four months in federal prison. stone was convicted in november of lying to congress, tampering with a witness, and of strutting the house investigation into whether the trump campaign coordinated with russia to tip the 2016 election. the sentence is in line with with the justice department recommended after it overruled a longer-term son by the prosecutors. stone is the sixth trump eight or advisor to be convicted in connection with robert mueller russia investigation. todayump administration increased pressure on iran by slapping sanctions on top members of a powerful clerical body that disqualified thousands of candidates from running in this week's parliamentary elections. officials say those targeted were responsible for silencing the voice of the iranian

by rejecting more than 7000 candidates. the u.s. special representative for iran says the iranian people know that what is going on is political theater. >> it is a republican in name only. when the government disqualifies half of the candidates running for office. millions of iranians had decided to stay home. they know they don't have a genuine say in the process. they are asking for a free and fair process where they can share their views openly, without the fear of being marginalized or massacred. added the sanctions have what he called a practical effect, and a symbolic effect. israeli prime minister netanyahu says he is pushing ahead with the construction of 5000 new jewish homes in key areas of east jerusalem. he made the remarks while touring a neighborhood where the homes are planned on some of the last pieces of land linking the palestinian areas of the west bank to east jerusalem. critics say additional building could cut palestinian residents off from the rest of the west bank.

global health officials are calling for nations around the globe to boost funding to fight the coronavirus while the outbreak is still mostly confined in china. the head of the world health organization says he is surprised that his response to his call for six and $75 million in funding has been limited. he says it's a sign that countries are not treating the outbreak seriously enough. 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. i'm mark crumpton. this is bloomberg. shery: live from bloomberg world headquarters in new york, i'm shery ahn. amanda: live in toronto, i'm amanda lang.

we are joined by our bloomberg and bnn bloomberg audiences. they: morgan stanley making biggest acquisition by a wall street firm since the financial crisis. the bank agreed to buy discount anchorage -- brokerage e*trade in an all stock takeover. risk off in the markets. stocks tumbling and bonds sinking to their lowest level in three weeks. one strategist says there is a correction ahead. that conversation, coming up. and the gloves are coming off for the 2020 presidential contenders. highlights from the democratic debates as we look ahead to nevada and south carolina. amanda: quick check on those major averages. a little bit of a change in tone today, off record highs, and a sharp decline in the middle of the day. downdraftsaw a sudden for stocks. could be algorithms, fears of coronavirus.

there is a broad look at the markets. is still&p 500, tech leading the declines, communications right behind. past thoseake you big techs that weigh in on the averages come over to the chip stocks. some of the biggest names are startlingly off. down 3%.ia, all that could be a closer look at coronavirus. some morning about how long this lasts, and how disruptive it is. ofry: we are seeing all these move because of the uncertainty of the coronavirus, including those safe haven moves in gold, the dollar jumping. what is interesting is we are not seeing that crowding of haven assets in the japanese yen. in fact, seeing the biggest two-day loss in 29 months. dollar-yen breaking out of that

long-term technical downtrend that has been in place since the middle of 2015. there are perhaps a few reasons, some concern over a potential recession in japan after fourth-quarter numbers. this is even before we had the coronavirus breaking news flooding the markets. we saw the economy slowing down the most in's 2014. also seeing some short covering and a plot of local cash leaving the country for better returns. we have tons of corporate news. morgan stanley agreeing to buy e*trade for $13 billion earlier today. bloomberggorman told a purchase was not a hard decision. for anust put at risk half months of last year's earnings to buy an iconic institution with $600 billion in assets, $300 billion in revenues that will improve our models. this was a no-brainer from that perspective. shery: joining us now is jenny.

is this just another wall street bank tried to get those main street customers? >> i think that is what is driving a lot of it. you heard james gorman this morning say this is a chance for us to increase what our wealth management unit does. right now they cater to the wealthiest of the u.s. consumer. this will give them access to more of the retail investors. amanda: it is funny the way he put it, they spent about what you are supposed to spend on an engagement ring, on this company. on the other hand, they are buying a part of the market where we have seen margin compression, pricing competition. is there some concern that may have overpaid for this? >> earlier, he was talking about just that. he said anyone who says i overpaid for this is jealous. he definitely doesn't think so. analysts on the call seemed concerned about the dilution that morgan stanley could see and its tangible book value.

we will see in those concerns linger. it seems like morgan stanley feels good about the move and is excited. gorman himself said he has looked at this asset many times over the past 20 years, so i think he was excited to get his hands on something that gives him a bigger presence in wealth management. shery: e*trade posted worse than expected earnings last month. our stockholders and the company pretty happy? this is an all stock offer. was up something like 27% when i left my desk. they seem excited. th was a 34% premium when you look at the terms of the deal. they are definitely getting a healthy premium. this was a company that had seen a lot of consolidation from its biggest competitors. schwab announced they were buying td ameritrade. that put them into the negotiating table, whether or not they wanted to. amanda: the other aspect, i'm curious our analyst reaction, this is outside morgan stanley's

business model. this is new territory. is there a concern about bringing the businesses together? >> that was another question, is this going to be a culture clash? morgan stanley has the really white shoe business, and then you have e*trade. james gorman made a joke that when they were meeting, he had to convince them that he actually does own a pair of jeans. it will be interesting to see how they mesh on the culture side, but james gorman making the point over and over, they are huge and wealth, and this will not be as big of a culture shift as people think. shery: are they keeping the e*trade brand? loves the brand, thinks they have built up over the years. he says maybe they are thinking of doing an e*trade, powered by morgan stanley, type of thing, but definitely keeping the brand. amanda: thank you so much. now to a fallen angel. l brand is moving to sell a

stake of victoria's secret to sycamore partners. was also step down as chair and ceo. jordyn holman is with us now. had been rumored in the marketplace for a while. not surprisingly because victoria's secret has been so we , has failed to hit it in this me to europe. what will be different now in private hands? >> now the victoria's secret will be private, a lot of the challenges they faced with reduction, sales, that can be handled without the need of the public markets. that was one of the strategies, taking this private. what it is bath and body works. the skin, lotion, and body lines. it is a question of how valuable that company is. wexner, some headline issues with him lately, but also a legendary figure.

how big of a loss is he to these brands? >> he was the longest-serving ceo in the s&p 500. 82 years old, known as a legend in retail in terms of consolidating, selling. him not being there in the day-to-day role just means the management is completely different. he sets the culture there. it will also be a question of what that culture looks like without his day today presents. shery: does it make sense right now taking victoria's secret out of the spotlight given all of those misconduct allegations they have faced, tarnishing the brand? >> 2019 was definitely a story of victoria's secret grappling with its connection to abstain. we don't know where the connections stand right now. those are some questions that are still out there.

this company, not being in the controlling hands of l brands wexner, sets it apart and investors minds, hopefully, the bigger me too issues it has. shery: bath and body works would become a standalone company. how does that work out? >> it would become its own publicly traded company. they report earnings next week. they will give details about how it will be run, how analysts can evaluate it. what is interesting about that brand, there is no direct peer to it. it performed really well in the malls. going forward, it will be interesting to see how it can perform. amanda: what about the valuation on victoria's secret? what are people thinking about the price paid? >> the deal puts the brand at $1.1 billion. some analysts think that is

lower than it should have been coming may be closer to $1.5 billion. it is a complicated company. there were a lot of headline some related to epstein, issues with the former chief marketing officer. something that baggage added to the lower valuations. shery: thank you for the latest on victoria's secret. plenty more coming up. this is bloomberg. ♪

shery: this is bloomberg markets. i'm shery ahn in new york. amanda: i'm amanda lang in toronto. u.s. stocks have been falling on concerns the coronavirus will take a heavier toll on corporate earnings. major indices still near record highs.

our next guest says we could see a deeper pullback, writing we could see a correction that makes the october 2018 to december 2018 selloff look tame. zula joins us now from boston. trazzullo joins us now from boston. justification for that, why are we at the end of this bull market? we have had all of our targets for the last couple of years. you are starting to see deceleration in growth and a lot of the major economies around the world. as you go higher in the market, the margin of error gets mueller and smaller. we look at this not necessarily as trying to call the final top. it is a constant assessment of risk and reward. getting to a point where there is a lot more risk in the market than there is reward.

when we look at this going forward, we have been telling our customers -- i talked about this in my last interview january 9. we look at 2020, where you should begin to pare back your exposures. it's been an amazing run. take money off the table and take a step back a little bit. previousou note in the two big market corrections, one was driven by bad investor behavior leading to the .com, the other was that financial behavior leading to the credit crisis. you point out something a little more obvious, but subtle in the way it affects the markets. believe in the system that is eroding. how might that change the perception of markets for investors? bill: good question. why did these long-term trends exist? we are in a historic bull market. why do people buy and hold u.s. stocks for that time?

they believe in our government, believe in capitalism, believe in the way our democracy functions, co-equal branches of government, congressional oversight of the president, a judiciary that is meant to impart equal justice across the citizenry. day in and day out to the trump administration, we see these core norms and values come and principles degraded. the net effect of that is we are in a situation where the president has basically unfettered power. we live in a dramatically different country today than we did even a month ago. i don't care who or what your political persuasion is. it should terrify you that we have one person with that kind of power. radical, immoral, and a political actor, that always seems to act in his own best interest before that of the

country, it is incredibly problematic. i wonder whether people will be comparable with that, going forward. of peopley work during the impeachment proceedings, mueller report. we didn't see any significant market impact. if you did see an impact, what investors think you have the fed put, they will come back to the rescue? bill: i would make the counter argument. the economy and the markets have been strong despite donald trump, not because of him. the reason that we have been able to hold us together is we have had two things that really underpin this rally. number one, historic monetary stimulus. interest rates zero in some countries negative. trillions in quantitative easing. the second thing is historic stock buybacks. that has what has kept the market at its levels. but there is a limit to how much stimulus we can do and the stock buybacks. i get back to the point where we have had this amazing run, 10-plus years.

we are at a point now where we feel him at the very least, you should begin to dial it back a little bit. the potential rewards are not as great as the risks to the downside. does that mean that will happen tomorrow? absolutely not. this is probably a process that takes a year or two. stlay some defense. shery: by defense, could you move overseas, it u.s. assets are no longer trustworthy, as you say, can they go abroad, where things are starting to look very cheap? bill: my first inclination would be, look, we have had this amazing run. end of basically at the 2018, when things go south, it can be very quick and dramatic. the first thing i would do is reduce my equity exposure overall. then with the money i have in the market, i would still favor

the u.s., although there are cheap areas in other parts of the global economy. like theook at things health care area, utilities, consumer staples, things where you have some protection, decent leastnds, and you can at do well if there is some upside. but if we begin to roll over, you have some protection. shery: great to have you with us, bill. up, sparks flying at last night's u.s. presidential debate. a sixth democratic candidate took the stage last night, vowing to take on president trump, overshadowed by the candidate's sharp jabs. we will discuss what is next in the race to the white house. this is bloomberg. ♪

amanda: this is bloomberg

markets. i'm amanda lang in toronto. shery: i'm shery ahn in new york. night unfolding in nevada last night as democratic presidential candidates took to the debate stage, often unleashing fierce criticism on each other. risk ifrats take a huge we just substitute one arrogant billionaire for another. in democratic socialism for working people, not billionaires. health care for all. the best-known socialist in the country happens to be a millionaire with three houses. what did i miss? >> i am less concerned about the lack of transparency on santa's personal health and the lack of transparency on his home care plan. >> 149 million americans that will lose their current health and servants under senator sanders bill. >> i'm the only one on this stage it has got anything done on health care. >> we shouldn't have to choose between one candidate who wants to burn this party down, and

another candidate who wants to buy this party out. is maybee are saying it is the time for the working class of this country to have a little bit of power in washington, rather than your billionaire campaign contributors. bloomberg is of course the founder and majority owner of bloomberg out the, the majority owner of bloomberg news. let's look ahead to the democratic contest ahead. joining me now is congressional reporter and education. what is next for the bloomberg campaign? >> it was quite amazing in a clip that you played, all the insults laid out one after another. it was a big night for michael bloomberg, his first night on the debate stage, coming out from behind the campaign ads. it's an easy way to present himself to voters. last night was more difficult for him. what you need to do from here on out is focus on his record as a mayor, businessman, and try to

sell that to voters. not saying that he is going to compete with other democrats to thehe most progressive, most liberal of the group, but to show he has what it takes to beat donald trump. that is what voters are most concerned about in this election. amanda: bernie sanders in some ways had the most to lose last night, did not come out necessarily head. in terms of what he needs to do and show to democrats nationally, even beyond super tuesday and the caucuses, what needs to happen for the sanders campaign? >> sanders has consolidated his place as a front runner. more polls from california confirming that. he had a good showing in iowa, new hampshire, goes into nevada in a strong position. looking forward to super tuesday states, he does have strong support, especially grassroots support in those states. pointhard to see at this

what is going to steal delegates from the sanders campaign. who is going to emerge as the most viable second choice, most viable challenger to bernie sanders? shery: quickly, the top issues on the agenda. >> the issues we have seen our health care, a lot of conversation about health care and taxes. i would like to see more on foreign policy and trade. it is hard to distinguish between the candidates on some of these issues because they mostly agree. we will see where they go from here on out. amanda: great to get your thoughts. bloomberg users, you can interact with all of the charts that you have seen on the network. the function is gtv . from toronto and new york, this is bloomberg. ♪

with i am mark crumpton "first word" news. secretary of state mike pompeo is in riyadh from where he met with king salamon today.

-- salman today. the two discussed security concerns with iran. iran denies involvement, and yemeni houthi says it was behind the attack could german chancellor angela merkel says the country must overcome the poison of racism after shootings last night near frankfurt. officials say it appeared to be a right-wing extremist attack by a lone gunman who was found dead hours later. gunman's 24-page manifesto called for "the complete destruction" of nations including india, turkey, and israel. global health officials are calling for nations around the world to boost funding to fight