we are now out of ammunition on a policy front. The fed blew everything over the weekend. This is absolutely all we can get. Perhaps you can see a bit of etf from goldman, you can see Corporate Bond buying, but now it is all about how you stabilize things from the fiscal side and the willingness of the fiscal authorities. So far, a lot of what we have heard about 1 to 1. 5 of gdp is probably not going to be enough when you look at 2015 or 2016 and look at the scale of the chinese stimulus. We still need to see much more coordination and much more determination from goldman to turn this thing around and it is hard to fight a virus with monetary policy. It has to be fiscal as well. Guy any levels you are looking at . Ian we have been saying the starting point has to be 2016, the 2016 lows. That strikes fear into the hearts of u. S. Investors because we are still a long way down to go on that. That 2016 level, the reason we are pointing to that is because our now cast of economic activity, before we had the oil price shock, we are down at the levels. Until we reach this kind of levels, notwithstanding the low Interest Rates, we are in a zero rate, zero growth world if that is what you have to cope with. Lows is in the 2016 where we should be looking. Even Something Like boeing that has had a terrible performance, it has still not yet gone down to the 2016 lows. That is the wording thing. It is the u. S. Market the needs to find a base, not the rest of the world. Guy you talk about the zero growth world. What sort of earnings number should we be looking for this year . Ian we came into this with a hawkish view. We were already talking about 10 eps growth. That is before this oil shock and the coronavirus shock. We have now penciled in 20 year on year eps decline. That will be very similar to what we have seen in the aftermath of the tech bubble. Not quite as bad as we saw in the gmc, but these are horrendous numbers. That is why i think you will see multiples discount a higher level of discount. This is why we have not been so excited about the narrative about the fact that bond yields will bear you out. In a world where Economic Growth is slowing, and a world where Interest Rates are being cut aggressively, that is telling you there is bad news out there. Equities do not do well until you stabilize after a period of time. Duration in terms of length of time rather than bond duration, that will be playing a role. We will take time for investors to feel confident. We still feel that what youre seeing is the liquidation of funds and that is one of the reasons why we are not convinced this is the bottom for this, even this technical rally. Alix ian, youve been on the zero growth, zero rate story. What you do . Are you in cash . Are you buying gold . Ian the things you go to gold, at the moment people are liquidating. They are trying to find any liquid asset they can liquidate to hit some of their margins. Shortterm we have seen the gold,. We would still be positive on gold. We would still be positive on cash. I would still be positive on u. S. Treasuries, even up. 8 . The pressure there is for yields to come lower, and in the equities base you will lose less defensive stocks. As i mentioned, there is probably still for more downside scope to the industrials, some of the more sickly sensitive areas of the markets. In the past it tends to be more consumer focused and less industrial that tends to hold up well it is thing like Agricultural Products rather than Industrial Metals where you can hide in these kind of markets. One of the things weve all only thingat the that goes up and bear markets is correlations. It is hard to find a place to hide. Guy stay with us. Plenty more to come from ian hartnett. Lets check in with the Global Markets and see where we are in the session. Lets go to kailey leinz. Kailey i have good news and bad news. The good news is we are well off the lows of the session. The bad news is we are still down between 6. 5 and 7 on the major averages in the u. S. More pain for the small gaps the small caps. A little less with the stoxx 600 outbound down to just 4 . This is an equity market that is fearful of the spreading coronavirus and spooked by the 100 basis point cut from the fed. Will it be effective . What does the fed know the market does not know . This is well off the lows of the session. We triggered our Circuit Breaker immediately after opening this morning with a loss of 8 on the s p 500. That then went to 11. 5 before we recovered. This is not the only day we have seen that kind of crazy volatile session. We triggered the Circuit Breaker in three of the past six sessions. Also getting one on monday and thursday of last week. It underscores the heightened volatility we are seeing right now. Something interesting i want to we have seen stocks selloff five times faster than they did during the financial crisis. Earnings revisions are not keeping pace. If you take a look at the terminal at gtp go at gtv , into thousand eight stocks fell followed by a 40 decline in earnings estimates. That would mean earnings revisions wouldve had to be revised lower by 14 . Instead what we are seeing in blue is theyve only gone down 1. 5 . That could signal analysts are still too optimistic about this equity market. As for individual equities in which you are seeing optimism, take a look at the packaged food space. As coronavirus concerns are spreading in the u. S. , people are rushing to the grocery store. I can tell you this from experience. All of the Grocery Stores around me have empty self empty shelves. Jeffries is saying food at home shales good rise in the next month. That is giving a boost to Companies Like can aggro, james smucker. Guy late last week the fda gave roach a green light for emergency use of its highvolume coronavirus test. President trump talked about the decision at his News Conference friday. Using federal emergency authorities, the fda approved a new test of the virus. We did this within hours after receiving the application from roche, a process that would normally take weeks. We expect up to a half a million additional test will be available early next week. We will be announcing locations on sunday night. I want to thank roche for their incredible work. Guy joining us from switzerland is the ceo of roche. Octor, the president talking as if this is happening quickly. Your tests are being brought in as quickly as humanly possible. You must be frustrated. It has been clear this virus will travel to europe and the United States. How frustrated are you this did not happen earlier . I am quite proud of what we have achieved, not only as a company but also in an excellent collaboration with the fda. We started to develop this test for hyper platforms in january. We developed the test in record time. Due to a very good cooperation with the fda we got emergency approval on friday. We have shipped the product and the tests are now available in labs across the u. S. Not you are saying it could have happened any faster . We started right away and we developed this test. There are other tests available in the market. There is an enormous demand for tests. We cannot yet meet supply. I am very glad we could make a big difference with his new test , which was actually approved in record time. Alix when you take a look out to april, what should we be doing today and not two weeks from now to get ahead of things . Dr. Schwan the most important method at this time the most important matter is the individual responsibility of all of us to stop infections and to flatten the curve. It is about social distancing. It is not it is about washing your hands. That is the most effective way to stop the spread of the virus. Alix are we doing a good job of that . Dr. Schwan good enough job. I think it is high time for all of us to take this very seriously and make our individual contribution, all of us. Can i come back to the question of the testing . Thereve been some that have suggested the older testing you used in asia could have been available earlier in the United States and earlier in europe. Is that the case . It is a lot about the ins dr. Schwan it is a lot about the installed platform in the system. That is part of the challenge. We have to ramp up the installed base of machines so we can do the testing. That is also the reason automation is so important. You cannot imagine you also need a lot of people, you need Human Resources to make it work. With this new offering, i am very glad we can bring important relief to the overall system. Guy in terms of the machines you have that are going in now, you have the 680 and the 880. Is there a 980 . Is there a faster way of doing this . The cobit 8800 is the fastest machine available in labs. Alix can you tell us where the next firepower is going . If you have the fastest machine, what is after that . What can you innovate to combat this in the future . Dr. Schwan the bottleneck is the rampup of production in this stage. Crisisse, following this roche will including look at higher systems for the future. The development of such platforms will take many years. At the moment the focus is to run as many tests as possible on existing platforms that means we have to ramp up the supply of testing. Alix here is a question from a bloomberg viewer. They wanted to know what your opinion was with respect to the fact that testing in switzerland is only for over 65 people in severe cases. Is that the right way to do that or doesnt need to be more broadbased irrespective of age . Dr. Schwan it is not a matter of age. What matters is you are termstizing patients in of showing signs and symptoms. Do they have fever . Do they have a shortage of breath . Is there a suspicion they have been infected with the coronavirus . That is how we have to prioritize patients. Let me also say we have to prioritize testing because there are not enough capacity for broadbased testing. That is not only the case in the United States, that is the case worldwide. Says we are beyond the point at which testing is useful. Do you disagree with that . Dr. Schwan i violently disagree with that. If they know whether somebody is infected or not, we can take action. We can isolate those people, we can treat those people. Likewise, if we know somebody is not infected, we save resources in Health Care Systems for those who are in need. In terms of mutations, is there an expectation within your company, within your scientists that we are going to see a mutation . The u. K. Is having a strategy that we need a herd immunity to point where reach a the virus can stabilize. Is there any sign this virus is mutating . Any expectation the virus will mutate . Dr. Schwan i am not aware of any mutations having occurred already. We know that viruses, if you , it mutates,flu that could also be the case for the coronavirus. Thatieve it is important we can react accordingly in case the virus starts to mutate at some point. Alix if we take a look at china, where things seem to have stabilized, the fear is that it not be a vshaped, it will be a w, where you go back to the worst but there will be incidents and issues and you go back to work and it becomes a slow grind. Are you noticing that at all. Once we clear this comedy things get better fast . Dr. Schwan all of that is speculation. What matters is we slow down infections and then we will see how the virus evolves and then we have to react accordingly. I believe it is too early to judge how the virus will evolve and how the spreading of the virus will evolve in the respective geographies. We do still see case studies like china and south korea, italy, the u. S. Taking more drastic measures. Have you seen one that works better . Doubthwan there is no that if you stop people interacting with each other, the virus in the spread of the virus slows down. Let me put it into very theoretical terms. If you could avoid human contact worldwide for two weeks, the virus would be finished. It would have no place to go. This is only theoretically. It shows you that if you slow the spreading, of course you can flatten the curve and that is critical at the moment because this gets a leave of the Healthcare System to cope with the patient really in need. Fear has to be we end up in a situation where we get into the summer, the virus dies down, not enough people have had it and it comes back in the autumn. How big a risk is that . Dr. Schwan i cannot judge that. I do not know it. There is certainly a need to watch the development of the virus, to monitor the spreading of the virus, if indeed such a scenario happens than be sure they act and to be sure they act fast. In awhat can we do to be better place to deal with such outbreaks . Thereve been warnings for a long time there was a potential for such an event. We were clearly out of position to make ready for it. What we need to do next time . What are the key things that government needs to do . Dr. Schwan the debt crisis shows us variance is important, we have to track new viruses and cla spread and act as early as possible. And then of course, is also important to do something about it. Testing is very important. I would certainly say to have a sound testing infrastructure helps to cope with a situation like that. Of course it is a lot about developing medicines to stay ahead of the curve. Think we will have a vaccine . Dr. Schwan i do not know. We are not in the vaccine business. Guy you talk to a lot of people in the business. What are you hearing . Dr. Schwan i hear that it takes some time not only develop a new vaccine, but then to also get. Olitical testing probably, this is still many. Onths out roche ceo joining us from switzerland. Later on, we have another exclusive interview with sheryl sandberg, the facebook coo. She will be talking about how her company is helping deal with the outbreak we are all living through right now. That conversation is coming up at 3 30 p. M. Eastern time. Eastern time is four hours behind gmt. The european closes coming up. European markets off the lows, but we are still sharply lower on the session. The ftse 100 down 4 . The dax in germany is doubly percent. 40 down. Some of the insurance stocks like bally ons is under pressure. Allianz under pressure. Some of the travel stops being hit hard. The european closes next. This is bloomberg. 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. Wthats why xfinity hasu made taking your internetself. 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. Guy 30 seconds to go until the end of regular trading in europe. It has been an ugly session but could have been unclear. The loss and to not look quite as great, certainly all of our lows. Of brightss, a sea red. Quick walk through the session. Lower. Off, gapped the lows of the day were later, but we flatlined most of the morning and into the afternoon, before trying to mount something of a comeback. Down over 5 right now on the stoxx 600. It was not long ago that we were north of 400. Lets take a look at the individual markets around europe. Iag under pressure. Allianz under pressure. Peripheral markets being hit very hard as well. We also have some shortselling bans in place in italy and spain. Lets break it down from a sector point of view, show you where the market is attempting to hide out. Half of 1 n by only today. Miners have had a better day. Utilities are there on the bond play. Down. Is you really need to look at the balance sheet. There could be opportunities. Car sectors down as well. Lets go through some individual names to highlight what we are seeing. Has lost a quarter of its value today. This is british airways, aer lingus, or whole bunch of carriers across europe. Basically, we have seen consolidation. Allianz down by 13 today. Pay attention to the banking sector. Down by 14 today. That is a name that many of us will remember from the great financial crisis. Alix it is a similar story here in the u. S. Could have been worse, down by 7. 4 , but we were down by 11 . We are off the lows, but it is the financials, energy, material stocks getting hit very hard, even though the fed did step in. Maybe some good news. The 10 year yield we have seen a bottom, if we are making higher lows. Lp the equity markets. Crude in the u. S. Has a 2 handle now. Basically, oil does not work under 30. Companies cannot operate with this price. It is just a matter of how long saudi arabia and russia can ain. Ain this p that brings me to the gold market. Why is gold selling off when you have this safe haven bid . If you need to cash, you need to go to gold to cash it out. Some speculation that maybe saudi arabia is selling to get that liquidy do to help sustain themselves with oil under 30 a barrel. It is really about how long anyone can sustain these prices in the market. Guy unless you happen to be in treasuries, where things are looking more interesting. Lets get back to the conversation we were having earlier in the program. Wallace,s now is geo as well as stewart. We had a g7 call today. The thing i saw coming out of that was the European Union potential band, traveling to the region. European Union Leaders are meeting tomorrow. What im not getting right now is a sense of cooperation. That is right. What we are seeing across europe is individual countries putting their own restrictions in place. On borders or people coming in. There is no real unified approach yet across the European Union. That applies as well to the u. K. , who is going their own way in regards to this strategy. We expect a briefing later this afternoon from the Prime Minister in which he will try to lay out in a more clear fashion what that strategy is. It is clear over the last few days on there is confusion in the u. K. About what is and is not allowed. We saw a very large gatherings over the weekend of concerts and that sort of thing, and there is a growing sense in the media that perhaps the u. K. Media has to move faster. Guy we will be hearing from mr. Macron in france later on. Ian, do we need to see cooperation, would that be a signal for stabilization . A bit of stabilization has come about from the monetary stabilizations, movements by the central banks. In tryingeen helpful to stabilize some of the dollar funding issue. Until we see more fiscal coordination, rather than this piecemeal approach, country by country, i think its very difficult. For us, the test is, is the combination of monetary policy, plus fiscal policy, which is what we have argued for in the end, you need to have both of those measures coordinated, and large enough that it starts to drive the dollar down, rather than allowing it to carry up. That is when we know there is enough coordination and enough pace and scale of policy action to start turning things around. Alix you make a good point about the dollar. You can stimulate all you want, but if it keeps gaining strength come it will offset any of the benefits of the stimulus. You need it to come down. What kind of stimulus does that look like for the dollar to decline here . It is hard to say. 2016,go back to 2015, remember, we have the evidence of 2008, what has happened to the banks to but also 2015, sovereign wealth funds having to sell assets to offset the fiscal deficit. We needed all of that stimulus from china, plus about 2 from the boj and ecb together. These are the kind of numbers you are talking about. About 2 trillion to 3 trillion probably of a combination of monetary and fiscal stimulus, and coming through in short order. That could be enough. At the moment, we are probably not seeing enough. Lots of promises, but we need to see real action. Because the weakness in the Global Economy is in the overleveraged small and midcaps, it is hard to get that money into the places it is needed. That is the reason why unemployment unfortunately may be rising in this environment. An laid out some pretty big numbers there. What is the hope that we will get something coordinated . How on the same page are World Leaders right now . Stuart im taking a guess, but im guessing not very. That is based on several months of what is happening in china, singapore, japan, and so on. As it has moved across the world, the response has been different. There have been quite a few moments when National Leaders have gone public in terms of their condemnation of other countries strategies, even after coming under pressure to do likewise. We have seen cohesion is not the order of the day, even within those clubs, like the eu. I was just going to go back a turning point for the market in 2009 was the g20 Conference Call by gordon brown. That london conference was the real side that we were at market lows, valuations were acceptable. Then we had tangible, coordinated action from a broad g7,p of countries, not just g8, but g20. That was a recognition that this was a global crisis. How much pressure is there being applied to riyadh right now and other capitals in the gulf, to say now is not the time , now is notice war the time to deliver a second hammer blow to the economy. Is that taking place as well . Moment that started, the real crisis in Financial Markets in europe and the United States kicked off. I would imagine some pressure, but it has been only about a week. What i will say is saudi arabia probably has three or four years where it can rely on the reserves it has. Say, this is not typically an organization that works on a oneweek timeframe. All of these organizations, all of that takes several months. It has to be in the interest of everyone. It is fair to say that russia is somewhat shocked by saudi arabia and its opec allies, and may the sense that everything has gone a bit too far. If you could resolve that, find a way to get the oil price up, find a rapprochement between the saudis and a deal that could maybe be brokered by the u. S. , how big of a game changer would that be . Were spending a lot of time talking about the virus, but the second leg of the crisis seems to be finding its epicenter in saudi arabia and moscow. This is a multifactor crisis. You still have the big issue, which is the high levels of debt in a whole range of small and companiesonomies across different economies. You are removing one element, but that will provide some support further out. Those lower prices are a tax cut for consumers of Oil Importing countries. 21, 2022, that will provide some support. You take away the risk of the decline in investment that youll see in the oil sector and the weakness of the oil sector earnings, which is the reason the equity market tends to respond so badly. That is the immediate crisis. Plus, this issue around the fiscal deficit, where even the russian deficit is forecast on a 42 per barrel. As we have said, 30, nobody can survive. That is where you get this additional liquidity pressure for sovereign wealth funds to start selling assets, even the most liquid, because they are the things that you can get the best prices for. Alix if we do not get an agreement, and we see the washout of certain areas in the energy space, does that eventually make it a good buy . The idea that youll have a supply gap down the road and companies will have better Balance Sheets at some point, or will it be a value trap . Ian at some point you get to the point where capacity, because of lack of investment because u. S. Shale companies will be forced to shut her. If that is sustained for three months, six months, that would cause a lot of problems for the u. S. Then that lack of capacity provides a big scope for oil prices to fall back into the 80 range in 2021, 2022. In the meantime, the lack of economic demand, plus the supply , really creates a value trap. Until we get a turnaround in in thef the scale, pause lower dollar, it is difficult to get value relative to growth. We would still say defensive quality Growth Stocks, in a world where bond yields are zero 1 and perhaps toward , still looks the most attractive strategy. Breaking news, staying on the commodity country world. Chiles centralbank cutting their benchmark rate 75 points to 1 . Already having some issues with copper production, and this makes it all the worse. The central bank will open additional credit lines as well to banks after they cut their benchmark rate by 75 basis points. Our panel. Thank stuart, ian. Thank you very much, indeed. Lets take a look at where we are with european equities, which have now settled. We are done with the session, a brutal one, delivering significant downside. The european markets did not have the squeeze friday afternoon. The ftse 100 down 4 today. , the owner of iberia and british airways, down sharply today. By dax down, cac 40 down seve 5. 7 . This is bloomberg. Guy from london, im guy johnson. Alix in new york, im alix steel. This is bloomberg markets. Ett. L joining us is ian harn you,ave data coming at earnings, headlines from g7, politics. What do you do, what is the most important thing to be focused on . For us, it is the village idiot strategy. We look as we are heading into a global slowdown, heading toward a global recession. Situation, you are forced to go to the most offensive assets you can possibly have. We have been talking to clients a last six months about the fact that this is effectively a valuation story. Too high, are earnings expectations are too high. At some point in the next six months or a year, you will want to have more cash than you currently have. Perhaps more than your trustees would like you have. Our sense is, keep it simple. Look at the response of the banks. The fed cuts rates. The policy has eased. And the banks tanked. That is still happening in europe, america. Start to outperform, value is not going to outperform. We would keep it simple. Quality, defensive Growth Stocks in the equity space. Utilities, food producers, these are the areas that provide some protection in equity space. On an asset allocation, bonds, equities, and industrial commodities tend to suffer relative to agricultural and precious metals. And credit is still where the lies. Credit has not done as much as we think him even though it has moved a long way. That is still a shoe to drop here. Alix if you are trying to manage where the credit market is going, where company Balance Sheets are going, what Economic Indicators can you look at for a realtime view of this . Ian what a lot of people are trying to do is look at the realtime indicators from Companies Like tomtom on how much road traffic there is, how many people are getting back to work in china. We are trying to find these more granular data sets to get that more immediate impact. When you can also see is that the markets get their fastest. The markets will tell you where you are going. To the degree you are seeing some stabilization. We have seen the asian markets start to outperform the u. S. And european markets. We think you are looking at a rolling recession. Quarter,he first Second Quarter is the european stress, and then you get the u. S. Until we have seen that max we saw those numbers earlier today from the states we will see more of those coming out. Credit is still yet to happen. How big of an event is it, how many problems are we going to see in terms of credit events . Walk me through your anticipation for the credit space. Ian we would call this subprime goes corporate. Everything you saw in the subprime space, in the consumer number youll see in the corporate space. A lot of things that are labeled than themore net debt highyield stocks. That is what worries us. Youll see these fallen angels crowd the space. High yield will selloff aggressively. Fiscal strategy has to overcome this, particularly in the u. S. How to study the small and midcap sector. That is where 70 of the employment is. If you dont stop that, President Trump has a big unemployment problem on his hands. Guy we appreciate you giving so much of your time to us today. Ian harnett, thank you. U. S. Markets look a little bit like this. Equities are down but off of their earlier lows. The dow is down by 8 , the s p down by 7 . We were looking at 10 drops early on. Circuit breakers kicking in. Some speculation that we could be going 13 down, but we didnt. Currently0year yielding 79 basis points. This is bloomberg. Reducing the number. Guy Boris Johnson getting a lot presseat from the british gran s about the details coming from the government. Changing his strategy now related to large gatherings, talking about the fact that people should stop unessential contact and travel. We will concede to follow this. It can find this on the terminal. Onx we want to check in Global Markets with kailey leinz. Absolutely a tough day. Well off the lows but also will not the highs. The three major averages down by 3 . This is not the first day we have seen this dramatic swing. Down byhas been up or 5 in the past five days. 7. 5 lower for the nasdaq. Down 10 in the past five days. Banks under pressure by the fact that yields are moving lower. You also have many of the majors stopping their share buybacks. That has citigroup, jpmorgan, bank of america down by 17 and 13 . Yields are part of that equation. I want to look at the spread and 10year treasuries. It is now steeper by 26 basis points in just the past five days, now looking at 41. 68. Curve is asteeper good signal for the equity markets, but maybe not today. The yieldly, when curve starts steepening come it could be 18 months for we see a bottom in the equity market. Boris johnson continues to speak, saying london is a few weeks ahead of the rest of the country and is asking everyone to stop nonessential contact and travel. We are about to enter the faster, accelerating phase of the outbreak. You can continue to watch this on your terminal, live go. For alix and me, this is bloomberg. Lets get to first word news. The less health and Human Services department has been hit a cyberattack. The attack on the departments Computer System sunday night was intended to slow the agencies system down but Officials Say it did not do so in any meaningful way. Sources also told bloomberg it does not appear hackers stole any data. This comes as the nation works to respond to the coronavirus pandemic. Millions of americas began their work week holed up at home today. The escalating coronavirus outbreak is shifting the nations daily routines in ways never before seen in the u. S. Wheels of justice slowed as well as the Supreme Court put oral arguments on hold come including fights over subpoenas to President Trumps financial records. The u. S. Has recorded about 3800 infections and at least 70 deaths. Two thirds of them in hardhit washington state. The Italian Government is meeting to discuss next steps as the country is being hit hard by the coronavirus outbreak. Lawmakers are set to pass a new package of
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