No huge moves just yet. We will give the market time to digest that. Once again, the bank of canada cutting 50 basis points. A little trepidation given the heating in the housing sector. Lets move to the u. S. Picture. We are getting a bounce today, and you can be sure that Services Data is going to do nothing to do away from that. The Health Insurers are at the top of the pack, up 12 for some of them, this after the super andday results showed Biden Bernie Sanders can for the democratic number nation. The 10 year yield at 96 basis points. We got as low as 90 points in the basis in the u. K. Session. Crude oil bouncing back about 2 . I believe we have a fiveday chart of the 10 year yield to give you an idea of where we have been for the last five days. We will get to that any moment. What is going on in new york, guy . Guy we are up 0. 9 on the stoxx 600. Utilities are leading. A defensive story when it comes to equities today. Feels like a risk on blowout we are seeing. The german tenyear, 64 now. We are down by another basis point today. We continue to see yields going lower and lower. Vonnie for more on rates now post the fed emergency cut, we are joined by mark haefele, ubs chief Investment Officer from zurich. We have another central bank cutting, and not just by 25 basis points. Your reaction to what might be the beginning of a domino effect, and whether this is because the g7 hasnt done anything coordinated yet . Can call it not coordinated, but we have seen not just canada and the u. S. React. We have seen australia react. We have seen japan react. These Central Banks are taking advantage of the low inflation environment to provide some support to these markets, and the history since the great financial crisis has shown that it tends to work overtime. I think after that be digested yesterday, that started to be reflected in markets a little bit. Vonnie do you imagine we will get more cuts from the Federal Reserve now that we are well below 1 on the 10 year . It seems like the market at least is looking for that. What is your outlook now . It is certainly possible to get another cut. Feds movebout the yesterday is that, given the coronavirus situation which continues to unfold, it is very hard for the Central Banks to achieve shock and awe with one move. Those are the two narratives playing out in the markets, making the markets, which is just how bad will the coronavirus situation unfold outside of china versus the willingness and ability of the Central Banks to cut. We would expect continued volatility as that swings back and forth on new data about the coronavirus. Guy mark, what did you make of the fed move yesterday . We had an intermeeting move. It felt like an emergency move. That seems to communicate the idea that we have an economic crisis on our hands, or economic emergency. Do you think that was the right way to communicate what is happening here at the moment . Do you think the fed sent the right message by delivering this . So, instantaneously, people were concerned, but i think over time, it will prove to be the right message. The fed is, in essence, saying that they realize that negative rates are not going to help the situation, and given the low inflation, they are willing to frontload cuts in support. They have that luxury, rather than wait and be back end loaded and potentially have negative rates. I think that is a positive signal overall. At the same time, for markets, if you think about yesterday, you have this fed rate cut at a time where, tragically, theres been eight deaths around the coronavirus in the United States, but it is a relatively small number to date. But we also know that the number of cases as the testing expands in the United States will increase. Those are uncertainties that led to some people to think that maybe the fed knows something that we dont. Is that a little bit there is some good data coming out from the World Health Organization mission to china about what control measures need to be done. We also have colleagues around the globe, particularly in singapore, a nation that has kind of got this under control. I think that it does transmit like the flu, and isolation does work, but it needs to be aggressive. The different scenarios that could play out in the fed leading a little bit here, being aggressive at the start, contributed to some initial wondering about what does the fed know that we dont. Guy that is a conversation we always seem to have. Lets talk a little bit about what is happening with the equity markets. Do you think with this quarter, the low was in friday for the s p . Course, dont know exactly where the low is, but we were in the markets yesterday adding to our equity exposure with optionality. We also bought some u. S. Highyield, in part because we think that the central bank weponse and the fact that have seen signs that containment has worked to a degree in china and some other nations leads us to believe that it is probably too late to be massively selling here, unless some other new factor unfolds. Vonnie where are the correct levels in u. S. Treasuries right now . What would be something you could live with on the 10 year . I feel like theres opportunities no matter what the level. We have to take it. Is of the things weve done , theve been adding in tips inflation protected securities, over the 10 year because we think some of the action in the 10 year is mortgage hedging and other things. That might be an opportunity for people to look at. Vonnie Market Participants anticipating another cut by the end of april. Many looking for something in march. Do we get as far as half a percentage point, or even zero before this is over . Know, i think when some countries have rates below zero, we are in economic uncharted territory yesterday with the 10 year below 1 . For some people, it felt like we had fallen off a flat earth or Something Like that. So anything is possible, but see i think we will aggressive action, not just monetary action. Stimulus ine fiscal different parts of the world as this unfolds, if it got worse. So there are stabilizers that would prevent an unprecedented move of Something Like the 10 year lower. Will the fed do actions if the 10 year continues to drop . Absolutely. Guy let me jump in for a moment. We are just seeing reported now that Michael Bloomberg has suspended his president ial campaign. That is being reported by axios. We will get confirmation of that very shortly. Lets get the latest on what this means for the democrat nomination process Going Forward from here. Kevin cirilli joins us now to give us his sense of what this means. Given what we saw yesterday, is this a big surprise . Kevin it is not a big surprise. Based upon my reporting, what i can tell you is that former new york city mayor Mike Bloomberg had gone into super tuesday hoping to take up a significant number of delegates. That did not turn out to be the case. Behind the scenes, what we are gathering is from Bloomberg Campaign officials, as well as folks who talk to Bloomberg Campaign officials, is that the former new york city mayor is someone who is driven by data, someone who is assessing the numbers, and the math simply does not look to be there for him to be the nominee. He has saidowever, consistently publicly that he will do everything he can to defeat President Donald Trump from getting a second term. In fact, if you look at a lot of these advertisements that had come out from the Bloomberg Campaign around the country, they did outspend significantly former Vice President joe biden, who emerged from super tuesday as the top contender and frontrunner of this race, but that advertisement coming from the Bloomberg Campaign were largely attack ads against president trump. That is largely anticipated to continue. Note,her points i would with bloomberg comes a political apparatus that is all around the country, and that is well positioned in suburbs around the country. If you crunch the numbers, the Bloomberg Campaign was able to win over a significant number of individuals in suburbs all around the country. Those are the key battlegrounds that democrats will need in order to win back the white house from president trump. So there is a case to be made from bloombergs political orbit that he will be able to be influential as it relates to the Party Platform in the direction of the Democratic Party, which was something he had talked beforend weighed ultimately deciding to get into the race. Vonnie will Michael Bloomberg keep spending on the airwaves, even if he has to change direction a little bit . Will he take direction from the dnc on who he should endorse . When will when should we expect an endorsement . Kevin he end his campaign have said publicly that he is very much going to keep his staff on through november and transition that campaign vonnie actually, let me jump in because we are already getting an endorsement. Michael bloomberg is backing joe biden in the 2020 race after dropping out. Kevin that just goes to further show that the biden political organ has been able to unify a large faction of the Democratic Party, in addition to picking up the bloomberg and dorfman. He also gets bloomberg endorsement. He also gets with that a political apparatus in atul graham states and a mechanism of in battleground states and a mechanism of being able to win. They will be able to convince independent voters that they will be able to convince suburban voters to back an alternative to President Donald Trump. Beyond that, he has said he will keep his campaign staff, a large number of officials on through november. The other point i would note here, this is an individual, having served three terms in new york city, with political experience. It is also someone who has emerged on the forefront of the issue as it relates to the Second Amendment and the environment. In addition to creating a political orbit in the suburbs, he also carries with him two advocacy issues that have become and have emerged as a crucial part of the Democratic Party debate, as it relates to the environment and as it relates to the Second Amendment. With that now, joe biden inherits all of that information , all of that mechanism in terms of that he will be able to funnel into his campaign. Guy are things to bloomberg chief washington correspondent Kevin Cirilli our thanks to bloomberg chief washington correspondent Kevin Cirilli. Just to reiterate, Mike Bloomberg suspending his Political Campaign and to endorse joe biden. He is the largest shareholder and founder of bloomberg lp, the Parent Company of bloomberg news. This is bloomberg. Guy from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is bloomberg markets. Evercore isi head of comic research, it of economic research, is a Business Cycle expert. Hes also on the board of the china institute. No better time to have him in studio than today. Thanks for coming. We will get to the election news in just a few minutes. First, we got Services Data betterthanexpected this morning. All is obviously not well. You do hundreds of proprietary surveys on a daily and weekly basis, so you have uptotheminute gdp growth data. What is it telling you . Ed it was really good. The economy has been really good. Now, andtracking china i think the u. S. Economy is going to really get weak and have zero growth in the second and third quarter. Vonnie zero growth, in spite of the 50 point fed cut . Ed right. It doesnt really help the virus very much. I think its going to be really weak, and our surveys, right now they are about 52, zero to 100. I think they will probably drop to 45. Vonnie on china, what are you seeing in terms of overall gdp growth number . Ed up again. We have gdp in the First Quarter bouncing 10 or 20 . You saw there pmi came out. It is just a complete freefall. It was about 30 . I think china is very weak, but things are opening up there now. By the second quarter, it will be a little bit better. I think pmi will probably go up a little bit from this freefall in february. Vonnie wow. Guy good morning. Nice to see you. Do you think claims that the u. S. Are going to pick up . Ed i do. I am bullish on the economy. I see things being very strong, like adp would indicate. Our surveys right now are 52. They were 55. They have come off. But looking ahead, it is hard to imagine that all of the things connected with the coronavirus risk wont impact the economy, just like they did china. In china, it took about three weeks from when it started counting the virus to when the economy really started to unload. I think towards the end of march, early april, i am counting on Something Like four to six months before we get to a point where the coronavirus is starting to recede like it is in china now. Guy how do you see this actually operating on a Company Level . Supply chains clearly are stretched. Theres going to be some sort of effect on the Services Side as well. Do you think u. S. Companies will hang onto labor or start to shed labor, at least on a shortterm basis . Ed i think they will try and hang on. They certainly are so far. Behaviornk it is the you and i have, whether in london or new york, as to what is going to happen. People are going to be not going out as much. That is going to impact the economy. They are not traveling as much. I think it is going to have a real impact. In 2021, i have the economy coming back to about 3 growth. Vonnie assuming everything goes well, what is needed between now and then to bring us out of what you are calling in armageddon Growth Scenario in china, and 0 growth for the next two quarters in the United States . Weve got a Federal Reserve response. What more is needed . Ed we have got to get more central bank easing. April, 25 in25 in march, and then they are going to look and see. If it looks really bad when they get to june, they will go to zero. Everything im covering is pretty obvious. It is just a question of how much you respond. Other Central Banks are responding, like canada just cut, i believe. Global short rates are coming down like a stone. Vonnie are there problems for small and mediumsize businesses . Will we see a wave of bankruptcies or liquidity problems . Ed sure, all over the place. Theres going to be a lot of interest in fiscal policy to try and help companies that have been impacted. That is what is happening in china right now. I dont think getting anything done in the United States, given the election coming up, but likeusly fiscal policy they just did in hong kong would make sense, make more sense if you are cutting interest rates. Vonnie we have a lot more to talk about. He is staying with us, ed hyman of evercore. Guy ok. Still ahead, our exclusive conversation. We are going to be talking about more on what is happening with the fed. St. Louis fed president jim bullard will be with us. Cant wait to hear what mr. Bullard has to say. This is bloomberg. Im abigail doolittle. Lets get a check of the markets at this hour. After yesterdays emergency rate cut, we have a nice rebound now. The s p 500 and the nasdaq here in the u. S. Up more than 2 . At the lows, up 1 . A little bit of uncertainty about the macroenvironment around the various rate cuts we are seeing. The make of canada cutting by the bank of canada cutting by 50 basis point as well. The stoxx 600 up 1 . Take a look at bonds. We have that 10 year yield at 98 basis points, losing to basis points on the day as investors still one in on bonds. When we take a look at the volatility on an overnight chart of the s p 500 futures, this is what it looks like. Lots of gains for the most part. Yesterdays move being bought. Theres a little bit of volatility. It will be interesting to see how the day plays out. When we put this in the context of the longerterm technicals by going into the bloomberg terminal, relative to the last year, you can see some upward trend, but lots of chopped. Wethe gap down last week, see the 50 Day Moving Average is starting to ramp down. Nearterm momentum is in control of the bears. You can see the s p 500 wrestling with that 200 Day Moving Average. Below that level, it signals that recent congestion could be bearish. Finally, a big winner on the day, the health care index, up the most since 2008. Im abigail doolittle. This is bloomberg. Guy from london, im guy johnson. Vonnie from new york, im vonnie quinn. This is bloomberg markets. The bti crude up almost wti crude up almost 8 . We are awaiting Oil Inventories from last week. The market is looking for a build. Just 450,000 of the previous week. We are also waiting on refinery utilization, which was negative last week. Here we have it. We have a build, but not as big as forecast. Oil is rising even more off the back of that. 84,000 barrels last week. Refinery utilization was down 1 . Gasoline inventories showed a drawdown double what was expected, at 4. 3 3 million barrels. Crude up about a dollar now, or more than 2 . Guy lets carry on our conversation