Our bloomberg voices are on the ground with all of this mornings top stories. We begin in japan, with efforts to calm the market jitters over the coronavirus outbreak. The boj says it will provide ample liquidity to ensure stability. Joining us is enda curran. It help to the market for a second. What did we learn . Enda it seems like it is part of a coordinated push by the worlds Central Banks. To be a g said they would provide liquid it the boj said they would provide liquidity and followed up by putting money into the market. It is important to also say what they are not doing. They didnt signal an Interest Rate cut. Interest rates are already in the get of territory in japan. They didnt indicate any outright easing. They already have a huge Balance Sheet from years of quantitative easing. It is in sync with steps being taken by others. It is more designed to ensure confidence than outright easing. Alix lets stay in asia right now. Global coronavirus cases are at 89,000. Indonesia reporting its first case. Italy and iran reporting more cases. Joining us now is yvonne man. China also stepping up and trying to help with the virus as well. From thend we heard premier that efforts are being stepped up in hubei, where they still report the most cases. In total, china reporting 202 cases today. Still seeing signs of stabilization. The focus is still be on the mainland, with the global test toll the global death toll topping 3000. The u. S. Now reporting its second death. You have iran in the last couple of hours seeing cases surge now to more than 1500 cases. Everyone is now being tested after one member tested positive for coronavirus. The number of cases there surged by 502 now 1700 cases. You talked about the oecd growth forecast being slashed. The brutal pmi numbers we got out of china over the weekend signaling that the factories screeched to a halt. Pmi plummeted to 35. 7. In january, it was at 50. The consensus was for 45. We were expecting it to be bad, but this was pretty shocking. Alix indeed. Thank you. The bank of england pledging moves to ensure market stability on the virus fears. The outbreak is starting to feed through factory supply chains as well. Joining us from frankfurt is lou bergs paul gordon is bloombergs paul gordon. Numbersdeed, the pmi not as bad as china, but still pretty weak. U. K. Manufacturing growth slowing. Contraction in the Manufacturing Sector continues in the euro zone. Of the cases, the impact coronavirus becoming clear in disruptions to supply chains, increased delivery times, running down of stocks, and falling demand. We are seeing those patterns across all of europe at the moment. Thats one of the reasons why the bank of england stepped in, saying it is working together with the u. K. Treasury, with International Partners and domestic regulators to ensure financial and monetary stability. Nothing from the European Central bank, where policymakers suggested they are still trying to gauge exactly what the impact up with these numbers suggest that impact there is, for sure. Alix jay powell said the virus poses evolving risk to the u. S. Economy, signaling they could be ready to cut rates if needed. President trump urged the fed to do more. Pres. Trump our fed has been a follower. We need a fed that is going to be a leader. We should have at least the same rights, and ideally lower, than other countries. We shouldnt be paying more. Alix joining us now is michael mckee. Michael for the fed, it seems like it is no longer a question of whether, but when and by how much. Chairman jay powell opening the door friday with that simple statement, promising, we will use our tools and act as appropriate to support the economy. By the time he spoke, markets had already priced in almost four rate cuts this year. The question is, do they cut by 25 or 50 basis points . Not a consensus on wall street yet, but people are moving in that direction. If you look at what happened overnight, we are seeing some backing off from the number of rate cuts it is thinking about in march, at least according to fed funds futures trading. The question is what good it will do. Slightly cheaper credit isnt going to get you out of your house to spend if you are afraid of the virus. It is not going to fix broken supply chains. The real issue is getting bridge credit to companies that are affected, that may be have enough cash flow. Airlines, hotels, restaurants and the like. The fed cant do that legally. That is a fiscal issue. Treasury secretary Steve Mnuchin and other officials will hold a telephone Conference Call this week to coordinate their responses to the crisis, according to the french finance minister. Alix thank you so much. Lets stay with u. S. Politics. The field narrows in the Democratic Candidates vying for the presidency, was Pete Buttigieg shopping up. I will do everything in my power to ensure that we have a new democratic president come january. Alix joining me is Kevin Cirilli at the white house. Bidenses after joe Strong Performance in South Carolina. Kevin exactly. Pete buttigieg out, tom steyer out, and joe biden trying to seize on momentum that his campaign claims he has from winning the South Carolina primary over the weekend, heading into super tuesday tomorrow. Comes a more narrow field, and increasingly a battle between biden and senator bernie sanders. On the lookout within the next 24 hours, look to see the spread in texas particular. That is going to be one of the when theys on tuesday are really duking it out, as well as california, where toator sanders, according the polls, is able to have a lead. Alix thank you so much. Stay with bloomberg for special coverage of super tuesday. We are going to have live analysis of the democratic contests, march 3 at 7 00 p. M. Eastern time. To pivot on the stories we have been talking about this morning, the oecds flashing growth forecast. According to the organization, the outbreak of the virus is pushing towards the weakest Global Growth since 2009. You can see euro area, germany, italy, canada, that was revised much lower than before. Overall, looking at global gdp 2. 4 from 2. 9 , but most people expecting an uptick in the back half of the year. How much stronger that will have to be is up for debate. Coming up in the program, more of your morning trade and analysis on the markets in todays first like todays first take. This is bloomberg. Alix time now for bloomberg first take. You get the trade and analysis of the markets. Adams, us is gina Martin Bloomberg intelligence chief equity strategist, damian marketr, chief emerging credit strategist, and also with us, till you jablonski, election bang also with us, sylvia managing, direxion director of Capital Markets. Damian when the expansion began, 86 fed meetings, nine hikes, three cuts. Theyve never disappointed the markets. With 50 basis points priced in, if you think that the 15 trillion of negative yielding debt and going higher, i think it very well may be. Alix do we break 1 on the 10 year . Damian i think so. Colleague at Lehman Brothers thinks so. I think it depends on your perspective. You cant pick bottoms. If you are a trader, timing is everything in your perspective, but if you are an investor, you start averaging in as you look at the market low of more than 10 down in a week, doesnt happen very often. Do you really think we will fall . Nto recession we will eventually price in the worst case scenario, you average and slowly with a longterm perspective. If you are a trader, you watch levels really closely. Youre talking about a huge decline to get to the lowest levels, so youve got to break lower to prove that they will that friday wasnt a major love for stocks. Frankly, you cant time this stuff. Nobody knows the answers. We are all trying to pretend like we do, but the reality is this is something very new. We havent seen a 10 correction four timess but for in history, and all of them were major crisis periods. Sylvia i agree. What do you do . At can average in and look names while also hedging. They still are a flight to safety. I think if you are a shortterm trader, there are opportunities. There are bear funds out there. You can go short things like high beta, Like Technology in china. This is different than before, but on a positive end, we had a credit crisis. This isnt that. Not having trouble rebalancing our funds. I agree with your other point, too. If youre going to hold stocks for the next 10 years, they are certainly on sale. The market tends to rebound and come back. Performance of the s p 500 is low double digits, so hopefully this is transient and we start to see an important swing. Damian you just look at the front end of the yield curve these things the large institutions have been using and piling into the front end of the curve, if you look at the positioning in 10 year shorts, even if we see a backup in yields, at these levels, is going to be very challenging to make the case that u. S. Yields have greater upside. I think they are going to probably try to find a new range here. Alix lets do that worst case scenario, then. If we break 1 on the 10 year, what happens . Is it a selloff in equities . What is the psychology for that . Gina i think it depends upon the conditions and how long it lasts. Nonetheless, i think equities have a tendency to price in the worst case scenario, and the worst case is recession. At what point are repriced her recession . Our models suggest you are pressed for recession below 2700 on the s p 500. Theres further downside for a worstcase scenario. The question becomes, do you need to price recession in an environment where the fed has already started to ease, fiscal policy makers are already throwing things at the crisis . At some point, you get a sort of exhaustion in the market because we priced in, ok, weve gone as far as we are going to go. I dont know exactly where that point is, but i think a normalized recession model is probably your best guess. That is somewhere just south of 2700 on the s p. Sylvia i think we are seeing some bright spots pretty far into this. Ofhas certainly gotten out control, but the numbers in china still seems to be it is beginning to seem like it is stable as i it is stabilizing. It has given the rest of the world a chance to catch up. I think we need to see inverse relationship with the coronavirus and the market. We need the coronavirus to go down, and the market will start to go up. I think if the fed cuts 50, the market might react, but i dont think it is going to get us necessarily back to a straight upward trajectory. Damian what is the communication from the fed . For me, if you cut 50 basis points, what do you tell the market . We will hike it backup . No way. If they do say that, the market is really going to freak out. So they will say everything is ok, we are not in recession. But it is very challenging for chair powell. Especially because just consumers were, strong, we were in expansion. So why are we cutting rates . Its a confusing message. Gina with respect to china and the signaling effect of markets, one of the biggest questions i got all week last week was why are u. S. Assets falling so much and the rest of the world is doing yell . Small caps did well relative to large caps. Signal ofe, is capitulation, the last dominoes falling. You saw it with gold as well. Issac china selling off, emerging markets getting creamed you saw china selling off, emerging markets getting creamed. I think we need to acknowledge that. Alix so i need to acknowledge what is working to pay off my debt, or is it actual complete elation actual capitulation . Gina i think it is a little bit of both. They are not necessarily mutually exclusive. But i do think when you start to see everything is failing except u. S. Treasuries, it is a signal. Nobody wants any risk, and we have already started to enter that. Damian and spread volatility. We had zero spread volatility for years, and finally last week, we saw spreads capitulate. That, to me, was the risk. We all talk about the oneway train in fixed income. I think u. S. Treasuries were five years year to date. If yields are falling, that is a different paradigm. All bets are off. Alix i want to highlight this one chart, Global Financial conditions. Become point does this we know it is an economic risk when does it become a liquidity credit crisis, that then we need the plumbing to work and stuff . Damian the currency basis, which is basically if you carry at a different currency and convert back to dollars, what is your yield, it hasnt really moved in the other direction. The permian from u. S. Dollar assets is once again building. That is where your point comes in. We could see something in the plumbing. We could see greater demand for dollar assets. I agree with you. I think youve got to watch the cross currency basis spreads here. Sylvia i think this is where global Central Banks come into play. That is essentially what will keep liquidity up. If have supporting repo markets, Central Banks supporting liquidity, that could keep the crisis at bay. But i think that will be a huge factor. Some of the things that are also going on in the background, the factories are starting to open, so does that mean the goods in the supply chains and the essential any Factoring Network start to get back online, and we see Consumer Spending again and liquidity back in the market . I think it is slowly starting to show signs of that. Gina i think this is a really good point. Everyone is focused on the fed might go 50 basis points. What about the Balance Sheet . That is probably much more meaningful. Lets not forget they started to back away from this repo intrusion earlier this year, and that triggered a lot of changes in the market even before coronavirus hit. If the fed goes back to the Balance Sheet, it probably does create this underlying degree of support that all assets generally celebrate. It creates a lot more volatility and uncertainty. Lets see what handles they pull or what levers, because i think it is pretty important. Alix especially when you have the 10 year at 1 . How much lower do you actually want to go . Im going to leave it here. Thanks a lot. Really appreciate it. Sylvia jablonski of direxion will be sticking with me. Any charts we use, go to gtv on your terminal. Browse the features, check them out, save all your charts. This is bloomberg. Ritika this is bloomberg daybreak. A big transaction today in the Cancer Therapy business. Is buying a company for 47 billion. The free fall in oil has been halted, at least for now. Opec and allies are expected to agree to deeper output cuts this week. Vladimir putin says he is willing to cooperate to support the markets. As 3. 7 res rose as much after tumbling 16 last week. The ceo at nokia is calling it quits after little more than five years running the finni sh networking company. Suri has struggled to gain substantial foothold in the market. That is your Bloomberg Business flash. Alix thanks so much. We talked about the boj and its pledge to calm the financial markets. One thing it did do was it bought a record daily amount of Exchange Traded funds. The boj purchased almost 1 billion of etfs today, more than four times the daily pace to hit its annual target. While it is highly unlikely the bank will keep buying at this pace throughout the year, mondays move shows the support the boj is willing to make to stabilize the markets, and it has the potential to do so. Ofalso raises the question tools other Central Banks will use when there is no room for them left to maneuver. We are going to talk to chuck research on how he is modeling the potential fallout from the coronavirus worldwide. In the markets, which ride to save some kind of risk on bid earlier anymore can earlier, but we are off by almost 2 . In other Asset Classes, lets take a quick look on where youre going to put your moneys. Yield cominggilts in the lowest in about three years. Is an indication of what the market expect the fed to do, now pricing in almost four cuts this year. This is bloomberg. Alix this is bloomberg daybreak. It feels like everybody woke up and decided to sell equities again. S p futures are down by about 0. 7 . European stocks continue to rollover. Weaker ok pmi in europe, in u. K. , and terrible in china. Dollar swissie down by 0. 7 . That seems to be the safe haven of choice. 10 year yield down by eight basis points. We are all talking about that 1 level. What would that actually mean . Gold futures getting a pop again today. The rumor was it was about selling off your debt. Crude holding onto its rally. Russian president Vladimir Putin says he is willing to talk about a cut in terms of oil. Maybe that is percolating in the market. Opec meeting later in the week. Coronavirus is pushing the Global Economy towards contraction. Estimates for a number of countries, like u. S. And china. Joining us from georgia is chuck watson, Enki Research founder. You model disasters and how much they wind up costing, hurricanes , for example, or floods. Have you been modeling the virus . Yes, we model things like industrial accidents or major things like influenza or pandemics. Alix what have you noticed so far . Theres a lot of uncertainty in this, and some of it is related to the uncertainty of the virus, but most of it is how people react to those events, which is a little bit harder to forecast and predict. Based on what we know or what we think we know, we dont think this is the one that is going to cause mass scale deaths and those kinds of things. It looks like the impact, particularly in the u. S. , is going to be closer to a bad seasonal flu outbreak. Economically, most of those have an impact which is higher than a lot of people think. 20 billionom anywhere to 80 billion of Economic Impact from the seasonable flu. Know know w