risk on bounce. it is time for global exchange, where we bring you today's market moving news from all around the world. from hong kong to berlin, brussels, washington, and new hampshire, our bloomberg voices are on the ground with this morning's top stories. we begin in asia and the latest on the coronavirus outbreak. the current number of cases stands at just over 43,000. the death toll now 1000. joining me from hong kong is "--aad salamat," anger of --haad salamat," anchor of coanchor of "t, bloomberg markets: asia." a feeling out's of china that things have perhaps gone a bit too far. those companies which have been curtailing production should step it all up, ramp things up, especially in areas that have been little affected. we are still counting the costs with regard to this. retail sales being hammered, industrial production likewise. we haven't talked very much about this. onot of trade heaped singapore, with the prime minister being lauded for being transparent, and at the same it couldng that ultimately be worse. bracing for is about a 30% fall in tourism. we are talking about 18,000 to 20,000 people a day not going to the city. that could make a big dent in the tourism income that they get from about $19.5 billion a year. a cruise ship which left hong kong a week or two ago is , anding over 2200 souls when it approaches on thursday, it will not be allowed to dock. that would make the fourth country that has refused to disembark passengers. back to you in london. alix: thank you very much. germany,nt to go to where shares of daimler are gaining this morning after the dividend toshed its free up some cash for electric cars and promised deeper cost cuts. joining me from berlin is bloomberg's benedikt kammel. what was new here? benedikt: the company is trying to draw a line under what was a very difficult year for daimler. the entire industry really trying to navigate the shift from the combustion engine, which daimler invented, towards the battery powered car. . that is an industry where daimler hasn't been able to make its mark. kaellenius ola saying they really want to push into that market. 20 odd models planned in the next two years all tied to that technology. that will make a lot of money, and you are seeing that being reallocated within the company. the shares are reacting to that. initially they were up somewhat, but now they are down because people are wondering how daimler will fund that transition. are they too late? tesla is roaring in this particular market. alix: and they already had to down there -- had to downgrade their forecast. , wherehad to brussels the eu european commission president ursula von der leyen and chief brexit negotiator michel barnier are discussing possible models for a future trade relationship. joining me is bloomberg's maria tadeo. maria: this is very interesting and very tough language, probably the toughest to come out of the european union when it comes to the u.k. and the trade negotiation. it could have an impact on the city of london. michel barnier, who is leading the negotiation, saying there is no open-ended equivalents when it comes to financial services in the city of london. this is not something that investors or the u.k. government should take for granted. the standards we play by in the european union are nonnegotiable. they are not up for discussion. what is interesting here is that this is really a warning shot from the european union to the u.k. government. of course, protecting the city and the business is crucial for the prime minister. say this is not guaranteed, and you are going to have to play by our rules. alix: thank you very much. now we go to london, where i am. we are taking a look at the u.k. economy narrowly avoiding contraction in the fourth quarter. joining me is jamie rush of bloomberg economics. walk me through the details. see the economy didn't expand at all. why hasn't the bank of england cut interest rates? when you look below the hood, what you see is actually a picture of improving sentiment through the quarter. october and november looked pretty bad. uncertainty was high, particularly around the election. once it is out of the way, sentiment really jumped. that is what you see in the soft data as well. you see that the sentiment boost has been sustained. we expect gdp growth to come in at about 0.3% in the first quarter. all of a sudden, the bank of england doesn't look so mad for keeping rates on hold, and that is what they are expected to do for the rest of the year. alix: now we head to washington, where fed chair jay powell will testify before the house financial services committee for its semiannual policy report to congress. now with thenged coronavirus. what do we expect jay powell to say? reporter: private forecasters have shaved their first quarter outlook, so investors are going to be listening to jay powell. how is the coronavirus changing the fed view of economic growth? second, markets have pretty much concluded that this is a disinflationary force, something that even the most hawkish marketof the federal open committee doesn't want to see. the third thing we are going to , the questions will probably hone in on it, what does this mean for their interest rate policy? markets are pricing in another cut. i suspect he is in no hurry to give any shading on that, and we will kind of dance around the question. alix: and is qe not qe? we are going to have coverage of the fed special semiannual testimony before congress coming up at 10:00 a.m. new york time and 3:00 p.m. in london. finally, the democratic presidential race is changing shape as senator bernie sanders is not the favorite to win today's new hampshire primary, but the results won't necessarily produce a clear frontrunner to take on president trump. the polls show another top candidates growing. joining us from manchester, new hampshire is kevin cirilli. so if we don't get real clarity today, what do we get? kevin: we might get clarity if there is an upset. the expectation is that bernie sanders wins, buttigieg comes in second, and third place is up for grabs. will it be joe biden, klobuchar, or elizabeth warren? but should that not happen, should earnie slip, should biden intoperform, then we head the south carolina contest and it is all about that momentum gain. the final point i would make is that for several of these other candidates, there will be pressure on them should they not have a strong showing in new hampshire tonight on how viable their campaigns are moving forward. they have to raise cash. they have to get that momentum. amy klobuchar has come on strong in the past couple of days given her strong debate showing friday night here in the granite state. but if she is not able to translate that into a significant vote count, there's going to be questions about their campaigns moving forward. alix: should be super exciting. thank you very much. we are going to have special coverage for you of the new hampshire primary later today at seven a clock p.m. in new york -- at 7:00 p.m. new york. small business owners in the u.s. are growing more upbeat about the economy. it is the nfib latest optimism read that rose for the fourth time in four months. business owners are having to raise pay to find qualified employees, yielding 1/4 of these surveys say that finding the right workers are a continuing issue. coming up on the program, more , andur morning news, trade analysis on the markets in today's first take. this is bloomberg. ♪ ♪ alix: time for bloomberg first take. we are going to give you the news. you get the trade and analysis on the markets. ,oining me is kristine aquino marcus ashworth, and also with us, daniel morris, bnp paribas asset management senior investment strategist. thanks for joining me. marcus, i always turn to our trader at home and say, what do people care about on the streets today? guy: i think it is still -- marcus: i think it is still the coronavirus. maybe the fed coming up, if there is any hint of easing or what the fed are thinking about with regards to inflation. .t is usual market stuff the coronavirus is the most important thing. we could start talking about a v-shaped recovery for china, and in europe, europe is obviously going to get killed by a weakening chinese economy. headlinesdalio made saying that investors are blowing this out of proportion, over exaggerating the market impact, yet it kind of depends on what letter it is. it v?l, is it u, is and how deep is it? kristine: i think markets are just happy to keep rallying from here. we saw the asian equity market rallying despite the numbers of deaths going up. there seems to be a sense that the focus really now is markets have discounted the initial increase in the death toll, but now it seems the focus will be on the second-order effect, and therefore, what we see as a hard impact on the economy. we are not going to get any sort of indication of that for about two and a half weeks. the first indication would be china pmi data at the end of this month. so the question is, what i markets to do in the next two and a half weeks? the answer seems to be keep rallying from here. daniel: it depends which market you look at. we see this disconnect between equity markets and treasury on.ds, bund yields, and so we are still 40 basis points down from the highs earlier in the year. that would suggest there is something to worry about. if you look at equities, particularly u.s. equities, there's nothing to worry about. one of those views has to turn out to be incorrect. we tend to be on the side of the equity market. that was certainly the case all of last year, when you had low yields signaling something was going to go wrong but never did. this time, we are a little more cautious. we are looking for more of an opportunity to buy the dip in equities. there is certainly risk out there. it may or may not materialize, but if you look at the sars crisis and earnings for the msci hong kong index, you had earnings fall percent year on year. there's a real risk that clearly, equity markets aren't pricing and. marcus: i am more concerned about what is going on in the bond markets. the equity market doesn't seem to have any focus on anyone but itself. it's got so much money floating around, it keeps going up ad nausea. it provides no signaling -- -- adup ad nausea him nauseam. it provides no signaling for me whatsoever. where are we now? consensus,he general i agree there is a bit of a comfortable disconnect between bond yields and equity markets. the general consensus in markets live is that something has to give in bond markets. we may not have seen the peak of yields just yet. alix: i guess the question is, does it matter when you have jay powell testifying, you have the balance sheet that is still quite large and expanding, although we have seen that follow for little bit, liquidity pumping into china? isn't that what equities are telling us? daniel: we don't think this adjustment that the fed has taken around the repo market -- know, qe is not qe. but the balance sheet is bigger. daniel: it is bigger in a different way. it is much more short-term than in the past. it is not clear the link between the balance sheet and equity markets. we think it is something else, which gets you to the point that, to be honest, the testimony may not matter all that much. we know there is not going to be a change in the outlook appreciably. we can look at the nuances, but essentially, nothing is going to happen. in the same way, it is probably likely to be the same case with the ecb, so we have to look for something else. it is either earnings, or it may switch back to coronavirus, and that may explain the schizophrenia in the markets over the past month. marcus: the equity market carries on regardless. what powell may or may not say is important for bonds. the point here is that they are looking at inflation, counting back several years backwards, which is all very confusing. the point is, will they cut in an election year again? or will they leave the door open? we are expecting another cut at some point. that may come after the election. we are certainly pricing in a dovish fed. how dovish after that strong pmi number will be very interesting to see. alix: that also makes the action in the euro-dollar increasingly more confusing. [laughter] alix: you laugh, but why? marcus: i wouldn't read too much into it. the only fx rate which matters in the world right now is the chinese yuan. that is the only way you see if china is recovering. all of the other official data, we won't see for another two or three months. it is really the price and where the currency is. where is the dollar? where is the euro? they've all been locked down. really is ae euro conundrum. i agree with you. yields in the euro area. christine lagarde is now insisting that she's an owl and that monetary policy can go anywhere from here. over marketseeing live, it seems to be a little bit hostage to external development at the moment. it really hasn't displayed that reaction that we've seen from the data. it makes sense because traders have been burned before in the euro, believing there is a revival in growth coming, only to be disappointed and met with an extension of ecb qe and all of that. they've been burned before. there is certainly a sense of caution, but still, it is a head scratcher as to why. marcus: the question is, what is your spirit animal? we've got owls, we've got bears. [laughter] alix: what is your spirit animal? marcus: surely the bulls. daniel: the question as to what has been going on with the euros, it is going to be growth or interest rates, but we don't want to forget trade. let's call monetary policy neutral. no one is doing anything, at least for now. see.r-term, we will that gets suspected trade, which is also, for now, not so much in the news, but that's where the risk is. trump decides everything that happened with china was a wonderful victory. let's move on to the europeans. when that happens, we tend to see the dollar strengthened, so that is the risk, that we get some trade pressures that will boost the dollar at the expense of the euro. alix: like the distinction between neutral end of us because that is how you make a market, basically. in terms of the flows we saw in the back of the year, it was all into value. that led a movement into the euro as well. now the u.s. has been outperforming everything yet again. if you believe it is going to continue, why would you not go in by the u.s.? exactly that. in a world of pain, and it is only going to continue. it will have much less let's ability to do anything. china is going to kill them even more. u.k. might be doing a little bit better. u.s. remains still the best place to invest. alix: you disagree, i see. daniel: you almost have a complete reversal in the ranking of the outperformance, at least from last year. it was u.s. tech, growth. particularly if you see normalization in values for tech , that is going to hurt rose, boost value. it is also going to boost small caps. i think you could see europe outperforming, value outperforming, small caps outperforming, which is certainly not the moment in trade. alix: really fun conversation. thank you so much. kristine aquino of bloomberg news, marcus ashworth of bloomberg opinion, thank you. daniel morris of bnp paribas will be staying with me. this is bloomberg. ♪ viviana: this is "bloomberg ."ybreak the parent of mercedes-benz is cutting its dividend by more than two thirds. daimler is also promising deeper cost cuts. ceo ola kaellenius is freeing up cash to pay for electric cars. his restructuring push has failed to gain traction. now to boeing. the company says it will take several quarters to return to skies.d 737 max to the telling bloomberg, "we are not system."overstress the by the middle of the year, boeing aims to get the jet flying again. we end with exxon mobil, cracking down on employee travel. this to analyze travel requests involving industry conferences. this is happening after exxon reported its worst quarterly profit in almost four years. that is your bloomberg business flash. back to you in london. alix: thanks so much, viviana. i have to wonder about that. how bad are things that you have to look at expenses? one of the company i am watching today is alibaba. it apparently is no block from hong kong's stock linked to china. for now, it can't be included in the program linking the asian financial hub to chinese investors. exchanges in hong kong and the mainland agreed last year to it exclude companies with secondary listing and weighted voting rights. that was before alibaba's debut in hong kong, which was a secondary listing. if you look at the outflows last month, that is when the extent of the coronavirus outbreak really became known. you can see the impact of that there. coming up on the program, oil rebounding from a one-year low as coronavirus continues to loom over the virus. have we really found some kind of base of support? we will break it down with amrita sen, energy aspects director of research. this is bloomberg. ♪ rg. ♪ ♪ alix: this is "bloomberg daybreak." checking on the markets, it is with gone. how long is -- it is risk on. how long is that really going to last? even the dax outperforming, despite weaker production number out of europe. switch of the board, and you can see some interesting things evolving. it is a broadly weaker dollar story. euro-dollar still sitting on some key levels. i want to take a look at the cable rate. at currencies moving higher. the one area to watch in the markets, three months-10 year yet again inverted yesterday, and now basically flat. we have a three-year option coming out leaders day in the u.s.. crude is soaring, up about 2%. russia seems to indicate maybe they could come to some kind of agreement, but maybe it feels like too much of a diecast bounce. we want to update you on headlines outside the business world. viviana hurtado is here with first word news. viviana: and china, the largest cities remained virtual ghost towns because of the coronavirus outbreak. shanghai and beijing returning to work, but streets are deserted, many offices are empty. many businesses are telling employees to work from home. the death toll has now climbed to more than 1000. here in the united states, the panic on plans to spend more than $10 billion over four years on a new stealth bomber. is still inmman research and development. the air force planes to buy a minimum of 100 of the planes to be operational in. . the mid-20 20's. the latest polls indicate -- operational in the mid-20 20's. the latest polls indicate bernie sanders to win the new hampshire primary. michael bloomberg is also seeking the nomination, the founder and majority owner of bloomberg lp, the parent company of bloomberg news. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. alix: thanks so much. markets are underpricing the risk that president trump might lose this year's election, according to standard chartered, who recommends buying the yen as a hedge. g10 fxbal head of writing, "we like the yen is a downside hedge. lowmited upside on yen is implied volatility in the response to economic and political shock, making it attractive for long positions." still with me is daniel morris of bnp paribas asset management. do you agree? we need to pay a lot more attention to what is going on in congress because that is going to have the bigger impact on the market and the economy. if you get a president of either party, the congress remains divided, that indicates he will not get any significant policy. then it comes down to more regulatory changes that might be relevant for particular industries, but not the broad change people have been talking about at the other end of the political spectrum. certainly want to look at politics for the presidential, but don't forget the congress. alix: fair. how do you want to hedge november? if you take a look at the vix, do you see a big move up? how do you do it? daniel: at this point, it is certainly quite early to be singing about it. we still have nine months to go -- to be thinking about it. we still have nine months to go. we have neutral to dovish, depending on how you want to characterize it, monetary policy. but fundamentally underlined, solid u.s. growth. gdp is nothing fantastic, but we don't think that is going to change. we don't play too much into the gyrations around the politics. still keep an eye on fundamentals. whenyou do that, that is you start worrying about valuations for the u.s. market. alix: to that point, it does matter if you are going to be looking at 1.5% growth versus 2% , 2.5%, versus 3% maybe. how do you think about it from that point of view? daniel: at this point, the assumption is that by and large come of the president doesn't have that much impact on economic growth or the markets. it is the fed chairperson that matters much more in terms of monetary policy. generally, the only time the president matters is when you have the party of the president also controlling the congress, so the first two years. alix: you don't even have a sand off -- have a selloff if sanders or were in wins? -- or warren wins? amrita: daniel: it would be brief --daniel: it would be brief. alexander novak said in a recent statement that russia is monitoring the effects of the spreading coronavirus outbreak on global energy markets, and studying the recommendation in order to assess the situation and determine a balanced approach based on market interest. , energyus is amrita sen aspects chief oil analyst. good to see you. of russia's make statement and the rally in oil today? are they tied? amrita: yes and no. i think the russian statement very much is that the official position is we need more time. virus may notthe be as bad as some people believed. the conversation is that there is broader agreement within russia and the opec countries that this is about working out the details the oil companies and just going through the domestic side of things right now. proposal ofthat the extending the current cuts, which is 2.1 million barrels per day, if you include the extra, it will extend to year end. that is what is on the table. alix: why is oil rallying today? don't: there's some news, know how true it is, of cases in china coming off. slowly, indices are resuming under huge amounts of scrutiny. all these other countries are coming down with some sort of transportation ban. this isn't over yet, but it does domestic some of the peak is probably behind us. i think that has been part of the rally. do cut, and remember that libya is still off-line, the market isn't as weak. is just that we suddenly have 2 million barrels of oil it with the problem we need to deal with. alix: is that a value or value trap? that look kind of said it all. [laughter] daniel: we aren't is abating a recovery more likely in equities because the conundrum we face right now is not only the disconnect between equities and treasury yields, but ultimately equities and oil. it is still down when he percent year to date, which normally, you would expect to see a pretty positive correlation between growth and equities like oil. so which one is right? at some point, we will feel like we are past the crisis, and whatever discounts there are come out of the market, i think oil is telling us it is too soon, and it is a question of when as opposed to if, but not quite yet. alix: if you take a look at the co-statement tangle we've been in, what should that be? we slipped into negative territory really fast. should there be some kind of base of support here? amrita: this is one of the fastest moves i've ever seen. on january 27, it kind of started to flip. we have been in very steep backwardation. but i do think it is justified because we have so much oil that we have to deal with. at these price levels, inventories globally were very low, so we should have enough onshore storage. about enough to justify some of that storage cost onshore. we don't think we need floating storage. willis when the contango go to 4% or 5%. alix: is it in tankers, in onshore storage? amrita: right now, it is oil headed to china that is going to february. the demand is down. but they need to store this oil. there's a lot diverted to korea. there's a lot of storage there. then, china is reducing the amount they buy from the north sea come from the west african countries. april,t cycle, march and you will see oil piling up in the west. the first buildup is going to be in the east, then in the west. that is what the market is starting to price in already. still, there should be enough onshore available to fill that, whether it be in europe, mainly the u.s. has a ton of storage space, if required. alix: all of that goes back to china and how quickly growth and recover. i forgot what article i was reading yesterday, but basically it was saying you can have a v-shaped recovery, but if it is very deep, you may not get that recovery in the back half of the year. what letter are you on? [laughter] daniel: we are focused on the chinese government objective for nominal gdp. they have maybe hinted they would let that slip, but they do want to hit that target, and generally speaking, what the chinese government wants, the chinese government tends to get. we have not lowered our full-year gdp forecast for china, so if the first quarter turns out to be weaker, we think it is going to prompt more stimulus, cutting interest rates, whatever. it is just a question of when the v slips. alix: once everything stabilizes, they have to read through the inventory they've already got, and then they can start buying. they were already stocking, and then they have to redo that. walk me through it. amrita: they have to take the oil in, but then that is why they started to reduce buying for march and april already, which is why we see inventory buildup. they should start to pick up depending on where the v ends up, but i agree that we think, if anything, we've raised our q3 .il demand numbers but every indication we are getting from china is that stimulus will be big, and they are turning a blind eye to a lot of the measures they had been taking to reduce some of the credit bubbles. they really do need to come out and support the economy. and for structure spending is going to be big. we see a big recovery in the second half of the year. it really depends on how much further there is to go down first. , it should be the peak for negative impact. alix: thank you. really wonderful to have you both onset. coming up, he calls president trump's budget plan irrational and destructive. we will speak with u.s. house budget committee chairman john yarmuth, democrat from kentucky. if you have a bloomberg terminal, go ahead and check out tv . you can watch us online, look at our charts and graphics, interact with us directly. this is bloomberg. ♪ ♪ viviana: you're watching "bloomberg daybreak." theegin with t-mobile, on verge of winning court approval for its $26.5 billion takeover of sprint. a federal judge could rule as early as this morning. a number of states sued to stop this deal. it is good but it to be a game changer in the u.s. wireless business -- it is expected to be a game ginger in the u.s. wireless business. airbus unveiling its jet of the future, a falcon like jet that wouldn't look out of place in a star wars movie. it features a so-called blended wing body to reduce fuel consumption. small business owners in the u.s. are growing more upbeat about the economy, according to the national federation of independent business index. one area of concern, 26% of those surveyed say finding qualified workers is their top issue. that is encouraging business owners to boost compensation. we end with hedge fund billionaire ray dalio. he says the market impact of the coronavirus is exaggerated. the founder of bridgewater associates told investors that there is probably a bit of an exaggerated effect on the pricing of assets. he now expects a rebound. that is your bloomberg business flash. alix: thank you so much. elsewhere in politics, president trump released his annual budget yesterday. the 4.8 trillion dollars spending planned will enclose -- will impose some deep cuts to social programs, while pushing defense and spending. committee donget yarmuth firing back, saying, "what the president has put forth is a destructive and irrational budget that intentionally goes after working families and vulnerable americans. he has broken his promises to the american people." congressman john yarmuth joins us now from capitol hill. thank you very much. if that is how you feel about the budget, what is your solution? rep. yarmuth: well, the question is what is the problem. right now, we have a deficit problem. it is getting worse. we are running $1 trillion a year plus deficit, which is a very significant increase since donald trump has been in office. but we also have a deficit in the country. we have an infrastructure deficit, and education deficit. we have got to start making investments in the american people if we want a stable foundation for our future. right now is the appropriate time to do that. instead, what this republican budget proposes is to cut taxes additionally, extending the tax cuts after 2025, for under additional $1.5 trillion of reduction in income to the government, and they offset that with significant cuts to medicare, medicaid, social security, the snap program, a lot of our automatic stabilizers that are there to protect people in case of a drop in the economy. this has exactly the wrong priorities, but it is the same playbook the republicans have used for the last couple decades. whenever they can, cut taxes, and then cut social support programs to pay for it. alix: i mean, we all know that the budget deficit is a problem, but it is not like the democrats are also tackling entitlements the way that needs to be done to get it under control. so what can you recommend? rep. yarmuth: one of the things we have been working on is some very significant initiatives to cut prescription drug prices. that is one of the biggest drivers of our health care costs, and therefore our medicare and medicaid extend the truce. we would love to get dooperations -- and medicai expenditures. we would love to get cooperations from republicans. we have already passed a bill in the house. we need republicans to get a handle on this. some state employees are now sent to mexico on the state dime and giving them $500 to go buy their medications in mexico. that is absurd. there are some steps we know we can take to make a difference in that area. the other problems are we have got an aging population. 10,000 people a day are turning 65. that is not going to change. we have to either bring new people into help pay for infrastructure security and into medicare, or take a really hard look at what is driving the increase in those medical expenses. alix: there seems to be relatively little chance of any of this happening, right? how do you move forward if you're going to contract -- if you're going to try to continue to grow the economy? the republicans are looking at 3%. that seems to be very difficult to do. what you do if you want to continue to cut taxes or something, or not raise taxes? rep. yarmuth: we have had a number of people before the committee to talk about this very thing, and one of the problems is we don't have enough people in the country. we need comprehensive immigration reform to grow the economy, grow the tax base, and fill many of the jobs out there looking for people. there's really no answer to that , but everybody is going to become a lot more fertile very quickly. we can do it with comprehensive immigration reform, and we must. that is the only immediate thing we can do to stimulate growth in the economy. we can invest in infrastructure. that will make a difference. we've got a proposal we introduced last week to do that on mesa can basis -- on a significant basis. other than that, cbo came to us with their annual report and say that tax cuts, only 20% of the cost is recovered for the economy, so 80% of tax cuts reduce gdp. last year, it was 1%. we can't keep doing the same thing over and over, which republicans want to do, thinking that a trickle-down strategy works. it never has, and it won't. alix: obviously there is the new hampshire primary taking place today as well. which candidate would be the most apt to get done what you say you want to get done? rep. yarmuth: that's a great question. i haven't endorsed in the race. i think the key factor will be not necessarily who the next person sitting in the white house is. it is what kind of congress he or she has. i think that is really what we have to focus on. who could not only when the white house, but also carry people into the senate has well and preserve our majority in the house? otherwise, whether it is bernie sanders or joe biden or any of the others, they are not going to be able to get an agenda through. alix: thank you very much for joining me. i appreciate it, congressman. john yarmuth, chair of the house budget committee, great to have you today. we have special coverage of the new hampshire primary coming up at 7:00 p.m. new york. coming up on the program, that u.k. economy narrowly avoids contraction in the fourth quarter. we will take a look at what all that means for the pound in today's trader's take. if you're jumping into your car, tune into bloomberg radio on sirius xm channel 119 and only bloomberg business app. this is bloomberg. ♪ alix: time now for trader's take. joining me is marcus ashworth of bloomberg opinion, who's going to make me talk about the u.k. i try to never talk about brexit on this program. [laughter] i justrmuth: -- marcus: think that today, it is interesting to see that we got what looks like a great number. theally, you dive into it, reason it flatlined was because of government spending. a very strong quarter, much more than we expected. quarter three, great. probably overstated. dropped down to flat for quarter for, but for exciting and negative. four,ason -- for quarter negative. expected the reason is because of the and the economy fell off a cliff, but the government pulled it back up. all of the confidence numbers are at record highs. we should be fine. alix: is this legit growth? do you want to buy cable? or is this still government and central bank supported? rep. yarmuth: our government -- marcus: our government a few moment's ago announced $100 billion and change for a high-speed network. it is happening. there's no doubt about it. government spending is coming back. we have a budget the start of next month. that is going to be a big spending budget as well. the government instantly going to spend its way out of this crisis and try to recover through leaving the european union and smooth out the bumps, of which there will be a lot, which is the reason why pound is not really rallying. alix: fair point. marcus ashworth of bloomberg opinion, great to get your perspective. coming up on this program, chris watling will be joining us of longview economics, ceo and chief market strategist. this is bloomberg. ♪ ♪ alix: welcome to "bloomberg daybreak" on this tuesday, february 11. i'm alix steel. let's take it from the top. pres. trump: china is very professionally run. i really believe they are going to have it under control fairly soon. alix: president trump backs president xi as the death toll tops 1000. with got 1016 people who have succumbed to this pathogen. it seems as if markets are taking it in stride here, and a feeling in china that things have perhaps gone a bit too far. president xi supporting that those that have been curtailing production should step it up. alix: singapore says it could see 25% to 35% decline in tourism this year. >> we have made a clear commitment towards the future of co2 neutral ability for daimler and our commercial vehicles. alix: and daimler frees up cash flow for electric vehicles by cutting its dividend to the lowest since the financial crisis. >> this is a company much like the entire industry, trying to navigate the shift from the combustion engine, which daimler invented, to the world of battery-powered cars. that is an industry where daimler hasn't been able to make its mark. alix: the ceo is under pressure to improve operations after issuing three profit warnings since taking office last may. thechair jay powell faces house financial services committee as the yield curve flips towards inversion. >> how is the coronavirus changing the fed's view of economic growth? markets have pretty much concluded that this is a disinflationary force. even the most hawkish member of the market committee doesn't want to see lower inflation. alix: this begins today's of testimony to congress. pres. trump: we are going to win new hampshire in a landslide. alix: president trump holds a rally in new hampshire as democratic hopefuls compete fiercely in the primary. kevin: we might get clarity if there is an upset. the expectation is that sanders wins, buttigieg comes second, and third is up for grabs. alix: former vice president joe biden slips. lots of news, but in the market, it still has that risk on kind of feel. s&p futures yet another record high. european stocks also at a record high. euro-dollar finding some kind of stability and selling in the back end of the curve. commodities in crude getting a nice pop. joining me for the hour is chris watling, longview economics ceo and chief market strategist. i have to tell you that my mother likes you the best. [laughter] alix: she's watching right now from new york and is really happy. chris: well, i'm thrilled to hear that. i'd love to meet your mother. she sounds like a marvelous lady. alix: excellent. so what is most on your client'' minds? chris: they've been obsessed with coronavirus, but i think that is slightly dwindling. i hope so. the markets are obsessed with how much upside this year. i thing it is going to be pretty good. on january 1 was the s&p could do 10% to 20% this year. alix: wow. chris: the irony is most strategists will forecast for percent to 7% each year. that is one of the least likely outcomes. do forn't tend to percent, 5%, 7%. it is very rare. alix: people are forecasting a v-shaped recovery for china. does it imply that? think the fear is greater than reality. alix: markets are still weighing the impact of the virus and whether the effects are going to be long-lasting. ray dalio, founder of bridgewater associates, says he doesn't think it is going to be a really long drag. he says, "investor concerns probably had an exaggerated effect on the pricing of assets because of the temporary nature, so i would expect more of a rebound. it most likely will be something that, in another year or two, will be well beyond what people are talking about." dianag us with this is choyleva, enodo economics chief economist. thank you for joining us. that is the market perspective from chris, from ray dalio. from your expertise in china, do you agree? diana: well, not really. [laughter] alix: great. diana: i hope your mother will say she likes my sense of you as well. [laughter] diana: she seems to be a key person to have on site here. alix:alix: so why do you disagree with that assessment? diana: with reference to china, i'm not looking at the rest of the world, but of course, china now is way more integrated into the global economy than it was during the sars outbreak. and also, what is happening now in china is that this virus has china's time when development model has faced a stern test in the 40 years of opening up. already the level of debt is high. growth has slowed down significantly. the authorities had a very difficult transition on their hands, both in terms of structural change, as well as deleveraging. not to mention the trade war and our thesis, the great decoupling which sees the bifurcation of the world economy into two fears, and on top of that, the coronavirus. there are very few things in china that reach everyone. as a result, it can have very significant implications on the political side of things. here isare looking for the authorities trying to throw money at the investment once the dow breaks peaks and it becomes able to doer, but the type of stimulus they did after the financial crisis and even in 2016. chris: i think that is a great point, and in a way, maybe u.s. adjusting the coronavirus might be the hair that broke the camels back. but we have been waiting for that for a long time. i think a financial historian said that bubbles, which china, in many ways, is a bubble in a lot of different aspects, but bubbles burst when money gets tight. it is not clear to me yet that chinese money has got tight. that would be my pushback and my question to you. alix: a chart that showed liquidity from the pboc. what do you think? financials get exasperated, having done china for 20 years, the china debate. we are not talking about that. we are trying to assess what the growth implications, and as a result, markets and global growth implications. and what i am trying to say is that the type of recovery we saw ,n 2016 unlikely to materialize even if they try, which they will, to throw money at the problem. that book is 1 -- chris: several books. --diana: luckily, it is not a stick as some other -- not economicas some other books that are more useful for -- chris: sleeping. [laughter] area: right now, we entering into a stagflationary world, which will be a very different world for global markets than the one they have been used to. the reason for that is first, decoupling, which means shortening supply chains. as a result, they do produce cost push inflation. that is going to be exacerbated by what is happening in china now in terms of the viral outbreak, and in terms of kind is way of doing things being laid bare in a very clear manner to the rest of the world. what is striking is the huge level of uncertainty everyone has with respect to what the chinese authorities tell them. partly, what has become very hasr is that even the who lost a lot of credibility in all this. so no one believes china when they tell them their numbers, and i think that is exacerbated in the supply change globally. at the same time, in china itself, we see prices rising because of the supply shock that the coronavirus is, and that comes already on the back of the massive issue they had last year with swine. even now, some are arguing that can't getg farms going, either. so it is a very tricky environment, and we will have to see how central banks in each of the developing economies respond to this. do they respond to the inflationary side or validate the stagflation part? chris: it is interesting because you mentioned 2016 parallels and the v-shaped bounce in china at the time, but i think the theme is different now. in 2013, it wasn't about chinese growth driving global growth crisis. out of the euro it was western growth. china is big and contributes a lot of growth, but it isn't the only game in town. i think the western consumer is increasingly driving global growth. to the extent of this shock and the short-term importance, it has to bounce, but intends of global growth, i don't think that is china's role at the moment. alix: in 2016, it wouldn't be copper or metal producers, but you would buy consumer related names. chris: exactly. consumer related, maybe western financials. i think stick with the growth names, less so the materials stocks. they probably will get a bounce if we get a chinese bounce, whatever size it is, but i wouldn't buy them as an investment. you buy them as a trade. alix: can you help square the two points of view? it feels like you are saying that is a longer-term trickle-down effect from the virus in terms of trusting china , or a bigger impetus in moving supply chains, etc. can you extrapolate what that means for the whole region and its trading partners? diana: i am looking at this from the perspective of trying to get china right. the economics of china and its interaction with the rest of the make an would not assumption on whether it is tiny growth or the western consumer. weather it is chinese growth or the western consumer. from a chinese perspective, any investor that says we will have a massive rebound from here because the chinese are going to throw huge amounts of money to counter, i think they will get disappointed because they are in a much worse position from cyclical and structural factors to do so. the second point is the longer-term because actually, i would argue that, from the perspective of what will be a key driving force of the world economy, politics, and financial markets over the next decade, i would argue by far, the overwhelming force will be the great decoupling, this bifurcation of the world into an american sphere of influence and he chinese sphere of influence. and what is going on with the spec to how china is dealing with these -- with this virus will play into that theme and exacerbate this decoupling rather than bring the two sides together. alix: fascinating take. chris: it is a great point. the world is clearly to globalizing -- clearly de-glob alization. alix: thank you so much. chris watling of longview economics will be sticking with me. coming up later today, jay powell testifying to the house financial services committee. this is bloomberg. ♪ alix: some breaking news for you. t-mobile has won court approval for its takeover of sprint. the stock for sprint surging up in premarket, surging after the bell yesterday as well. finally, they get the right to merge. they will have a monthly subscriber base of about a million -- of about 8 million, and the same league as at&t. still shia verizon. they will also have cash still shy of verizon ash still shy of verizon. -- still shy of verizon. jay powell will give congressional testimony today. joining us from princeton is ira jersey of bloomberg intelligence , chief u.s. interest rates stretches. chris watling of longview economics is still with me as well. what is going on? ira: i wouldn't worry about the three month-10 year inverting. the market is getting ahead of itself thinking that the federal reserve might cut this year. it is forcing rates a lot lower than they might be otherwise. the market is very concerned about what is going on in china, about the global growth situation, so they continue to press against the federal reserve that really wants to remain on hold. what you are going to listen for in powell's statement today is how worried numbers are right now about the coronavirus and bubble growth, and secondly, what questions are going to get asked. those questions white circle a lot around fiscal response. chair powell has to mention that monetary policy might not have tomb anymore bullets left, and fiscal response to any slowdown in the u.s. is going to be necessary. chris: interesting. i wonder how dovish you think you might tilt. he seems to want to be neutral at the moment, but there must be concerns about the supply chain issue out of china. i wonder whether they could thin some cuts to create some confidence. ira: one of the big things i think that jay powell will mention is things about supply chain, how this will in the medium-term impact the global economy, and what the fed response to that is. one of the things he might say is that this is not something that monetary policy can really help because monetary policy is a blunt instrument that basically, lower interest rates should create lower loan demand, and their bore -- and therefore more demand for goods and services. but it is a different problem then monetary policy could help. monetary policy can move faster than fiscal policy, but there's only so much that central banks can do in a situation like this, which really, is almost nothing. alix: what do you think. do you agree? chris: i mean, it's a fair point. there's a degree that monetary policy is blunt, but it also lists confidence and underpins people. you can do lending programs in the fed if things really do get tough on parts of the supply chain. but it is increasingly blunt as an instrument, that's true, and fiscal policy will be supported in that respect. alix: how do you think jay powell tackles the dollar? it was just on a tear. clearly, president trump is going to be tweeting during the testimony. ira: i think he will turn to the inflation component of the dollar. moveow does the dollar's impact inflation? a stronger dollar in the u.s. is clearly not good for inflation because imported goods prices are lower thereby in dollar terms. the other thing he is going to be asked a lot about is on the technical side. i am sure he's going to be asked about repo, about what is going potential repo facility that they've been talking about now for almost a year. we first wrote about it last march, so we are approaching the year point at this point. are they ready to handle any kind of financial stresses that might pop up in the banking sector? that is going to be something very important for them, and thusly -- and especially now that there is talk that they might loosen some of the rules. that might concern lawmakers that banks are not going to have the same strict standards they have been under recently. alix: thanks a lot. really appreciate it. ira jersey of bloomberg intelligence. chris watling of longview economics will stay with me. we will have jay powell's testimony at 10:00 pick -- at 10:00 a.m. and t-mobile and sprint will finally get to merge. billion dollar deal had issues about whether it would be blocked, but it seems now we are moving forward on this. we will talk to antitrust analysts. this is bloomberg. ♪ ♪ viviana: this is "bloomberg daybreak." under armour shares plunging this morning. the athletic gear maker warning of soft results. it says it may restructure. under armour forecast calling for sales to followed by a low single-digit percentage. projected earnings are well below estimates. and news that brooke moments ago, t-mobile gaining court approval for its takeover of sprint. . a number of states suing to stop the deal. it is expected to be a game changer in the u.s. wireless business. shares of sprint are soaring. that is your bloomberg business flash. alix: let's get more on that merger. joining us is jennifer rie. what was your take away from this? jennifer: i have to say i am a little bit surprised. i haven't read the opinion yet because it was just issued while i was waiting to come on this morning. this trial was really close. i think the states actually had the easier argument than the companies did here, so after having attended the entire trial, i thought that the states had made their case. i always thought it was a close call because the judge expressed skepticism on both sides, but what it looks like here is the judge was simply unconvinced that the companies, once merged, would have the ability to raise prices. interestingly, that is even a little different from what the department of justice determined. had the justice department determined they did not require a certain amount of assets sold to dish once the companies merged. alix: so who are the winners and losers from all of this? jennifer: obviously, sprint is a huge winner. a big part of this trial was the fact that sprint was a failing or weakened company, that they had an uncertain future going forward, so certainly both sprint and softbank are. . huge winners anyway -- softbank are huge winners. winner., dish is also a there is some skepticism about whether it will be a successful facilities-based telecom operator, but they are getting a lot of assets here. they are getting a real head start into this business. they are getting subscribers. so i think dish is probably a winner here as well. alix: did we learn anything about how the government's handling mergers from this? hasifer: well, i think this been a really unprintable year in terms of the way the government is looking at antitrust in mergers. there have been so many unexcited outcomes. i think what we see in my mind is that this to part of justice, when it understands -- this department of justice, wooden understands that the administration is interested in it could have a larger effect in what it could do in our country for 5g, it is going to use the department of justice to consider that. not just to keep the blinders on and stay within the confines of antitrust. i think that means it is going to be unpredictable for these companies and the attorneys that advise them, but also for the investors looking at these deals. alix: really interesting take. coming up on the program, we are going to take a look at the stakes in the new hampshire primaries. also, jay powell released the remarks he will be giving at the house financial services committee. this is bloomberg. ♪ [ fast-paced drumming ] [ fast-paced drumming ] that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else. it's a different kind of wireless network, designed to save you money. switch and save up to $400 a year on your wireless bill. and save even more when you say "bring my own phone" into your voice remote. that's simple, easy, awesome. click, call or visit a store today. alix: this is "bloomberg daybreak." i am alix steel. a quick check on the markets. you are still seeing a risk on feel to the overall equity market. record highs within european indices. in other asset classes, the cable rate is moving higher. better-than-expected gdp. euro-dollar at the lows of the session, now down .1%. for more on fed chair jay powell's remarks, we want to get to michael mckee. michael: powell's text is very short, just four pages. very little new. just one mention of the latest threat from china. jay powell saying "the fed is closely monitoring the emergence of the coronavirus which could lead to disruptions in china that spill over to the rest of the global economy." that is it. beyond that, the u.s. economy appears to be in good shape, and in his words resilient to the global headwinds that intensified last summer. job openings remain plentiful as employers are increasingly willing to hire workers with fewer skills. consumer spending has moderated but the fundamental support in spending remain strong. housing has turned up at inflation is likely to keep rising toward the fed to percent target as low readings in 2019 start to fall out of the calculations. the only real problems have been with and remain business investment and global growth. of theports, some uncertainties around trade have diminished, but risks remain. under current conditions, monetary policy remains appropriate, and as he has said many times, the fed is not going to change interest rates unless "developments emerge that cause a material reassessment of our outlook." he calls for finding ways to boost labor force pro participation and productivity and the fed chair did have a warning for congress that interest rates are so low the fed might not be able to support the economy in a recession, and therefore fiscal policy becomes important. that means it would be important to bring down the deficit or as he put it, put the nation's budget on a more sustainable path. finally, powell reached -- reiterated the fed's t-bill purchase are designed to speed up the reserves on the fed balance sheet and not affect monetary policy. levels,ves get to ample he says the fed will gradually transition away from the active use of repo operations. --appears the fed chairman if the fed chairman will make the, he will do it during q&a portion of his testimony. alix: michael mckee, thank you very much. , but, i guess it is not qe as a market participant you want to buy risk assets because of incident? chris: what is liquidity? it is money that gets into the system and somehow lives asset prices. it is extra money. the balance sheet is expanding. if you look at an aggregate sheets,stern balance they grew from the crisis to late 2016, then they shrunk, then since september they've grown. there is a correlation with stock markets and the stock market going up. it sounds simplistic. it is not completely simplistic, but there's a lot to be said. i thought that statement was steady as she goes. alix: steady as she goes, we are reassessing the rest. hang tight, chris watling will be sticking with me. tune in later today for coverage of jay powell semiannual testimony before congress. 10:00 new york time. we now turn the race for the white house. new hampshire is heading to the polls to hold the first in the nation primary. is there with bloomberg contributor's jeanne zaino and rick davis. londongood to see you in , but we are here in manchester, new hampshire with rick davis and jeanne zaino. at quite a few of these new hampshire primaries. how is this different from others you have seen? rick: i think there is more consolidation at the top. even though there is a laced for price between -- for first -- a race for first price betwet -- a race for first place between bernie sanders and pete buttigieg, they are within 15 points of each other. with the economy as strong as it is, that is a loser in most people's estimation, again in the states that will decide these things. there's a lot of consternation in the democratic party. even if he was elected, without the senate he will not be able to put through these programs he has talked about. at least in my estimation, not explained how he will pay for. there wasew years ago a sense the democrats had come together against donald trump, there was a lot of energy against donald trump. we saw trump at his rally in manchester, new hampshire. is it possible for the democrats is it possible for the democrats to get that kind of momentum? rick: trump is very good at pulling off these events. he beat elton john for the most people to attend at this arena. it was quite a show. the question is intensity. we did not see a significant improvement over 2016 in the iowa caucuses were turn out. that will be something closely watched in new hampshire because the democrats do have an intensity problem until they prove otherwise. part of what is unique about this election and going forward is you have two candidates, tom steyer and mike bloomberg, who are not playing in new hampshire. tom steyer spent a norms meant v money, but -- of t he will not show in the top five. in south carolina he is pulling well. mike bloomberg, who has spent a norms meant of money and super tuesday states, will have a say in how those states go. david: the money is an interesting point. you get to super tuesday and that requires a lot of money. who has the moneywho has the mog and who needs the money? jeanne: mike bloomberg, tom steyer, they have the money to do it on their own. joe biden has the money. we forget how much money bernie sanders has. i think mayor pete, if he does not come out at least two, he will have a challenge when this opens up. similarlywarren situated, and amy klobuchar. high stakes for those 3 -- mayor pete, elizabeth warren, and amy klobuchar. if they do not new well here -- if they do not do well here, they will have real trouble on super tuesday. strategy opens up the if you are the campaign manager. how you spend your money? rick: no amount of money will have an impact on super tuesday. 40% of the delegates to the democratic convention will be selected on one night. you try to get momentum. you hope the media advertises for you. whoever gets hot out of new hampshire keeps it through nevada and south carolina, that is the best advertising campaign you can have is momentum. two, you have to pick your shots. you cannot campaign in 14 states in one week. a lot of these candidates have spent an enormous amount of time in iowa and new hampshire, maybe that paid off, maybe it did not. the bottom line is they will now a 10th of that time in 14 states they spent in two. david: it is all about california for the democratic nomination. jeanne: it is a huge amount of delegates. california and texas. one lesson from 2016, we learned hillary clinton raised and spent $1 billion to the president trump. he was able to get the media and when the general election. money matters, but people saw also have to get better in media david: thank you so much. michael bloomberg is the owner of bloomberg lp, the parent company of bloomberg news. back to you in london. alix: great conversation with david westin. make sure to tune into david later on today. he will be covering the new hampshire primary on balance of power and a special 7:00 in the evening and 12:00 in london. we will be speaking to ceo cheryl miller about the results and how the coronavirus is affecting the auto industry. remember bloomberg users, go to gtv on the terminal. any charts we have in the program, you can check them out. this is bloomberg. ♪ alix: daimler is lower in european trading as the company slashes dividends to the lowest in's the financial crisis. miller caught up with vizio and asked him about the biggest cost issue. >> a lot of it is intelligence. how do you approach the design of a vehicle and how do you take cost out while at the same time improving the product? there's a lot of potential there. and as the case with any big company, you can never get lean enough. we have started a program with a range of measures to lower our overall cost structure. >> you talk a lot about your vision for the future. what kind of margins do you want to see at daimler? >> we have put together a program about cost efficiency and also cost restructure and in our capital market today we presented in november of last year we said we want to put a floor in the 2022 timeframe on the car business of around 6%. of course we have higher ambitions. the focus is to make the next three years count. >> one of the things you want to do is focused on your core business, which i would think is mercedes-benz cars, but you are also selling vans and trucks which seems like a different business segment. how will you scale down to just one core? say trucks is just as much part of the daimler family as cars. we are the biggest truck producer in the world and in the states we are the biggest truck maker. very successful and profitable business. we view trucks as core as well. alix: that was bloombergs interview with the daimler ceo. time for bottom line. we look at companies worth watching. today will focus on one and take a look at a company surging in premarket trading after its results top estimates. joining us in new york is cheryl miller, autonation ceo. chris watling with me as well. i am sorry i am not there but it is great to have you with us. your quarter was solid. i am curious as to your outlook in terms of demand in the u.s. and also demand you see and hear about in china. cheryl: it was an all-time record for autonation, not just for the quarter but for the year. our quarterly results were $1.74, that is up 71% for the quarter. the year was $4.98, up 16% for the year. we feel good in terms of demand. we had three interest rate cuts last year. as i look at 2019, we had 57 million units total between new and used. as i looked at 2020, it will be similar. we see the migration from new to nearly new. yous: it sounds as though feel pretty good about the consumer. i wonder how you would read that? financing for autos has gotten cheaper over the last 12 months. how do you see the consumer? cheryl: the consumer is in good shape. financing has gotten cheaper which is important for affordability. what we see for new vehicles is about a $5,000 increase in prices. that is what is causing the shift to used vehicles. our used vehicle growth profit was up 21% in the fourth quarter. while the new vehicle market is holding in, it is definitely a strong market for used in the u.s. chris: that is extraordinarily how the profitability is holding in so well. is there room to squeeze the margins to get more cars out the door? it sounds as though they are healthy enough to do that. cheryl: we are always trying to find the right balance. in new vehicle shares one of the great things year-over-year is we have reduced our inventory by 11,000 units and that helps us keep the optimal mix for customers between volume and pricing. alix: can you give us some perspective about how the coronavirus might be affecting your business? you have to have some kind of read on it. is a worldwide supply chain. we saw this with the tsunami that hit japan a few years ago. what we saw is issues for hyundai in korea where they were importing parts from china. fiat chrysler talk about some things, so we will see how it plays out. the good thing is over the years automotive has diversified in supply chain to a degree and thus of nami -- and the tsunami in japan taught us some lessons about that. it is interconnected. we feel like we have a healthy supply of those in parts and inventory. a 52 day supply in new. we were able to go through the gm strike in good order. i feel good about the inventory we have on the ground to meet consumer needs. chris: i was going to ask you about the diversification of suppliers. are there any pricing pressures that come once you switch suppliers, and how quickly can you do it? is it flipping a switch or is there more to it? cheryl: it depends on the product. in japan was on issue at semiconductors and that is harder to flip a switch. in china we will have to see which factors are impacted depending on where they're located. if something is in wuhan versus shanghai, you will see differences. people are focused on making sure there is adequate supply chains. the good news for us as we have an adequate part supply in the u.s.. we feel good about where we are with supply chain. have?how long do you how long with your inventory in terms of car parts until you have to replenish? the gm strike was 40 days and we had adequate supply through that period. in most cases you have 40 days of supply and with autonation selling 30 brands and having so many stores across the country, we are able to share inventory across our brands amongst our stores as well. chris: if you take that to a higher economic growth level and think about the u.s. economy, i am guessing you would argue it was not as much of a beat at all assuming coronavirus is dealt with over there. cheryl: if it is dealt with in a reasonable amount of time i think the auto industry should be in good shape. we will see how it develops. i believe everyone is focused on the factories, on trying to contain this and getting people back to work. if it extends over a long period, it will be hard to tell. if we keep it in a reasonable timeframe it is doable. we have lessons learned from the tsunami in japan years ago. alix: and to bring it back to the u.s., you mentioned the average car prices have been rising as a sign of strength. what happens to the used car market? does it get better? or do we feel consumers are better able to rotate into the new cars? cheryl: we've seen the price of new vehicles push people to the used market from an affordability standpoint. a $5,000 increase over a five-year period is 15%. when the customer goes into the showroom, some customers take a pause and shift ever to what we call nearly new. that is why we think the total supply will stay around 57 million for the year. we think we will continue to see better affordability in used for customers. alix: thanks so much. great insight into the auto industry. cheryl miller of autonation. and chris, thank you for joining. what is your favorite trade? what is on your mind? chris: we are seeing rebounds in oil. the oil market has been so volatile, it has been fascinating. we were heading to 100 now we are down 50 and hopefully heading up from here. alix: you are long? chris: exactly. alix: it is like you knew i was going to ask you that. chris: possibly. alix: appreciate you guest hosting with me. that was fun. coming up, we will break down what the trait could be in today's technically speaking. if you are jumping in your cartoon into bloomberg radio at sirius xm 10 one 19 and on the bloomberg business app. this is bloomberg. ♪ alix: time for technically speaking. we'll set you up with trades for the day. bill maloney joins us now. listen to him every day at squa on the terminal. good to see you in new york. we'll start with shanghai. what do you think? bill: shanghai is up .4% overnight. we talked about the shanghai exchange. on february 3 it fell 7.7%. it has rebounded 7% since, shrugging off the virus fears, back into the long-term trading range, potential resistance at the 200 day and the top of this gap. resistance around 2950 in the shanghai composite. alix: let's talk about oil. has it found its bottom? we were talking to chris watling who is long. bill: i heard you talk about the earlier hit. crude futures up, it broke the 51 support that dates back to june, but it has been holding the 49 level since february 3. that is your new short-term support in wti crude futures. the next up around 44. boeing,t's get to talking about not only the demand from china but how to certify their process and their parts. what you see on the chart? bill: boeing is up 1% in the premarket. share.und 348 a 344 is your key level and the 200 day at 352. alix: thank you very much. bloomberg's bill maloney joining us from new york with your technical update. that does it for me. coming up with jonathan ferro, tony dwyer. this is bloomberg. ♪ jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪ jonathan: coming up, equities at record. china urging companies to wrap up production. a tensioning turning to the fed. -- attention turning to the fed. the race going to new hampshire. senator sanders leading in the polls. here is your tuesday morning price action. record highs on monday and we are set to add weight to that. up 11 on the s&p 500. positive one third. euro-dollar very close to a 1.08 handle. let's begin with the big issue. all roads leading to the fed . >> we are in a liquidity driven market. >> liquidity is tremendous. >> it lifts all boats. >> the coronavirus outbreak. >> coronavirus. >> it will not