Bloomberg. We are targeting parts of the business where we are not generating acceptable returns. Matt apple falls short. The iphone maker expects to miss its quarterly revenue goal because of the coronavirus. And bhp warns of a hit to Raw Materials demand and prices the virus fallout extends. We actually have glencore across the terminal here saying it is going to take a 2. 8 billion impairment charge. It sees the scope of three emissions falling by 30 over 15 years. Bit, 2. 4arketing a billion. Recommended 2020 base distribution of . 20 a share. That will be the dividend news. Carbon emissions falling, coal mines deplete. Glencore says it is watching coronavirus developments. The bottom line in terms of earnings before interest and taxes was 4. 15 billion the estimate was for 4. 07 billion. Doing a little better in terms of adjusted earnings before interest and taxes. We are also getting eu car sales. European car sales dropping 7. 4 in january as new taxes hit demand that is already weakened. Watch out for carmakers to move this morning as well. We are just under an hour from the start of cash equity trading across europe. Let us take a look at futures. Down across the board. A lot more concern about coronavirus today after apple basically canceled its revenue outlook for the quarter. You see cap futures, dax futures, and ftse futures down more than 6 10 of 1 . Look at u. S. Futures. This will be the first trading day of the week for the u. S. Yesterday was closed for president s day. Nasdaq futures down three quarters of a percent. Tech Index Futures getting hit disproportionately more than other Index Futures. Take a look at the gmm here. We can see some real moves in the brazilian real. The black box here means a bigger move than three standard deviations away from the 90 days these core 90 day z score. In terms of equity indexes, for the most part, red arrows. India,howing gain, but hong kong, south africa down as well as thailand as we get ready for the european open. Lets get to the markets now with mark cudmore, bloomberg mliv strategist. Do you feel we have even worse news on the coronavirus after the apple revision to its Revenue Targets . Sure we have worse news on coronavirus, but certainly the secondary impacts are being registered by investors. I think it is very relevant. Apple is not only one of the Worlds Largest companies, but it is a bellwether for that very successful tech sector, showing leadership in u. S. Stocks. They have a Large Consumer base in china and a supply base in china. The fact is apple is saying this coronavirus continues to disrupt the revenue guidance. It is making everyone realize, this is a big issue. I think we know, we can see from how equity prices have traded, there is a large part of the market that assumed the impact would not be longlasting. Policy would counteract it. I think this apple guidance is saying we are going to be dealing with the fallout for some time to come. I dont necessarily mean negative prices. It means we are going to be struggling to work with a real pricing for another few months still. Column on this, he has warned previously he does not think we are going to see a v shaped recovery even if we have seen it so far in recovery indexes. Do you agree . I do not think equities are traded in a correlation with economic in any countries. The centralbank policy is much more important. I agree we are unlikely to see a recovery but i also dont know how important that is to markets. Was going to china have a deep a vshaped or a longer more sustainable you ushape, you would have no idea. We are in an environment where the policy response is always more important than the underlying economy. What i mean by that is we actually trade off the policy announcement, not the real impact of the policy on the real economy. Isont actually think this the core issue for markets right now. Obviously it is a very interesting issue for economists. Matt speaking of policy response, headlines coming across from singapore, saying it from the million budget to counter the virus affects. What do you think of the measures we have seen so far . How far along are we . Are we going to continue to get more major amount announcements from asian and global economies . Anna definitely mark definitely. In terms of the policy response, we are quite early. There are many different views about how far along we are in terms of buyers containment. No point in adding my voice to that. Whatever your perspective is, whether you think it is contained or not, the policy response is in the nascent stages. One of the first countries to announce its budget in the wake of the coronavirus. We have seen this support. Central banks will be following, governments will be following. Economicme way the response will play out, the policy response will play out. For joining so much us. Mark cudmore is the mliv managing editor joining us out of singapore. Im sure when you get back to your desk, you will see these measures, but that is the red headline. Singapore planning it hundred Million Dollars cut from the virus to counter the virus. Dollars from the budget to counter the virus. Impactl apples warning prices . Put in your answer to contribute to that conversation. In terms of breaking news, we have had a lot at the top of the hour. Glencore is one of those companies coming out with earnings that is going to be affected by the coronavirus. Looking at 400 million net loss after an impairment charge. Sales, have european car a big drop there. 7. 4 in january. That was before the coronavirus came into the public eye. There was a tax hit in terms of demand. Evenhas hurt car demand more than it already had. It was fairly weak. Then of course we got that headline out of singapore planning an 800 billion spend to counter the virus affects. Hsbc earnings early this morning. We will take a look at your stocks to watch at the open, see how we expect that one to move. 15 of itsto slash workforce. 35,000 jobs will go. Charges. Ion in remember, Bloomberg Radio live on your mobile device or on dab Digital Radio in the london area. Tune in. This is bloomberg. Matt welcome back to bloomberg markets. This is the european open. We are a little under 15 minutes away 50 minutes away from the start of trading. You can see the impact of concerns about coronavirus after apple cut its revenue guidance for the quarter. We see Franklin Resources in mason. O buy legg we could see more consolidation in that industry. Franklin resources in talks to madehe firm legg mason, famous by bill millers massive success decades ago. Thatlin resources may buy company. Singapore is going to spend 800 million to counter the coronavirus. Now it plans two packages totaling 5. 6 billion to support the economy. Lets get the bloomberg first word news. Outbreak isavirus heading one of the worlds most valuable companies. Apple does not expect to make its revenue guidance for the quarter. Ramping ups is lowerthanexpected after the Lunar New Year holiday. Stores in china have been closed or operating on reduced hours. The u. K. Warns an unprecedented attack on the european itmission following highlights the gulf between the sides ahead of negotiations next month. Bezos isunder jeff committing 10 billion to fight Climate Change. It will begin issuing grants in the next 12 months. Amazon is under pressure over the environmental consequence of online shopping. He said in a post on instagram, we can save us say birth. Save earth. Global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thanks very much. Now, let us get your stocks to watch around the newsroom. Dani burger is looking at ship stocks for us. Joe easton is covering hsbc. What do you know on chip stocks . No surprise the sector is going to be under scrutiny after apples warning they are unlikely to meet the quarterly guidance. We have to look at apple suppliers around europe. Look for ams, dialogue some of, infini on, just to name a few. Semi, infineon, to name a few. We may see a read across the entirety of the chip manufacturing sector. Not just those hit by apple. Matt we will keep our eyes on those stocks. Joe, hsbc, clearly a ton of news this morning. What do you expect . Plans toas announced cut costs. Basis, 31 billion as of 2022. The market was expecting 33. 5 billion dollars, so betterthanexpected asians, but not a huge beat expectations, but not a huge beat. They will trim revenues by 2 or 3 . The main and negative is there has been no update in who will the new who will be the new ceo. That is what the market was looking for today. Hong kong is still the main drag. Net interest margins declined in the last quarter, which was quite a big surprise given that rates remain steady despite the disruption there. The big take away at the moment, all these costcutting measures, we dont know who the new boss is going to be and it is an overhang in terms of hong kong disruption and the coronavirus. The ceo was on Bloomberg Television discussing a few moments ago. Negatives as well as costcutting measures being announced. We will continue to keep an eye on it. We are going to get the latest stock stories by typing first go on the bloomberg. You can also get your first word news via the mobile app. Hsbcs chief Financial Officer spoke exclusively to nejra cehic and manus cranny about the banks plan. Let us listen. We have shrinking in areas. Clear we have clear underperformance and a lack of competitive advantage. What we see a significant investment in those parts of the business where we do think we have competitive advantage and we can grow. Doingk we are absolutely those things. Interesting comment from the shareholders. Options fairly binary. You are saying you are balancing two sides of the coin. Are you happy you are getting the balance right from those options. Think this is the right thing for the bank to do, the right plan for now. We definitely we are looking million of130 riskweighted assets in the next three years. In parts of the business that are performing well, particularly asia. We think this is the right balance. It is coupled with a Cost Reduction program coupled with toanizational simplification allow a sped up pace of execution. We think it is a great plan. Manus on riskweighted assets, you are at that moment of leaning into not bad asset price markets and hunger for yield. Riskweighted assets, a little more before we go. Unsurprisingly, it is parts of the business, the markets business in Global Banking and markets we are beginning to exit a lot of domestically focused customers in europe and the u. S. On the Global Banking side. To exitlso Going International customers that are not producing acceptable returns. I think we are going to be quite surgical in terms of targeting those parts of the business that are not generating except of all returns. We are going to take those assets and reinvest in parts of the business seeing much better returns. The u. S. Business, characterize for us what that is going to look like. We know the numbers. What are you trying to achieve . N two things. On the retail side, getting back to where we think we have for aitive advantages population in the u. S. And International Customers. You see a 30 reduction. We are focused on the east coast and Building Branch presence on the west coast. Secondly, on the Global Market side, reducing our presence in the u. S. Quite materially looking to concentrate into london. As hsbcs cfo ewen stephenson. We are going to speak to the Intercontinental Hotel group. Dont miss it. Bloombergome back to markets. This is the european open. 37 minutes until the start of cash Equities Trading this morning. Big drops in futures right now. 0. 8 on the ftse, hsbc is going to cut 35,000 jobs and apple is cutting its revenue forecast for the quarter due to the coronavirus. There is a lot going on. Let us get to our interview right now with the ceo of one of the Worlds Largest hotel operators, intercontinental has reported revenue for the full year that met, slightly beat the average analyst estimates. The question i asked of the ceo, what is the outlook like . Keith barr joins us. You did better than the street was looking for in the reporting quarter. I wonder, because of your very large exposure to the chinese market, what do you expect for the Current Quarter . We had a really solid year last year. Areas of strong performance. We had our best performance in terms of opening new hotels in over a decade. The number of new hotel rooms up about 5 . Profit up 6 . We were able to increase our dividend 10 . A solid performance for last year and good momentum to this year. Clearly the coronavirus is a challenge for the travel industry and for business in general. We are very focused on the health, wellbeing, the care of our colleagues. Customers working with our Business Partners and also with the government to support them in china to deal with individuals being affected by this. Expect do you first, how do you expect the coronavirus to hit your numbers . Do use to manage the companys chinese business, so you have particular experience in this market. What does it look like for intercontinental in q1 . Keith i lived in shanghai for almost five years and helped build our china business. Im proud of the Team Managing through this tough time. Travel is significantly down in the month of february. We are seeing basically a number of cancellations, but also rebookings. It is really difficult to call with the impact of this will be given the fact we dont know how long the virus is going to be a significant impact. We do know, we had sars, i lived there with h1n1, we saw drop in demand for a short period of time and a very strong recovery because of pentup demand and the chinese governments ability to stimulate Economic Growth and activity. It is only a small portion of our business today. A huge part of our growth, but less than 10 of our business today. Matt you have almost 900,000 hotel rooms. Locatedtion of that is in the affected area, in china . Keith about 15 of our existing hotel supply is in china. You have a little under 500 hotels in operation today in china, upwards of 500 being developed in china. To give you a sense, we have signed a few new hotels. We have opened a few in china. It is less than 10 of our companys profits, but it is a portion of our future growth. Thats what this industry is about. Longterm, sustainable growth. With the strength of china, we are confident in longterm prosperity. Unlike product production or Industrial Industries where they have supply chain issues, you can bounce back. You expect a sharp recovery . Keith we saw that with sars, it was a vshaped recovery. Other industries, there is that pentup demand of meetings, conferences, people need to travel for business, we pick up in the latter portion of the year. We need to make sure we are supporting the government. In wuhan, i am proud of our teams. We have four hotels there which are housing medical teams that have been flown in to treat the afflicted individuals. One of our hotels has been doing meals to help the workers build the new hospitals. We are part of the solution, working with the government. Very proud of the people on the ground making a difference. Matt thanks so much for your time. Keith bar, ceo of Intercontinental Hotels group. Next, bhp warns that the next six weeks are crucial for measuring the Coronavirus Impact on commodities. We will talk to the ceo. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Bloombergome back to markets. This is the european open. We do see futures pointing lower on more concern about the effects of the coronavirus. Apple cutting its quarterly Revenue Target. A lot of companies talking about the effects. This morning we spoke with ig hg about what it will do to earnings. Bhp, first half earnings surged on higher iron ore prices, allowing the companys new ceo to extend a run of bumper returns to investors. A protracted coronaVirus Outbreak could hit Commodity Prices even more seriously than it already has. Mike henry spoke to bloomberg earlier. Listen in. We are shipping all of our products, prices have held up because of the disruptions. We have not seen issues with payments. Contained,things are we think they will go back to the remainder of the financial year. If not we will have to adjust our forecast. So far we remain confident about the remainder of the half calendar year. I want to get to iron ore in particular. Im throwing up this chart for the benefit of our viewers looking at the collapse in chinese iron ore imports. Records go as far back as 2015 where the status that began. Given that almost 50 of your revenue in the first half was thanks to iron ore, is there a concern for deterioration in pricing . Mike if we look at iron ore inventories in china, they are not unreasonable currently. Absorb moree inventory. Steele seen weakness in demand in china. We have had supplyside disruptions. There have been disruptions. We have to keep in mind the coronavirus is impacting domestic supply of iron ore and domestic supply of cold. The has helped to give resilience to the market. Bhp needs more copper, more nickel as well. Do you believe you will have support for major multibillion mna in terms of these assets alongside earlystage deals . My strong first preference is to be securing options. Keeping an mind we have options within the existing portfolio. My first preference is to be securing these through earlystage entry. Area o