Hard not to because that is the alltime low on the 10 year treasury. It would have consequences. Reactionready seeing in stocks around the world potentially. This is all coming from the sentiments as we progress through the morning, and japan overnight and now in the united states. We started off the session in the positive and now we are lower by 1 apiece. Groups arethree lower now and you are looking at things like transportation, energy, the dollar Index Holding above 99. We backed off the highs there with gold futures, but that vix is still at 25 and likely will stay there. This is interesting. Guy lets take a look at what is happening here in europe. Lows. Just obsession just off session lows. The german tenyear now 52. Volatility continues to rise. We are watching this very carefully. Vonnie all of this began with the coronavirus and the number of cases in europe containing to continuing to rise. Italy with melody the latest. The number of cases continues to increase, but the speed of the rise is somewhat slowing showing signs that the government may have been somewhat successful in containing the outbreak. There have been more cases outside of the previous hit regions, but most of the contingent remains in the quarantined areas i the government. The situation remains complex, but there are signs that we might be heading toward some stabilization. Guy lets talk about the efforts across europe to deal with the situation. There is a hotel quarantined in spain rate this situation we do not want to go out of control. What are the European Authority saying to each other . Is there coordination at this point . The Health Ministers our meeting today to cornet efforts especially the countries which are neighboring, that have the most travel with italy. We do not know what they will decide, but the general idea for now is to avoid wholesale closure of the borders. Hit againste a big european integration. Vonnie bringing you a headline from the world health organization, they are saying data shows the transmission of the virus in china is slowing, so that is good news. This is a positive news conference. Their data shape face saying that transmission of the virus data isng thered saying that the transmission of the virus is slowing. The rest of the world is not yet ready. Of thethe locking down few areas in italy, what else is the government doing . Italy is trying to extend the testing to make sure as many people as possible get tested so they can handle how big this is good there this is. The Italian Economy is already very weak, and the global slowdown would hit it even more and the fact that the two most productive regions are in virtual lockdown is going to reverberate and probably push the economy into recession at the end of the First Quarter. Italy will be able to help thegh money to economy is a big challenge. Guy what is happening with the Football Games . Is the game this weekend going ahead . Are fans being allowed to go to the games . Are big events they are starting to get canceled . Many events are being canceled, but for now we do not have a wholesale cancellation of the matches, which would be the real major tragedy here in italy. Jokes aside, it seems that most major events will not be canceled, but games will be played behind closed doors. Cheeringo public or no , you just have to watch it on television. Even some of these cities turning into ghost towns, maybe that is what people really want to do. It will not deter the fans from watching. I just want to point out that the major indices here in the u. S. Are down 1. 1 . That 10 year yield right now is at 132. Guy lets talk about where we are going. Theres a big selloff yesterday and we are starting to accelerate to the downside. This is a classical flight to quality. People are going into treasuries and gold, buying volatility paid some of the things that have rallied the most, this is why the Technology Sector is selling off, not so much actually the cyclical trade at this point in time, which is interesting. I think that potentially comes if you have a continuation of the further spreading of the virus. Then we will need to go into the d cyclicals. Takingat message are you from the bond market right now . Clearly there is a flood of money entering the bond market. Weve got 50 on the german tenyear. That in terms of signaling what is going on . Months whatlast two you have had is flowing into bonds and equities. Clearly theset markets are not necessarily a reflection of this risk. Not reallyversion is a good indicator of a recession so we are not calling for one at this stage. Thing vested invested think investing in theny of liquidity, but also realizing there is a huge amount of uncertainty. That is the crux here. How do you manage that . Diversification and limiting the concentration of individual securities that you have. It is through buying old strategies, a combination, because there is not just one that works. You cannot just buy treasuries and just sit on it because that is too expensive. You need to combine strategies. Vonnie what happens when we blow through 131. 80 . Close. Very do we then see a capitulation in yields . One that level would be an overshooting or and , so clearly there are a number of assets that could overshoot. Gold in our view is starting to get to that stage where we overshoot. A lot toogically happen where you have such a lack of entirety. Tomorrow we may have positive news or negative news so it is difficult, we are in the business of trying to predict , butis happening tomorrow we rather invest for the next few months or so. I think that is what we are following the strategy of being diversified and managing the uncertainty by this approach that i described. Vonnie if what you describe happens, would it not be tempting to short some treasuries . From a trading perspective it could well be that is a good strategy over the next week or so. , whether it ised treasuries or investmentgrade, weight prefer investmentgrade because theyre still a little bit of yield, you need some safe assets, clearly especially in the private banks. Have those safe haven assets, where will you find diversification . Maybe through hedge funds as well, some will be playing this correctly, and will find opportunities happening. That is a strategy which a lot of our clients are following, and i think it is wellsuited when you have the potential for that volatility. Guy we will wrap it up there. Looking forward to continuing this conversation to figure out where exactly these markets will go next. In the red for a fourth consecutive day, stocks here getting back earlier gains as the coronavirus is a continued overhang on the market. Right now the major averages all down and we have to Pay Attention to the bond market as well. Right now we are looking at 133 on the 10 year, within two basis points of the record low as investors continue to seek the safe haven. Europe is also underperforming by about 1. 7 . It is lower by about six and a half percent in the past for sessions. There is no buying of the dip. Lower, aof marching look at some of the secondary indices. The average is down 2 , the airlines are a big drive there. Its 2020 profit forecast because of the virus overnight. Mid and small caps are lagging. Some of the big laggards, you have the likes of Palo Alto Networks down, there were stay since 2017. You also have lending tree down for the better part of 30 13 . You for that. We have a lot more ahead on bloomberg markets. Coming up we talked to Thierry Vanlancker about his outlook for the Global Economy. Buying credit karma, we will be talking about the ceos of both companies. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. At trade deal with india could happen at the end of the year. President said the two leaders understand each other on these issues. Michael bloomberg is hoping for a do over for the president ial the president ial debate tonight at his first debate last week, he was widely panned. Bloomberg makes it clear he is turning his focus tonight to bernie sanders. Bloomberg is the founder and majority owner of the Parent Company of a bloomberg news. Harvey weinstein spent the night in custody here in new york. Until he is sentenced next month we will be held for raping one woman and sexually assaulting another. His lawyers plan to appeal. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. What are the primary concerns of your clients beyond the coronavirus . We have started a few weeks ago valuations, and in particular the valuation and that u. S. Tech industry. Therefore this was one of the reasons we are up to at least a partial profit in technology on top of the concern about the potential supply interruptions. It is very difficult to be underweight in technology because this is still the area that people see growth. We are rather invested around the health technology, etc. The other concern is simply the difficulty to find income. Clearly with this bond market rally, it will be more difficult than it is right now. It is important to limit the risktaking in the credit space, not to be tempted to go down too far on that sector. Emerging market bonds have been much more resilient than u. S. High yields from a yield perspective. Vonnie how much of a shakeout would it take for investors to big confidence again in the attacks, the mega tax . Mega back to the techs . A sectors probably that will continue to have lots of opportunities. There are a lot of clients who are sitting on a lot of cash and who have been because of concerns around evaluations. You will first need to see the shakeout, get more confidence and get more clarity on the situation. This is merely a difficulty that people are facing, just that lack of clarity. We studied the markets and earnings and Interest Rates, but we are not the doctors. Even they dont have a full picture of this. We need more clarity. Guy one of the themes running into this shakeout was that there was very little option protection buying. Eople were short vol you can understand why. Nevertheless, do you think this latest incident may change minds when it comes to buying protection . That is something that we have been doing for years in the industry, and the Private Banking industry and retail as well. So that will continue to be something that i think is the standard percentage are as long as the Interest Rates remain low. That being said, we were lucky last week, but on this concern nervousnessthe around the coronavirus and around asia did not spread into a concern around the economy of the world and that is really the trigger for us to buy bella to liddy at low levels 25 buy volatilityo at low levels. Guy this is meant to be the year when you rotated out of the united states. Into europe . Arguing, and we did not because we are overweight on the u. S. , because of the cyclical concern, because evaluations and dividends, and those are arguments that i did not relate to. What you have seen over the last year or so was that people did , they did notions matter as much as safety and the cyclical exposure. , bige is very cyclical manufacturing sector, low economic growth. If you have a bit of a hit from the coronavirus, that could be even lower and clearly the market is wearing about the recession. Guy we will leave it there. Such an interesting days. Such an interesting day. This is bloomberg. Guy from london, im guy johnson. Vonnie live from new york, im vonnie quinn. This is bloomberg markets. Home depot has rebounded from a string of disappointing results, the largest Home Improvement chains reported results that beat estimates. Their stores did better than expected and now the company is forecasting sales growth of up to 4 this year. Quarterly earnings were better than expected. There ceo says the results were not as good as the company intended, but they were helped by a strong holiday season. Iphone sales in china plummeted last month. This months numbers are likely to be worse because of the coronavirus outbreak. Apple has reopened nearly 30 of the 42 stores it had closed in Mainland China because of the virus. That is your latest Bloomberg Business flash. Lets check the 10 year yield. We are within a basis point of the alltime low. Now trading at 132. 88. We were just below that a moment ago. Low. 0 is the alltime the market really clustering around that particularly particular yield right now. Here in europe, the markets have certainly taken a hit. The ftse 100 now down by 2 . Down, and we are at session lows. The stoxx 600 is getting awfully close to that 400 line. That was a really big resistant line for the market. It closes next. This is bloomberg. Guy 30 seconds until the end of regular trading in europe. Another sea of red. Yesterday we were down sharply. This morning we thought we would get a bounce, do not last. It did not last. We started up. It did not last long. An hour at best. Then we were in negative territory. Concerns about italy, iran, spain, austria. Another look as we approach the u. S. Open, then we faded quite sharply. We tracked down toward session lows. 1. 76 today. 400 was a big line for a long time on the stoxx 600 and breaking through it was a massive moment. Resistance became support. Is 400 going to hold . Look at the volatility story in europe . Higher, andpped then another spike higher in volatility. Pay attention to that. It is important. What is happening in terms of the individual markets around europe . The ftse 100 is down 2 . The dax down 1. 8 . The madrid market, where we have seen more cases of the coronavirus, a hotel has been quarantined. Madrid the market down 2. 32 . Peripheral markets underperforming. Money is flowing into the core markets. That safety trade is on. Every single sector in europe is on. The miners are looking a little bit better. Signs of stabilization in china. That is what the who has been pointing us to. The household sector, food and beverage, the defensive bond proxy names are looking better relative to the overall market. A much more eclectic mix when it comes to the stock story. Banks are certainly down. Names like commerzbank under pressure. Insurance is down. Utilities down. Health care also tracking lower today, down over 2 . A less easy to read sector rotation story developing in europe. Just give you an idea of what is going on and what the sector looks like. Ventas dropping. We were talking about what is happening in italy. Potentially having to cancel games. Ntus bouncing back. Barclays is an idiosyncratic story. Branson saying to the chairman you need to sort out what is happening with the senior management. Barclays not one of the big under performer. Down 2. 38 . That is european close. Vonnie in the u. S. It is an interesting session. You know the fingers are poised above the computers. The s p 500 is down 1. 1 . Sectors in the s p 500 are in the positive. Crude oil is giving back another 1. 3 . Transports are down. It is also because we had a resurgence of trepidation about the coronavirus and whatever else is going on in the Global Economy which is pushing yields lower. Gold futures at 1650 an ounce. The vix is up at 25. We have seen a rise in the vix since the beginning of the session. On that point, most companies are reversing their losses from yesterday to a certain extent. Gilead, not, including giving back 3 . Lets have a look at this chart. It is the one we are watching. You know the fingers are ready 1. 3180, the we hit alltime low on the 10 year treasury. This is a substantial backing off. We are at 1. 3338. We have been within half a basis point to several times in the last hour. Expect that trauma to continue throughout the day. Dutch paid company the dutch paint company does a portion of its business in china and many of its customers does. What effect will the coronavirus have on the company . We are joined by its ceo who joins us in new york. Lets talk about what is happening with the business right now. Anis the coronavirus having impact in terms of the demand story . What effect do you think it will have on your business . In the First Quarter, we have said that it will have an impact in the First Quarter because the market is down, the Lunar New Year extended until this moment. We do believe things are stabilizing and that seems to be happening and at some point in the early part of march we are back up and running and therefore the impact for the year would be quite limited. Do not forget our big is this is in the executive space, architectural space in the u. S. , and it is winter time. That is the small season. We also see things logistically. It all seems to be getting back to normal. 14 out of are 15 plants are back up and running. The reaction in the stock market is slightly out of sync with what the reality is on the ground. To see a spread to europe and start to see the european economy being affected, how will that affect what you just said . Thierry that is anybodys guess, but i think we are far away from a doomsday scenario. The individual cases, the people who are impacted, that is a personal drama. I believe there is a distinction between the measures being taken to contain it and therefore the headlines you get. We will see it when we get there but frankly for our company, part of it is in the architectural space. The biggest part of our company is looking into auto space and oil and gas, etc. We do not necessarily plan for the worst. Saying much more to be done. Margins are still lagging. What is the big plan . Thierry i think we did it in groups. We started with quite a distance in performance versus competitors. We made up and said we are halfway in the journey. I think we are halfway in the journey. We are catching up with strong bottomline performers. I think we had a detailed plan on cost and pricing margins, optimization, new systems. It is a new system to get us up to where we are. We are completely on track as far as we see it. Vonnie many analysts are still concerned about 2021 through 2023. What is acceptable . Thierry we said by the end of the year would we would be the best performing category in our history. We laid back we wanted to go to market plus growth and 50 basis points a year increase in the bottom line and that would bring us near the top. We feel we have all of the plans in place. We have the products in the market franchise to be able to do it. Guy you do have exposure to the car sector. Im curious as to where you see that sector going. It seems to be in a difficult place. We are try to figure out how the Global Economy will affected and how the transition to electrification will affected. What is the opportunity for you . Thierry unlike some other paint companies, our exposure to the Automotive Industry is quite limited, it is less than 10 of our total turnover. The big correction happened already last year. We are lest involved with the oem directly. Believe we are getting into a more stable situation. In 2019, of course with all of the inventory effects, there are much less cars built, much less cars built in the tier one supplies, all of the inventory sells much less. Andave seen that flatlining coming back up a little bit as inventories getting replenished. For us, where your relatively sheltered from those cycles. What are your expectations for the european consumer this year . What are your expectations for the european economy . Vonnie it is thierry it is interesting because the european economy has been hovering, is it growing 1 or 1. 5 . The european consumer seems to be somewhat agnostic to what the overall economy is doing. To what the overall economy is doing. We talked about brexit a lot and where it was in the u. K. , which is a key market, and our business, the Strong Player with the brand in the u. K. That brand has been doing well. We think we have an increased market share. It feels like the europeans have so many things to worry about economically than to just go home and painter living room, which is fine with us. Vonnie it seems like there are so many Geopolitical Forces at work for Companies Like yours. Right now youre looking at a phase i deal for the u. S. And china, but a phase two that might start at some point. You have the coronavirus and stagnation in italy. Then you have positive signs like home depot. When you look those small bits of u. S. Economic data, does it bode well for that part of europe . The u. S. Market has been the strong one economically cap. If you compared with global markets, we are not an agricultural pain in north america so we have not had the benefits. The paint industry is by definition relatively local. What we sell in china is made in china. What we sell in europe is largely made in europe. The trade deals have a secondary effect, but not that much impacting us directly in our business model. Vonnie that is all we have time for. We will have to get an update on the restoration of the rembrandt masterpiece you are undertaking another time. Our thanks to thierry vanlacker. At wheres take a look european stocks have settled. Not much action during the option but plenty of action during the last stages of the session. A significant selloff driven on highvolume volatility spiking as well. Those are the final numbers you are looking at today. Some people are saying we would get a turnaround today. In europe, that did not turn out to be the case. The analysis at the top of hour with the cable show on dab digital radio. Bloomberg radio. You can find it on all of your bloomberg devices. This is bloomberg. Guy welcome back. We are getting updates on the number of cases of coronavirus reported in italy. The lombardi region around milan is updating us and updating the numbers in terms of those that have been infected. The number rising to 240. The death toll has also risen as we have worked our way through this tuesday. We continue to watch the spread around europe. We now have confirmed cases in switzerland. You now have cases in mainland spain. We have a hotel that has been quarantined. The cases around europe are certainly spreading. That partly accounts for what we have seen today in terms of the market action. Downelloff that drove us toward session lows in europe as we have just been through the close in the european markets. Vonnie . Tuit, the Software Giant behind turbotax, said it is buying credit karma. We are about 24 hours pass that announcement and celebrating our the ceos of both companies. Joining us from San Francisco is ceo and president and credit karma is ceo and president can lend. Ken lynne. Had you talked about a potential deal before . And creditdmired ken karma for a long time. Weve been talking about our mission and purpose and what is possible in terms of what we can do together. I would say our talks got serious and the next several months and we are fortunate to be sitting here with you today. Tax season and i would be curious has how you plan to market turbotax and credit karma and they are sort of competitors and that was one of the big things you had to lobby about in bc in washington, d. C. The mostumer choice is important thing for us. We think at the end of the day what we have always been focused on is a mission around enabling consumers to have and this deal has facilitated that. Guy why didnt you ipo the business . Ken i have always been on the record that for us as the company the mission is the most important keys and the ipo was a tool in achieving that mission. We have always been in a situation where we have a choice. When we look at the ipo market and what we can do with intuit, we realized that based on the mission into it was the much better option. Is this a defensive acquisition or an offense of acquisition or a combination of both. Ken wants a tax filing platform and maybe that was starting to eat into your business . Goal we set an internal that by 2025 we want to double the Household Savings rates for anybody on our platform. We see this as an opportunity to put the power of the customers data in their hands, whether it is spending, income, Credit History. That gives them the opportunity to get preapproved loans and preapproved insurance at the best rate possible with hundreds of Financial Institutions competing for that business. That is the opportunity we see ahead of us. We believe and what they are doing with free taxes, but this was not about tax. This was about what is possible in terms of changing the world for the better and powering the economy for consumers. Vonnie are you worried about any antitrust concerns still . Sasan we will work with regulators to provide them whatever information and data they need. We are not concerned because this is good for consumers. This provides choice for consumers and create an environment and a platform for more competition. More Financial Institutions will want to compete for the consumers business and the consumer will have the power of data to understand what is right for them. Better savings accounts, better loans, brighter credit cards, better credit cards and advise for us to improve their Credit History and credit score. This is to the upside for consumers and create more const more competition. Vonnie what signal does the sale sent to the fintech more broadly . Sasan this is all based on what we believe is important to deliver for customers and help them make ends meet. We believe there are a lot of investments in fintech but we do not see anyone putting the power of choice in the consumers hands and ensuring we can help them improve their credit rating, improve their income, improve how much money they save. This is about an investment to ensure that we put the power in the consumers hands. I think the signal it sends is we meet much more we need much more innovation in fintech to ensure we create space for the consumer. Guy there of been a lot of deals done in the fintech space. Was that a catalyst . Sasan not at all. We are grounded in the choices we make and our number one choice was to help consumers make ends meet, and achieve the goal we set for 2025 which is to double Household Savings rate. That has been our pompous. Our compass. This acquisition improves the market. Guy how will this work . How will these companies fit together . Ken we have talked about an acceleration plan at credit karma. We provide more certainty for the right Financial Services for our members. We provide transparency to ensure they get the best rate. We simplify the process for any Financial Services product on our platform. When you think about the ability to partner with intuit we can accelerate all of those visions. You can make that platform more robust and that is what we are focusing on. Accelerating the business and create more benefits to our membership base. Vonnie you brought this project to fruition in some ways. Where are the gaps you see in this area now. Where is your rain leading you next . Ken if you look at innovation in internet over last three years, i think consumers have been largely left out. You think about how challenging it is to find the right Financial Services product, how hard it is to apply. These are Real Solutions for most consumers. We focus on how we solve those problems and ensure every product you see you are qualified for. How do we make it so all of the friction is taken out so you will refinance a loan when you can save money. How do we ensure that of the 500 you might have in a savings account, you are getting the best yield and if rates are changing we can help you move those dollars to a higher account. Those are important things for consumers and theres too much friction in the space today for them to take advantage of it. Our partnership will accelerate the Technology Necessary to automate all of those functions so the consumer becomes the winner. Vonnie our thanks to both of you and congratulation. That is ken lin, credit karma ceo and founder, and sasan goodarzi, president and ceo of intuit. Checking u. S. Markets, we have the s p 500 often slows, down. 9 . Hp is the best performer. Regeneron up 7 . Regeneron up 7 . A competitor drug not performing so well and that is giving regeneron a lift. Home depot up 2 . We are watching treasuries because we are hitting lowes on yields. Is at 1. 3354. 1. 3180 is the record. The two 10ead lowering across the board. This is bloomberg. Hi were glad you came in, whats on your mind . Can you 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 european close on bloomberg markets. It is time for our stock of the hour. Here is viviana hurtado. Hours our stock of the credit card processor mastercard. Having the worst 20 day fall since 2011 on a warning of slower credit card spending because of the coronavirus. You can see it is down 8. 3 . Lets take a closer look. Credit card processor lowered its growth forecast for 2020 fiscal year sales. All of this a sign of the coronavirus and how it is altering consumer habits. This as the virus spreads beyond china. The virus is limiting international travel, spotlighting weakness in crossborder trips but also assign the virus is impacting ecommerce. Lets take a look at the broader stock context. We were taking a look at how mastercard cut its forecast. So have analysts. Is doing the best, but you can see industrials and energy being hit the most. All of this will demand dropping after an airline schedule. Another big announcement, how mastercard will navigate the coronavirus. Today it names a new ceo. He is a company man, chief product officer. Former ceo who becomes the executive chairman. He will not just have to navigate the coronavirus fallout but also how the stock will perform. You can see that its sort under the previous ceo. That is the stock of the hour. Guy thank you very much indeed. 1. 33 73 the current yield on the u. S. 10 year. Richard clarida speaks at 3 00 eastern in washington. 9 nonetheless. In the main, we are lower. Powerup, balance of free viewing tonights democratic debate. This is bloomberg. David from bloomberg World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. On the brief today, we are in hong kong on the spread of the coronavirus. Gina martin adams in new york on what the spread of the virus may mean. And in washington, Wendy Benjaminson on who will be in the spotlight in tonights president ial debate. Let me real let me lay out what President Trump said in india. President trump ive spoken to president xi and they are working hard. If you know anything about him, i think he will be in pretty good shape. And have had a rough patch i think right now it looks like they are getting it under control more and more. David they say it looks like they are getting it under control. Does it look like that way from where you stand