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tv   Whatd You Miss  Bloomberg  February 28, 2020 4:00pm-5:00pm EST

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the nasdaq almost flat on the day while we were talking. [bell ringing] joe: the nasdaq on the verge of going green. romaine: the nasdaq is up about two cents. joe, you're talking up the markets. out,nyway, we should point it's still a very bad week for the markets. a very bad month over the last seven days. that we have seen in the past two years, they are really concerned. closing with the nasdaq in the green, and it's still less to settle, this would be the second advance for the nasdaq for the week. that gives you a sense of the ask and of the damage. volume continues to be much, much higher than we normally see.
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for the s&p 500, 139% above the moving average. romaine: on a weekly basis, there are only two stocks that finished in the green in the s&p 500, and those were both speculative plays around the coronavirus. sector andal quick looking at, energy stocks, small energy up 4.5%. this is a sector that got up litter rated. no new bond issues. let's check in with our reporters and see what they are keeping an eye on. abigail, let's get started. -- abigail: let's get started. this is the worst week since 2008. as they had that small move.
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he said watch after 350. that is when the by that can happen. that might be why we saw the better clothes than expected, but when we put it in the theyxt of the longer term, absolutely sliced through the 200-day moving average. here is the moving average and blue. in yellow, the 100-week moving average. when that has happen in the past, for the most part, it has signaled that we are likely to go down to the 200-day moving average, which suggests more bearish action is ahead that could add more volatility. thanks. i am looking at gold. gold is the true safe haven.
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treasuries have rallied with the yield. they are at 14 basis points. gold is down more than 4% on the week. than 3% on thee week. thanks. oil continues to slide on the fears of the coronavirus hurting global demand. this quickly spreading coronavirus is hireling global markets deeper into losses, as we all know and wti is down for the year. rice'sien said that if continue to slide in wti they could go as low as $40 a barrel. thanks, renita -- joe: thanks, renita, and the
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rest of the market team. and, bill orlando bill, i would to go to you. what would constitute a good headline? there are different times of volatility when you are waiting for something. maybe if it's the eurozone crisis you are waiting for germany to spend more money. maybe you're waiting for the fed to do something. that investorsng needed to do? got one a couple hours ago with jay powell saying the fed was prepared to do something. our view internally is the fed is going to cut rates internally. the curve has inverted based on the fed funds rate at the treasury yields. to cut interest that the fedfact
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has our back, i think this rally may have been related. with the coronavirus we are cases plateau. the mortality rate outside of china is less. ultimately i think that would be good news. romaine: when you look at the price action and take stock of where the market was trying to go this week, do you get a sense that people have a genuine sort of expectation that global growth and u.s. growth is still relatively intact? you may have a speed bump in q1 and q2, but this idea that looking out over the years things will end up where people thought? : i think people want to hang onto that. the goal in
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that was the speedbump and maybe it's turning into a speed bump. but you have not seen a lot of people capitulate on their emerging-market view. it's still very undervalued. not capitulating. we will have to see how this develops in the u.s. will be do think there over buying of treasuries as stocks look for a bottom? if there is this then's we will get as an indication that the outbreak is turning, that will be reflected in equities, but will be demand for treasuries remain? phil: that is an interesting question. 10%, a monthnt, ago it was 165. we are at an all-time record low right now. treasury yields are dramatically
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under bought. the vix. katie was talking about that. gone from 12 to on a near-term basis, the equity market is down 16%. it was dramatically oversold. typically when you get that combination, that tends to inflection a reversal. scarlet: a testing of that. phil: we will say. obviously we will see more of that next week. i think we need to see what saturday in south carolina looks like. ad come next wednesday with little more information and projection on the data, investors will feel more comfortable going one direction or another. the democratic primary, you're talking
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coronavirus, do you think that is something that has been disruptive to the markets? phil: no question. the narrative to reelect the president has been on the strength of the market. if we go into recession because of the coronavirus, and that is not our call. that opens the way for a democrat. the market is definitely were tod if sanders win, what with the fed due to transition from market friendly economic policies today to market unfriendly economic policies. what would that do? i think some of that was reflected in prices over the course of the last seven days. -- one: when things thing that seems to get lost, a lot of people thought that were high. arguments it was not high. but you talk about forward pe on the s&p 500, down at least two
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points on that this week alone. pullback.have the is this the pullback we needed. and once the coronavirus gets contained, you then have a reason for another rally. >> all of that is coming from price right now. you do see the forward pe up us yes come down. you see downgrades there. that, thatget past would definitely be bullish. it will take a while for companies to assess the damage from the outbreak. >> absolutely. julie: our thanks to our guests. that does it for the closing bell. "what'd you miss?"" is up next.
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to the largest industrial gas company on how the coronavirus could impact its supply chain. this is bloomberg. ♪
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♪ romaine: live from bloomberg world headquarters in new york, i am romaine bostick. scarlet: i'm scarlet fu. joe: i'm joe weisenthal. -- "what'd you miss?"." romaine: the world health
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globalation raises its virus potential. companies were already altering their supply chain. we will discuss whether the coronavirus is accelerating the shift. and chairman jay powell has a statement that he is prepared to protect the american economy. all right, for more on the market, we are joined on the phone by fed chairman michael holland. i'm wondering what you make of today. in extraordinary final moments, the nasdaq closing in the green, other indices below, well off their lows. is this just like every other hour this week except for the last one. -- last one? >> we have a good suspicion,
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joe. i was watching carefully. i was reminded of another part of history when friday was an important we can talk about that in a second. you presume the algorithms were wrapped up. it acted a little differently today. possible, thes cruise line stocks, the energy stocks, some of the selling seem to be spent in terms of energy and the was a little bit of a and stock market activity. interesting to see what happens monday morning. something we is have been keeping an eye on all day, michael. it is a safe haven. what does that signal to you in terms of the people having to raise cash to sell things that they like in order to cover the
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margin costs. thehe activity today, action was an indication of something else. at the yield in the bond market. the 10-year and the two-year. low levels.vely you have all kinds of crazy things going on. you can see constellation brands had to come out. they had corona beer as a name and were down 20%. it's kind of our -- irrational things going on. specifically, there is this phenomenon.
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expected.s to be and there's no surprise it went up in a hurry. last year, earnings were certainly not up. a major amount of upside. was ae that back, it short time. it was not that crazy. it looks awful. there was this idea that asset prices had diverged from fundamentals from the last year, year and a half. but was there any incentive for anyone not exposed to equities, not overweight in equities to jump back in, maybe considering assetis did was ring price -- bring asset prices and fundamentals more in line with each other? >> but the good question. i'm am sure that some people watching now are out of the
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equity market entirely. even as it continues, you do not have $100. $ to you have to go $10 down with the favorite companies. actually having been in the business for many, many years, it's a great question and that's the right answer. as it goes down, you buy more. -- joe: let'sut talk about yields. you have the 10-year treasury at one point 68%. 8%.1.6 treasuries have been surging all week and capital gains of been quite impressive. how are you thinking about diversification, what do you want to the diversifying to? know ifsince i don't
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the coronavirus is an attendant , whether it will cause inflation or deflation -- there inflation.iate , you have no room for mistakes. i stayed at the very short end of the treasury. much currentt so income on the one hand, but i can sleep better at night. joe: that is worth something, being able to sleep well at night. >> yes, and a lot of people are happy to have these short-term
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fixed income portfolio for sure. michael, one last question. i'm going to steal joe weisenthal's very good question. you have a viral outbreak in which we really don't have her read on what the fix is eons a vaccine or the outbreak just slowing. in the past, we of the debt crisis, germany, the taper tantrum, or even last december, 2018, it was the fed coming in and saying it's not going to raise rates. what's a positive headline that traders and investors are waiting for? -- i think the question would be answered in part what we know it isn't -- jay powell did come out. it didn't do a thing for the market. what would turn the market on its head next week would be a major difference in the momentum of the coronavirus. instead of getting two or three
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headlines that are going in the other direction. i think this market could do with the -- what the crude stocks in the energy stocks did earlier today. scarlet: michael holland, really appreciate your. get some rest tonight. you will need it. coming up, we will head to the new york stock exchange to talk about how the coronavirus could impact the global trading industry. this is bloomberg. ♪
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all right, this week,is the stock market is going into the -- the world's largest gas company exposed to this, and
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let's go to the ceo of the company, steve angel. he joins us from the floor of the new york stock exchange. think you for joining us. areess not many companies exposed to different industries the way that yours is. can you give us a sense, if you have seen any impact so far from the coronavirus in the supply chain? steve: i think it is important to state up front that we are a global business, but we operate globally -- locally. our products are sourced, made, sold locally. so we are not involved in any global supply chain. were not even involved in any regional supply chain. we are not even involved in any regional supply chain. two weeks ago we give guidance and accounted for what we believe to be the impact, on our
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business, of coronavirus in china. joe: has anything in the two-week period since then changed what you see on the ground? we thoughtweeks ago there would be a slow ramp coming out of the lunar -- lunar new year. it's exactly what happened. if anything, we may be tracking slightly better in terms of recovery. how do you extend that forecasting from italy and its entryimiting outside of the country to the united states, where we have been sold to prepare for a pandemic? steve: we don't see an impact at
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this point. that is something we have to evaluate every day. if you take a place like italy and the united states, we operate a very big business. we try to prioritize the production of oxygen for medical purposes because it's a respiratory disease. did comment a few weeks ago about the recent acquisition there, and i believe you made the comment about efficiencies you had predicted predictedwas when this was announced several years ago. there were vestiges that were left hanging. i guess that there were questions about the other properties and what may come with them? in terms of the required to vesta schuurs, we have completed those. we still look at our portfolio. our strategy is to focus on gas and engineering is mrs..
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there are businesses that both sides brought to the merger. it's not a large percentage. something we will be looking to work through in the coming months and years. scarlet: steve, you are the gas company.trial i wonder what your conversations are like? certainly that industry has taken it very hard. we see commodities overall. what do you observe and how is that going to radiate across commodities overall?
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steve: we are a big supplier of parks like hydrogen to the refining industry. we do that under long-term con tracks. steve:the -- contracts. from that standpoint, we are insulated. companies like oil companies, refining companies, you can see the margins being squeezed as prices are coming down, but fortunately for us, because of the nature of our contracting and supply with them, we are insulated from that. ceo steve angel joining us from the new york stock exchange. thank you. interesting, scarlet, particularly what we are seeing with ace chemicals and base metals. right now the readings are modeled. today,ill striking because it has been so brutal, we have been really interested -- scarlet: i just want to point out i'm looking at futures and they are somewhat positive. this is bloomberg.
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mark: the world health --anization >> we are trying to contain the disease. 83 thousand people worldwide have been infected. 2800 have died. larry kudlow is weighing in on
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the market's reaction to the virus. he says he acknowledges things could change and the situation could deteriorate. he added what is needed now is calm. the market has gone too far. i've seen this before. it can come back rapidly. i'm not saying the market is wrong. it is what it is. you've got millions of people trading all around the world. i just think everybody, person,, or ordinary people should not overreact. he said it is sometimes a hard case to make in the middle of one of these crises, which is part psychology in part fact. i don't think anybody ought to panic right now.
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the trump administration can't -- in mexico. a federal appeals court upheld an order barring the policy which prevents immigrants from living in the u.s. during the review prospers. human rights advocates say asylum-seekers are often assaulted in shelters and buses and on the streets when looking for food. the pompeo is defending killing of the iranian general last month. he was the top terrorist in iran and the strike reduced risk to americans. pompeo forriticized limiting his address. hillary clinton faced 11 hours of questioning over benghazi.
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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 am mark crumpton. this is bloomberg. this is possibly the worst thing i've seen in my career. scarlet: i think a rate cut is on the table. >> i think the fed will respond by lowering rates. policymakers are going to do everything possible to prevent the u.s. from going into a recession. >> it will not encourage somebody taking risk. >> even if they don't see the hard evidence. two cat -- to cut or not to cut. the fed may be forced into an emergency cut if the virus gets worse. joining us for more is seth carpenter.
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so great to have you here. cut your perspective, is a baked in? i don't think it has been baked in. we have been -- the economy is starting to slow down. the coronavirus, 15% or whatever in equities have to be rattling their cages. i think the fed would like to see evidence. that will be the truly difficult part. to the biglly comes disruptions, they have to make a value judgment. scarlet: is the thinking they will cut if there is evidence unless there is evidence otherwise? >> my sense is the baseline is not to cut. the first sentence today was the u.s. economy is strong. there's no reason to start that way if they don't want to sound anymore like they are heading.
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some said it was too soon to speculate. i think what jay powell was trying to do was to say we are paying attention. we feel good as a base nine. we are no longer hiding our heads. meet in when they do mid-march, obviously this is a conversation they will have to have. are they going to be able to point to any data to support a rate cut? my understanding is the effects of the coronavirus is not really showing up just yet. >> it is hard. none of the official data, what they are going to do, and i think it is safe to say, are there any corollaries to learn anything from it. you could look to where the supply chains are shorter in asia. if you look at the first 20 days worth of data for south korea, imports five fell by half.
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that is the first sign a big part of the global supply chain is starting to show disruption. then if you think back to 2011 when japan had the earthquake and tsunami it disrupted their motor vehicle sector. vehicle duction fell 9%. huge direct effect from the supply chain. they have to consider that type of disruption. because the u.s. has not experienced something like this in a long time, there's the cut, willf if they do it accomplish anything. i am curious your view. the fed cut is not going to do anything about fear over the virus. it could send a message. >> there is in terms of liquidity. on top of that the fed is aware
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nothing they do with interest rates will short-circuit the supply chain disruption. you can't do that. if there is a demand slump because people are going to hotels less and restaurants recovers,he economy any interest rate cut could help support the economy and whatever the recovery is. romaine: that is the part i am curious about. when they have these discussions, they have to talk about the impact of the policy decision. is the impact discussion going to be once we start to recover this will help? or these rate cuts will help? >> there will be a lot of all of that together. if you think about 2019 the way the fed did them, it was insurance against a were slow down. that is clearly on the table now. i guess what i would urge the either thereabout,
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is a small negative effect or a big one. we can argue over numbers. the question they should ask is if you cut rates, and it turns out it is just a small negative effect, how bad can that be? what is going to happen? they are going to hit their target sooner? that is the analysis they should be doing. scarlet: we are going to take a break over the weekend and come back ready to deal with next week. we will get the jobs report. does it matter? >> i think it does. we get a bad report. u.s.ually think the economy is slowing. there's lots to be worried. if we see a negative jobs report on top of whatever fears are going on in financial markets, that would be an impetus to push them further in the direction they should be leaning. romaine: president trump is
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speaking. he said he hopes the fed gets involved soon over markets. those are his words. what is the fed reacting to? financial assets, or economic? >> right now the fed has their attention very much on high alert of markets. i don't think they want to react just to financial markets. they would love to react to something specific in the data. it is not there. they have to react to the signal and their best judgment of what the implications are. scarlet: some very fuzzy signs then. seth carpenter, thank you so much. right, president trump hopes the fed gets involved soon. ordering ad they are lot of supplies to combat the coronavirus and feels confident despite the virus. he says the virus impact is unknown. curious way of describing what
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is happening. he says he's looking at and expanded travel ban as well. there's no details yet. he's looking at a decision very soon. we know the u.s. has already limited flights from china, certain imports of entry. more details in a few minutes. this is bloomberg. ♪
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>> the virus continuing to take a toll, business process the damage from the outbreak.
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our next guest is calling for an impact that could last up to two years. joining us from st. louis is panos kouvelis, director of the boeing center and operations management at washington university. two years. what is it about the supply chain disruption that can have such a long trickle effect? even if the acute phase were to end globally in another few months, the consequences will be with us for a long time? >> yes. thank you for having me. howe got to understand these things propagate. that is the expectation. at this point we see demand chokes. they will last, especially as someseems to be taking time. when they propagate with a
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significant lead time, it will take time. at the same time, there are the supply folks. seen the shortages we expect. within the next month or so we will. romaine: assuming it does propagate into something bigger, how does it translate into demand shocks? >> of course they will. it implies a shortage. people mightmeans decide to do something different , or companies might decide different products. willrtain industries they be delayed at releasing new products. that is going to translate into demand. if you are in the gaming industry, this is the time you
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work on new products. all the shortages are going to shift your development cycle by a few months. play some want to comments we had from someone at m.i.t. yesterday. companies began real loose -- reducing their reliance on china. take a listen to what the professor said. other places like vietnam, malaysia, where would you move now? a safe place? south korea does not look safe. japan does not look safe. it is not clear where to move. mexico? i don't know why mexico would be immune. scarlet: i'm going to jump in because president trump is
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speaking to reporters right now. ofsident trump: thousands people outside. it's going to be exciting. we have a big day in terms of the democrats. and then on tuesday you have a big day. it will be interesting to see all of them doing well. the 15 people likewise, we have them down to a lower number. most of them are in really good shape. would not people, i say not doing well. very sick. she's hopefully getting better. we are at the same number. 15.ntially we've only had a lot of that is because i called it early. very early tosion close our borders to certain areas of the world. we did that. we are hopefully getting lower from that number. we will see what happens into the future.
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some countries are doing well. some are not doing well. you can see that for yourself. we are very well organized. we have great talent, great doctors, great everyone. there's tremendous spirit. a lot of spirit. as you know, with the flu, on 26,000-78,000e people per year. even more than that sometimes. we have not lost anybody yet. hopefully we can keep that intact. there have been no deaths in the united states at all. a lot of that is attributable to the fact we closed the border early. a good just keep doing job. we are ordering a lot of elements thatt of frankly we would not be ordering unless this was something like this. we are ordering a lot of different elements of medical.
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we are working on cures and getting good results. they are working as rapidly as they can on a vaccine for the future. with that, i think i can head out. go ahead. is this an economic or public health crisis? president trump: it is the unknown. people say how long will this last? i think they are not happy with the democrat candidates when they see them. that has an impact. to wink we are going easily. you never know. i don't think that is helping. i think basically it is the unknown a little bit. i feel confident. our people are doing a fantastic job. we have not seen an increase and people are getting better.
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almost everybody we see is getting better. it could be everybody. how much time are you spending on this? >> president trump: a lot of time and coordination. mike pence is doing a great job. are isnd she, alex these on top of it. we don't want any bad surprises. >> do you think there's a risk of economic recession? president trump: you are going to have to speak out. we are looking at that right now. we are looking at a couple of bittries that have a little
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disproportionately high number. we are going to make that decision soon. >> do you think this is a hoax? cnn isnt trump: i think a very disreputable network. i think they are doing everything they can to instill fear in people. i think it is ridiculous. i think they are disreputable. some of the democrats are doing the way it should be. some of them are trying to gain political favor by saying untruth. the fact is i made one decision that was a very important decision. that was to close our country to a certain area of the world. it was relatively heavily infected. because of that we are talking about 15, we seem to be getting better. one is questionable. had that decision not be made,
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it could be a different story. some people are giving us credit. some people are not. it's political. it's politics. speaking of politics, i'm going to south carolina. we are going to do fantastic there. it will be interesting what happens tomorrow. president trump speaking to reporters, saying he is looking at a travel ban decision, expanding it perhaps. he said that would be made soon. he hopes the federal reserve gets involved over markets even as he questions whether the impact, the corona virus had an impact on the market. let's go back to panos kouvelis. professor, we were talking about the trade war and how it had caused some shifts in the way
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companies organize their supply chain and source their material. was that a good thing for the set up right now in which the coronavirus is limiting companies' ability to get material and parts from china? is reducing the dependence on china. and think about sourcing from other parts of the world. theyhelps the company's if can diversify their supply base. constraints in the system do not necessarily help if you are trying to anticipate shortages. overall, it was driven by the trade war in a certain way is helpful for the current situation. joe: any company that relies on partners, other companies to produce their goods, there's only so much they can do. when we try to look in the future, which companies will
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survive, which ones won't, what best practices will characterize the companies that get through? things they did in the past to prepare for this, what will determine who is prepared? >> the companies that have a well-organized supply chain management program in place. they have dealt with previous crisis and they have playbooks. a situation we classify as a black swan. you can't exactly expected. helpsu manage a crisis quite a lot. you need to monitor and be aware what is happening. verye got to communicate effectively within your organization, outside of the organization. you've got to empower people closer to where things are happening and having emergency operations centers. exercise the
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mitigation strategy. by having the excess capacity, , having theity inventory in place and of course your able to reallocate resources and exercise your flexibility. there are companies that are famous at doing that, like cisco, having one of the best supply chain management programs. ,oe: thanks to panos kouvelis director of the boeing center washingtonor at university. oil having its worst week since the financial crisis as panic sets in. the biggest weekly drop since december 2008. ourmore let's bring in commodity strategist. where does this end?
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is it another macro asset like everything else and as long as people aren't panicking? >> i look at crude oil, it has been a consolidating bear market. wti. look at it should be good resistance. 40 should be good support. that has been the support level for a while. if you look at the five-year average, it should trend lower. the coronavirus is a good reason for that to happen. and bond yields. they have been a great indicator. areine: looking at brent, there correlations in this market that will give me insight into where this might go? >> the best forward-looking indicator is bond yields. we have all-time lows. commodities are catching up. they are deflationary. they are trending that way.
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what is it going to take to end these trends? if the worst of the coronavirus is over, that may help. demand is declining. supply is very strong. scarlet: can opec do anything about this? >> they will. they are fighting a losing battle. you expect them to cut. they need money. that is the problem. russia is at its breakeven level. they need money. because of low prices. scarlet: thank you so much, giving us a peek into what might halt oil's light. the south carolina primary on saturday. joe: more americans heading to be polls on super tuesday. romaine: the february jobs report coming out on friday. a reminder you can subscribe to our weekly podcast on itunes. you will find our best content
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and enjoy it over the weekend. that is all for "what'd you miss?." joe: have a great evening. this is bloomberg. ♪
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♪ kurt: i'm kurt wagner in san francisco in for emily chang. this is "bloomberg technology." who elevates its risk for the coronavirus as multiple country struggle to contain it. meanwhile, -- hey


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