Ease concern over coronavirus. 1 10 year yield falls below for the first time in over 150 years. Uncoordinated action. Other g7 Central Banks are yet to follow suit, though expectations for the central bank of canada, japan, and korea and furtherrowing to fall. Scott meinhardt said u. S. Equities could slump another 15 but a surprise come back for joe biden on super tuesday cease turn positive. Speaking of the biden news, we are getting a breaking headline on the bloomberg terminal that joe biden has won the Texas Democratic president ial primary, state that was expected to show strong support for Bernie Sanders, has gone instead for joe biden according to the associated press. Of super tuesday for joe biden. A contender who had almost been counted out after the initial caucuses, coming back in a big way after getting endorsements from Amy Klobuchar and pete buttigieg. Matt, lets go from the United States politics to Money Management in the u. K. Breaking news on the uks largest manager of assets in the u. K. , pretax profit missing estimate by a little bit. Pounds, the estimate was 2. 23 and the fullyear operating profit, 2. 13. They are confident they will deliver growth into the future. Yountion this on a day when would have expected them to talk about the big picture in the markets, but i mention this because we will be speaking to ceo afterand general seven 30 u. K. Time. With all of the nervousness around coronavirus, a great voice to have on the program. Just an hour from the start of equity trading in europe. Futures, green arrows here in european futures. Stronger green arrows for u. S. Futures than we are seeing across europe. Maybe it is a risk on day for the u. S. After the big drops that we saw yesterday. Equity indexes, plunging along with that bond yields. What do you see on the gmm . Anna in europe, we missed out on a lot of the drop yesterday on the u. S. Markets so perhaps the u. S. Markets have more to claw back, more risk on today. A volatile session in asia, a mixed session in the asian market, the msci asiapacific up. 2 . The australian markets, down, 2 . Kospi up a lot of diversions going on to do with the way the individual economies will be affected by coronavirus and the way authorities are responding in each place, but we have seen through thepetite Asian Session and more appetite for some emerging market fx. Itthe other side of the gmm, seems to be in the rate sovereign bond space we are seeing readjustments last 24 hours. Sovereign bonds in the Asian Session, appetite on the shorthand, the twoyear, five year horizon for sovereign bonds and yields coming down. Is there an expectation Central Banks will follow the fed lead . Aboutsia was talking preparing eight stimulus packages. Lets leave the markets there for a moment had talked about what we have seen in the last way for hours. Delivers an emergency rate cut, one chair Jerome Powell said had to happen amid concerns around the impact of the coronavirus on Economic Growth. Here is how central bankers have responded around the world. What really matters is not the epidemiology, but the risk to the economy. We saw a risk to the outlook for the economy and chose to act. Bank of englands role is to help u. K. Businesses and households manage and economic shock that could prove large, but will ultimately be temporary. Coronavirus has turned out to be a global problem. Is soed for coordination much more. The bank will take all necessary steps to support the u. K. Financial system consistent with statutory responsibilities. Further rate cuts is another option available. The other option is in terms of supporting the markets by liquidity. We dont think we have all the answers, but we do believe our actions will provide a meaningful boost to the economy. Anna lets get into the markets. Central a selection of bankers speaking before and after Jerome Powells announcement around the feds emergency rate cut. Kuba, laura cooper is with us on set in london. Last 24 take in the hours. The question of the day, how do assets price central bank impotency or is it too early to say that was demonstrated yesterday . 50 basis point rate cut from the fed and the market sold off. For many, that made the fed look fairly impotent. Laura i think the capacity of central bank to stimulate the economy, the limited capacity is more of a secondround effect. What we are seeing now is the shock and all of the fed and markets trying to digest that. Yesterday, there are two ways of reading what the fed did. Were they too dovish . Did they spook markets . Was it seen as desperation, too much too soon . Anna because of the timing. Laura exactly. Markets are positioning for coordinated policy action. It came shortly after the g7 statement. Come out without other support, that spooked markets, as well. Matt is the concern here that the fed is signaling to investors how dangerous the situation is . In terms of supply chains, in terms of people unwilling to travel . Is the market seeing this as a sign that the u. S. Is going to fall, could fall into a recession by the end of the Second Quarter . We sawi think thats why the Market Reaction we did after mondays rally because fed chair powell in his press conference did highlight the fact that fed policy is inadequate in its own, itself. It needs Additional Support from the fiscal side and is cant impact the supply chains. It certainly cant provide the stimulus needed in the current context. That being said, Monetary Policy fed work with a lag, so the is likely trying to get ahead of the situation and that is likely why they saw the need to act financialand conditions tightened quite sharply over the past seven or eight sessions, so the fed saw the need to act. Financial conditions have this is nowain, so putting pressure on other Central Banks to follow the fed and markets are certainly priced for that expectation, so the bar is quite high. See u. S. Eresting to futures tick higher. That because, is the markets are saying we overdid it yesterday, we shouldnt have been as spooked as me we were . We should be thankful, or is it because we are getting the results of super tuesday and joe biden is looking stronger than many had expected him to . Is that what we are seeing . We are seeing political risks unwind in terms of biden taking over. He is a market friendly candidate and that is likely dominating the current move. It is likely we will see other Central Banks coordinate and that is providing some risk on sentiment more broadly. Will telloming days us how markets are interpreting this and whether or not we do see other we will not central bankers have the bazooka we saw from the fed. Matt laura, thank you for joining us. Laura cooper, joining us from the mliv blog. Get her work and the work of her colleagues by typing mliv on the bloomberg terminal. Next, we will take a look at stocks to watch this morning at the open. Sensethere will be more of individualism in todays trade, certainly more than xorerday at this time as plans to sell to a french insurer. Fascinating story for the family, for sure. This is bloomberg. To theill connect european open. 45 minutes until the start of cash equity trading in europe. It looks as if we are seeing a bounce at the start of the trading day. U. S. Futures point higher as they unwind some heavy selling we saw in the latter part of the u. S. Lets get a first word news update in london. Update on the coronavirus. According to reports from around the world come over 50,000 people have now recovered from the virus or been released from hospital as the total number of infections has risen above 93,000. At least 80 of cases are mild similar to regular feeling flu. Japan said the Tokyo Olympics could be delayed until later in the year amid concerns the coronavirus could cancel the games for the First Time Since world war ii. May is the latest the decision could be made. Right now, plans are proceeding. Bernie sanders won the biggest prize of super tuesday, california. Joe biden staged a strong comeback, winning nine states including texas in one of the biggest upsets of the night, biden one thing massachusetts. Sanders had been expected to win their. 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. Matt laura write with your first word news. Or stocks to watch from around the newsroom, annmarie hordern, joe easton is covering dialog semiconductor. I guess more money, cashes in. Annmarie on the heels of a mass with fiatassive deal chrysler. The billionaire in italian family, investment deal. They are selling their reInsurance Business, about 9 billion in cash. Really about diversifying but we have seen these insurers pressure,res under Interest Rates lower for longer. They are getting some more cash, so watch exor at the open. Anna well also watch dialog semiconductor. Guidance for firstquarter revenue between 220 to 250 million euros. The market was looking for around 250 so the 220 lower end of the guidance is likely to be seen as negative. He also reported a 23 slump in net income in the Fourth Quarter , so it is pretty much a negative report from the semiconductor company. Unsurprisingly, they note it is mainly due to the coronavirus. Certainly not the First Company that has been talking about the virus from that sector. We saw Microchip Technology in the u. S. , 80 weak demand in china. The report came out a few days ago and the sector has been one of the underperforming among the many that have slumped in recent weeks, so keep an eye on that sector following the report from the German Company today. Thank you very much for joining us. Get the latest stock stories from our Equities Team i typing first go on your terminal and get the first word news on your mobile app. To stemhas cut rates the Economic Impact of the coronavirus but the emergency move seemed to unnerve markets by signaling it is unclear how long the outbreak will last. It either spooked markets because it shows the u. S. Economy is in more trouble than they thought or it shows that the fed was the only g7 body to react after a Conference Call from which we expected coordinated action. Joining us, the Global Market strategist for jpmorgan asset management. What is your take away from the fed cut . Spote fed were in a tough because they didnt get the Market Reaction they would have wanted in equity but had they not done anything, you could have been looking at a worse day on the stock market front. They decided to move early and aggressively. I think the market is also telling you as jay powell did that this is a question more for fiscal policy than Monetary Policy, so im not writing off Monetary Policy. Tore are helpful elements more supportive Monetary Policy in this scenario, but it is the targeted fiscal measures that we will need to see more before the market regains some confidence. Anna one of our colleagues writing on his blog, it is calling an electrician and asking him to fix your leaky faucet because you are asking the fed to do something that isnt quite their job. But they dont have the whole story. What is the whole story . What sort of macro measures should we expect from the u. S. . Indonesia is talking about preparing eight different types of stimulus packages. I think we can take france as an example in their announcement yesterday. Will havehat they public backing for loans for small to medium sized enterprise in france to get money flowing through the system. At the moment, this is all about trying to effectively prevent job losses and take a shortterm economic hit to the Balance Sheet of the government rather than the Balance Sheet of the corporate sector. You want to see loan forbearance , tax credits, for example, ways in which employees can continue to see some elements of income if businesses are shutting down on a temporary basis and when the bounceback comes, whenever that may be coming you want businesses to benefit from that, rather than feel too much of a strain in this period are we expect activity to slow. Financial conditions in are tightening substantially so the fed cant print a vaccine to if there is a supplyside problem and Central Banks cant affect it, they need to worry about the demandside problem that follows. There are tightening financial conditions, they cant be restricted. They have to come down, right . The you expect them to come down further . I think that is quite likely. Whether that is at the march meeting or they will hold back ammunition for later in the year, im not sure at this stage, but i think there will be further steps taken and the fed wont be the only bank to move. Our eyes will be turning to the ecb and bank of england, in particular as to where the move goes because the currency is the one to watch. We saw strength in the euro yesterday and the ecb will be kurt particularly concerned if they arent following the fed and seeing a stronger euro pressuring European Growth and they will feel they need to act, as well. Gh was mentioning public backing for Mediumsized Enterprises in france yesterday, clearly caught his attention as we were talking about other measures that need to be brought in and we have seen the french finance minister saying this morning the fiscal is going to be more effective than monetary in a virus crisis, speaking at the moment in france. We will keep an eye on what is going on in europe and the global story. Next, diving into debt. Investor stock up on treasuries as a rate cut suggest it is unclear how long the Economic Impact will last. We will talk about that next. This is bloomberg. Matt welcome back to bloomberg market the european open. Were looking at 38 minutes away from the start of cash trading, green arrows here although we finished in the green yesterday in terms of the European Equity indexes were as u. S. Equity indexes tanked at the end of trading so now, you see u. S. Futures gaining a little more than european futures are this morning. Concerns about the coronavirus are driving u. S. Debt to record low yields. The tenyear treasury has dropped to below 1 for the first time ever. That as ulysses s grants time in the white house. Emergency rate cut might not be enough to prevent the outbreak from chilling the u. S. Economy. Guggenheim cern cio scott minard says the rally and treasuries isnt over yet, nor is the stock selloff. I see another 15 decline, maybe even more from where we are right now in stocks and when i turn to the bond market, i think we are going to continue to see the fed have to ofe and i think our target 25 basis points on the 10year note or quarter of 1 on the 10year note and 1 on the long bond are almost inevitable at this point. Anna our guest is still with us. We had the view of scott minard, below 1 on u. S. 10 year. A 150 your first. What is the lower bound for that . I dont think we know what that is because i think the market is extrapolating that the fed are going to find it difficult to stop, because in my expectation, the data in the u. S. Is going to deteriorate over the coming months and the real impact of this virus starts to feed through. Of thent seen much weakening in the Economic Data so far in the u. S. And if that data starts to print in the coming weeks, pressure is going to build on the fed to keep delivering more stimulus. If they are perceived to be on the way to zero, there is plenty of downside for u. S. Yields in this. Matt and plenty of downside for stocks. Scott minard is out there with one opinion. Jim bianka says it could drop 20. We could see another 20 to 30 decline from here. I think hes talking about the s p 500, but pes last month for the s p were 20. So if you have declining Economic Growth, if you have rates that are falling further, if you have supply and demand problems, pes should be more like 10, 11, 12, he argues. Hugh to me, for the selloff to find a real floor, you need to see two things. First, a peak in the increase in infection rates and that one, we have to pass into the dont know category. Piece, the market space in coordinated and fiscal policy backed up by Monetary Policy to strengthen. Seee, we are starting to some measures but the question remains isnt as to when that will come. It is more how effectively managed that is going to be, particularly in the european case. Anna thoughts on credit moving away from highyield, more into investment grade, is that the story . Hugh simply, yes because you have the Central Banks in the higher parts of the market. Dont want to need to refinance on a regular basis to be coming back to Capital Market in these periods of elevated volatility. Grade issuers are benefiting from much longer dated maturities, less need for immediate refinancing, so it is unsurprising ig has been better behaved. Anna the publishing business, issuingish europes first bonds in a week. Things have been closed up and now maybe a little loosening. Hugh gimber, Global Market strategist for jpmorgan asset management. Later in programming, we will speak to the st. Louis fed president James Bullard at 4 00 p. M. London time. [ fastpaced drumming ] [ fastpaced drumming ] matt welcome back to bloomber