A 1. 07 handle. On the stoxx 600 we are up 0. 7 , near session highs. Vonnie china now makes moves to stimulate the economy, including possible bailouts for hardhit industries. Continuing to shape our schedule and we are seeing strong demand. I do think we will have to take some additional provisions. Demand is holding up. We are shipping all of our product. Prices have held up. We will see reduction from next week onward in china we will see production from next week onward in china. We are diversifying source of supply, supply chains. Asia is a growing market. We are not abandoning it. Vonnie for details now, lets get to rishaad salamat, coanchor of Bloomberg Markets asia. People have been lost here. Is a human tragedy, but it has got corporate victims as well. Hna g last few minutes, roup, which went throughout a spelling spree in the last decade, it looks like the coronavirus may be the tipping point. Moment, looking at purchasing this company and taking control of it, even though its program of divestments have still let it into financial problems. If we look at what is going on, that reallympany had a problem servicing all those debts. The coronavirus has made the task that much more difficult. This is being reflected across the board. We got a load of Companies Operating in china at the moment. We heard from adidas, as well as nike. Theyve been pummeled by all of this. Adidas saying they are seeing sales down 85 in the stores just opened. On top of all of this, weve got Chinese Private companies, and hna group would be one of them, furloughing people. Even if they were to have full capacity, would anybody come . Just because they open doesnt mean people actually go to shop in their stores. Minutes, about 54 before macau gets back to business. Weve got the casinos opening up. It is just about 45 minutes by ferry over there. Again, do people go back to the gaming tables . We mentioned the airlines. Weve already had a report on Bloomberg News talking about how chinese authorities are looking at cash infusions to support these beleaguered carriers. On top of that, perhaps looking at m a activity to keep these carriers aloft. Then we have a situation where weve got 10 point 4 million passenger seats removed in the last four weeks. Weve got a situation where the Chinese Market is behind that of portugal, so there you go. Were looking at various measures here, but the big story, hna group perhaps falling into provincial governmental hands. Vonnie thank you for that. That is bloombergs rishaad salamat. For more impacts now, we are joined by jeremy siegel, professor of finance at the university of pennsylvanias Wharton School of business. Obviously we are acknowledging the human tragedy. It is a terrible academic terrible epidemic at the moment. Hand, the market seems to be reacting well. Is it because of china stimulating . Jeremy i think it is the prospect that this virus is going to be contained. Theres no other way to describe, and i think right now the nasdaq has been continuing to hit new alltime highs, the s p now at an alltime high come of that has to be a very large expectation that this virus is going to be contained, and the Global Economy is going to rebound. I see no other explanation for it. I hope the market is right. That is clearly what the market thinks. Vonnie is it going to go beyond the First Quarter . Companies have begun to complain about this and say this is really affecting their earnings. Some companies are showing a brave face, but there is clearly a lot of concern out there. Certainly is, and Many Industries probably will go quarters, orter, but two even three, if there is a rebound and you do the math on what the discounting is, you do not get a very large effect. If this does not become a a 1918de pandemic of variety, i think the market is using a rational gauge to say theres no reason for me to markdown stocks significantly as a result of the news we now have. Puma saying it is been pummeled in china. The stock is up 7 . The market is basically looking through it and saying things are going to get better because of the way things looked before we went into this crisis. Fomc minutes are out later on. The focus will be on the bill buying program. The expectation is that that is going to be tapered in the spring. How is the market going to react to this . The speculation has been that while this wasnt qe, it had effects. Jeremy i think what the qe did was solve the problem in the repo market last october, which was a big disturbance, to say the least. Theyve moved reserves down too much. Theyve realized, oh my goodness, we need more, and they have not brought that up. The fed is now in an extremely comfortable position. Theres no reason for them to move one way or the other. Littleppi this morning a closer to 2 . They are in a stay mode. My feeling is they will take for some of that, but they have provided enough reserves to normalize that market, so i think the fed is comfortable, and i think the market is looking beyond that. What worries me is that everyone solved,is going to be and we will see a big pop, but then we are faced with earnings. Earnings this year do not seem very robust, even with a recovery from the coronavirus, so i am not looking for a great year overall. Not a terrible year, but i think that earnings and their lack of a big push is going to be the big news we are going to hear the remainder of this and second quarter. And by the way, the headwinds of the dower, you mentioned that earlier, while the strength of while theollar strength of the dollar is going to subtract from s p earnings this quarter, theres a lot of virus. Ds outside of the guy lets talk about another one. What if Bernie Sanders is the candidate . Is that a headwind . How would the market take it . Jeremy i think that is a headwind because, even if the republicans keep the senate, it is true that those radical proposals, the president can do an awful lot. We have seen trump do an awful lot. Way, and the national polling, sanders does quite well against trump. A lot of people say he cant stand up against trump. Again, the counterattacks against sanders have not yet begun. , mayor bloomberg might start some of those attacks. We havent started that campaign. But clearly, in the betting rated as a 50 ow chance and rising to take the democratic nomination. We will see if bloomberg can eveningm, his rise this i. Think that is also a very important consideration for 2020. Vonnie jeremy, thank you. We will be having a conversation about that a little later this hour. Of course, Michael Bloomberg is founder and majority owner of number guilty, the prince of Bloomberg News owner of Parent Companyhe of Bloomberg News. Coming up, we will sit down with suzanos ceo. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is Bloomberg Markets. Lets check in on the market story with Abigail Doolittle. Abigail the story today is certainly risk on. The equity indexes around the world, lots of green on the screen. 0. 4 , the nasdaq up 0. 7 , the chip index up about 2 on hopes that the coronavirus situation in china, that tragedy, is not going to impact that supply chain for chips all that much. We also see the stoxx 600 in europe up, and during the asian session, the nikkei was especially strong in japan. As for what is beneath the seeace in the u. S. , you can most sectors are higher, so investors are really going towards stocks. Utilities, real estate, those are high dividend yielding stocks, so we will be talking a look at rates in a moment. When rates go higher, those dividends look less attractive. I was mentioning the strength for the technology and chips. There you see it with tech up 0. 7 . Helping the financials and hurting real estate and utilities, that is the 10 year yield, although right now it is unchanged. It had been higher. That would make those rates look less attractive and help the banks, but the real mover here, take a look at the dollar against the yen. Gaining come ot day for the yen since august, so really a risk on day. Vonnie thank you. That is Abigail Doolittle. Suzano is the Worlds Largest pulp producer. Suzano has just unveiled a plan Carbon Emissions and develop renewable materials. It is going to be unveiling new plans and a couple of hours. It is also seeing a huge impact from the coronavirus on the chinese economy. You tell us all about all of these plan is the ceo, walter schalka. How does suzano see the market for pulp in 2020 given the headwinds in the First Quarter . Walter we are going to see some disruption at this point of time because of the coronavirus and the logistics in china, but we see both on structural consumption. The measures that the Chinese Government are taking is going to allow consumption to grow in china, and we are seeing growth in terms of consumption higher than the organic growth we have been facing from previous years. Vonnie you are expressing a lot of confidence, but what do you know about what the Chinese Government will do in order to combat the effects of the coronavirus on the industry, and how much will prices rise . Are following every day how it will affect our customers. What is known as we are facing some problems to deliver finished goods to the end customers, to the supermarket. But things are improving every single day, and we believe in the coming days it is going to be addressed. Walter good morning guy good morning. Lets talk about your esg credentials. You are unveiling this plan a little later on to become carbon neutral. Why are you doing this . What is the primary motivation for making this move . Gettinganies seem to be a shareholder boost at the moment. I am wondering what part that plays in your thinking . Walter it is very important to mention that the brazilian industry is 100 based on plant and forest, supplanting 500 trees every single day. We would like to show to society that we can Impact Society in a very positive way. Many companies are announcing at this point that they want to be net zero or carbon neutral. We are negative. We have absorption of co2 emissions on our operations, and the fact that we are planting trees every day, but weve to be even more than that in the coming year. Tonsnt to have 40 million of absorption of Greenhouse Gas emissions. On top of that, we want to replace plastics. Ourre developing in addressable markets we want to produce textile based on wood pulp, and through that, we went to increase to replace 10 million tons of plastics in the next 10 years. Have 200,000 people out of poverty. Guy the poverty line is the direction i want to go in lets talk about the social side of things. Make sureou doing to your company is a balanced company . How much work do you still have to do . Walter the company has been working on the direction, and our peers in the industry are doing the same in brazil. It is going in the right direction for many years. We believe we are well prepared to Impact Society and bring value. People that inspire and transform, create and share value with all of the stakeholders. We will develop a new direction. Vonnie how does suzano plan to take it vantage of low Interest Rates . Are you looking at International Expansion right now . Walter we are not looking for International Expansion. Our next plan is going to be organic growth in brazil. To marketsave access worldwide. Our Interest Rates are going down. Debt withry longterm 4. 8 Interest Rate right now. Guy what do you think about president bolsonaro . Is he doing a good job . Walter he is doing an extremely good job on the economic side and needs to improve in areas such as environmental, in education. On the economic side of things, he is doing a very good job. Vonnie thank you for coming into join us and chat a little bit today. If very best of luck in unveiling the new plans a couple of hours from now. Walter schalka is ceo of the Worlds Largest pulp maker, suzano. Pulp maker, undern go to tv terminal 2 look at all of our interviews. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is Bloomberg Markets. Time now for our muni moment. Taylor riggs is in San Francisco with doug brown of wells fargo. Over to you. Taylor thank you. Doug, thank you for joining me. From doingre banned a lot of newco she deals in california. That has now been lifted. But has it been like getting back into the california market . Fargothe reality is wells was never closed for business in california. We used that time to try to figure out other ways to support the state. Dam017, when the orville needed emergency repairs, wells fargo stepped up to lend those funds. Right now it feels great to regain their trust, and we couldnt be more proud of that. Taylor we talk a lot about california being one of the largest issuers last year. They were the biggest issuer in the u. S. Broadly speaking, we are seeing a big shift from the taxexempt to the taxable market. Is california leading in that way . Doug absolutely. The Municipal Market is only stronger in california. 60 of issuance to date in california in the Municipal Market has been taxable, a huge increase from even a year ago. We have seen that strongly in california. Taylor what has been driving the increase . Doug undoubtedly the 2017 reform has pushed things, but more important has been the absolute low level of rates and credit spreads which are driving things towards taxable because of the ridiculously low levels of spreads and rates that are available. Taylor lets talk about those low levels because your fiduciary responsibility is to the issuer, but a lot of these deals are coming covenant like. How do you ensure that investors are also protected. Doug thats a good question. We have seen borrowers even down space issuing bonds without financial covenants. On the investor side, however, we focus on making sure they understand the credits, and we are watching closely to make sure the levels. Taylor what can we expect from that segment . Doug we expect a lot of taxable issuance. We see funding of taxable projects, long dated, even 100 year issues for universities, and not always for capital projects. We expect that trend to continue. Taylor doug brown, wells fargo managing project director, thank you. Vonnie taylor riggs in San Francisco, thank you. It is time for your latest Bloomberg Business flash. The biggest auto lender in the u. S. Is getting into the credit card business. I led financial has agreed to buy a subprime lender for nearly 2. 7 billion in cash and stock. Allied has been looking to diversify. Shares are down 10 this morning. Blue apron is evaluating options to jumpstart its business. Among the possibilities, raising Additional Capital or selling assets. The one time unicorn startup now with a market value of less than 60 million. Bloomberg reported a Fourth Quarter loss blue apron reported a fourthquarter loss that was worse than expected. Ahead, we will speak with ukraines Foreign Affairs minister about a range of issues , including the ongoing conflict with russia. Cayou help keep these guys protected online . Easy, connect to the xfi gateway. What about internet speeds that keep up with my gaming . Lets hook you up with the Fastest Internet from xfinity. What about wireless data options for the family . Of course, you can customize and save. Can you save me from this conversation . That we cant do, but come in and see what we can do. Were here to make life simple. Easy. Awesome. Ask. Shop. Discover. At your local xfinity store today. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is Bloomberg Markets. Lets check in with the bloomberg first word news with ritika gupta. Ritika more fallout from the coronavirus outbreak. Hnaa plans to take over group and selloff its airline assets. The virus has hit the conglomerates ability to meet financial obligations. Hna has been selling off assets after a global buying spree left it heavily indebted. Inflationary pressures may be building in the u. S. Moreproducer prices rose than forecast last month, up 1. 7 from a year earlier. Energy. Ludes food and almost all of the increase was due to the cost of services. Imf is protecting a rebound in Global Growth despite the coronavirus outbreak. The fund says the Global Economy appears to be bottoming out. Still, it says that risks include the virus and trade tensions. Is criticizing the European Union for efforts to aun enforce a un arms embargo. Iny say theyre interfering a dispute where they have no authority. The country is now split between rival governments. 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. Im ritika gupta. This is bloomberg. Vonnie thank you. The u. S. Department of justice has selected a top federal prosecutor in brooklyn to vet and manage all ukraine related efforts in the wake of President Trumps impeachment over his actions toward the u. S. Ally. You kane Foreign Affairs ister that impressed eiko prystaikonister vadym