Facing. Really reminiscent of that merce outbreak in 2015. We saw that 10 billion extra stimulus package back then. Because of this, we are seeing the markets under pressure, but one exchange that im watching is small caps in china. Actually at the highest level since october 2016. We have seen those pboc Monetary Policy measures. Not to mention more news that china could be taking over a hardhit industry. Lets get a broader check of the markets with Sarah Ponczek. Pretty much Everything Else is now trading in the green as the trading session does progress. We have seen markets turn lower under further pressure. 0. 2 but still on track for its best week since june. The hang seng now down 1 . Many times this week we have seen the benchmark approach 50 day moving average, but we have seen it fail as we have seen today. The nikkei roughly flat, but modestly lower. After trading as high as a half percent early on. Then we see the south korean kospi and underperform her across the region once again. The fxlso take a look at picture. We have seen massive moves in the asset class lately. Seen theeve resurgence of king u. S. Dollar. We see a little bit of dollar weakness today. Still very close to that round number of 100 for the index. We are seeing a bit of a rebound in the japanese yen, the bestperforming g10 currencies so far in the trading session. This coming after the worst streak since 2017. Breaking through 112 and Still Holding above that level. The aussie dollar moving lower once again after touching the lowest level since 2009 and the euro holding near the lowest levels since 2017. Haidi Sarah Ponczek in new york. Marketslook like asian ending the week on a pretty riskaverse note. Theres concern about the ever spreading impact of the coronavirus. There looking ahead to what g20 finance ministers and central bankers will have to say over the weekend. We already heard from the boj coronavirusying the and how to mitigate the damage will be at the top of the agenda. Lets get you the first word means with su keenan. Su we are going to start with secretary of state mike pompeo in riyadh, where he met saudi arabias king solomon. They discussed shared to security concerns. Saudi arabia and the u. S. Blamed iran for the attack on Saudi Oil Facilities which temporarily cut in half daily crude production. Iran has denied any involvement in that attack. Turkey says it is not happy with the progress of its talks with russia on restoring calm in northwestern syria. Syrian Government Forces have a militaryting campaign to capture parts of the last rebel held areas. Relationsained between russia and turkey, which support opposing sides in the conflict. s biggest telcos has warned the government not to ban huawei from its 5g networks. Martin boyd says his company would face difficulties with its nextgeneration wireless networks. So far france has refrained on an outright ban, but orange and iliad say they wont be using huawei in their 5g networks. , longtimeoger stone ally of president trump, has been sentenced to three years and four months in prison. Tone was convicted of lying congress, tampering with a witness, and obstructing the investigation into trumps ties during the 2016 election. Stone is the sixth trump aide or advisor to be convicted over Robert Muellers russia investigation. The president says hes been treated unfairly. Global news, 24 hours a day, onair and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. Confirmed cases of coronavirus in china are close to 75,500 after the province at of the outbreak reported another 400 infections and 115 deaths. Lets cross over to Tom Mackenzie in beijing and yvonne man in hong kong. Chinas stateting council to come up with their news briefing. What are we hearing from authorities on the outbreak . Hoping to get some more transparency and clarity in terms of the change in methodology. Maybe some more details on that. The top line number is you are looking at more than 75,500 infections in china and tragically more than 2200 deaths as well. The other headline number is that the rate of infections out of hubei has increased compared to yesterday. That actually doesnt mean, if you look at the trend, it doesnt mean the slowdown in pace of infections has come to an end given the Multiplier Effect in terms of how infectious this disease is. Do we trust the data out of the government . Is it accurate . Those questions still remain for many people. Theres concern in beijing that we are seeing a spike here as well in the chinese capital. According to state media, one hospital used to have nine infections. Now they have 36. That is causing some concern as well. A spike in beijing is something that authorities are monitoring. The World Health Organization says countries beyond china are not doing enough. That so far donations have been limited. Yvonne, we are seeking increasing anxiety over the number of cases outside of china. Yvonne in terms of the total outside ofeaths china, that is at least 11. The first coming from south korea. The spike in infected cases has gone up five times in a matter of days. A lot of questions about whether they are doing enough to contain this virus. This has been tied to a cluster of cases involving a fringe religious sect where one patient infected multiple people at a service. The Church Closing three facilities. There also calls to close its sole unit as well. Those concerns playing out on social media. The shutdown was trending at one point. Some calling for a lockdown similar to wuhan. Neighboring japan also seeing a more than doubling of numbers. From the chief cabinet secretary, saying when it came to that diamond princess cruz, 1000 people still remain on board that ship. Over 700 have left the last couple days. 400 expected to leave today. In terms of the quarantine measures, he maintains it has been effective and the number of infections are gradually falling. If you are wondering what is going to happen with the tokyo olympics, he says they are continuing preparations for the games and for a safer event. We had chinas january credit numbers coming through. Did that get a little bit of a buffer in terms of the economic damage . It may give corporates a little more resilience. The new lows picked up. The corporate sector may be a little more resilient. , 5rall, aggregate finance trillion yuan for the month of january. U. S. Dollars. Ion loans picking up, that seems a positive. You are going to see a dropoff in credit expansion. Yvonne, what about the corporate warnings . Yvonne the latest weve heard, they are saying this coronavirus outbreak could impact negatively for their 2020 revenue. They are cautious about restarting production given the safety of their workers. They are expanding overseas. Fully loaded, they say. Airlines,mes to the sherri spoke to the chief, painting a pretty gloomy picture. They are forecasting the first annual decline in Global Passenger demand. Tom mackenzie in beijing and yvonne man there in hong kong. Casinos may macaus have reopened, but they are making a slow come back. Analysts join us later, betting on three key stocks. Shery on the back of the virus outbreak, Asset Management in education, ecommerce, and wet markets. This is bloomberg. See, we areu can seeing the coronavirus outbreak rattling investors. Increasingly so over the past couple weeks. This has prompted earnings revision and growth downgrades. Our next guest says the following earnings and rising stock prices are still not cheap. Joining us for more insight is claudia kwan here in sydney. Even as we have this disease spreading, the dislocation of , conservatively 50 activity going on in china, markets trading pretty high. Claudia it is interesting what weve seen in china. That actually lends to the Financial Stability of the system. The tradedigestion in finance and Manufacturing Sectors. To equitylends itself leveraging. They actually have quite a strong platform here now. The ones that havent reported yet, we are expecting downgrades. Comfortableestors here at these levels. Broad there seems to be a part of the market if this is a shortterm thing, then fundamentals will recover. It is longterm, then [indiscernible] how do you fish around for value and good growth fundamentals . Claudia really good question. I think the markets will be driven up through liquidity. The strategy would probably be more cautious. Stocks that are reasonably quiet. More earnings resilience. It is not dissimilar to stocks that we would like to own. A couple of names weve been looking at, tencent is one of the most resilient of the large caps. They should see weakness. Cloud makes about 30 above valuation. Going back to my earlier point on Financial Stability, weve seen that they are in a good space now. On a standalone basis, they are profitable, which is really constructive. I am really quite constructive on it. And education stocks. Why . Claudia i think education stocks is one that weve been looking at for years. Use are reported earlier this virus has just accelerated that move online. We of the structural shifts are probably going to see is the consumption of services. Consumer was quite comfortable with goods, but now we are seeing that migration across the u. S. Largest market shares in china. We think the drag is now coming close to an end and that proliferation of consuming Education Online is fascinating in china given the breadth and the inaccessibility of good teachers to all those cities. Shery we have breaking news at the moment. Poised to pay roughly 3 billion to settle federal investigations into consumer abuses that were rampant at the bank for years. This is according to a person with knowledge of the matter, saying the doj and sec may announce penalties as early as friday. The company isnt expected to plead guilty to a crime. This as they very much anticipate a settlement and this marks the largest yet for a series of scandals that has already claimed to ceos and billions of dollars in operating losses tied to legal costs. Fargo to pay roughly 3 billion to settle federal investigations. Claudia, let me talk about banking in china. We continue to see these measures to stimulate the economy. Will this strain the Banking Sector as we continue to see perhaps nonperforming loans rise . Claudia interesting question. In china, you have 100 million, which i think is probably the area that could be the most under pressure given the virus. At any given time, theres about 22 million on watch by the banks. That is a normal scenario. Under this current backdrop, it really depends on the rate of recovery of the economy. The best case in a radio is full recovery by midmarch and the outside scenario is if this virus is sustained longer and the recovery is slower, in which case the conclusion would be that you might see some regulation to help those in need. The nonperforming loans should remain relatively stable. Haidi claudia, getting some lines from the ministry of commerce. A briefing in beijing. Ministry official saying the will berus hit on trade big, but bearable. Cautiously optimistic on the 2020 trade outlook. January to february trade will be hurt by the lockdown as well as the Lunar New Year holiday. Slowdowndo see a sharp when it comes to january and february trade numbers. It could be quite bad. More consumer transformative story coming out of this coronavirus, are there any stocks that appeal to you . Weve been talking a lot about food delivery services, supermarkets for example. When markets closed down, people shop online more. Are any of those trends sustainable . Claudia definitely they accelerated trend that was already taking place. It is the number one producer of fish, distributor of fish, in china. Theyve started to roll out store programs, which we think is probably the most consumable in china. It is a big leap to go from a wet market to consuming fresh online, but it is less to go to a modern channel, i. E. A store closer to your house. Communitylot of that and social interaction with buying fresh produce. The stock is also not expensive, but we think that is structural on the basis of Consumer Behavior. The other one is consolidation, where the large players gain market share. They are probably a little more efficient in their supply chain. Haidi interesting. Claudia, great to have you. Claudia with us here in sydney. Lots more ahead on bloomberg. Stay with us. Haidi we are getting some pretty strong market moves at the moment. Looking at the u. S. 10 year treasury yield, dropping below 1. 5 for the First Time Since september as we see this rally in u. S. Treasuries. Investors seeking shelter in this part of the asian trading day. Concerns over the spreading coronavirus and the impact on dislocationrporate when it comes to supply chain. We are also seeing the risk aversion when it comes to the aussie dollar. Aussieu. S. Falling below 66 u. S. Cents. We do know that the aussie has already been in oversold territory as it has been trading near that 11 year low. From a commodities standpoint, from a risk currency standpoint, as well as exposure to china, we are seeing the aussie dollar taking that beating. Latestet you the business flash headlines. Is predicting strong earnings rebound in two months. They expect to see the impact of the coronavirus. They posted a fourthquarter earnings miss and a warning about 2020 results. They expect to see operating profits come in at 5. 5 billion this year. The ceo says there are still a lot of uncertainties out there. Many have canceled departures from china in the last two weeks. We usually have quite a Cancellation Program immediately after Chinese New Year because it does take a few weeks, but obviously this year china has been closed for twice as long. Climbed 10 tome more than 700 million in the fourth quarter, boosted by gains in lending and Wealth Management. That mr. Analyst estimates. The bank did not mention the impact of coronavirus, but said it expects a slight uptick. Unicredit has emerged as one of the main contenders for the job at hsbc. The 59yearold french is accurate if it is said to have been in talks with europes biggest bank. They are considering candidates including hsbcs interim chief. The bank announced a major restructuring including the loss of around 35,000 jobs. Coming up, why bernstein is betting on galaxy. We talked to a Senior Research analyst. This is bloomberg. 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. Su it is 10 29 a. M. In hong kong and shanghai. Im su keenan with the first word headlines. Hubei province, ground zero for the coronavirus, has reported 411 new confirmed cases and 115 fatalities. That brings chinas total death toll to at least 2000 people while the total number of confirmed infections is about 75,000. The World Health Organization has been running trials in china as it seeks ways to treat infected patients. Preliminary results should be ready in about three weeks. Health officials calling for nations around the globe Organization Says he is surprised by the limited response. His call for 675 million in funding. He says countries are not treating the outbreak seriously enough. To japan now, where the number of factions has more than doubled in the past week. That is leading to criticism of the governments response. Hundreds were also infected on the cruise liner the diamond princess. Those numbers have not been recorded in the domestic count. South korea has recorded its first confirmed death. Cases their increasing fivefold in two days. Most of the new cases came from a cluster in a fringe religious sect. South korea has now recorded 166 cases, the highest number of infections outside mainland china. The Airline Industry is expecting the first yearly decline in Global Passenger demand since 2009 in the wake of the Global Financial crisis. The International Air transport services and says that while it is too early to predict the impact on profits, the outbreak will cut about 30 billion from revenue. Chinese carriers will be worst hit. Global news, 24 hours a day, onair and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. Haidi thank you so much for that. We are watching headlines coming out from the press briefing in beijing. Ministryhe commerce experts and officials speaking there. Expecting weakness when it comes to the chinese economy on the trade front. We did here earlier that there will be a sharp hit when it comes to japan trade out of china. Lockdown as well as the scheduled holiday, saying that slowdown will be big, but quite bearable. Still cautiously optimistic when it comes to the 2020 trade outlook. We didnt get the january trade figures. They were delayed and then they said they will be releasing them in february. So we havent really had an idea of how this epidemic has played out when it comes to import export demand. Also saying the coronavirus epidemic will hit foreign direct investment. Of 2019 has been holding up pretty well. We are continuing to monitor those lines out of beijing. In the meantime, we are seeing some of the reaction on equity trading as well as the fx side of things. Shery the korean won really etc. Relating accelerating losses. We have coronavirus cases in south korea topping 150. We are seeing the offshore yuan at the weakest level this year. Of weakest since december 2019. This after the reference rate came in above that seven level. The japanese yen rebounding and seeing strength against the u. S. Dollar. This after the biggest twoday loss since 2017. These safe h