The Global Supply chain factor. Early facebook investor Roger Mcnamee joins us for what the virus means longterm for Companies Like apple and tesla. Paul, dramatic day for the markets and elsewhere. Why are you following . Paul tuesday trading day in asia, i guess the question is, to far is this stone going think . A drop asoking for well, about 2. 5 . Nikkei futures, big hit, 4 . South korea had one of its worst days and 17 years on monday. Japan of course playing catchup because monday was a Public Holiday. Take a look at currencies. The aussie dollar hit the yard over the past 24 hours. Currently just hanging on above . 66. The aussie 10 year continuing to slump toward historic lows. Of red. Uyh a lot in the u. S. , stocks tumbled. Three benchmarks slumped. Good to Abigail Doolittle lets get to Abigail Doolittle in new york. Abigail the markets selling off in a big way. Here in the u. S. , a three day slide. This is the worst of those three days. Friday, the disappointing pmi number. Coronavirus, the that it is primarily in china, that started a selloff on friday. The spread of the coronavirus over the weekend making it pretty clear to investors that we did not know the extent of it. There was a time when many investors and traders were thinking about this as sars. Now that we dont know, we can see investors want out of stocks. The nasdaq hit hard. Take a look at that stock, down nearly 5 . We take a look at the year to date chart, the dow is down about 2 , the s p 500 down slightly comedy stoxx down even more. The stoxxlightly, down even more. It is not just the major averages, some of the specialized averages, such as the new york faang index. Dow transports down about 3. 6 on the year. Take a look at the emergingmarket index. Off we are seeing, extending across Asset Classes. Oil selling off, copper selling off. China of course is the Worlds Largest user of natural resources. Now, the idea that businesses would eat into the profit outlook. The 10 year yield at one point today was almost at record lows. At that point, having its best day since 2011. Investors one out of risk assets. You can see the 10 year yield moving down in a big way. Risk off seems to be the case. There are technical indicators that suggest this could be the beginning of some new risk off. Emily Abigail Doolittle, thank you. Meantime, the surgeon in coronavirus case the surge in coronavirus cases around the world has sparked concerns of democratic but the World Health Organization says it is not there yet. The sudden increase in new cases is concerning. Pandemic now does not fit the facts, but it may certainly cause fear. Emily lets get the latest from yvonne man in hong kong. The story seems to be the way from china but south korea remaining a key concern. Latest burst in infections could drive potentially a second wave in this epidemic. In south korea, more than 800 cases. We just got the Consumer Confidence numbers. Plunging to fiveyear lows. A dozen or so countries had issued tighter travel restrictions. Hong kong issuing a red alert for the country. That honga saying kong will start banning nonresidents from entering if they travel from south korea starting today. In italy, at least six deaths recorded. Milan region and around in a virtual lockdown. There seems to be concerned now that the spread seems to be mostly through hospitals. They dont seem to know how this disease arrived in italy in the first place. Iran reporting at least 12 deaths. Kuwaitstan, bahrain, and reporting their first cases. Emily lets talk about the World Health Organization saying this is not a pandemic yet. Why is that significant . Or is it all semantics . Director general talked a little more about come at this point, they are not dealing with an uncontained virus. But they usually do classify it as a pandemic when you see epidemics across multiple countries at once. At this point, they are saying the total number of cases outside of China Remains relatively small, and the needs of the affected countries are tailored. Does it have the pandemic potential . They say, yes, but not quite now. They are concerned that new cases appeared in patients that did not have a travel history to china, perhaps suggesting that there is a it in chain of infection there is a hidden chain of infections now. Paul joining us for more, stephen, folio equities manager. I just want to give some historical context. We have a chart that puts the selloff in the context of the past 10 years. The purple circle is yesterdays sell down. Light blue is the taper tantrum. When you look at it over the past 10 years, it is not as severe as some of the other selldowns we have seen. Things can always get worse. There was another factor that contributed to the selloff last night, and our opinion, that is Bernie Sanders taking the lead in nevada. He is seen as bad for markets. There are a lot of negative headlines. But i actually dont think this is nearly as bad as what the market is saying. Part of the decline reflects very rich valuations. The fact of the matter is that authorities around the world are doing the appropriate thing to contain the virus. There is no antidote, so the way you contain it is by isolating people and stopping them from traveling. That is the right thing to do. Contained,once it is we could get a pretty sharp rebound. The we were hearing from ubs chairman over the weekend. 24 hours later, he appeared to be proven right. Is this idea that governments are doing the right thing really credible . We have just heard 100 new cases in italy and no one knows how they got there . Chris government is absolutely doing the right thing, quarantining people, providing information. , ofr almost 80,000 cases course that is worrying, but there are Something Like 30 million cases of the flu in the u. S. Per annum. The death rate is 3 . When we compare to other coronavirus is like sars and mer s, it is much lower the death merswith sars was 10 and was 30 . Cannot go to work, they cannot spend as much money. But it is the right thing to do, it is how you contain these touses, and it is how we normality when we get to the Northern Hemisphere summer. Emily we talked about production footholds in china. At the same time, speaking about rich valuations. Are there any names or companies that you see more likely to overcome and avoid wild swings due to the coronavirus . We have structured our portfolio to have some investments that specifically benefit from market turbulence. These companies go up when the market goes down. Another way to think about it is it is a hedge against turbulence. Some of those are derivative exchanges. Miners, and gold market makers. Market makers stand between. Uyers and sellers i encourage people to think about that. Thesis you is the are working on about the Overall Economic impact country to country, given the uncertainty. Steven it could cut about 1 trillion of global gdp, but 1 of gdp growth, which is a meaningful number. Forecasted, gdp growth, takes it from about 6 to 4. 5 . That is obviously a lot slower than we have seen in recent memory. This is going to be a shortterm impact. Once we get over it through quarantine and containing the virus, we will get a sharp rebound. We have already seen governments recommend some stimulus into the economies, cut Interest Rates in china, they are insuring against force majeure. Governments are very aware of the issue. They are doing the right things. There is great sharing of information around the world. I think it will be more coordinated this time around. Well get it under control but no doubt, that means quarantining people, which means low gdp growth, but it is not a fundamental change in the economic environment. Paul he strongly stake your position in the sharp rebound camp. Do you see any buying opportunities . There are definitely buying opportunities. But the stocks that were do to get hit on any issue that arises because they were just too expensive. Just to talk about valuation , the market cap is bigger than gm and ford. Virgin galactic is bigger than qantas. s market cap is as big as the australian stock market. We are not buying heavily right now because the stocks that have, for the most expensive ones. But certainly there are opportunities arising. Paul plenty more to come. The coronavirus is a National Security threat. Next, we will hear from the former director of the u. S. National security agency. Retired general Keith Alexander knows what the biggest phone abilities are. This is bloomberg. Paul welcome back to Bloomberg Markets. Lets check it on the first word news. Consumerin with confidence numbers, plunging the most in five years as the number of Coronavirus Spreads. Since june decline of 2015 when another virus, the middle east respiratory syndrome hit the korean economy. An Interest Rate decision on thursday. Moving to malaysia now. Intoics have been thrown turmoil after the resignation of Prime Minister my dear mom it Prime Minister mahathir quit. Ad, who he seeks to form a new government or a new leader emerges. Failing that, there would be a general election. The u. S. Is expected to sign military deals worth around 3 billion with india later tuesday. President trump announced the agreement at the start of his twoday visit. Trump also reiterated his pledge that the u. S. Would sign a significant trade deal with india, though he gave no timeline and later said he is in no rush. Pres. Trump we are in the early stages of discussion for an incredible trade agreement to reduce barriers between the United States and india. Working together, the prime fantastican reach a deal that is good and even great for both of our countries. Global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am su keenan. This is bloomberg. Emily the deadly coronavirus continues to wreak havoc across the globe. Governments are mobilizing their efforts to contain it. Many levels of bureaucracy, including intelligence agencies. Aboutg us to talk more what those intel agencies are doing, retired general Keith Alexander. He joined me now here in the studio. General alexander, thank you for joining us again. Lets talk about collective security of a not just of the United States were different countries, but im curious, does the coronavirus leave us more vulnerable . Gen. Alexander i am not sure it leaves a small leaves us more vulnerable. It does point out the vulnerability we have with china and other countries. The real vulnerability is the fact that we dont really have a collective Security Framework for companies. When you think about it, when you fly across the country or you come from china, you have an air Traffic Control picture that shows where airplanes are. Well have a picture that shows where malware is. Peoplempany has 10, 20 working by themselves. Imagine if we bought if we brought that workforce together couldild a picture that be used by the government to help our nation and allies. Emily what would Something Like that look like . Gen. Alexander take the banks. They collect information at Network Speed and share it into the cloud. All the same, they dont each have to work on their own thing individually. They can work on it collectively. I think that is the future. In doing that, you begin to build a picture. What you are doing with the coronavirus, the rebuilding that picture around the world. You dont have that same picture with cyber, so you dont know where infections are. The impact of trade, and the impact of theft of intellectual property. Slowdownre seeing is a. We are not seeing what it could be. General, how would you bring about the sort of collective security you describe . Gen. Alexander that is a great question. It started in 2015. It said, we should Work Together. Reduce liability for companies, get them willing to share their information, get past reputational risk, and get to a point where they are the victims and help us understand what is hitting them. Most of the companies that get imagine that you could see an attack going on like you would a missile attack, and you could stop that attack. That is what we have got to get to. Think about the partnerships we ,ave with the australians working together as we have in the past to build a picture about what is hitting australia, the United States from other countries. Build a collective framework that would help defend companies, sectors, states, and nations. I believe that is something the private sector can lead and share with the public sector. Paul the leading democratic president ial candidate Bernie Sanders was saying just a couple of days ago, telling Vladimir Putin to stay out of the election process in 2020. Will the collective framework you are talking about health . Talking about help . Gen. Alexander we can say to stay out. That would be akin to having a Million Dollars on a bench in new york city and telling people, dont take it. We have to defend it better than we are today. Than we i think, better are today. A framework that allows us to defend this that makes it impossible for us to get in. This network is emerging at an exponential rate. Emily where do you see the biggest vulnerabilities right now . Iran . S. Election, china, gen. Alexander i think the biggest concern i have is the theft of intellectual property. China needs that to fuel their economy. They steal it from us. Think about that, intellectual property. But it is not just us. Australia has had the same set of attacks. Europe as had the same. We are all victims. We should Work Together to defend this. That is what i am concerned about most. That is our future. You think about your three sons, daughters, or grandchildren. That is their future, this intellectual property. We have to defend that. Emily retired general Keith Alexander, thank you so much for stopping by. I have more next. This is bloomberg. Look at howtake a the markets are doing right now. New zealand, the only market trading this tuesday in asia, already off. Futures pointing south by about 2. 5 . Those will reset in about 20 minutes. Make a futures playing catchup. Kospisby at its worst had its worst day in years on tuesday. Look at currencies as well. The yen played on a few gains after being beaten up last week. Towardsie tenure slip one year lows. On theat virus bloomberg terminal. This is bloomberg. Paul breaking news from United Airlines, they are withdrawing itir 2020 forecast, saying has seen a decline in demand to china, 100 , so that would be all of it. A 75 decline in demand for the transpacific route. And withdrawing its 2020 guidance there. And earnings per share at 15 18. Breaking news from united. Of course, airlines among the hardest hit by the ongoing coronavirus crisis. Now first word news. Su we are staying with the virus. The s p 500 fell the most in two years, dropping more than 3 as fears grow over the threat of the coronavirus outside of china. More than 1200 cases and more than 20 deaths have been recorded around 30 countries with spikes in italy and south korea. World Health Organization says it is too early to call it a pandemic, but countries should be prepared. Are a decision about whether to use the word pandemic to describe it is based on an ongoing assessment of the geographical spread of the virus, the severity, and impact it has on society. For the moment, we will not we are not witnessing the containment of the virus, and we are not witnessing largescale care. Su police and germanys ama deliberately rammed his car into a crowded carnival parade in a small town about 100 miles north of frankfurt. About 30 people were injured, some of them children. The 29yearold driver was arrested and is being investigated on attempted homicide. Daysncident happened in after an extreme shot and killed nine people in a town just outside of frank for. And here in the u. S. Of the frankfurt. And here the u. S. , Harvey Weinstein has been convicted of Sexual Assault and rape, more than two years after allegations as part of the metoo movement. The 67yearold, acquitted of the most serious charge, predatory Sexual Assault, was sent to prison while he waits sentencing on march 11. His lawyer said he will appeal the decision. We are disappointed. We knew that we came in and we were down 350 the day we started the trial. The jury knew everything they could know about the case. We cannot find someone who never heard of Harvey Weinstein. Su global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Getting back to the widening coronavirus epidemic, cases outside china has jumped and italy is grappling with europes largest outbreak with more than 200 confirmed cases and seven deaths. Alessandro joins us on the phone from room. So much happening there today, what is the latest . Alessandro the latest news is there has been another spike in the number of cases, we are now at 229 with seven deaths. But there has also been good news, that so far the outbreak seems to be contained in a handful of villages south of milan, and a small village near venice. So far, all the cases are linked therese two clusters, so does not seem to be an outofcontrol outbreak for now in the country. Emily any more info