Freezing hiring sending their shares lower peugeot gives a soft outlook. The tie up is on the right move. This is not a merger on the crisis mode. This is two Mature Companies they know the challenges ahead are very significant and will be in a better shape coming together as we mentioned, the dow has suffered the twoday point loss wiped 1. 7 trillion off the s p this follows the fact that u. S. Authorities warn a pandemic is likely they told americans to prepare for, quote, Community Spread of the infection. The transport sector had its worse day. Energy and tech more than 10 off recent highs tech off a record close one week ago across the major indices were much higher than average. We look at what is looking likely all three of those at the moment looking to trade down at that market open. As investors took money out, they were looking for safe havens which says u. S. Treasuries were in the yield hitting an alltime low. The 30year as well. Just know that investors did flee those in favor of safer ones as you can see here, europe is falling lower. The dax down 2. 3 . Lufthansa taking a lot of focus. The airline came out with pretty drastic measures to offset the impact felt by their business. Like Many Companies across the world, they are finding it difficult to estimate what that impact will be they are taking action to try to mitigate that risk the cac 40 down, ftse mib down italy remains the epicenter of the outbreak in europe getting to our colleague matt taylor in singapore. Walk us through what the asians saw overnight. Things were a little more contained. We did see declines on the back. The Australian Market was the ledger down by 2. 3 . Take a look at some of the north asian markets. Down by about 1 we continue to see a strengthening of the japanese yen around the 1. 10 level. We are waiting on a possible rate cut out of the bank of korea. 25 basis cut that will happen tomorrow well be watching that in the thursday session china markets. We did see that down we did see the shanghai composite down we were focusing on hong kong. We had the budget unveiled with about 15 billion u. S. Dollars the bulk will be on cash handouts about 1,200 u. S. To help try and kick stuff out of the economy. Hit by coronavirus as well the market not impressed by it down on the day. That is the picture on asia. Over to you. The coronaVirus Outbreak has worsened in italy. 320 diagnosed patients and 11 deaths several eu countries have warned those not to visit doctors have confirmed new cases further south including one in sicily Government Agencies opening an investigation on skyrocketing costs for masks on line. Spreading to other parts of europe five other countries have reported new cases all involving patients having recently travelled to italy in austria, authorities have sealed off a hotel and a hotel on canary also shut down Health Visitors met in rome to discuss the crisis they agreed to keep their borders open for now some countries have tightened checks for travelers a number of hotel chains and airlines have extended rebuking and cancellation policies. Delta said flights can be rescheduled at no extra cost united and american are monitoring hyatt said travelers planning to stay at properties in italy can cancel their bookings for free we heard from lufthansa this morning some pretty drastic measures to combat the outbreak. The airline has plans to offer employees to unpaid leave, to freeze hiring and expand parttime working options. It will reveal the earnings impact during results on march 19 lets look at stocks. Can you see shares there 3 lower. R ryan air shares down clearly investors trying to assess what this will mean for air travel more broadly. Not just in italy but around europe bringing in the Founding Partner. Thank you for being with us. Clearly, investors focus on investigations of this continuing outbreak of coronavirus in europe. What are your views . It is very hard to predict where all of this will end clearly, we are reaching negative news about the virus. In these kind of times, cooler heads prevail. We are going through the portfolio and through potential investments on positive or negative side and see what the worst case virus would bring and if there are opportunities or not. You have to pick your way through. How do you do that . What kind of criteria are you applying to decide whether to reduce investments or increase a stake in the company increasing assumption that the Virus Outbreak will spread that europe will go into recession and look at specific stocks and see selling is almost indiscrime gnat even sectors that would in theory not suffer from any outbreak and not benefit from it. These go down as much as lufthansa and other Airline Operators we go from stocks that will suffer to the ones that dont and are unnecessarily sold off. So opportunities by this selloff we are seeing. I want to ask you about management weve had earnings come through and heard about the impact they are seeing from coronavirus. The hotels stuck out to me we spoke to ihg, they were saying they havent seen any impact outside of asia from this you look at the warnings and the anecdotes from people around the travel plan and businesses how much weight should investors put on managers at this point. I think all of the statements are sort of backward looking you see all the Earnings Releases are sort of incorporating one month of coronavirus. It may last another six months even managements have no clue what is going to happen. If i were a manager, i would drop my outlook for 2020 well do our best, it may be a lost year. Hopefully well find a cure and 2021 will be better but not too hopeful in terms of 2020 for earnings thank you for your thoughts pleased to say you are here with us for the full hour, founding partier and manager. A major u. S. Index has delivered higher returns than private equity returns in the s p enjoyed returns of 15. 5 over the last 10 years to june 2019. Private equity saw returns of 15. 3 . One of the authorities of that report does not think private equity will lag much longer. Also asking attendees at the super return in berlin how they are managing the outbreak of coronavirus. We did find in the u. S. The Public Market returns did beat private equity since the crisis, the u. S. Markets have had an incredible run. The big question is what is going to happen over the next decade clearly investors are voting with their pocket books that private equity will continue to deliver. The expectations and likelihood is that the Public Markets will return to the longterm average of Single Digits what is happening now is Community Transmission a week ago, 10 days ago, you didnt hear about south korea, iran or italy. Now you do so much of investing is common sense. I would imagine two weeks from now, it wouldnt surprise me if the virus has spread elsewhere we think it is obvious it will hit growth to what extent and how long, it is too early to tell i dont think anyone knows we own 28 companies most in the u. S. And europe. We are in touch with all of our Companies Regarding the con continue si planning the most important thing is employee well being. Our colleague is still at that conference in berlin. She joins us now reporter it is an interesting time for private equity given that returns will last were not as high as the u. S. Public market that puts pressure on the industry Going Forward the head of european credit thank you for joining us we were saying that people were talking about the coronavirus. What is your take on the impact it might have on the economy clearly, we are in very early days we have only been talking about it five or six weeks the markets were already a bit jittery. From our perspective job one is to make sure all our employees are safe around the world. Given our analysis, we are focused on businesses with travel exposure and asian supply chain exposure we are watching it closely ever day. Lets look at the credit side. We have seen the spread come back lets talk about the regional aspect for example, italy do you think that is a sustainable thing. I think over time, credit maps the overall health. Clearly, there is Central Bank Distortion over time, that will normalize talking about countries like italy, are you optimistic about the outlook there, especially from that perspective. We are more focused on markets like spain declining unemployment and rising gdp growth. Our outlook is caution Many Industries are facing disruption from digitization or automation our goal is to not lose money. Late in the cycle, we have been very cautious. We prefer sectors that have done quite well through cycles. Weve seen them do well. Communications, software, education and health care. Recently, weve been active in nonambulance sheet that would include service sectors. Payment processing, et cetera. Lets talk about where we are in the cycle you also might like it if spreads are going wider. Are we approaching peek territory . Weve been late in the cycle. Coming to the con rens saying the same thing before the outbreak, it seemed like the oacd countries had growth no question that growth has spread meaningfully. They still exhibit Strong Revenue growth in the 5 to 10 change even with the virus impact to date, there is a lot of nervousness in the market. Also a lot of nervousness coming from political side of things now brexit is happening but we dont know exactly how much will turn we think it is an attractive market the mood has developed quite a bit. It seems interesting the brexit was announced four years ago certainly better than expected the vote that occurred in december really set the stage for the next 12 months there is a lot of pentup demand. There is comfort that at least we have a direction. There is a lot of work to do to reach the final agreement. We are caution on the uk thank you with that, im sending it back to you but not before im teasing my next interview. At 11 00 cet we look forward to that interview. Maming up, the carmaker says it reins in china well have more after the break. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] welcome back hermes posted a slow down as it was hit by growth in hong kong and tax increase in japan. It is starting to see stores reopen in the Chinese Market despite concerns of the coronavirus. It is too early to tell the economic impact. Diageo says it has seen significant disruption the British Group says 2020 net sales will take a hit of up to 325 million and operating profit could drop as much as 200 million pounds. Danone expects the outbreak will wipe 100 million off First Quarter chinese sales. Also missing expectations falling 1. 9 billion euros adecco swung profit in the Fourth Quarter but expressed concerns of the slow down among coronaVirus Outbreak the swiss Human ResourceCompany Posted a profit of 256 million euros. On an organic basis, they fell psa reported a 13 rise. Although it warned of a 3 decline in the european auto market Charlotte Reed joins us from paris. Reporter at the moment, they dont see any disruption things are running as normal supply chain could be impacted some peers have mentioned they have a couple of weeks and theyll have to start closing plants saying at the moment, things are running as normal. This is an extra factor. They are already facing extra head winds sales in europe are slowing. They see sales going down by about 3 other head wind is china they have been very much going down in china. On top of all of this, you have all of the technical challenges. You have all of the investment being done to be future prove. Electric cars. Selfdriving, et cetera, this comes with alliances and mergers pulled together to be able to face the future. We know psa is in the process of merging with fca at the moment it will take 12 to 15 months to come together. Going very well. The stars are aligning we know those are aligned in the sector we have the french government. Italian government saying we want to keep jobs in our countries. All of this is very complicated. One of the stars of the car industry turned around peugeot said that the stock is doing quite well outperforming the market on the back of these strong results one was the strategy of the group in china the growth had been coming for the sector fca have a very small market share. Only about 0. 5 . I asked was it worth trying to break into this market or sharing the focus. Take a listen . Is this a fact . At least on the psa side it is a fact there is something we do not understand looking for excellence, efficiencies, we have not found that yet we are succeeding everywhere else this is not connected there. Possibly in the perspective after the merger different ideas and experiences that will help us to find out what we are missing. Something isnt doing as well as it should be we need to recognize that and consider when we will merge and it will help us to find what is doing well it is something ahead of us. An upside. Right now, the results of china are not improving our profitability. With this situation where we could say for the future could only be better it is exciting that well be able to think all together that this time hopefully will work. That was the chairman of the managing board of psa. Weve seen a strong set of results here for 2019. One of the few stocks in the green. Despite fears of the coronavirus when he said no impact so far and concerns on the waste coming through in europe. Thank you for breaking it down and bringing us that interview. Alcon posted a rise. The swiss medical company gets a boost. Well cross live to geneva with more after the break dont just plan to retire. Plan to live. An annuity helps cover your essential monthly expenses, so youre free to live the life you want. Find out how an annuity can give you Lifetime Income at protectedincome. Org can be a sign your feeling digestive systemhed down isnt working at its best. Taking metamucil every day can help. Its psyllium fiber forms a gel that traps and removes the waste that weighs you down. It also helps lower cholesterol and slows sugar absorption, promoting healthy blood sugar levels. So, start feeling lighter and more energetic by taking metamucil every day. Take the metamucil twoweek challenge, lighten up. Just take metamucil every day for two weeks. Available at your local retailer. Welcome back to street signs. Im Julianna Tatelbaum and im willem marx here are your headlines. The dow suffers the worst twoday point loss u. S. Health officials warn a pandemic is likely while the outbreak expands to austria. U. S. Futures continues to an alltime low lufthansa takes drastic measures offering ememployees unpaid leave and freezing hiring sending their shares lower alcon shares see green after posting Revenue Growth on the back of the surgical division. Well speak with ceo later today. We are about an hour and a half into the european trading session. Sliding on losses in the days leading up we are entering the fifth straight session the dax is suffering in italy, down 1. 2 . Now entering correction territory. This follows the steep selloff of italian stocks at the start of the week after italy became home to the largest outbreak of the coronavirus outside of asia. Cases now tally 320, 11 deaths reported so far in italy investors digesting what this means for the spread of coronavirus across the european region lets look at 4 x markets. The euro trading firmer against the dollar in the uk, sterling giving back some of its recent gains down 0. 4 . Lets look at u. S. Futures yesterday was a very difficult day for trading on wall street we saw the dow over an 800point loss making it the worst twoday fall in history for the dow. We are looking at more red across the board the dow looking at a 200point drop at the open alcon has posted a 3 rise. The figures led by strong 4 sales growth in the Sales Division and steady growth in vision care. We are joined live in geneva what is the company predicting for the rest of the year very good morning, willem lets focus on the Market Reaction and ill speak to your questions here if people are worried about the coronavirus story inevitably, people are going to look for defensive stories and some resilience. I thinks that what weve seen here as far as alcon is concerned. The management keen to point out that this is the second year of increase in top line theyve delivered 1. 88 billion net sales for the Fourth Quarter. The market was looking for 1. 89. The earnings per share core number coming in just off the headline analyst expectation as well but close enough that i dont think the market will begrudge them that either. The forecastfor 2020 the company is guiding higher for 2020 theyve revised higher on the margin 17. 5 to 18. 5 as we come back to that story. If you are concerned about capital gain and Capital Growth at the moment, there is nothing like having a little bit of income since this company span out of novartis in 2019 well hear more from the ceo of the business about why they feel it is time to recommend a. 19 dividend a decent outlook for 2020. Thank you for your in sight there. I want to bring you fresh comments from french officials france has now reported the second coronavirus death in france, according to the countrys Health Authorities they Just Announced this it was a 60yearold french man in very serious condition. He was tested late tuesday and died in the die. What this means for france more broadly, this is one of three new cases bringing the total confirmed cases of infections to 17 that is the latest in that country. Lets get back to what is going on in markets. Thyssenkrupp is expected to sell the elevator unit. Getting back to the Founding Partner and Portfolio Manager. Before the break, you were telling us we were really seeing indiscri indiscrime at selling in the markets. Surely this is fertile ground. Yes, correct. Off the top of my head, i think more than 60 billion private equity has been raised they can leverage that several times with a couple of billion that can be deployed in the public equity market there are some companies that are feeling the pressure we have steady area among the telecom and cash flow that private equity can borrow against. My criticism is often that if their stock prices are going dund if they dont fix the prices going down by the sub opt mall allocation, they better fix it fast. You talk about the private cash flows what about countries like in europe are there parts where structural content on a National Level will make players more attractive to private equity if you look at europe, germany, switzerland and more, the Corporate Culture is against being taken over by private equity they look at private equity as the enemy. They wouldnt be open to having those discussions. Youve mentioned the uk there. If i could pivot, i know youve increased european reads in recent months. In the uk, when you look at uk asset prices, what do you think about asset prices in the uk is this an area where private equity will be looking i would say more of a long opportunity. Weve seen this for instance where a lot of companies can be improved a lot in terms of allocation th for Companies Operating in asia and u. S. Should probably be under separate entities and be worth more and better run. Juliana mentioned you have short positions in european retailer im wondering, given the impact potentially on coronavirus, on retailers, you see these towns in italy under quarantine. You see the impact and shoppers not being able to go out and buy what they want presumably that is good news for those positions of some of those sectors . Originally, Retail Properties and the increase of Online Shopping i think the coronavirus only exacerbates that trend yesterday, we saw the cut dividend of some of the stocks where some of the prime properties are reliant on chinese consumers, tourists, and they are just not there. If you combine that with the fact that a lot of these companies have a lot of debt some can weather this corona storm but some like these Retail Property companies have a lot of debt it will hurt them quite a bit to miss a couple of quarters of cash flow. Dutch companies historically have been penalized for the focus. Theyve had a lot more interest in climate change. Have you noticed a shift in Investor Perception of that focus on other stake holders now that there is such appetite to invest in companies that do priorities outside of those stake holders. Very much so. That key word here is esg. A lot of money is flowing into that space we see money flows going into particularly scandinavia and companies that care about their employees and labor relationships, suppliers and other stake holders. Thank you for sharing your views with us. Founding partner and Portfolio Manager. He stays with us for the show. Rio tinto posted from higher iron ore prices. Underlying earnings for the full year rose to 10. 3 billion slightly below estimates Taylor Wimpey also on the growth the uk home builder delivered a Record Number of completions last year but average sales prices are flat building costs inflated the company flagged the political and eek conomicou ecot are important. We havent seen any impact on supply or demand that is not surprising we are a very uk centric business it would be brave to say that couldnt happen over the next few weeks. But very, very hard to predict it massively depends on the extent people stay home whether by choice or because they have to it is hard to give you numbers Scandinavian Airlines will take a hit related to flight suspensions but expects the effect to be marginal if the outbreak is contained before the summer calling the net loss to 1. 1 billion. Revenue increased 3 on the back of passenger growth. Speaking to cnbc this morning, while demand in hong kong was down due to the spread of coronavirus, global data for the Summer Season remains unchanged. This thing is moving rapidly. I wish i had a crystal ball to look to the future i dont. I have to rely on the intelligence and the booking patterns we see. If i sclexclude china and hong kong, that has dropped radicily. We still see a normal booking pattern for the Summer Season. Coming up, taking over disney as the former theme park boss looks to keep the magic going. E; a range of innovative air fresheners with no heavy perfumes that you can feel good about using in your home to deliver a light, naturalsmelling freshness. Febreze one neutralizes stale, stuffy odors and releases a subtle hint of fragrance like bamboo or lavender eucalyptus. To eliminate odors with no heavy perfumes, try febreze one. Brand power. Helping you buy better. Welcome back bob iger has stepped down after years of speculationof his succession bob chapek will take over. Iger will stay on as executive chairman to oversee endeavors. He began back in 2005 when the company grew with major pictures with pixar, marvel and more. Keith block is stepping down from salesforce. Shares fell on the back of the announcement salesforce reported a loss of 248 million compared with net income of 262 million the year previous stakes were high as Democratic Candidates squared off in the last debate private als argue americans would not elect a selfdescribed democratic socialist we have more reporter as the clear front runner, Bernie Sanders stood center T Center Stage but from the start, he was attacked. Can anybody in the room imagine americans voting for him. Accusing him of proposing plans he cant pay for lets do some math. 40 trillion than 30, then 17. Medicare for all will save money. Sparing over gun control. Bernie voted five times against the brady bill im the only one up here with re receipts while voting over and over again i think i would make a better president than bernie. The stakes will be higher for joe biden. I will win South Carolina hes positioned himself as the strongest position with voters of color. Race the central theme. I know if i were black, my success would have been harder to achieve we should have a formal base of race to retell the story of the last 40 years for africanamericans. This was the last debate before 14 states vote on super tuesday one week from today. The others trying to stop sanders from coming away from those contests with an unbeatable delegate lead the Founding Partner and Portfolio Manager is still with us briefly, look biing at this raco the democratic b siside, does i matter who ends up in this race and why . Looking at the uncertainty. Everybody in the primaries tried to take a very extreme position to the left. Very an ttibusiness, increasin taxes, very antibusinesslike sentiment, which is on the news now every day, which is not helping. In terms of who will win, definitely Bernie Sanders seems to be the most extreme on the left and antibusiness, i dont think that will be good for the stock market im not predicting who will win but his agenda is pretty antibusiness. In terms of President Trump, what do you expect who and what he will target as he increases campaigning . If sanders will be a candidate, hell say hes a communist, socialist and antibusiness. Looking at trade relative to what happens i think in the runup, we wont hear much of trump from the trade war. I think youll see that after the election then hell step up rhetoric against china and france and the eu in general. So you think this benefits President Trump in the markets i think the main platform he has run on with his predecessor obama definitely, the economy still from the coronavirus that has done well is his main platform the Founding Partner here request us throughout the show the stoxx 600 trading about 1. 5 lower clawing back some of the steeper losses red across the board there every major region and sector in the red this morning lets get a look on the markets. The ftse mib has entered construction off the highs lufthansa coming out earlier this morning taking drastic measures to mitigate the risk. Announcing a new Cost Cutting Program suspending hiring and offering unpaid lead dragging down further airlines on that note, take a look at sek torz the worst performing sector and investors weighing out what that means for travel patterns. Auto is up we did hear frompsa Group Another down day the dow down other 180 points. Thats it for today Worldwide Exchange is up next markets in turmoil after the dow suffers its worse twoday point loss in history. Wall street is looking for even more losses today. As investors send mixed messages from washington, d. C. As pandemic concerns spread in the united states. The end of an era at disney. As bob iger retires after nearly 15 years at the helm it has been a fun run i st