Cable. T to highlight you could argue we are not really going anywhere. Poin the 50 basis point cut to be already priced in. We get more coming out today on the 10 year. Yields down by about 10 basis points. Crude continuing to rollover. Time now for global exchange, where we bring you todays market moving news from all around the world. From london to rome, to hong kong and new york, our bloomberg voices are on the ground with this mornings top stories. The bank of england cutting rates to help keep credit flowing amid Economic Uncertainty over the virus. Bank of england governor spoke earlier in england. Carney the bank will take all necessary further steps to support the u. K. Economy and Financial System consistent with its statutory responsibility. Ago, that was a few hours and then we wait for the budget. Absolutely. A fine display of cooperation from monetary and fiscal actors. Weve heard from the monetary side. We wait for this fiscal side this morning, coming around an hour and a half. What we heard from the bank of england today being described by them is a big package. It includes a 50 basis point cut , and a programes to push out lending to smaller and mediumsized businesses. Theres acknowledgment that we make to the pressure of the coronavirus biting hards and biting fast. This is designed to push lending into the real economy and support growth in the economy. Bank says this could support growth to the tune of more than 1 of gdp. The bank is keen to play down similarities with 2008, saying this could be very different. Mark carney hoping Financial Services can be part of the solution rather than part of the problem here. That is a lot of what i said this morning is designed to promote, to promote the lending. We now move from monetary towards fiscal. We wait to hear for the new we wait to hear from the new chancellor of the exchequer. He will try to get the u. K. Economy ready for the socks that lie ahead. Alix thank you so much. Later in the hour we will have jim oneill, former secretary to the treasury. The government is finalizing a stimulus package to shield the economy from the virus outbreak. Joining me from rome is bloombergs italy economic reporter. What do we know . Reporter the country, as you know, is under lockdown. The situation is so serious from the coronavirus that the government has decided it needs to act strongly because theres a strong impact. As you say, 25 billion euros. The government plans to spend that amount. Pass aay, they will package for 12 billion euros for mortgage payments, to have a moratorium on mortgage payments, loans for small and medium size businesses, all meant to boost the economy. The economy is at a standstill. That means that one of the most indebted countries in the world is going to be spending a lot of money. The plan to go up as far as debt to gdp is concerned, but say we need to do whatever it takes. The eu commissioner, the former italian Prime Minister, said he agrees with this procedure and will try to do whatever it takes. Alix thank you so much. Just to keep on that whatever it takes theme, german chancellor Angela Merkel also saying germany will do whatever is necessary to face the crisis. She says the eu does have the necessary flux ability for the crisis, and she will lock and germany wont block the eu crisis spending planned. Now we turn to asia. The number of coronavirus cases exceeding 118,000 come with the rate of infection slowing in china while cases are growing in europe. Joining me from hong kong is stephen engle. Sarah thats right stephen thats right, the china confirmed rate going down. That is a good trend for the chinese. However, they are also stepping up their controls at the borders in the major airports like beijing to keep in downed infections from going up. Beijing announcing today it is going to require a 14 day mandatory quarantine of government facilities for all arriving international passengers. Select it was just for countries, like japan, iran, and other places having a surge in overseas coronavirus infections. That is definitely hurting real airlines hurting Regional Airlines area Cathay Pacific not putting out a warning. Despite the trade war and ongoing protests in hong kong, the coronavirus seems to be the biggest problem because capacity down by 9 . This is a company that gets half its revenue from the market, so Cathay Pacific definitely having a problem. All ofpacific cutting their problems to japan. Alix thank you so much. Now we want to turn to oil, where the escalation in the battle for control over the Global Petroleum market has crude Falling Crude following a rebound. With me is annmarie hordern. Annmarie more shock and awe the oil market. It really looks like Crown Prince Mohammed Bin Salman is not abating in his price war with russia. They are boosting their Maximum Capacity for aramco in a directive from the kingdom to the state owned oil company. Ive been to the aramco facilities in tehran. Years andtake billions of dollars in investment. Dhabi National Oil Company are boosting their april production to the market by 4 Million Barrels a day. February, they were 3 Million Barrels a day. Thats a huge amount of oil theyre going to spring under the market in a short amount of time. Weve known they have been building up capacity, but they havent tested yet given the opec cuts. One thing for sure, this price war is escalating, and the world is awash with crude. Alix thank you very much. In the u. S. , futures dropping this morning. Putting me was a quick update of the market is taylor riggs. Taylor what a wild ride it has been. We had a strong finish at the close yesterday, and today reversing that, heading back lower by about 2 or so. You havent had backtoback gains in the equity and bond market since february 12. That certainly seems to be the case again today. Lets talk about the bond market. The 30 year, eight basis point rally today area thats good, given the 30 year yield is still about 1. 20 or so. Rally,seeing a strong but still 20 basis points above the record low of 0. 5 that we got on monday. I want to flip to the dollar. Rates, youe cutting are seeing a weakening of the dollar today by about 0. 2 , but the dollar has been all over the place as investors digest a weaker dollar with the rate cuts and a stronger dollar with the safe haven dollar. Alix thanks so much. We end on u. S. Politics. Former Vice President joe biden further widening his lead in the democratic nomination race. Mr. Biden its more than a comeback in my view, our campaign, to come back for the soul of this nation. This campaign is taking off, and i believe we are going to do well from this point on. Take nothing for granted. Alix joining me was more, david westin, anchor of bloomberg balance of power and wall street week. David a big night for the former Vice President last night. He won four of them, including the state of michigan. Michigan had a surprise victory for Bernie Sanders four years ago, and donald trump won there with a slim margin. It is expected to be key to who wins in november. Especially when you consider the next set of primaries include florida and ohio, where it is generally understood that biden night, he saidt we really specked and admire and thank Bernie Sanders supporters. Please come over to us. Finally, may be as important as the results last night as why people voted that way. In michigan, they voted provide an for two reasons they voted for biden for two reasons. One, they really think he can beat donald trump. Two, they really think he can deal with a crisis. Alix which has been the white houses big fear. Thank you very much. One other trend i am watching is the bounceback we saw yesterday and markets. You had a big rebound tuesday, attempting to halt reason volatility. Authersg opinions john says dont get too comfortable. You have to have complete hopelessness in order to have that rally. He says, it takes a while to adjust for that. Saw inte line is what we 2003, the purple line is what we in 2013. He says, we are not quite that pessimistic yet. Coming up, more of your news, your morning trade and analysis of the markets in todays first take. Goldman sachs downgrading their profit forecast once again. In. Will take it this is bloomberg. Alix time now for bloomberg first take. Joining me from our inhouse team of wall street veterans and ofiders, Mike Mcglone Bloomberg intelligence, and also sarah hunt, alpine woods portfolio manager. I want to start with the Goldman Sachs note that just came out. Someone there wrote they are revising their profit forecast down in a 5 decline. Is that it . Is that true, or is this peak hopelessness . Sarah think about the best of times, worst of times. Four weeks ago, equity markets were looking at the best of times, making new highs almost every day. I think the hard thing with earnings right now is we dont know what they are going to be. It looks like it could get bleaker longer, and we dont know how long this is all going to last. Its a hard thing to say it is not going to be over. Right now we dont know about a lot of things, but certainly the ness ofe oblivious the equity markets seems to be over for now. We have to see where we go for earnings and also how long this takes for things to start normalizing. I think right now, that is really challenging. Mike i think the s p 500 needs to take out that low from 2018. It was very suspicious, happened too fast, and everything trickled down from there. We all see what is happening. But the vix is popping. Look at the 50 week average, the 100 week average. It is still historically very low. They have to go back. They always do. The bond market says they are going to go there. From there, crude oil says it is probably going to happen. Natural gas, going to happen. The bond market, take off your tick the bond market, off your boxes. Sarah earlier this year, i was saying, how is it these things two diametrically opposed ways . I think it is very challenging for a variety of reasons. Portfolios, retirement, all of these numbers on bond yield is also very disconcerting for a lot of people, and for everybody investing as well. Mike we had our lehman moment this week. The real yield reached the lowest level ever. The last time we had that was around 2008 when lehman went under. The key thing i still have a problem with come of the s p 500 on a 200 week basis is unchanged. That doesnt make sense in this environment. Alix one is the diversions between europe and the u. S. The divergencebetween europe and the u. S. Now you see the yield compression narrowing like this. We are not even that far. We dont have that appeal anymore, right . Where doyou ago you go, and how do you find the support we need for the equity market . Sarah theres a lot of problems from the investment side right now. The bonds are telling you that things are going to get worse, so you are a little worried about going into equities. I think what is going to end up happening at the end of what looks like the end of the bad news, when headlines stop getting worse, i think people start saying i am still stuck with bond yields locally, so i have to go somewhere, so you will probably go into equities, but at a lower multiple than today. Alix what multiple . Sarah what are my earnings . [laughter] sarah i think that is the challenge. Now, everyone is pulling guidance because they just dont know. So then we start looking at 2021 much faster than we normally do. Become to guys also alix im waiting for it. [laughter] fed will do whatever it takes. I look at the massive amounts we have to increase our debt, we have to stimulate our economy, and you have to think that gold appreciates in this environment. Alix in the same way that we get the 50 basis point rate cut from the boe, nothing really happens. Fours there are down basis points. All of that is either already baked in, or the market is telling you it is not going to do any good. Sarah or they are saying it would have been worse if you didnt do that. It is very hard right now, and i agree on gold. Everyone says it is an inflation hedge, but if ive got negative rates all over the world, why is it wrong to think that gold is interesting here . Its not to me. Gold and farmland values. It is like gold, very highly correlated. Alix but arent farmers going to get hurt . Mike they are, but that solid physical aspect, taking a piece of paper that is being distributed indiscriminately and using that to provide an asset. Alix if we take a look at the price action today, can we see the u. S. Continue to diverge from europe on the downside . It used to be can we outperform. Now, can we underperform what europe is doing in terms of fiscal measures, in terms of the actual equity market . Canh i dont know that we honestly outperform if we get cyclical measures. There was the whole idea we were going to get a stimulus package yesterday that we didnt get, but we need to Start Talking about, ok, we will help Small Businesses if you have a problem. That is going to make people feel less concerned about , im going to lose my job because everything is slowing down. Thats a problem. If there starts to be some underpinning to that, something where it seems like we are going to get through this, i think the u. S. Comes back better. Europe still has a lot of structural issues that the u. S. Doesnt have, although the banks start to have similar structural issues that they have in europe. Mike a lot of it is just mean reversion in terms of volatility. You look at stimulus, the fed is going to have to issue access stimulus. On asesident should err much stimulus as possible because he needs to be able to look back from the election and said i did whatever we can. Ofah and thats the benefit not having a lot of political alignment right now, it is a lot harder to do something in a crisis. Alix the vix is having a big jump, and then the blue line is the move index, what we are looking at for treasury volatility. It is outpacing the rest. Does the rest of the market catch up . Mike the bloomberg market index is the highest it has ever been. Theres not a left room best theres not a lot of room left theres not a lot of room left. Sarah the hard thing is you cant use treasuries like you would normally look at fixed income. I think youve got place was a reasonable dividend yield places with a reasonable dividend yield. Right now, they are not bad places to be because i dont think any of this is going to really change defense spending. Discretionary is a little trickier. I would like to see Interest Rates stabilize before we see equity markets stabilize. Alix all right, guys. Thanks a lot. Sarah hunt of alpine woods sticking with me. They seen sachs call, 2450 at the downside, but a rebound at the end of the year all the way to 3200. Any charts we use throughout the show, go to gtv on your terminal and check them out. Gtv. This is bloomberg. Viviana you are watching bloomberg daybreak. The coronavirus may worsen trading conditions for one of the most liquid assets, u. S. Treasuries. Banksgan says overwhelmed could be flooded with an extra 300 billion dollars worth of u. S. Government debt. That could pose a challenge to a vital part of the Financial System plumbing. Eddie just says in china adidas says in china, the coronavirus will cut First Quarter profit by about 500 million. Also says it cant estimate the fullyear impact. Sales last month, sales in china slumped 80 . Cathay pacific expecting substantial losses for the first half of 2020 as the coronavirus outbreak hurts travel demand. It is adding to the pain for the carrier after last years prodemocracy protests in hong kong. That is your Bloomberg Business flash. Alix thanks so much. One other story we are following is the market volatility, what it means for Pension Funds. They may find themselves in a bad position. On stocknomics depend market returns and bond yields, both of which are getting creamed. This chart shows s p 1500 Pension Funds had already seen a status fund drop. It is a lot worse now. Crisis also for states. This is bloomberg. Bloomberg. Alix this is bloomberg daybreak. Goldman sachs culling the end of the bull market. They see downside to 2450 in the s p, and a rebound by the end of the year to 3200. Nonetheless, big call coming out from goldman. The underperformance to me in the u. S. , with equity futures down about 2. 5 versus europe, public comes down to stimulus. You get potential budget boe,lus out of the potentially more out of italy, while the u. S. Doesnt have any specifics yet. If you can switch of the board, you can see what is going on. Excusen in europe me, up in europe. Selling in yields, still down here in the u. S. The curve continues to flatten slightly. 20 billion in notes coming out today. Crude off by another 3 . The price were getting deeper and hurting even more companies, as well as all of their debt. Christine lagarde issued a warning this morning and told european leaders on a Conference Call tuesday that europe will see a scenario that will remind any of us remind many of us of the 2008 financial crisis. Failure to act boldly right now would risk your economies. Does this feel like 2008 . Sarah it didnt feel like 2008 to start with because this was more of an Economic Activity is going to slow down, youve got issues and bond yields, youve got all of these problems. I think the oil issue added a whole level of uncertainty on the debt situation. Youve got a lot of highyield companies in the oil markets. Now people are starting to worry about those. It wasnt a credit crisis, but it is being exacerbated into a credit crisis. Think that is why people are picking up on the parallels between now and 2008. This is something we were looking at as an economic slowdown, and therefore you had to worry about stimulus. I think you through a giant wrench and the work with the oil problem. To me, its not subprime. The assets of these companies could be good. Theres just too much debt, which is different than the underlying mortgage is bad. Does th