Coronavirus cases climb, worries as the number of u. S. Cases increases without links to and outbreak. Joins apple and hp in scrapping its outlook on the virus. Standard chartereds cfo tells bloomberg it is too soon to say how bad it will be. Quit, factors will probably come through in march and beyond. The uncertainty at the moment is which markets is in which markets it will affect things. Matt europe on other. Matteo salvini tells bloomberg the Prime Minister is underestimating the threat. We are live in rome as Giuseppe Conte meets Frances Emmanuel macron today. We take a look at futures. They are a little worse in the is. Compared to well, no, stand corrected. They have dropped much more now in europe. Its rare you see a move in this order. Percent. Res down 1. 7 u. S. Futures have recovered a bit. They are down less than 1 across the three major indexes, although just slightly in terms of the nasdaq, down almost 1 . And more risk off news anna, do you see more risk off news on the gmm . Anna we do. It does look like where turning in our treatment of coronavirus stories. Things move closer to the United States. The lady gets traded looks to be a little bit different. Futures, as you pointed out, look negative. Up,chinese market, though, which means overall, the percentage is down. 9 , so it is weaker, the maybe not as weak as european futures indicate right now. In terms of what is driving markets, and south korea, more than 1500 cases. We have indonesia looming large. We see the rupee dropping for its eighth day against the dollar, its longest losing streak since september 2017. Foreign investors pulling out money from the nations bond and stock markets as the coronavirus spreads, so indonesia tends to loom large today. That is part of the story we are looking at, but lots of the focus is moving stateside, after we heard the press conference from President Trump, but more importantly after we got news about seemingly a Community Acquired coronavirus case in the United States, that has taken the markets attention perhaps away from asia a little bit and more toward the u. S. A macro strategist joins us in london. Good morning to you. When i look at u. S. Futures, a little earlier, we were down. Now nasdaq futures down. Still, quite significant losses again, and it seems almost inevitable that we were going to get some level of Community Acquired coronavirus in the u. S. With the amount of time it takes to diagnose, it does not take a great deal of imagination to think this would happen. Why is the market surprise . I think where we are looking at markets right now, it shows how fragile they are, how much Little Information can affect the at a marginal level. The fact that we are seeing these cases spread to the u. S. , that is why we are seeing the reaction we are. What is surprising this morning is the extent of the selloff we are seeing in european futures. This likely reflects some of the catch up from yesterday in the u. S. Session. Matt is the concern bigger for europe right now . Clearly, italy is down in the european epicenter of this virus, and European Markets have not been the european economy is not seen a strong is the u. S. , European Markets are not valued as highly as the u. S. What do we expect in terms of the equities . Look atinly, when we european equities, and a lot of the selloff has been in those more cyclical sectors, travel and leisure, autos, energy, the ones more exposed more directly tourismupply chain and impact. We are seeing less declines in terms of defensive sectors. What is surprising is we did see more of a market move yesterday on the reports that we could potentially see german fiscal stimulus come in. Certainly, there are a number of political hurdles there. Of a growthg signs recovery there on the facts of this trickling in. You would expect to see this delayed rotation from u. S. Equities likely into european equities finally take hold. Anna what about trade in the haven assets . We see gold going higher again. Interesting to see the yen catching a bit today, and that ties in with a narrative that the market focus is moving more toward the u. S. , so the dollar not the haven today. The yen is the haven today. That is quite interesting because when we looked late last week and earlier this week, the japanese yen was tumbling on the fact that we were seeing these domestic pressures within japan and now the fact we are seeing steep selloff inequities, so we tend to still see quite a high correlation between yen performance and the s p 500. Certainly, i think also where we are see me seeing this safe haven bid is in treasuries, the fact the 10year is sinking below 1. 30 percent, so it is quite exceptional. It is a question of how much more this haven bid can continue its path lower. Matt getting back to europe, i want to ask about the news out of berlin yesterday that the German Government might at least temporarily lift the debt break here. That means they would increase fiscal spending, both in local regions and on the federal level. How is that going to impact Financial Markets . This is your analyst question of the day. I think it is a case of is this too little too late because tricklingected to see in over time, not exciting to see a big sizable boost, and as well, theres a number of political hurdles to recover, but we are still seeing it play to the euro. We are seeing a slightly less in it of german bunds, but if we do expect to see this fiscal stimulus come in, it would likely provide a floor to the 10year yield. We do expect to see some positive green shoots across European Assets that have been hit quite hard so far on the back of these virus fears. Anna thanks so much, laura. You can get involved with the question of the day. Up next, we will look at our stocks to watch at ab invev. The Worlds Largest brewer forecasting lower earnings due to the coronavirus. The weight of this has impacted their business in china. We will get to this story around the drinks sector and have more on the drinks sector as we go through this morning. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. Rhea we are right now about 50 minutes away from the cash the start of cash trading. Off once againsk today. Lets get your stocks to watch. Annemarie horton is looking a Standard Charter for us. Lets start with you and Standard Chartered. Hsbc, we are seeing this morning on the coronavirus on Standard Charter and what we can expect for the for mostwhich accounts of its Revenue Growth. That is what Standard Charter had to say even though they are buying back shares. We are seeing the impact of the coronavirus hit Standard Charter, similar to what we heard from hsbc. Anna from a bank to a drinks business. Coronavirus again the culprit. Just that they are forecasting a drop in earnings for the fourth for the first quarter. Fourth came and way below expectations. On a day when you are not expect such a huge move in stocks, you would expect Drinks Companies to move within. It may be that all the Drinks Companies also take a hit today. This is a pretty bad report that certainly will raise conditions for the 2020 outlook. Matt what is the story on saffron . Coronavirus to the issues with the boeing max, it has become the latest aerospace outlookto flag its 2020 , and its as revenue is likely down over likely to be by 2. 4 . Got the coronavirus playing into this company as well, although they say that their production is almost back to normal in china, so they are working on the assumption that coronavirus is not going to be an issue after the second mayber of this year, so the situation will improve by the end of the year, but it is certainly a challenging backdrop for stocks in aerospace at the moment. Anna thanks to everybody for their contributions on the stocks to watch today. You can get the latest stories. Rom our equity team joining us now, greg peters head inmultisector strategy at pg fixed income. Good morning to you. Lets start our conversation talking about corporate debt levels and credit risk, i suppose. Are you concerned about the kind of credit event resulting from the coronavirus . I think it is too early. What i think the markets are responding to is not so much fundamental impacts on the economies, although this adjustment lower and corporates are starting to come out. To me, it is really about uncertainty. That price needs to adjust for the unknown, and i think that is where we are at. Are and a lot of companies closed. For the most part, these are small to mediumsized businesses that only have enough cash to get them through the next few weeks or months. That if somerry companies started going bust, than other Big Companies are going bust after them . That is a concern. Clearly, companies have levered up over the past 10 years. Corporate debt levels are really high. Leverage is really high, so the room for error is very small. I think that is a risk, particularly in the smaller companies, but once again, i think it is too early to assess all this, so what the markets are really adjusting to is uncertainty more than fundamentals. That is my belief. Anna a european investmentgrade companies have fitted from ecb by. I suppose if the ecb is looking for tools, they do need to step up and do more in the face of the virus threat, perhaps there will be more of the same, more of that . I think so. Markets are factoring in, although it is hard to disentangle what is going on, but the markets are factoring in a more proactive central bank, right . So there is more scope for the fed and the u. S. To do rate cuts and things than here in europe, but nonetheless, Central Banks , andresponded in the past i think they will respond again. Matt what do you expect from other Central Banks . We are waiting, for example, for a rate cut from china. What could the ecb do . Are there other Central Banks that you think have tools, or are there Central Banks that you think dont really have much ammunition left at all . The fed has the most ammunition in terms of rate cuts. There is scope for the fed to do more. Once again, i think it is too early, but the markets are definitely moving in that direction, but at the same time, you know, it is more of the same. The ecb will increase their bond buying program. Other Central Banks you know, china has more scope to cut rates. That is something we think it an important policy tool. I think there is scope to do more definitely. Insight. Nks for the lets get a couple of corporate stories for you that we are covering this morning. Wpp is one of them. This is the advertising business. Fourth quarter comparable organic sails down. The estimate was for a drop of 0. 8 , so that looks to be a little bit worse than anticipated, but they reiterated. 021 targets and 2020 views that is interesting if you are looking for companies that are not citing coronavirus as a reason to become more negative today, then there is one. Coming up on the program, edging closer to a pandemic. The fda issues a coronavirus warning as more cases are reported in countries other than china for the first time. This is bloomberg. The number of cases is now has surged over 1500 and just six days. Where is the surge coming from . What is the conversation in korea right now . What action needs to be taken . The surge is coming from a city far from the south korean capital and has to do with a religious sect as part of a religious organization. The government has actually over 210,000t of people, they secured their names and are trying to see if the people part of this organization. Ave had any physical contact that is how they are trying to track down people showing symptoms and seeing if they are also confirmed with the coronavirus. Matt what are the expectations behind them Holding Steady . What is the reasoning behind that . The bank of today, korea pretty much held a very optimistic tone about the impact of the virus having on the economy directly, although they did downgrade their outlook for gdp, they said that it is not enough to downgrade the actual central rates. They said despite the coronavirus outbreak in south korea, what the government should focus on is helping and providing support for the companies that may be impacted, but it is not yet on the level of the central bank. Anna thanks very much for your report. What i found interesting about the south korean case, they held. N rates actually with what they said about not cutting, they said mending support facilities was going to be more effective, so micro policies was going to be more effective. Is that something you think the Central Banks might be listening to . That was surprising and unique, and its clear that where the level of rates are and the qe programs currently in place that theres new tools that have to be developed. I thought that was somewhat of an ingenious tool that was talked about, but i think markets are really expecting too much from Central Banks here. The cut rates they cut rates so preemptively without any data impact. On the true i agree with kind of not cutting rates at this point in time, waiting for more data to develop and evaluate other tools in the kit. Matt we are starting to get fiscal stimulus from a lot of governments in asia and hints that more fiscal stimulus could come here in berlin. Do you think thats too early . A lot of people are saying its a little too late. Yeah. I mean, thats a different response function. That is serving a public good, so that fiscal spend that is important, markets that have been watching fiscal spending, particularly in germany now for a very long time, so i do think on the margin, that is helpful and should actually have more of an impact than rate cuts or more qe, but i think a move on the fiscal side is important and will have more impact positively then a rate cut wood, for example. Matt their currency strategist daybreak europe and was saying that this year, there is less fiscal stimulus coming out of the u. S. Government, out of the u. S. Budget then there was last year so there will be a drop in terms of u. S. Spending. Are you concerned about that . Do you think it will change . Well see. I mean, the u. S. Has really kind of increased their deficit pretty sizable he over the past year and a half. There was this big fiscal ofgram a year ago, so some that is coming off, but you did get this boost towards the end of last year when they raised the spending caps in the u. S. , so it is something to watch, but , you know, you are quite right. You are not going to see the same type of yearoveryear spending in the u. S. , so if you believe that other countries have to kind of step up to fill that gap, then, you know, watching germany and other countries is important, so the u. S. Is not going to lead the charge here. Anna briefly, what did you make of the hong kong announcement . Literally cash for residents. That is one way to do it. It was unique, lets put it that way. Once again, another example of policy tools that are unconventional, and that is highly unconventional, and we will see. Definitely a direct impact. Yes, direct impact and unconventional. Thank you for joining us. President trump downplays the risk of the coronavirus to the u. S. , but markets are not convinced the country identified the first markets are not convinced as the country identifies the first case without ties to a known epidemic. This is bloomberg. Good morning oh no, here comes the neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. Back to Bloomberg Markets. This is the european open. We are just about a halfhour away from the start of cash trading across europe and in the u. K. You can see that we have futures down deep in the red right now. Im matt miller here in berlin alongside anna edwards at our European Headquarters in london. Anna lets get back to our top stories. In the United States, Health Authorities say they have identified the first coronavirus case that does not have ties to a known outbreak. That follows assurances from President Trump as he tries to ease fears around the virus. Because of all weve done, the risk to the American People remains very low. We are ready to adapt and ready to do whatever we have to ask the disease spreads. Placedresident trump Vice President mike pence in charge of leading the response. Investors concerned about the outbreak have driven six Straight Days of losses erasing the s ps gains on the year. The yield on the u. S. 10year currently sits at 1. 31 . What is the lower bound for the u. S. 10year yield . How low can ago . Well, lower in what is the answer. Our view all along has been a ared in the u. S. Attractive. We think the scope for yields continues to move lower, so i dont have an exact target, per se, but it is definitely a bias for lower rates, so our central tendency has been kind of 1. 5 . Its possible 1. 25 percent now, but i think the bottom line message is that u. S. Rates are still attractive versus other destinations. Matt the fed has been worried that there would be issues of over leveraging to the consumer for businesses if they continue