Our bloomberg voices are on the ground with all of this mornings top stories. We begin in japan, with efforts to calm the market jitters over the coronavirus outbreak. The boj says it will provide ample liquidity to ensure stability. Joining us is enda curran. It help to the market for a second. What did we learn . Enda it seems like it is part of a coordinated push by the worlds Central Banks. To be a g said they would provide liquid it the boj said they would provide liquidity and followed up by putting money into the market. It is important to also say what they are not doing. They didnt signal an Interest Rate cut. Interest rates are already in the get of territory in japan. They didnt indicate any outright easing. They already have a huge Balance Sheet from years of quantitative easing. It is in sync with steps being taken by others. It is more designed to ensure confidence than outright easing. Alix lets stay in asia right now. Global coronavirus cases are at 89,000. Indonesia reporting its first case. Italy and iran reporting more cases. Joining us now is yvonne man. China also stepping up and trying to help with the virus as well. From thend we heard premier that efforts are being stepped up in hubei, where they still report the most cases. In total, china reporting 202 cases today. Still seeing signs of stabilization. The focus is still be on the mainland, with the global test toll the global death toll topping 3000. The u. S. Now reporting its second death. You have iran in the last couple of hours seeing cases surge now to more than 1500 cases. Everyone is now being tested after one member tested positive for coronavirus. The number of cases there surged by 502 now 1700 cases. You talked about the oecd growth forecast being slashed. The brutal pmi numbers we got out of china over the weekend signaling that the factories screeched to a halt. Pmi plummeted to 35. 7. In january, it was at 50. The consensus was for 45. We were expecting it to be bad, but this was pretty shocking. Alix indeed. Thank you. The bank of england pledging moves to ensure market stability on the virus fears. The outbreak is starting to feed through factory supply chains as well. Joining us from frankfurt is lou bergs paul gordon is bloombergs paul gordon. Numbersdeed, the pmi not as bad as china, but still pretty weak. U. K. Manufacturing growth slowing. Contraction in the Manufacturing Sector continues in the euro zone. Of the cases, the impact coronavirus becoming clear in disruptions to supply chains, increased delivery times, running down of stocks, and falling demand. We are seeing those patterns across all of europe at the moment. Thats one of the reasons why the bank of england stepped in, saying it is working together with the u. K. Treasury, with International Partners and domestic regulators to ensure financial and monetary stability. Nothing from the European Central bank, where policymakers suggested they are still trying to gauge exactly what the impact up with these numbers suggest that impact there is, for sure. Alix jay powell said the virus poses evolving risk to the u. S. Economy, signaling they could be ready to cut rates if needed. President trump urged the fed to do more. Pres. Trump our fed has been a follower. We need a fed that is going to be a leader. We should have at least the same rights, and ideally lower, than other countries. We shouldnt be paying more. Alix joining us now is michael mckee. Michael for the fed, it seems like it is no longer a question of whether, but when and by how much. Chairman jay powell opening the door friday with that simple statement, promising, we will use our tools and act as appropriate to support the economy. By the time he spoke, markets had already priced in almost four rate cuts this year. The question is, do they cut by 25 or 50 basis points . Not a consensus on wall street yet, but people are moving in that direction. If you look at what happened overnight, we are seeing some backing off from the number of rate cuts it is thinking about in march, at least according to fed funds futures trading. The question is what good it will do. Slightly cheaper credit isnt going to get you out of your house to spend if you are afraid of the virus. It is not going to fix broken supply chains. The real issue is getting bridge credit to companies that are affected, that may be have enough cash flow. Airlines, hotels, restaurants and the like. The fed cant do that legally. That is a fiscal issue. Treasury secretary Steve Mnuchin and other officials will hold a telephone Conference Call this week to coordinate their responses to the crisis, according to the french finance minister. Alix thank you so much. Lets stay with u. S. Politics. The field narrows in the Democratic Candidates vying for the presidency, was Pete Buttigieg shopping up. I will do everything in my power to ensure that we have a new democratic president come january. Alix joining me is Kevin Cirilli at the white house. Bidenses after joe Strong Performance in South Carolina. Kevin exactly. Pete buttigieg out, tom steyer out, and joe biden trying to seize on momentum that his campaign claims he has from winning the South Carolina primary over the weekend, heading into super tuesday tomorrow. Comes a more narrow field, and increasingly a battle between biden and senator bernie sanders. On the lookout within the next 24 hours, look to see the spread in texas particular. That is going to be one of the when theys on tuesday are really duking it out, as well as california, where toator sanders, according the polls, is able to have a lead. Alix thank you so much. Stay with bloomberg for special coverage of super tuesday. We are going to have live analysis of the democratic contests, march 3 at 7 00 p. M. Eastern time. To pivot on the stories we have been talking about this morning, the oecds flashing growth forecast. According to the organization, the outbreak of the virus is pushing towards the weakest Global Growth since 2009. You can see euro area, germany, italy, canada, that was revised much lower than before. Overall, looking at global gdp 2. 4 from 2. 9 , but most people expecting an uptick in the back half of the year. How much stronger that will have to be is up for debate. Coming up in the program, more of your morning trade and analysis on the markets in todays first like todays first take. This is bloomberg. Alix time now for bloomberg first take. You get the trade and analysis of the markets. Adams, us is gina Martin Bloomberg intelligence chief equity strategist, damian marketr, chief emerging credit strategist, and also with us, till you jablonski, election bang also with us, sylvia managing, direxion director of Capital Markets. Damian when the expansion began, 86 fed meetings, nine hikes, three cuts. Theyve never disappointed the markets. With 50 basis points priced in, if you think that the 15 trillion of negative yielding debt and going higher, i think it very well may be. Alix do we break 1 on the 10 year . Damian i think so. Colleague at Lehman Brothers thinks so. I think it depends on your perspective. You cant pick bottoms. If you are a trader, timing is everything in your perspective, but if you are an investor, you start averaging in as you look at the market low of more than 10 down in a week, doesnt happen very often. Do you really think we will fall . Nto recession we will eventually price in the worst case scenario, you average and slowly with a longterm perspective. If you are a trader, you watch levels really closely. Youre talking about a huge decline to get to the lowest levels, so youve got to break lower to prove that they will that friday wasnt a major love for stocks. Frankly, you cant time this stuff. Nobody knows the answers. We are all trying to pretend like we do, but the reality is this is something very new. We havent seen a 10 correction four timess but for in history, and all of them were major crisis periods. Sylvia i agree. What do you do . At can average in and look names while also hedging. They still are a flight to safety. I think if you are a shortterm trader, there are opportunities. There are bear funds out there. You can go short things like high beta, Like Technology in china. This is different than before, but on a positive end, we had a credit crisis. This isnt that. Not having trouble rebalancing our funds. I agree with your other point, too. If youre going to hold stocks for the next 10 years, they are certainly on sale. The market tends to rebound and come back. Performance of the s p 500 is low double digits, so hopefully this is transient and we start to see an important swing. Damian you just look at the front end of the yield curve these things the large institutions have been using and piling into the front end of the curve, if you look at the positioning in 10 year shorts, even if we see a backup in yields, at these levels, is going to be very challenging to make the case that u. S. Yields have greater upside. I think they are going to probably try to find a new range here. Alix lets do that worst case scenario, then. If we break 1 on the 10 year, what happens . Is it a selloff in equities . What is the psychology for that . Gina i think it depends upon the conditions and how long it lasts. Nonetheless, i think equities have a tendency to price in the worst case scenario, and the worst case is recession. At what point are repriced her recession . Our models suggest you are pressed for recession below 2700 on the s p 500. Theres further downside for a worstcase scenario. The question becomes, do you need to price recession in an environment where the fed has already started to ease, fiscal policy makers are already throwing things at the crisis . At some point, you get a sort of exhaustion in the market because we priced in, ok, weve gone as far as we are going to go. I dont know exactly where that point is, but i think a normalized recession model is probably your best guess. That is somewhere just south of 2700 on the s p. Sylvia i think we are seeing some bright spots pretty far into this. Ofhas certainly gotten out control, but the numbers in china still seems to be it is beginning to seem like it is stable as i it is stabilizing. It has given the rest of the world a chance to catch up. I think we need to see inverse relationship with the coronavirus and the market. We need the coronavirus to go down, and the market will start to go up. I think if the fed cuts 50, the market might react, but i dont think it is going to get us necessarily back to a straight upward trajectory. Damian what is the communication from the fed . For me, if you cut 50 basis points, what do you tell the market . We will hike it backup . No way. If they do say that, the market is really going to freak out. So they will say everything is ok, we are not in recession. But it is very challenging for chair powell. Especially because just consumers were, strong, we were in expansion. So why are we cutting rates . Its a confusing message. Gina with respect to china and the signaling effect of markets, one of the biggest questions i got all week last week was why are u. S. Assets falling so much and the rest of the world is doing yell . Small caps did well relative to large caps. Signal ofe, is capitulation, the last dominoes falling. You saw it with gold as well. Issac china selling off, emerging markets getting creamed you saw china selling off, emerging markets getting creamed. I think we need to acknowledge that. Alix so i need to acknowledge what is working to pay off my debt, or is it actual complete elation actual capitulation . Gina i think it is a little bit of both. They are not necessarily mutually exclusive. But i do think when you start to see everything is failing except u. S. Treasuries, it is a signal. Nobody wants any risk, and we have already started to enter that. Damian and spread volatility. We had zero spread volatility for years, and finally last week, we saw spreads capitulate. That, to me, was the risk. We all talk about the oneway train in fixed income. I think u. S. Treasuries were five years year to date. If yields are falling, that is a different paradigm. All bets are off. Alix i want to highlight this one chart, Global Financial conditions. Become point does this we know it is an economic risk when does it become a liquidity credit crisis, that then we need the plumbing to work and stuff . Damian the currency basis, which is basically if you carry at a different currency and convert back to dollars, what is your yield, it hasnt really moved in the other direction. The permian from u. S. Dollar assets is once again building. That is where your point comes in. We could see something in the plumbing. We could see greater demand for dollar assets. I agree with you. I think youve got to watch the cross currency basis spreads here. Sylvia i think this is where global Central Banks come into play. That is essentially what will keep liquidity up. If have supporting repo markets, Central Banks supporting liquidity, that could keep the crisis at bay. But i think that will be a huge factor. Some of the things that are also going on in the background, the factories are starting to open, so does that mean the goods in the supply chains and the essential any Factoring Network start to get back online, and we see Consumer Spending again and liquidity back in the market . I think it is slowly starting to show signs of that. Gina i think this is a really good point. Everyone is focused on the fed might go 50 basis points. What about the Balance Sheet . That is probably much more meaningful. Lets not forget they started to back away from this repo intrusion earlier this year, and that triggered a lot of changes in the market even before coronavirus hit. If the fed goes back to the Balance Sheet, it probably does create this underlying degree of support that all assets generally celebrate. It creates a lot more volatility and uncertainty. Lets see what handles they pull or what levers, because i think it is pretty important. Alix especially when you have the 10 year at 1 . How much lower do you actually want to go . Im going to leave it here. Thanks a lot. Really appreciate it. Sylvia jablonski of direxion will be sticking with me. Any charts we use, go to gtv on your terminal. Browse the features, check them out, save all your charts. This is bloomberg. Ritika this is bloomberg daybreak. A big transaction today in the Cancer Therapy business. Is buying a company for 47 billion. The free fall in oil has been halted, at least for now. Opec and allies are expected to agree to deeper output cuts this week. Vladimir putin says he is willing to cooperate to support the markets. As 3. 7 res rose as much after tumbling 16 last week. The ceo at nokia is calling it quits after little more than five years running the finni sh networking company. Suri has struggled to gain substantial foothold in the market. That is your Bloomberg Business flash. Alix thanks so much. We talked about the boj and its pledge to calm the financial markets. One thing it did do was it bought a record daily amount of Exchange Traded funds. The boj purchased almost 1 billion of etfs today, more than four times the daily pace to hit its annual target. While it is highly unlikely the bank will keep buying at this pace throughout the year, mondays move shows the support the boj is willing to make to stabilize the markets, and it has the potential to do so. Ofalso raises the question tools other Central Banks will use when there is no room for them left to maneuver. We are going to talk to chuck research on how he is modeling the potential fallout from the coronavirus worldwide. In the markets, which ride to save some kind of risk on bid earlier anymore can earlier, but we are off by almost 2 . In other Asset Classes, lets take a quick look on where youre going to put your moneys. Yield cominggilts in the lowest in about three years. Is an indication of what the market expect the fed to do, now pricing in almost four cuts this year. This is bloomberg. Alix this is bloomberg daybreak. It feels like everybody woke up and decided to sell equities again. S p futures are down by about 0. 7 . European stocks continue to rollover. Weaker ok pmi in europe, in u. K. , and terrible in china. Dollar swissie down by 0. 7 . That seems to be the safe haven of choice. 10 year yield down by eight basis points. We are all talking about that 1 level. What would that actually mean . Gold futures getting a pop again today. The rumor was it was about selling off your debt. Crude holding onto its rally. Russian president Vladimir Putin says he is willing to talk about a cut in terms of oil. Maybe that is percolating in the market. Opec meeting later in the week. Coronavirus is pushing the Global Economy towards contraction. Estimates for a number of countries, like u. S. And china. Joining us from georgia is chuck watson, Enki Research founder. You model disasters and how much they wind up costing, hurricanes , for example, or floods. Have you been modeling the virus . Yes, we model things like industrial accidents or major things like influenza or pandemics. Alix what have you noticed so far . Theres a lot of uncertainty in this, and some of it is related to the uncertainty of the virus, but most of it is how people react to those events, which is a little bit harder to forecast and predict. Based on what we know or what we think we know, we dont think this is the one that is going to cause mass scale deaths and those kinds of things. It looks like the impact, particularly in the u. S. , is going to be closer to a bad seasonal flu outbreak. Economically, most of those have an impact which is higher than a lot of people think. 20 billionom anywhere to 80 billion of Economic Impact from the seasonable flu. Know know what we think we , it looks like the impact in the u. S. Would be in that range of maybe 75 billion to 80 billion. Alix and what about in china . Chuck china is a really big one, from all of the satellite data we have been looking at. We moderate her we monitor things like heat plumes from factories because we cant really trust a lot of the data coming out of china, but it looks pretty bad. Theyve essentially been shut down for over a month in industrial capacity in the major producing regions. See 500 billion to 700 billion impact in china. Compare that to the earthquake that was about 180 billion. Thats 5 of their gdp. So a 5 hit to the china gdp just has cascading effects to the Global Economy. In the u. S. , based on what we are seeing, particularly the news that broke over the weekend that it looks like this has been spreading in the u. S. For maybe six to eight weeks, the good nobody that is that really noticed because it looks so much like a seasonal flu or cold. We are thinking 75 billion dollars, 80 billion in the u. S. , maybe 3 of gdp. Alix does your modeling suggest shaped, ushaped, or vshaped recovery . Chuck that is where it gets into the real speculation. If you look at q4 of last year, we were already seeing declines in the percent of gdp related globalization. Because of already, trade wars, brexit, u. S. China trade, the globalization share of gdp was decreasing. That may continue with this. That is not necessarily a bad thing, particularly for market stability and overall Global Economic stability because we dont want to be dependent on single sources for things like iv tubes and masks and that sort of thing. I think you may see a bit of a q2, early q3, but overall this year, i saw the oecd forecast, i dont think we will hit 2 Global Growth this year. I think it will probably be more like 1. 5 . But the kinds of growth we will see may actually be more productive in terms of stability. Alix can you talk a little bit more about that, in terms of what we will see from the government and reaction that may be different than other natural disasters . Chuck for one thing, if you look at this, a normal disaster, you have a lot of infrastructure damage. Theres no infrastructure damage from this. Most impacts are likely to be Service Sector type things. If you think of your own personal dealings, if you need a it this may not buy week, but that still means you need it next week. If i dont go out to dinner this week, im not going to go out to dinner twice next week. But in terms of things like Decisions Companies are making, decisions consumers are making, do you really want to be dependent on china as a source . I think this has a lot more longer term implications for the chinese economy in terms of longterm goods. May be, you dont like to think in terms of good news for somebodys bad news, but in terms of local production , this could be actually a good wakeup call, and we may see some good come out of this in terms of overall Global Economic resilience in terms of the ability to resist future events. Alix really appreciate your perspective. Chuck watson of Enki Research, thank you. I want to update you on a headline that crossed. The Vice President of the ecb is speaking in london, and says the ecb will closely monitor the data and stands ready to adjust all instruments as needed. Lastber last wednesday, thursday, he also said that overreactions can have bigger impacts than the virus itself, so smoothing out the conversation on the edges. Still with me onset is Sylvia Jablonski of direxion. We talked earlier about what people are moving into for safety. What about people taking on risk . Sylvia you have to look at the market and try to assess what would benefit and what will hurt the most. Right now, what is getting hurt the most are things like high anythings, technology, that requires some sort of relationship with china and the supply chain there. What we have seen is some traders go in and take their spots on those cycles, shortterm views, so for a day or two or three days. We got some news that manufacturing has slowed down in china. That comes into china. So what are the names that can go down . It can be technology, semiconductors, china, and it will take shortterm tactical trades. In the longterm, i think traders are looking for flights to safety. Etfs that combine utilities, treasuries, gold. Basically, assets that are noncorrelated and allow you to participate in the market over the longterm. So they do get some kind of yield over time. They are not correlated to equities. , i know youing is have been talking about this on bloomberg, but people could be surfing the web, shopping through the instagram platform. Thats but a name that has been beat up, so if you look at the communication sector, you might see some flow into there. I think generational trades exist now, so some of the names i mentioned that people are technically trading on the bare side are also single stock names on the both side for a longterm hold. Namesr big super tech that have move markets forward for the last decade are now on sale, and you could benefit from that. Alix are you seeing anyone take on any risk . Sylvia we have definitely seen 200 to 300 change in 20 day average daily volume and some of we do seeunds, so traders going long. S p 500 is three x long is 3x long. Alix do they trade out . Sylvia they do, but they are shortterm products. They are holding that for a couple days on some positive momentum perhaps the fed with its supportive messaging. We got some news that the factories in china were back up and running. Things like that tend to bring positive momentum. Overall, general trading population, it is definitely a flight to safety. Benefit from could people being at home right now and not necessarily those high beta trades. Alix so great to catch up with you. Right having you onset. Sylvia jablonski of direxion joining us there. I want to give you an update on headlines outside the business world. Ritika gupta is here. Ritika the field of democratic president ial candidates just got smaller. Pete buttigieg has dropped out. Racegieg won the delegate in the iowa caucus, but couldnt attract the support needed to win the nomination. Joe biden is hoping to keep the momentum into tomorrows super tuesday primaries. On saturday, he was the winner in South Carolina. The u. S. Is waiting to see if the taliban will live up to the peace deal signed over the weekend. At agreement is aimed winding down the war in afghanistan. President trump says he plans to meet with the taliban leaders. Secretary of state mike pompeo says he doesnt know when or where that happens. Plus, he wants to see if the treaty holds. Turkeys president erdogan has crisised a border in europe. Turkey told millions of migrants seeking refuge in europe that it wont stand in the way if they want to leave. Thousands of them flocked towards the greek border, where Greek Security forces were trying to hold them back. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Alix thanks so much. Coming up, ipos on hold. We will discuss that next in wall street beat. Plus, check out tv. You can watch us online, click on charts and graphics, data through and rewatch anything you may have missed. This is bloomberg. Ritika this is bloomberg daybreak. Hour, adamn the next jonas, Morgan Stanley head of global auto and shared mobility research. Ritika this is bloomberg daybreak. Is calling itia quits after little more than five years running the Finnish Network company. He struggled to gain a foothold in the allimportant fifthgeneration market. Nokia is now exploring potential asset sales or mergers. Barclays top shareholder once Ceo Jes Staley removed from the board. Cherbourg investors says the situation around staley is now a circus. Investigators are looking into his relationship with disgraced financier and sex offender jeffrey epstein. Elliott management once twitter to have a fulltime ceo. Bloomberg has learned the hedge fund has taken a roughly 1 billion stake in the company and nominated for directors. They are concerned that Ceo Jack Dorsey his time between twitter and mobile payments platform square. Im ritika gupta. That is your Bloomberg Business flash. Alix thanks so much. We turn now to wall street beat. First up, virus turmoil hits david einhorn. Greenlight capital extending declines, falling 3 from the market plunge. And ipos starting to cancel. That is according to a reuters report. Joining me is bloombergs sonali basak. Lets start with david einhorn. Sonali 3 is bad when you take it in consideration with his peers and the rest of the year. 3 decline bring some down more than 10 for the year after a big rise last year. Thats a problem for david einhorn. The rest of the managers could say that in a tough time, they are able to hold up. Like like steve hupp steve cohen and the rest of the pretty strong,t which is a problem for steve einhorn. I to visit him in general and een people that have b making large, concentrated bets fared well. Is cana of a hedge fund they hold strong in this market . Alix i wanted to talk to you about what you are hearing about what the wall Street Market is like for anything. Sonali my sources are all saying it is not a complete disaster yet. While they have delays, they dont have cancellations of ipos. The question is when. We dont know when the market is going to get better. It has is the highest been in years. There are some big names beyond warner and coal hahn that can suffer and cole haan that can suffer from these issues. Alix stay with me because we will talk more about what is on the street here with dale head of, bain co. Americas. What do you notice in the market . We had that deal from gilead today. Dale i think the most interesting thing, i noticed in the last segment the number of times you used the words uncertainty or instability. I think that is important. A buyer and seller needs to be pretty closely aligned on what they think cash flows are likely to be in order to get alignment around what evaluation is. As long as we are talking about uncertainty and instability, it allows the buyers to be far apart, whereas in this circumstance, it is only this far apart. Aboutk as long as we talk uncertainty and instability, we will talk about friction in the ipo market. Itcredit,saw into happen we saw into it we karma happenedit with a mixture of cash and stock, which confused people. Dale there is still a lot of cash in the marketplace looking for an investment or return home. Continue . That credit spreads have been blowing out, for example. Then the cash is needed somewhere else. How do you see it playing out . Its hard to know in this instance. It would be easy for us to look foolish for to eight weeks for foolish four to eight weeks from now. We dont know how this is likely to play out. Sonali what i heard from you is that people are using this as an opportunity to buy. Credit karma was an ipo candidate and ended up being a better deal for intuit at the end of the day. Is it a good idea for some companies to buy . Dale i wouldnt rotate on the news coming out yesterday or today or even tomorrow. Before company a buys company b, typically those Leadership Teams have been in conversations for 9, 12, 18 months sometimes. Trend be tricky to over on what we have been hearing today because these deals have been in the works for a long time. Sonali how do you use the money you have been sitting on . Dale what we are seeing in the marketplace is a mixed shift in terms of the type of deals companies are pursuing. Instead of going after what we think is a traditional scale deal, where i am buying a company in my market with products and customers i know, what we are seeing is that over the last 10 years, topline growth has been harder to come by, and the types of deals we are seeing are shifting more towards what we would call scope deals. These are instances where a company is buying into an adjacent market, a set of customers or capabilities they know less well, but are highgrowth, or are buying a capability they expect to adopt going forward. Over the last decade, topline growth had been declining for top companies, so what these types of scope deals do is allow r toplineoose thei growth. Those of the deals we are seeing happen more and more, from our vantage point. Elliott and from twitter over the weekend. Elliott has put so much money to work, but activism overall has put money to work in companies doing deals. Activism does activism as an asset class suffer when we see more of this . Dale what is the thesis for that, exactly . Sonali well, there is so much more uncertainty. Are we worried about more acquisitions, more transactional activity under this uncertainty . Dale i think that is a reasonable thesis. Alix but uncertainty. Dale that is the word, right . Uncertainty and instability. Alix i mentioned gilead earlier , performing well because it has a potential treatment vaccine. Any sectors you feel like are good to go . Earlier aboutpoke the scope deals being the types of deals we are seeing a lot of these days, there are certain sectors where we are seeing a ton of that. We were just speaking about oncology a minute ago. Pharmaceuticals is an area for sure where we will continue to see these scope deals, where companies are buying into new innovations they havent felt themselves. Alix thanks so much for stopping by. Really appreciate the perspective. It is the return of volatility on the buyers fears. That is coming up in todays traders take. If you are heading out, tune into Bloomberg Radio on sirius xm channel 119 and on the Bloomberg Business app. This is bloomberg. Alix time now for traders take. Joining me is damian sassower. Damian im many emergingmarket guy, but evening emergingmarket guys have to look at s p volatility. What we are looking at is the vix curve and what is implied for next year, even with the u. S. Elections. My goodness, what an inversion we have seen. That spreads to all high beta, highrisk Asset Classes like commodities and em currencies. Alix here is where volatility heresruary 10, and february 24, and now fiber a 28. So theres and now february 28. So there is rewriting all across the curve. Damian we were in that sort of stasis for just recently, and now we have kind of blown up. That was the third biggest move we have seen in history. What does that mean . In fixed income land, you see things exploding by 30 . These huge moves are basically carrying over to other high beta Asset Classes, with implications for market involved. Alix opportunities or panic . Damian i think there are opportunities. When you look at currencies like the real, what you see is the five handle coming into play. Do you think that would come into play without the fed . I dont think so. In the peso, in the rand, these are huge moves. Definitely something to keep an eye on for traders. Alix awesome stuff. Thank you very much. Coming up on the program, mark howard, bnp paribas macro strategist. This is bloomberg. Alix welcome to bloomberg daybreak on this monday, march 2. Im alix steel. Lets take it from the top. President trump calls on the fed to act and puts out a statement, saying they are ready to use their tools and act if needed. Im also calling tonight for the Federal Reserve to take action to help out american companies. Alix the markets now pricing in nearly four cuts this year. It seems as though it is part of a coordinated push by some of the worlds biggest Central Banks. We heard the fed statement friday, and japan said they would follow liquidity they would provide liquidity, and followed up by buying 1 billion of bonds. Just by creating a slowdown in china, that will have worldwide impact. Its the oecd slashes Economic Forecast to a level we havent seen in over a decade. The brutal pmi numbers out of china over the weekend signaling that the world factories screeched to a halt. The manufacturing pmi plummeted to 35. 7. We were expecting it to be bad, but this was pretty shocking. Alix oecd also warns of possible contraction this quarter. Mr. Biden those of you who are knocked down, counted down, left behind, this is your campaign. Alix joe biden stages a muchneeded comeback in south tom steyer and Pete Buttigieg dropout. Kevin now it becomes a more narrow field, and it is also increasingly a battle between biden and senator bernie sanders. Candidates prepare for super tuesday, where 14 states vote. In the markets, take a look at where we were, where we are now, potentially rolling over to step it. The s p is down just 0. 4 . We were down a full 1 , so it could be worse. Dollaryen down 0. 1 . This was he still benefiting, but not the top g10 performing currency. At one point, we had yields down on the 10 year by 11 basis points. Now just down by eight. Crude managing to hold up its bid. That is a russia opec story. To break down the bullishness and give you perspective on just how big the move have seen, taylor riggs joins us for more. Taylor it is not the fact that the market has fallen, it is the rate of change. One measure of that is the outflows of the s p. Thestors now withdrawing most since early 2018, when you had the volatility trade that blew up. Investors reversing five weeks of outflows and withdrawing money, arguably going into safe havens. The next chart we have to show the sentiment of all of this is the number of stocks that are declining on the nyse versus the number rising. Out of 3000 stocks that are falling, relative to those that are rising, that is the worst twoday period weve had in this entire bull market. It all comes down to thecall ratio. To the putcall in this case, much more Bear Sentiment relative to some of the bullish sentiment. Alix taylor riggs, thank you so much. Over the weekend, Central Banks over the globe seemingly stepping into a sure markets. Japan promised liquidity and bought etfs. Fed chair jay powell signaled friday they are ready to cut rates. Joining me is mark howard, e p perry barre multiassets passive ,ist multiasset specialist and John Chisholm, Acadian Asset management cio. So what do you do . One of the things we do, we are a quantitative equity manager. I think our message would be dont panic. Stocks are 10 off from where they were or more. Monetary policy is getting better. Theres a lot of easing in the system. We would not the cearley project a vshaped recovery, but we are optimistic about the mediumterm. Got an say if youve investment approach, stick with it. Weve done a study, so weve ,ooked at epidemics, wars events like 9 11, and we had about 2600 different events. What we found is that once you are in the middle of one of these things, you should not sell out of markets. You should not sell out of equities. Generally, you are better off staying the course. If you could predict these things, you could have gotten out. Then the strategy of selling and staying out of the market for two weeks is one that could pay off pretty well. But nobody can predict these kind of shocks. We are looking very closely at the corporate sector. They havent formally come out and said how this is affecting their business, not just in china, but in europe and the americas. What are their customers doing . We will get a hold host of regular earnings this week, and it will be a disclosure not just of the last quarter, but the last several weeks. We also have a meeting out of ge and one out of gm, with huge exposure to china and elsewhere. I think this is going to be important data. Alix Morgan Stanley had a note on how the risk premium crossed a line, where lower yields no longer help. With the 10 kissing that 1 , are we there yet . Is that where cutting rates isnt really going to help the equity sentiment because of it. Clearly, the market is discounting significant centralbank action all around the world. I think it is a sign of the severity of Global Growth that they are commenting between meetings. They may go between meetings. We are going to be watching whether or not there is a fiscal complement. He mentioned italy. People are talking about germany. Obviously, japan is very active. But will the u. S. Be able to pull something together . Of anyink the time recovery is really a function of what is happening with the economy. We know that manufacturers are struggling. Companiesansportation are having a tough time. If this all turns around with and a quarter or two quarters, we are not necessarily going to see a vshaped recovery, but we will see recovery. Alix the question was whether or not the fed cuts will actually work, we had a question about this on the terminal. Is this then we see modern monetary theory, where you have andave some kind of fiscal, Central Banks will basically have to go in and finance it . It is really hard to see how lower rates are going to drive anything. In europe in particular, low rates arent going to create more lending. It may actually impede profitability. I think we are going to see more fiscal responsible. Mmt is hard to predict. One of the candidates is pushing that, but it is not clear the incumbent is going to do that. There may be something different, with more tax cuts or tax referrals. Alix and in europe, like you mentioned, italy with the 3. 6 billion euros and germany talking about it, so it was the budget cap that might be moved or they will let it slide because they didnt know how to handle it. I think the policy is really important. Monetary policy cant help markets where they are right now, but the important factor is also sentiment. Investor sentiment. While things are going to get worse over the next week or so, we will see more cases reported in places like the u. S. , we will start seeing closures of schools or deferral of events and conventions. Alix already happening. My trip got canceled. Meaning it will get worse before it gets better. John hopefully within a month or two, in which case we will be looking at a much better environment. S p i have this chart, the 12 months for dividend yield, which is the white line, versus the 10 year treasury yield. You look at that and say, im going to have to buy. How do we think about the credit market starting to seize up, financial conditions tightening in relation to companies . At some point, can they not pay their debt . What is the transition mechanism . Mark from a credit market standpoint, companies shouldnt be borrowing to pay dividends. I dont know that there is a onetoone leak pitch. What i would onetoone linkage. What i would look at is more earnings itself. We think it is going to adapt further. If earnings are to come down across a broad swath of companies, not just transportation and travel related, but consumer related because the west hasnt seen a viral outbreak that curbs behavior like john was talking about. It is not just the casual tourist. It is business leaders. All businesses around the world are developing plans to work from home, and that is going to influence all sorts of activity. I think earnings are going to be under some pressure. That is going to influence expecting vivid ands going to influence expecting dividends. John this is going to work over the medium to longer term. It is not a great shortterm predictor. Alix thats a fair point. It also reads the question of how do you know value when youre looking at it . How is it value versus a value trap . Energy is a great example having to borrow to pay your dividend. How do you see it . John i think theres a valid point about companies likely having to cut dividends to some stent. Theres a chance we could be in recession at some point here. We are going to see a quarter probably of negative growth. Whether receipt who are not, we will see whether we will see two or not, we will see. You have to have a lot of dividend cuts to make it to a value trap. Mark i would say to your other comment, the credit market has tightened up quite a bit in the short term. In particular, the investmentgrade market has closed for six days. When you see the credit market extended period, that is worrisome. That gets the central bankers attention. However, the flows indicate that will probably open if we get some stability and rates. If we get a couple of days of stability after tuesdays political events, then you could see borrowers come to market and you will see some narrowing in that relationship. Alix do you buy the 10 year at 1 . John it depends what youre investment objective is. If you think things will get better before they get worse, before they get worse. Alix do you still buy them now . John our models, one of the things they look at in terms of sectors is primary market indicators, leading indicators. Right now, those have gotten more favorable for utilities, but they have gotten more favorable for defensive companies in general. Offsetting that a little bit is the valuation. Utilities havent come down as much as some highflying companies. It is modestly more i wouldnt panic and a time like this. Alix are we in for a liquidity shock . Where would you first find it . Mark i think the low end of the credit market is going to file squeeze. Weve seen some very weak results. Thats going to be a bandaid. The secular trend is worrisome. The highend of the low yield market is vulnerable. We seen a number of Companies Already talking with the creditors, so they have workouts in the hopper. More broadly, highyield have relatively light, relation. We are more concerned about private credit market, way down low. Companies that are relatively start up, very small, the dont have a lot of flexibility have taken on debt. , where thes of asia immunization schedules are shorter and the highyield market has blossomed over the last several years, and protections are quite a bit weaker. That is where refinancing risk and Liquidity Risk is. Alix thank you. Dale stafford and John Chisholm both staying with me. Potentially, russia may support an opec cut. More on commodities next. This is bloomberg. Alix the oil freeforall taking a break today. Vladimir putin says that russia will cooperate with open plus for cuts in the market with opec for cuts in the market. Help me understand Energy Stocks. Do you like them . Do you not . What do you do . John in the shortterm, it is a tough environment. Commodity prices normally dont do well in those environments until you see a turnaround. Weve got high volatility. It is hard to see the turnaround right now. Right now, models are suggesting that Energy Stocks arent the most attractive sector. Mark i would agree. You have to look at the shortterm dynamics of resetting Global Growth, but also many investors becoming more esg compliant. Some of them are going to be underweighting energy. This is just a reason to pull that forward. You are going to be fired if you are a Good Growth Company that think itlback, but i is going to be a tough slot for the energy sector. Alix theres two different stories. Ngterms shift towards esg, and the other is if they bounce, they might bounce the hardest. Thisen you look at structural shift, how do you deal with that . It is not just an energy. It is in autos, it is in utilities. Age of sectors are having to redo their Business Models going forward. Mark i look at it from a standpoint. You have to look at who are going to be winners and who is not. We have seen that with autos already, and that will affect the food chain as well. We seen some auto suppliers consolidate, and i think the same is going to happen to energy and energy services. John history doesnt repeat, but it does rhyme. You want to look at what is wellpositioned to thrive in the environment. It might be a tesla. You also have to look at what you are paying for those future earnings. Tesla might do great, but if you are overpaying, maybe you want to be out of autos entirely. Alix i have to wonder if the virus, particularly for the huge multinationals, are we going to look for a more protectionist rhetoric not just coming from World Leaders . Will you rebase because you dont want to be exposed . What do you think . Youre laughing at me. [laughter] mark no, i think it is a big picture thematically that people are wrestling with. Alix especially if you have a work from home thing. I dont have to fly to australia. I can do a teleconference meeting. All of theseand great new telecom systems, with the virus and the worry of being on a plane or what have you come i think that is happening faster. You bring up a great point. Investors are grappling about you know, not just the virus when it spreads into the developing markets, will it change the global acceleration . I think it is a good question, particularly if you see more populists getting elected. Think, if anything, we will see a trend going back the other way. Both the political system, politicians and the erector it and the electorate, realize theres a real cost. People dont want to see Economic Growth come down. I think why we have seen some damage, im not sure we are going to see a big increase from where we are now. A shock likeu see this that is exogenous, it is like seeing the tide go out and seeing whos not wearing their bathing suit. I think that is going to change a lot of philosophy around where you source your components. John i think a lot of firms are worried about supply chains right now, and thinking through how can we improve our supply chains so we have redundancy in the system. I think that will be a good thing. Up, its not this going to be a 2008 stimulus kind of thing, so is it going to do what we think it is going to do . Mark you are absolutely right. Monetary response alix or even fiscal. The it depends how consumer reacts. We dont know how they will react to these harsh constraints on individual liberties. It is one thing for china to impose sharp constraints in wuhan. It is another to try to get california to stop driving or new yorkers cannot do something. It is going to be very interesting to see how the west adapts to that. Alix John Chisholm of acadia and mark howard of bnp paribas are with me. Coming up, we just started talking about that, and we will break it down even more, coming up next. This is bloomberg. Ritika bloomberg daybreak bloomberg daybreak this is this is bloomberg daybreak. A big transaction today in the Cancer Therapy industry. Gilead has agreed to buy 47 in a atl that values the deal 4. 9 billion, and 9 premium to thursdays close. Treatmentsd cancer that harness the immune system to fight tumors. The ceo at nokia calling it quits after little more than five years running the Finnish Network company. Ridge eve surrey has struggled hasain rajeev suri struggled to gain a foothold in the essential 5g. Of the founder and ceo softbank is in new york to pitch hedge funds and Financial Institutions on investing with him. It has also raised risks of this is bloomberg. Drops inaus reporting gaming revenue. Revenue is down about 88 last month from a year ago. Casinos had closed down for 15 days to help contain the coronavirus outbreak, even thoug coronavirus outbreak. Even though they reopened, the crowds havent really returned. This is just one example on how it can filtered through anticonsumer could be hurt. Manufacturing is one thing. Are we really holding up here in the u. S. When you take a look at Something Like this, and how much pain china and macau is feeling . Coming up, a look at how the virus is hitting Global Supply chains, and how all of this plays into the u. S. President ial election. Happy monday, everyone. This is bloomberg. Alix this is bloomberg daybreak. I am alix steel. Here is where we are set up today. S p futures downtown. 8 . Egging up a little steam to the downside. We tried for risk on big a risk on bid overnight but we cannot sustain it. Youre seeing the dax off 1 . In other Asset Classes, the third best performer in the g10 space is the swissie. I did want to highlight what is happening in the bond market. Huge moves, although not as huge as they work an hour ago. The u. K. 10year down three basis points. Pmi not great. The boe says they stand ready to support financial conditions. This is a full on bull steepener. Yields down 11 basis points in the u. S. Traders talked about the 1 level. Lets talk about the krone virus and how it can hurt the u. S. Economy. Michael mckee, look at some of the data so we can get a read on that. Walk us through it. Michael we have very few cases in the United States compared to the rest of the world. You wonder what is the fear in the markets about . Here are some of the things that could go wrong. The biggests interruptions of supply chains. The colors so how much a country depends on china. Brown is the worst. If you look the United States, we are very dependent on goods coming from china. Where did all of the manufacturing go when china in the u. S. Were in the trade war . Vietnam and cambodia. You can see how dependent they are. Japan. Interruptions of supply chains is the biggest threat to the United States. In my continuing efforts to make you like me better, i will talk about oil. Look at what happens with oil prices. Oil prices go down, we see gdp because we go down lose investment in the Permian Basin and other places for they do a lot of fracking. That is what happened in 2015 when we had the peak manufacturing recession. Now oil prices are collapsing along with everything else, all of the other assets. That is something to keep an eye on it means we pull back in investment. Finally, the other big thing people are worried about is demand. The stock market, as it continues to go up, has generally held Consumer Spending higher as people feel more wealthy. Now the stock market is going down and we have seen weakness in Consumer Spending over the last couple of month. People areoncerns afraid to go if we are afraid to go out shopping we will not go out and shop. In china even Online Shopping had a pause. Those are the things we are watching at this point. Things that could interrupt the u. S. Economy. Alix fine, i like you, whatever. How many oil charts johnny to have . How many oil charts do i need to have . Are very strong. The consumers unbelievably strong, companies are strong. We have one problem, we have to get this problem brought into focus. Alix still with me are mark howard and John Chisholm. Do you like the consumer . There is a lot of strength in Consumer Spending. We will have to see a bump in it with what is going on in the economy, with the coronavirus, we are going to see declining consumer confidence, but i think that is going to turn around once we get past this. The question is how long will it take . Mark i think mike brought up a good point, which is shifting consumer behavior. I would point to durables, whether it is automobiles, appliances, those are farther to buy online. They are very deferrable. That can tie into the employment picture. The consumer in the u. S. Is all about employment and theyre feeling about future economic activity. We get payrolls this week. I do not think that will be a leading indicator. I think next month in the month after after Companies Announce how they will adapt, that is when they might start to see a change in payrolls and employment activity which could affect spending later. Alix i brought up a chart talking about how sentiment, how you feel going forward. It has held up well. If you see the spread like we did in china, how many businesses will afford to be able to pay their workers when they are not working . The different productivity, how can you get some of that back . Mark a lot of people can work at home today, but at some point it will impact productivity. If youre running a manufacturing plant you cannot work from home. Alix i cannot work from home. I do not have a set on my computer. How do we get productivity backup . Everyone expects the virus to turn the corner when the temperature changes. Normally when you have a shock, whether it is an oil shock or iteris stock or Something Like that or a terrorist shock, the consumer does come back. As long as the wealth effect in their 401 k and elsewhere does not get obliterated too much. The other thing is confidence. I think confidence will rebound. All of the political noise could create a depression on confidence because therell be a lot of backandforth. John i add on to the supply chain question. Different companies will get impacted differently by this. Some companies have a lot of manufacturing or a lot of intermediate goods and places impacted heavily, and others are much less impacted. If you are an investor at the stock level, it helps to understand company by company what is happening, what is the impact going to be on that particular company. Alix that comes into President Trump last week talked about the middle income tax cuts. That has been in the mix to support the economy. How do you translate that into the political landscape. You mentioned all of the noise. We will hear a lot of stuff along those lines. How do you filter that . I am not a policy expert, but i want to point out how the house responds to any proposal the white house may bring forward, because it will be fraught with political implications. It will be an interesting tugofwar as the administration drives to do things to stimulate growth, but it may be seen as trying to buy votes and i do not think the house will take to that kindly. John it will hard to pass any kind of major taxcut regulation. This does not seem like a likely outcome. Alix you need to hedge the election and trade around it . How do you do that . John we need more information. We need to see who the candidate will be on the democratic side. We need to see how they are supported by the rest of the sanders, it is mr. Whether he moves to the middle after he solidifies his nomination as many people believe he will move somewhat to the middle, bringing his voters along to try to have the best chance of grabbing some of the middle voters. In that scenario, particularly if the senate stays republican, i do not think you have to hedge. If there were to be a swing, that would be a game changer. Most market participants, if it looks likely we will see president sanders, they would regard that is a negative outcome relative to the alternatives. We first have to see if sanders wins the nomination. I would say today it does look likely. If you are looking at the probabilities, you would say yes, he is likely to be the democratic nominee. Alix what i find difficult is health care is one of the three sectors where youve not seen much downward revision. Gilead has done well. That is the sector that will get hit the hardest if the market starts pricing in a sanders when. A sanders win. You have to sell winners . Where you put your money elsewhere . It is not just health care. There are many other sectors affected, for jiggly if there were a wealth tax. Particularly if there were a wealth tax. Investors will be looking at decline in corporate profits to diminish Growth Outlook and how to position those sectors that are the safest, that have healthy dividends. As you pointed out earlier, the decline in yields will force people to look for yields elsewhere, and the big dealers in the equity market, particularly given the gap shown on the screen, that will draw money and that is how investors will be able it is only in september and october you start to see real adjustments based on policy pronouncements. Alix what is on your Shopping List right now . The one thing youre are focusing on as you come in . John if you have a process, stick with it. Right now our process is telling us that over the medium to longterm equities are attractive. Sovereign debt over the medium and longerterm term looks unattractive. Therell will be some volatility along the way. In terms of sectors, the more defensive sectors have got more attractive over the last few weeks. Mark i look closely at the primary credit markets because that is a sign of helping the broader Capital Markets. The freeze will continue for another couple of days. Once it reopens, there should be generous concessions for many investors. That is why i think therell be interesting opportunities to own high quality debt at wider spreads and with new concessions. Mediumterm, i will be looking at the dollar. The u. S. Capital markets have been huge beneficiaries of inflows. If by some combination of factors the dollar meekins the dollar weakens measurably, i think some of those International Investors may move to repatriate. Alix great to catch up with both of you. Mark howard and John Chisholm. I want to give you an update on what is making headlines outside the business world. Ritika gupta is here with first word news. Ritika americans are grappling with the possibility of a widening coronavirus epidemic. New york city reported it its first case of the disease, a woman who contracted it while traveling in iran good china says its total numbers of infections has risen above 80,000. South korea has more than 4200 cases. The field of democratic president ial candidates got smaller. Pete buttigieg has dropped out. He won the delegate race in the iowa caucus but could not attract the diversity needed to win the nomination. Joe biden is hoping to keep going into the super tuesday primary. Saturday he was the runaway winner in South Carolina. President turkeys erdogan has declared a border crisis in the european union. Greece has declared a state of emergency and quit accepting applications for asylum. Key told millions of mylan millions of migrants seeking refuge in europe that it will not keep them from leaving. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am ritika gupta. This is bloomberg. Alix we do have sat breaking news. Cnbc is reporting that jack welch has died at 84. I cannot tell you what a loss that is for the business community. Ge,as ceo for decades at started at the helm in 1981. He started working at ge in the 1960s. He was an engineer in massachusetts and worked his way up to become ceo, where he was for many decades and left a big legacy. Cnbc reporting jack welch has died at 84. A true loss for the business community. This is bloomberg. Ritika this is bloomberg daybreak. I am coming to you live from the principal room. Coming up in the next hour, lori calvasina, rbc capital head of u. S. Investment strategy. This is bloomberg daybreak. Is making a highstakes gamble on the 737 max. It has gone in a hiring spree to make sure it has enough workers in place when it resumes production. About 700 and 30 have been hired about 730 have been hired. It plans to restart the factory and a couple of months. The Company Hopes regulators will lift to the grounding order on the plane by midyear. Activist investor elliot management wants twitter to have a fulltime ceo. Bloomberg has learned the hedge fund has taken a billion dollars state in the company and nominated more directors. They are concerned jack dorsey splits his time between twitter and square. The two sides met on friday. Dorsey did not take part. Harley davidson needs to find a new ceo. The chief executive unexpectedly stepped down on friday. He parted ways with the board after 26 year career at the motorcycle maker. During his five years as ceo, harley lost half its market value. Am ritika gupta that is your Bloomberg Business flash. Alix time for bottom line. We focus on Companies Worth watching. Today we will drill down into autos. Joining me now is adam jonas, Morgan Stanley global head of auto and shared mobility research. If you want to know what is going on in the Auto Industry, he is the one you have to get the answer from. Where are we on sale . What is overpriced right now . Adam working with our colleagues in asia and globally at Morgan Stanley, chinese production we expect is on the telemetry to get back to normal sometime in mid to late march. That could present component supply problems into the spring and early summer season. Disrupts int supply our u. S. Forecast over the next two months. That said, the impact on demand, which is more unquantifiable, is what we are looking through right now, whether it impacts consumer sentiment, auto credit, willingness to lend, that kind of thing. That is what we are much more concerned with on the demand side rather than the supply side. Alix is there any Company Better positioned to handle this when others . Handle this than others . Adam we are working through that right now. In terms of supply of complete vehicles from china to the u. S. , it is really not a factor. The Auto Industry is so diversified, at this point it is just degrees of how much you are hurt. Everybody is exposed. The answer your question as there is no auto company that is invincible to this. The conversation two weeks ago was automakers shifting toward ev, mobility, etc. Does this crisis change or delay . What does it do to the transition . Adam we do not think it has effects on the transition. You need help in open Capital Markets. You need tens of trillions to of dollars to fund the slipping off of liquid fuels and into electric vehicles. I do not want to say that is not a factor, but in the near term and mediumterm we think it is forces of technology, battery and curve, the urgency climate orientation of the companies and investors is driving us. Aboutwhat did we learn the test lows of the world in relation to virgin the teslas of the world in relation to Virgin Galactic. You can say it is fun to get into and talk around but they do not mean anything. That is not true. We have learned tesla is not going anywhere. Is there something to the narrative that we missed . ,dam Building Public support building Capital Market investor support for the formation of our countrys great projects, whether it was the electric utility grid in the 1890s, u. S. Highway act in the 1950s, henry thes horseless carriage in 1900s, all of these things can have the impact of getting caught up in a bubble type mentality. We think you have both going on at tesla and Virgin Galactic where you have real economic and Capital Formation with changing ecosystems. We are seeing history take place before our eyes. And that kind of high velocity orculative retail professional oriented trading environment we are creating, we are seeing some of that speculation happen at the same time. Alix i also feel like what it does is it brings into the conversation cap. We are not it brings in tech. We are starting to talk about google and amazon and how that filters in. You go to ces and a lot of them are talking about ships and evs chips and evs. What you make of that . Adam we think the pace of eb adoption only 2 of vehicles made today are electric. To get to that 5 to 10 penetration, we think youll be tesla, foxconn, the battery companies, google and apple mandates to be the os of the cars, the internet of cars, that case of innovation and Capital Talent is what will take us here through the lens of a city and a micro fleet or an uber or lyft on amazon. That is something investors have finally realized this will not move to toyota, but the pace of the Tech Companies that needs things to get on board. Alix if im an investor, what do i buy . Adam lots of things to buy, including tesla. We downgraded tesla because we thought it is overvalued relative to the rest. We have a price target of 500. We are not in the business of telling investors to buy a stock that has a 35 downside. Our message to investors is this. If tesla does the things to justify at 650 price target, and no more, no less, it will lead to enormous Capital Formation up the chain and downstream joint battery companies, Silicon Semiconductor companies, electric motor manufacturers, charging infrastructure, mining, the entire ecosystem including moving the earth, electrons to get into the car, it will come down for the ride. Alix what about the traditional car Company Landscape or suppliers . Adam it depends on your upside and your risk tolerance. There are many Auto Companies trading at 1 or two per at one times or two times eva. Ebita right now. They do have capability to make highquality vehicles at scale. They can partner with the lg and samsung. Alix the battery guys. Adam they can work with apple and google to do the operating system for the car. Working with lg and honda, these kinds of things could present a formidable competition for the likes of tesla. We think they will get various levels of Government Support and they will develop capabilities. Alix great to catch up with you. Always great to chat with you about ev and cars. Adam jonas. To follow up on some of the news we have brought, reporting shows jack welch has brought has passed away at age 44 at age 84. He became ceo of General Electric in the early 1980s. Joining us is Brooke Sutherland of bloomberg opinions who covered ge for many years. This feels like a very big loss for ge, whether or not you feel how ge wound up, huge changes happened under his tenure. Brooke at one pointwas the opinion me of managerial later,nce, and then given the challenges ge faced, some of those decisions did come under scrutiny. He significantly expanded ge and pushed it into a variety of businesses, whether it was finance, media, it was at one point the most valuable American Company and that has to be part of his legacy even if we question some of those choices in retrospect. Alix a huge loss for the business community. Can you talk about the company that became ge, from 1981 to 2000, where did it go and where did it end up . Brooke it was a conglomerate. It was the beall, and all of conglomerates. They had their core businesses of aviation and power but they were also immediate. They owned nbc. It was one of the biggest companies. They came under significant scrutiny when we came in to the financial crisis and saw ge dealing with the fallout of that, having to cut its dividends. That was under jack welchs successor. He change the face of this company. It has been dismantled over the years as many of the purchases he made later undone and sold off. It is interesting this unfortunate event does come on the day when one of the biggest ge bears is upgrading the stock to a hold. Assign some of the more recent troubles are starting to be put behind the company. Outlook needed to get mores perspective on ge. What is your biggest take away from the kind of manager he was . Brooke it was all about operations. All about doing things by the number and making sure this is a company that ran as well as it could. It was interesting that at the end of the day, there was a loss of focus on the daytoday operations that led ge down some of its difficult paths. Alix thank you so much. Brooke sutherland of bloomberg opinions. Jack welch, the former ge ceo debt at 84 years old. Dead at 84 years old. Awesome internet. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] jonathan from new york city for our audience worldwide. Im jonathan ferro. The countdown to the open starts right now. Jonathan searching for a bid after a monster weekly loss. Breaking the resolve of central bankers ready to act. The latest data shows chinas economy grounding to a halt. 30 minutes until the opening bell. Good morning, good morning. Monday morning price action all over the place. We are bid again, up 11 points on the s p, positive. 33 . Against the. 9 dollar and a monster bid into the bond market. Yields lower on tends by six basis points. Your yield below 1. 1 . Central banks ready to step in. Given the coronavirus, we are not about to see a drop off in liquidity. Jay powell sing the fed the fed was prepared to do something. Should and most likely will respond