good morning welcome to "squawk box" on cnbc. we are live this morning at the nasdaq market site in times square in from davos, switzerland. becky is off today our guest host this hour is cnbc contributor ma chel caruso-cabrera. >> welcome back from davos. >> thank you >> u.s. equity futures at this hour joe said it, davos top dow looking to open down close to 500 points. down 490 points -- 493 points right now. s&p 500 looking to open down as well, 56 points down nasdaq looking to open down, about 196 points all on this -- all on fears of coronavirus and there's lots of factors at play. let's show you treasury yields this morning and where they

stand. right now you're looking at the ten-year note. overnight in asia, the hong kong and shanghai markets were closed for the lunar new year but we're also going to show you the nikkei the nikkei sharply lower, down by 2%. take a look at european markets as well because you're looking at red arrows across the board you'll be looking there, the worst taking place really right now in the ftse 100, off by 2.5%. >> 160 on the ten-year you know who's on? kamarr is on today. >> what did he predict he was below 1.5%. i said, you're finally going to be wrong i don't know. breaking new, afghan government officials say a boeing plane operated by the state-owned airline crashed in the country's central ghazni province, which is held by the taliban. now, the airline's acting ceo is denying those reports saying

none of its airlines have crashed -- or none of its airliners have crashed and the fate of the passengers and everything else is unknown at this point however, we'll take a quick look at shares of boeing. when boeing goes down, it drags the dow down further you can see eight points of additional downward pressure we went from about 380 to almost 500 after boeing sold off. >> the cnbc article quotes the ceo of the airline saying, look, we have two flights a day. they're both safe. so, this seems very, very strange that we would have these reports that it occurred and then he says that it didn't happen hard to know exactly what is going on. >> in a taliban-held area. so many different -- again, we have no -- nothing but conjectu conjecture. >> but we do have phil lebeau. >> let's get to phil phil, good morning

>> hey, joe? >> yeah. >> can you add anything to what we're talking about here, phil >> not until we get more details. there's more questions than answers at this point. i think a lot of people are looking at this, whenever you hear the name of a manufacturer connected with a plane crash, immediately people say, is there something wrong here there are so many unknowns here. think back to what happened with the plane being shot down outside of tehran and in the moments right afterwards people were saying, is there some kind of mechanical issues could there have been something linked with this particular kra, that happened over there and then it later came out, no, it was shot down we're not saying this plane was shot down but early on, there's so many questions there. i'm not surprised to see the stock come under a little pressure we often see this during plane crashes. you'll see pressure put on either the manufacturing or some of the key players who have

components within a particular aircraft and as developments come forward, news comes out, you often see a correction in that particular stock >> it's impossible, phil, you're right. it's nice you're up and we get to come to you but we need more details before we can say anything at this point. >> right. >> so, at this point we know we can come back to you because you'll hear first. >> yeah, we're in touch with boeing and as soon as we get any details in terms of what's happened, the type of aircraft, et cetera, we'll let you know. >> it comes at a time when, of course, the united states has been negotiating with taliban leaders about a peace settlement there. one of the big arguments and issues of contention were the leaders of the country, the elected leaders of the country felt like they were not being included because they purposely weren't being included in the negotiations because they don't control that much territory of

physical afghanistan the fact we wouldn't know what is happening doesn't surprise me >> phil, we'll check back with you. >> yep >> a lot of -- >> so much going on. >> we have to move on. >> meantime, we're also watching crude prices this morning. let's show you what's going on falling sharply as rise of coronavirus rising sparking demand for official. overnight chinese officials said there are more than be 2,800 cases of the fast-spreading coronavirus. the virus has spread personalitily with five confirmed cases in the united states and infected patients in singapore, france, nepal china has extended the lunar new year holiday to try to halt the spread of the virus. we're going to go to eunice yoon who is right now in beijing. >> reporter: i'm coming to you from a popular entertainment districts in beijings.

it has tons of restaurants and bars it would normally be buzzing at this time of the night still, right now it's extremely quiet. what you're seeing here is being replicated all over the country. people are worried about leaving their homes and there are concerns, so the government has been taking many more aggressive measures to try to contain what they've described as a strengthening virus. over the weekend the chinese premier li keqaing is currently in the city of wuhan, the hot zone of this outbreak. and this comes after president xi jinping over the weekend convened an emergency meeting when he described the situation as grave now, many of the authorities here have come under criticism, especially the local authorities in wuhan the wuhan mayor actually just today offered to resign. this is after yesterday he said 5 million people had left wuhan

because of the lunar new year holiday and the outbreak that is the -- bigger than the size of the population of the entire city of los angeles in terms of what the government is doing now, they've taken more steps saying they're going to extend the lunar new year holiday by three days to february 2nd and then two economic centers, suzhou and shanghai, said they're going to extend their holiday they've basically ordered companies not to return to work until february 9th for hang shy and february 8th for suzhou. the question now is how long will companies stay closed i was talking on the phone with -- or talking with ford they said they're trying to decide exactly how long they're going to be staying closed and then the shanghai markets, we've been asking them, you know, the markets are -- when are you guys going to open

they haven't decided these are the questions people are asking because there's so much uncertainty over the virus. >> part of the problem, i guess, euni eunice, is the incubation period they're not sure it could be 1 to 14 days i understand it's asymptomatic, but are you contagious if 5 million people left, not showing signs or symptoms, you can't have a high degree of confidence that all those people aren't spreading it somewhere else. >> absolutely. that's actually what's adding to the fear here because the health officials over the weekend had said that the incubation period on average is ten days it can be as short as one day and as long as 14 days that that unlike the sars outbreak in 2003, people are apparently contagious during this time when they're not showing symptoms so, with sars, once you showed symptoms, then you were contagious but in this situation, it's not the same so, that's just adding to the concern here >> eunice, michelle, good to see

you. why are you wearing the mask is that required is that caution on your part >> reporter: it's not required in beijing yet, but everybody is wearing a mask here. and the recommendation has been to wear a mask and that's, again, another reason why there's been such a focus on the lack of protective gear and masks, because it's not only in wuhan where people feel the need to protect themselves, but now because of the fear of the spread, people in -- across the country are feeling they need to wear these masks >> eunice yoon, please stay safe thank you for reporting. boy, we have a story on our hands. it's affecting the market, it's affecting everybody. >> that story really pretty unbelievable what happened yesterday as well. this one can't get your mind around it yet. i don't think i have and fans around the world.

fans, nonfans, everyone in disbelief after basketball legend kobe bryant and his 13-year-old daughter, gigi, goe a gianna were among those killed when his helicopter crashed. authorities say nine people died in a crash 30 miles north of downtown los angeles in calabasas. thousands of fans gathered outside the staples center to honor the five-time nba champion who spent all 20 of his professional seasons with the lakers the lakers returned from a road game yesterday video showed players hugging on the tarmac and wiping away tears. fans at nba games across the country wore kobe bryant jerseys and observed moments of silence in his honor i didn't know him, but i felt like i just saw him because he was back here for the u.s. open, for the tennis and i just remember thinking, wow, this guy is so comfortable in retirement and so happy and

has such a great life ahead of him and his daughter, obviously, and the other seven people it was just -- my son, we were headed down to an event. i'll never forget. it's like one of those instances, i know where i was -- >> where you were -- >> -- when i heard it. he said kobe bryant, and i said, what about it? it was about 3:20 here i said, o, no, it's impossible >> you don't know this we were in the process of booking him to be here next week. >> private equity. >> on our show. >> oh, really? >> he was a great businessman, by the way, in the past couple of years of his life he had started a private equity firm, bryant stieble and had a very successful exit selling one of his businesses to coca-cola owned a piece of legalzoom, owned a piece of dell technologies he wanted to be a businessman. that's what he -- that's what he wanted to be he wanted to prove himself -

>> won an oscar. >> wanted to be as successful in business as he was on the court. he talked about that a lot. >> and a short film that won - >> yep he won that oscar. he was - >> he was just -- he was very competitive and always had that drive. you always saw that. it seemed like he was in such a good place at the ambassador he was an ambassador for sports, this was tennis in this case, and big for soccer and something he was doing with his daughter, who was a budding -- >> someone who transcended his sport. even women who don't follow sports, knew who kobe bryant was. >> shocking -- >> there's a quote he said to jim gray i saw online that threw me over the edge yesterday it said, at the end of my career, i want people to think of me as take talented, overachiever i was blessed with talent but worked as if i had none. i thought that was just really so profound an idea and thought.

>> the lakers got him. they stole him when they got him. in his first game he scored zero points, which was his last game he might have scored like 60 i don't know anyway, it's bad >> we mourn his loss and we send our -- the best wishes we possibly can - >> to -- >> so the other families in the plane, in the helicopter. coming up when we return, much more on this morning's market selloff take a look at stock futures right now because we are in the red. we're closing in on potentially being off by 500 points on the dow this morning right now it's at 487 points down the s&p 500 looking to open down about 56 points. the nasdaq looking to open down close to 200 points. we'll talk about all the big names set to report earnings this week as well. and later, we'll talk to an infectious disease expert from j

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stocks are sharply lower again this morning joining us with a look at the busy week for earnings and some potential individual names, maybe to buy on the dip, jason brady, ceo of thornburg investment management. thornburg has $43 million under management just -- you know, we -- different times have been to davos where whatever the prevailing sentiment winds are, they can reverse quickly weird it happened again. just the overall market, would you even be buying the stocks you like on the dip now or wait for things to shake out or get right in >> sure. i think u.s. stocks generally don't have a lot of valuation support. they're expensive. i think some of the earnings you're seeing, apple or microsoft, these are becoming the utilities of our time. so, those are the names you might feel a little more comfortable with however, in general, you look at credit being extended. you look at u.s. equity being pretty extended.

this is the time to be cautious. >> let's start with apple. utilities you think of as widows and orphan stocks. that dent look like a ulgs to me you mean in terms of being ubiquitous in all parts of our life what do you mean >> exactly obviously, the real move into services so, that is -- this is the biggest stock in the world there's not a lot of new news there but the services growth has been in the mid to high teens and we can expect that to continue, i think. the other piece is iphone sales, it's really been -- -- it's hard to get away from that with apple. i think the market underappreciates how well the iphone sales for 11 will be. it's really about revenue for this name. >> do you like microsoft do you buy this on the dip as well >> yeah. >> another big cap tech. >> i would utility like, up to the right, that's nice. with low volatility, i think

that's more of a function of the market microsoft is really dane investors should focus on azure. it's a game-changer. if you think about the value of a microsoft customer, consumer customer, with the cloud that's 1.5 to 1.8 times the overall lifetime moving from desktop to cloud. they have an advantaged position because they're already on your desktop to be a strong competitor with amazon. >> finally, pfizer, it's not tech but dividend. one of the major pharmaceutical players. >> right there's a bit of a theme here. not so much that microsoft and pfizer are the same stock. not at all but you're looking at less of a concept name and something where there's real drivers underneath it we feel like pfizer really sandbagged right about here. sandbagged what 2020 could be for the kind of new pfizer after the merger

this is an attractive dividend closing on 4%. dividend payers is where investors can get paid cheaper relative to nondividend payers previously. >> thank you $43 billion, you must dye your hair no gray hair that's a lot to be responsible for. >> the folks here do a good job making it look better, except for you. >> speak for yourself. stocks tumbling, much on the wuhan virus. and boeing shares after a report that a boeing plane crashed in afghanistan. we'll bring you more information as we get it. fugitive former ceo carlos ghosn speaking to phil lebeau. we'll show you what he said. that's next. sfx: [phone ringing]

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hear about his story, something he wasn't able to do under house arrest in japan. phil lebeau with ghosn with a warning. >> it's a blunt warning, he especially what foreign executives in japan should do. he wants them to get out here's what he had to say. >> if you were working in japan, you have to be very careful. unless the system changes, you're playing with your life. >> have you talked with other ceos, foreigners >> yes >> they askmy opinion, i'm saying, get out. if you have -- you have -- the risk of having a problem with your colleague, your partners, you can be set up. if you're set up, nobody's going to save you. >> you've gone in the last 15 months from being a global business superstar, transitioning into what some would say an underground or underdog folk hero people are looking at your fight right now and saying, yeah, this is the person who we believe in because of what he's gone

through. has that transition been tough to make? >> look, phil, what happens to me on november 19th, 2018 was a shock. it's like you died it's like you disappear. you die. and i've been in a completely secondary state until i came back to beirut on december the 30th so, now i have the impression i am reborn. somehow i'm breathing again. i'm alive. i'm alive again. so, i look at that and i said, okay, i died on november the 19th but at least i had the chance and the opportunity to be back and defend myself. >> the question is whether or not carlos ghosn will be able to defend himself we'll talk about that. it's just one aspect of this documentary you do not want to miss "fugitive ceo: the carlos ghosn story" premieres tonight at 10:00 p.m. here on cnbc. michelle, you were over there as

well shortly after carlos ghosn escaped from japan the one thing that stands out, and i think you'll agree with this, is there is a level of not venom but certainly he feels like he has been -- gone through the wringer throughout the last year and a half and his story has not been told and he's hell-bent on making sure he gets that story out. >> yeah, he definitely feels like he was railroaded because i was going to lebanon to do that interview, phil, i did a lot of work looking at the japanese legal system. it's very interesting. they have a very interesting way of looking at what the justice system is supposed to be about if you go to my linkedin page, i and a researcher says in japan it's about rehabilitation and reintegration into society that's the role of the prosecutor if you think about that, that

presumes guilt that's why they have so many confessions that we would look at as coercion but they feel it's very, very important to admit something and then you get the equivalent of a plea bargain during the sentencing. you'll get a shorter sentence if you do this. it's thoroughly different than the way we look at it. you add on top of that that it sometimes really is used to get at your economic enemies, your corporate enemies, it's a pretty tough place. >> i think what's interesting is carlos ghosn would like to defend himself to say, look, these charges are bogus and i will prove that. in order for that to happen, japan will have to agree to try his case somewhere other than in japan. you and i both know, very few countries -- no country probably would say, sure, we'll take our case and we'll try it in another country where we're under a different set of rules that's highly unlikely to happen now you have carlos ghosn in a position where he's trying to defend himself but we don't fully know all of the

allegations that the japanese prosecutors have put forth so, for carlos ghosn, this is going to be an interesting period here where he says, look, i can prove that i did not do what they said i did. >> yeah. trying cases in other countries is extremely controversial we see this when dictators fall, for example, and they want some -- some countries want to prosecute them for human rights in places they never existed and there's a desire to have these people face justice. yet at the same time, is the legal system really equipped and is it the right way to do that it's a tough thing i think doing a case in another country isn't going to be an option >> well, you want to watch this documentary tonight. >> for sure. >> not only did we talk with carlos ghosn, you did as well, we also had producers in turkey, japan. we talked with other people who have an interesting perspective, not only ol carlos ghosn as the executive but also on his escape you don't want to miss some of these interviews >> for sure. i can't wait you know, phil, it captivates so

many people. i can't tell you how many people stop me and say, oh, my gosh, what was that like just unbelievable how it's really captured -- that cloak and dagger captured international attention. >> i agree 100%. >> all right, phil - >> phil, thank you for that. we'll be watching 10:00 p.m. eastern time coming up, more fallout from the rapidly spreading wuhan virus. we'll talk to an infectious disease expert from johnson and johnson who is trying to determine if a vaccine can be created. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from using feedback to innovate... to introducing products faster...

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good morning welcome back to "squawk box" on

cnbc among the stories in front is iter and this hour, futures are down sharply when i say sharply this morning, i mean sharply amid growing fears about the coronavirus that china reports cases of illnesses have now topped 2,800 the death toll has climbed to 81 china's trying to contain the outbreak, including extending the lunar new year holiday to keep the public at home. meanwhile in the usa, the fifth case of the virus has been confirmed in arizona you're looking at the stock market down with the dow implied like it would open off, more than 400 points. it's marginally better than we were an hour ago closer to 500 points but we'll see where things end up as we are still close to three hours away from the open boeing shares are down this morning, this coming after afghan government officials said a boeing plane operated by the state-owned airline crashed in the country's central -- >> ghazni.

>> provence held by the taliban. the airline's acting ceo is denying those reports, however we'll keep an eye on that as well. >> that's crazy. did a plane go down or not >> it either happened or it didn't. >> if it didn't -- it seems leak a weird thing to not be able to confirm if you're the airline itself, doesn't it >> you would think. >> or to deny that it even happened is very strange >> time will tell, i guess. coming up, much more on the rapidly spreading wuhan virus. we'll talk to an infectious disease expert from johnson & johnson about the potential for a vaccine. near term, we would hope. later the ceo of kansas city southern speaks out on the company's business, trade and more you can watch or listen to us live on the go, on the cnbc app. we're coming back right back new york state is taking business to the next level.

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welcome back to "squawk box" this morning sports fans are mourning the death of basketball legend kobe bryant this morning and his daughter they were among those killed in a helicopter crash killed yesterday. tributes are pouring in from the business community disney ceo bob iger tweeting today, we at disney mourn the tragic loss of kobe bryant, a

giant in sports and person so full of life terrible news. tim cook tweeting, i admired his athletic prowess from afar and his humanity close up. joining us to talk about the business of kobe bryant and his life and so much more, dylan buyers and emily glazer is here, reporter from "the wall street journal. so many of us know anymore as a basketball player but over the past several years he's become quite the investor and businessman. >> he was basically at the beginning of what could be a powerful second act. not like unlike what magic johnson or lebron james is doing now, kevin durant is doing now, which is basically leveraging his position as an incredibly high-paid and famous athlete and turning that into something where he had an investment arm, he had a production company. i mean, he had won an oscar.

there was immense potential there to sort of live a second life where he could simultaneously create a real business and also sort of advance the causes that he cared about. >> so, there is still a fund. >> there is. there's about a dozen employees. >> a dozen employees as part of this fund. there's investments that they have made in a number of businesses, including, by the way, dell technologies that business is connected to another business, stieble, is that right >> right there's a fund itself, brian stieble, about nine or ten employees. they've made a number of investments, legal investments, legalzoom, minted, honest company. they focus on telecom and gaming they've been making a ton of investments for several years now. >> also, a stake in epic, the maker of "fortress". >> there were a few gaming investments there. look, i think if you look at the

portfolio of investments he had, there was a smart plan there.ala he exited from both of those and i think made a handsome return. >> was he connected, by the way, i don't know, and maybe the oscar was related, i mean, given some of these tweets that we're seeing from the tim cooks and bob igers of the world, was he doing business with disney or apple? >> he was. he was doing business with espn, so disney. in fact, so -- he was doing business through espn plus, their streaming app. he had a show called "detail" where he would break down sort of play-by-play a game another basketball player had played and go into intricate detail about how they played the game and the intricacies of the game. >> how did his business compare to what michael jordan has done, who also put out a statement that made me cry last night. >> that's a good question. i think he was just a giant in the industry one of the things he focused on,

especially with the entrepreneurs in his investment company. people loved kobe bryant i live in l.a. there were hundreds of mourners outside the staples center i think he took his humanity from the game and impart that on those in the second act. >> the michael jordan is an important question people would say kobe bryant is fantastic but not quite at the level of michael jordan but i think everyone agreed he parlayed that career into a successful business career more than michael jordan has done he's a role model in terms of athletes - >> you think kobe bryant had a more successful business career than michael jordan? >> yeah. look, michael jordan had sponsors - >> he had the michael business >> it was huge. >> but that -- >> the nike business was huge for kobe ko, too

in fact, when kobe left, i would get the figure wrong, but he had made more money both from salary and endorsement deals than i think any other player in the league by that time. but i think what i'm pointing at is, michael jordan never -- i think it had something to do with himself and his feelings about the media and the public and never be able to successfully exit the game of basketball michael jordan never figured out that second act in a really great high-profile way the way we semajic johnson, lebron james, the way kevin durant be is setting himself up to do. kobe bryant was on a path to do that and he was doing it across multiple platforms investment vehicle, production company, deals with espn, winning oscars. >> okay. >> i think jordan still made a lot more money with the jordan brand and owning these teams nonetheless, thank you, waking up early and coming to us from l.a. meantime, when we come back, a lot more to talk about more on the coronavirus and more

cases in the u.s. and the international death toll rising to 81. markets looking to open lower, about 400 points off the dow we're coming right back after this ♪ ♪

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an update now on the wuhan virus. overnight chinese officials said there are now more than 2,800 confirmed cases of the fast-spreading coronavirus

the same as sars, same as the cold virus rhinovirus is a coronavirus. the death toll rose to 81. i was just talking to meg. yearly influenza deaths 300,000 to 600,000 global, global. so, keep it in perspective this is scary, though. the virus has spread to the u.s. with at least five confirmed cases as of last night china has extended the lunar new year holiday to try to halt the spread of the virus. the airline sector getting hit hard meg joins us more on the companies battling the outbreak. >> thanks. as we've seen those case numbers tick higher we're hearing from more pharmaceutical companies responding to the outbreak some are developing potential vak teens, including moderna, and others are exploring new drugs. another approach is testing whether existing drugs might

work against this novel coronavirus. gilead sciences says it's looking at experimental anti-virus drugs to see if it could happen and abbvie has made available one of their drugs at the request of chinese >> it's now investigating whether it can create a potential vaccine against this coronavirus. >> thanks. stick around let's bring in a voice from johnson & johnson that can fill us in on where the company is regarding a potential vaccine. joining us now is paul and he is chief scientific officer and vice chairman of the executive committee at johnson & johnson he joins us now from amsterdam

do you have a feeling now whether it's possible to create a vaccine that would be available and you could manufacture enough of to deal with this version of the coronavirus. >> we are comfortable that we can scale it up. we have done it in 12 months in zika where we did not have the virus and we had to start from scratch. even if we're in the same situation we have to start from a sequence we are going to take an approach with at least five different constructs and different partners and collaborations all over the world in order to see which part of the virus we can use to make an effective vaccine

and develop a model that we can invest it in and also starting the upscaling. we have a platform which has been used in all of these and at the moment we have used it in more than 20,000 people already for vaccination. we have an exceptional upscaling platform where within one year, in one year we can produce up to 300 million vaccines if we would find one which is really active. so first, find the vaccine and prove that it works and start the upscaling process and do the big kick off for the multimillion upscaling if we find one. >> obviously the viruss mutate a lot. is there something on the surface of the virus that you would look at that would not mutate as time goes forward? is there a way do that

it seems like these things find a way to mutate around therapeutics and vaccines. and that's why we do it. we look at the sign cysts thciet we have. we have dozens of scientists working on this so we're pretty confident that we can get something made that will work and stay active for the longer term and so we will see how that goes. >> you had access to the virus itself and ebola versus having to work with zika and you said

that's the situation here but since we have five cases in the united states and the cdc says it's working to make samples available to academic labs of the virus, prototentially couldu get access to be able to work from that and cut down the number of months that it takes to advance the work? well, we had been working for different organizations because the virus was already known for 20 years from drc and that's where we started from an actual vaccine that we had on the shelf to upscale it to do all the work here we started the sequence and that's the delay is longer than with ebola

we hope to further accelerate it maybe we can cutoff two or three months depending but we better first before we promise. >> the actual production of large volumes of the vaccine, are we at a point in molecular biology where we can do it and manufacture it or do we still do it in that cumb cumbersome way how would it be manufactured and scaled up, doctor

>> it's using cells in vessels we have calculated now and we have done it already for other vaccines that we can get up to hundreds of millions, up to 300 million in a thousand liter vessel so we have fully optimized that platform and that gives us confident that ultimately if we have a vaccine we will be able to make it in large quantity. >> i understand that tamiflu is ineffective but the virus is similar in certain ways to hiv and that ace inhibitors might be helpful to lessen the mortality rate there should be a lot of that available i would think since it's manufactured already. >> it's available in china on

the market and we have been with the health center and they will start developing it right now. it is being provided today to start that evaluation. it's preliminary data so we need to be careful that we don't overhype it until we really have clinical outcomes. we are looking into the lab and we have made contact over the weekend to start screening our libraries of drugs into screens where we normally can measure quite well whether the drug is active or the virus yes or no and that's in part happening >> sorry, i wanted to ask you briefly if you could help us put into context how you're looking at this outbreak and your infectious disease how concerned are you how it's

spreading? >> well, i'm quite concerned but we learned that we could control measures that disease could get under control. that's why china is doing the right thing and the whole world is doing the right thing to make sure that they have the patients that are infected. it's quite scary it's going so fast in the world so we shouldn't create panic but at the same time, very worried that this could become a global pandemic and therefore take all precautions and so that's also why we start working on the vaccine two weeks ago. it's dangerous for elderly people and children, vulnerable people. >> thank you we wish you the best and we appreciate you coming to us from amsterd

amsterdam. >> thank you coming up a lot more on squawk box this morning rapidly spreading virus as well as a plane crash in afghanistan all putting pressure on the markets. stay tuned you're watching squawk box right here the design thinking, the digital engineering, security, blockchain, and we will be first to market! yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market.

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thank you for having me. >> it's a long flight back u.s. equity futures, that is a long flight. futures dropping this morning as a number -- the number of coronavirus cases rise the number of people infected continues to climb chinese officials have confirmed more than 2,800 cases. the death toll there has climbed

to 81. they have also announced expanded efforts to contain the outbreak including extending the lunar new year holiday to keep the public at home including here in the u.s.a. a fifth case of the virus has been confirmed in arizona it's a scary virus, but at this point it's old people, children. people that might be compromised, with cancer and things like that hopefully it doesn't gain strength and become deadly mike joins us with more on this morning's sell off. >> i think the context matters here this is the first pull back we're seeing we have gone more than 70 trading deals without a 1% move. that looks like it's poised to trade. here's where the s&p came from it's important as a set up we were looking for a catalyst for a pull back so this up trend since october has basically at

this opening level for the futures been broken. that's all that means is that we have been waiting for a pull back it's beenunusually strong and calm 11% rally since october but as long as you're above that point when you broke out to highs late last year this is all considering a fairly normal pull back obviously the news matters here but it's also about the fact that we have proper taking and selling in this market this is a ten year chart of a ten year treasury yield. we have two major, major lows just under 1.5%. we thought we were getting it and each time we turned up from there we went above 2.5 and this looks muddled now so the concern is we might be in that zone. we have to worry about applying the yield curve. finally the volatility index has been calm but interestingly not as calm as you might think you had this floor around 12 there has been a build up of tension or at least hedging

activity ahead of the political stuff happening here and now we're looking at back in the mini october sell off and then peaked there so right now it's a slipperier footing for the market but it doesn't seem like we're beyond normal pull back zone just yet, guys. >> thank you for that mike. >> should give some kudos i guess. >> he said on tuesday do not buy anything until this has been solved. >> on tuesday, we were still, you know, pronouncing it so it's very early there weren't any u.s. cases yet and he immediately said that now i will say in the past i have seen guys like him that told me that sars or bird flu or whatever the virus was -- and it's never happened but one harvard epidemiologist that might be overstating things said this could be scary and went back to 1918 is the last time

that anything like this has happened i just looked it up. the spanish flu, 20 to 50 million deaths. >> it was brutal it swept across the continent. >> just to be clear i think his call was much more of a short-term call. i mean, we were really asking him about what he thought of david teppers's call friday earlier. sort of buy with both hands and he also said look i could change my mind at any point and the call was saying, guess what, i'm going to -- >> well, the biggest concern was the monetary and fiscal combination of things that he says is as crazy as anything he has ever seen. >> meantime, i want to get over to j.j. to continue this conversation right now.

do you look at this as a dare i say buying opportunity how do you play this >> first of all i don't think i'd be buying with both hands right now. that's probably not the smartest thing to do but i think it's part of a normal sell off. they had a rough day on friday but overall i think that with earnings also, some of these earnings stocks may make some statements that if they would give good early looking statements this would be a great opportunity for buying that said, i'm always a believer that you should be a partial buyer at any time. you don't want to be both hands in and i think doing something

like that is just foolish at any time but particularly when you have such a big unknown. i think the funniest thing for this week an drou drew is the fs going to have a meeting this week and it's probably a story for you guys with everything else going on this week. >> what is your sense in terms of earnings this week? he brings up a good point which is if the earnings are very positive maybe this train continues the ride it's on. >> i think there's a chance of that earnings the early indications are good the issue is the market ran up 11% in a straight line it's a matter of the reaction. what the set up is for something like the very big nasdaq starts that you're going to start to hear from. they built in a very good first quarter. it's not about that. it makes sense to ask why is the market reacting to -- because everyone keeps passing around the historical examples, right of other diseases, outbreaks that did not really end up being long-term for the market it's because the market needs the global economy to have that

and that's the thing that's now in jeopardy with the chinese market that's the issue and that's why i think it's an instipth of let -- an instinct and it's very, very bullishly positioned going into this. >> i would ask you to weigh in on this boeing news this morning. z and a plane reportedly going down in afghanistan and boeing saying it didn't and it's hard to sense what any of this means. >> it's hard but i do think that the market has pulled back we held the line for awhile and now we're just not sure so we

have to be very careful about it. >> that stock down to around 5 this morning but that's the only thing with the markets. that's not necessarily a reflection of something else. >> it seems like they have nothing but bad news yet they still seem to recover. people don't want to sell the stock and i think the other thing that's being effected this morning that has been an amazing story over the last 2.5 weeks has been crude oil you know, 2.5 weeks we're talking about maybe a 65 handle on crude oil and now you're talking about 52.65 as we head into this morning. that's been one of the most volatile trades all week long. to your point about bans on air travel, et cetera, it's the area that's taken it the hardest over the last week or so. >> where are we on the debate about how expensive the market is or isn't?

especially when you watch the ten year yield start dropping like this. >> the market got to the highest valuation of the cycle but not really out of line with where markets get to when inflation is at this level. interestingly, bond yields are supportive at these low levels of equity valuation. however only if the credit market also signs off on it. so corporate bond yields have been a strong part of all of this they have been softening up just in the last few days so that's something to watch and i think that you came into the last couple of weeks with the highest valuation and sentiment situation in two years you have to work that out. >> thank you guys. appreciate it. >> thanks acti, andrew. >> thanks. >> you have come a long way in terms of science. >> the spanish flu. >> 1953. structure of dna. >> it's not just science too but controlling spreads and what do you do logistically. >> i have faith.

hopefully. anyway, coming up, the ceo of kansas city southern on the trade deal, the state of business and the nation's railroads before we head to break though here are the futures to look at once again. down exactly 400 squawk box coming ghba rit ck what do advisors look for in an etf? rit ck don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. to take care of yourself. but nature's bounty has innovative ways to help you maintain balance

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joining us now is the president and ceo of kansas city southern great to have you on this morning. let's start with usmca you're obviously domestic rail and the transports will be effected most likely by the scare of the coronavirus but i can't imagine that it's not high up on your priority list at this point. is it, sir >> you're talking about the coronavirus? >> yes. >> it's an unknown

i wouldn't say based on what we know that it's going to have a big impact on our business. >> the transportation average in terms of airlines you could see some weakness there. but not domestically i think what are there three or four or five cases at this point. let's focus primarily on usmca is that going to be a big positive would you say i think it will. it's the doubt of where things stand and the border relationship beyond that there's a lot of things that have been modernized and improved i don't think there's any question is this the perfect agreement? probably not but is it better than nafta and is it better than no agreement certainly, yes. >> we're seeing some impact on

fuel actually at this point from global concerns about what could happen is that positive for the rail industry >> it could be in our case, in the case of moving petroleum products and that's been a big area of growth for us between the u.s. and mexico that has more to do with constitutional reforms that took place in mexico a few years agatha opened the market and started to break down the monopoly but that's been a big area of growth for us as a company and growth areas that we see going forward. >> are you con vipsed thvinced a growth area going forward? because they're not a big fan of what they did with the oil industry there he's the old school that thinks that the government should be much more involved in the oil sector rather than less

involved and it doesn't fade away entirely but if you look at what he said more recently, it seems that he has accepted the fact that what's happening with refined products and the ability for foreign companies to enter mexico and compete has been a positive and in the absence of that, they will have a real problem with fuel supply. >> oh, that would be a relief. you were working a lot on advancements at the border in terms of technology to speed things up. moving stuff from mexico to the united states. how is that going?

>> it's going well we're engaged with customs patrol and all the security and tax agencies we're working on a project that we think would be helpful and making the border crossing more efficient but there's no doubt that there's a lot of improvement and even if you look at the model that's right here in north america, the way freight moves between canada and the u.s., if we could move toward that model, which i think is a very relevant precedent, it could significantly reach capacity for both southbound and northbound. >> what would be the difference in time frame if now it's currently and eventually it could be and in canada it's only and new mexico it's as long as. >> you know, it could probably be a 50% reduction in the amount of time that it would take to move product across the board. >> overall, the strength of the u.s. economy is clear to you at this point and do you expect capital spending to pick up? >> well, capital spending in our

company and across the industry has actually been declining but that's been more a function of the operational efficiency improvements that have taken a place across the industry and we are certainly a little bit more bullish than our rail industry peers in terms of the way we look at 2020. we think 2020 is going to be a decent year. particularly as we move into the second half of the year. usmca should be a boost to the mexican economy which will help us as well. >> okay. great. thank you. thank you very much. >> a lot more on squawk this morning. we'll talk about the coronavirus

outbreak and how much is weighing on market sentiment this morning there it is. you can see it on the green. it would open off about 390 points nasdaq also part of that sell off as is the s&p 500. we'll talk all about that plus boeing under some pressure this morning too after a plane crash in afghanistan boeing saying it didn't happen we're going to talk about all of it right after the break

they were among the nine people that were killed when his helicopter crashed in southern california the business world reacting from the death of kobe bryant in a statement nike, his long time sneaker endorser saying we are devastated by today's tragic news he was one of the greatest athletes of his generation and has had an immeasurable impact on the world of sport and the community of basketball. he was a beloved member of the nike family. disney ceo tweeting today we at

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sarah nelson is the international president of the association of flight attendants good morning to you, sarah. >> good morning. tell us to the extent that you can what impact this is having, what the feeling is among your world. >> well, flight attendants are on the front lines of any disease outbreak

we're very attentive to anything going on around the world. we are started with giving crews the most current information and making very clear what they should be on the look out for. of course with this particular virus, we are very concerned that infected persons can spread the disease. so airport screenings and any look out for any symptoms on the flight may not necessarily protect people from this so we need to be very clear about who is traveling from infected areas beyond the look out and also provide flight attendants with glofs aves and k and protective equipment. >> is there anything specific that you would do, if you're going to do for attendants that you should be doing for passengers. >> let's be very clear, our recommendations to the airlines is that there's now gloves and masks for those that need it on the flights. so that's all the crew members, any medical personnel that may

assist during the flight if necessary and any passengers that may start experiencing symptoms we would also recommend that if you are sick stay home and don't fly. and when we find that there has been an infected person on any of our flights then we need to lock that down and we need to be in communication with the crew members and get them into isolation and all the support they need. >> unfortunately, it appears that from what we're hearing, you can have symptoms or you could actually be able to pass this along without showing demonstrable symptoms and how much of a game changer is that >> it's very concerning. for instance with ebola you could not pass the disease unless you were experiencing the symptoms so airport screenings and being vigilant to look out for any symptoms was a good way to try to understand when you may be affected that is why we have been very clear with airlines that they

need to be -- they need to have enough gloves and masks for flight attendants to wear on the flights in and out of infected areas so they can protect themselves even though we may not be seeing signs. >> how does that work? if there's somebody on that flight, on a flight that's got it, does the air system of the plane actually >> this is passed through contact. so the air circulation is concerning but what is more concerning is the people interacting with an infected passenger. that would be the passengers directly around them and also think about it the crew is going through and delivering food, picking up food, taking rubbage from passengers and that's why the crew members need gloves and masks and protective equipment

to be able to protect themselves. >> i don't want to overstate the case do you think passengers should wear masks >> well, passengers who are experiencing any sort of flu-like symptoms or the virus-like symptoms should be wearing masks and that's one of our recommendations to the airlines is to have enough masks on board so that flight attendants can provide those to passengers that may be experiencing some symptoms. >> and then in terms of screening at the airports, are there particular airports that you think are more significant in this or more at risk if you will >> any airports with passengers traveling from infected areas. but also now we have cases around the world so the major hubs are already conducting screening and that's very appropriate. we also need cdc to be thinking about air travel more directly and working directly with our union.

what we find is that the recommendations focus in on the airports, focus in on how to handle this locally. when the disease has occurred. that's why it's more than they're recommending right now because those of us on the front lines are working to make sure that we're doing as much as possible to spread good information, contain what we can and take preventive measures. >> are you confident that you're going to get enough masks? what is the response from the airlines i assume they're working on it >> one of the things we're having to do is encourage crews to pick up their mask at their base here in the u.s what we're seeing is a run on masks and gloves in the affected areas around the world so we're encouraging people to make sure that they are picking up their own masks and not necessarily counting on the fact that airlines have said that they're going to provision them on the planes in case those are needed or taken by someone else who is very concerned about

having that equipment themselves. >> okay. sarah, appreciate you joining us this morning thank you for helping us through this appreciate it. >> thank you >> we'll be right back this is bittersweet. we want to thank michelle for being here do you -- before we go, do you have a ticket to anywhere in the world right now already? >> i'm flying to san antonio later this week. >> that's it. >> no overseas trips planned. >> so the next airport you touchdown in will be san antonio as far as you know. >> yeah. >> because you have bags packed. >> i didn't until they called me to go to lebanon a couple of weeks ago. >> well, just, you know, you don't have to be packed. >> like riding a bike. packing in under 10 minutes. >> don't store them. >> it's always an honor and a pleasure to be on with you guys. >> nice to see you. >> boeing under pressure this morning after reports of a crash in afghanistan but the ceo is denying the

report says there's two flights and they're fine >> the futures are sharply lower. squawk box is coming right back. robinhood believes now is the time to do money.

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that's held by the taliban now, the airlines acting ceo is denying those reports but in any event the shares of boeing were actually down 8 or 9 earlier they're down about 5 points. let's bring back in phil any more clarity on what happened here yet, phil? >> no, no, there's not just more conflicting information and we have reached out to boeing. boeing says it's trying to check to see if, in fact, a boeing

airlines aircraft has crashed in afghanistan which is what the government has what little we have is coming from nbc news that has a producer in kabul. that has given this update proximately 100 bodies are at the scene. that is according to a government spokesperson and the government spokesperson said it belonged to ariana airlines but the ceo is denying that the plane crashed or that one of its planes crashed the company has four boeing 737 airplanes so at this point, we don't know, a, if it was an ariana airlines plane that crashed and b was it a boeing aircraft that crashed? there are military aircraft over there. it could be a boeing military aircraft could be another manufacturer military aircraft as well and i'd find it hard to believe if somebody says there's 100 bodies at the scene that it would be a military aircraft. more questions than answers. not surprising

hopefully we'll get more clarity within the next couple of hours. >> phil, thank you for that. mean tile, we want to bring in an analyst on this good morning to you. i had misspoken earlier and suggested that boeing ceo said it hadn't happened this is the airline ceo saying it didn't happen but what does this headline risk mean for boeing shares and boeing investors it seems to be almost an every week occurrence. anything that even has the word boeing in it. >> we had the 777x first flight on saturday is being overshadowed by this there was only one fatal accident in 2020 that was one way too many. same thing in 2019 in the last decade that was the most fatal accidents there was one boeing and so the mix was different. and they're not all boeing aircraft you go back to 2016. that was the last airbus crash.

>> the stock looking to open down again this morning but of course the market is almost in line with where the market is, what do you think the value of this >> irrational. >> how should a rational investor look at this company today? >> they look at this as a global monopoly and cash flow problems will be resolved that's why we're maintaining our 390 tampl 390 target we get there by looking at the concessions. the two things concessions to the airlines that they have to pay out and gross profitability of the aircraft that's now lower because of the additional cost chlts a. >> the map you said 390 is your price target that's based on the max being back in the air when >> max being back in the air in 2020 in mid 2020 per the company's guidance. >> but the company's guidance has been terrible so far

we're assuming that production starts in q-4. that's earlier. >> do you trust him? >> i think communication was one of the issues. >> do you trust him? do you trust him as an individual who studies this company, do you trust what he says should investors listen to what he says and just say, he said it, i trust him? >> i think the company has been overly optimistic. nobody thought this would dragon. >> i'm asking you personally this is what you do all day long do you trust this man? >> we need more of a history to trust him. he hasn't been ceo of boeing for five years greg smith has been there since 2012 he's had a great track record so he's the one that i'm relying on. >> okay. you described it at the very beginning, the news that has

gotten overshadowed is that the 777x is up in the air. that's the good news what does that mean? >> it's a milestone that they achieved something they haven't done in awhile and this was first flight the aircraft is expected to enter service a year from now. so early 2021. >> and given all the challenges that the max has had, does that change the time line at all for other planes do you believe that the process for approval for these types of aircrafts getting in the air again that it's going to fundamentally blowout and shift how this happens. >> of course we're seeing it with the max, right? one session attached to it which were necessary in the first place and second the faa will inspect every second off the ground so that adds additional scrutiny to the process. so could i say that the development might take a little bit longer >> and if it does, does that

change the number. >> it doesn't push out the price target as much as one would think because the 777x was not as lucrative as the max. >> thank you for coming on this morning. >> thank you. >> thank you. >> coming up, how mike bloomberg is using big data to gain an edge in the presidential election that story is next futures are under pressure this morning as the fears of the coronavirus, fears are mounting. we'll be right back. ta me.lkor i consulted with your grandmother's doctor. we can do the screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪

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he was using big data to give his presidential campaign an edge. >> as we know, michael bloomberg has spent over $217 billion so far on advertising that's three quarters of the total amount of all the other democratic and presidential president trump spending combined but while public attention has been on his tv ads, his biggest weapon is digital ads and his use of data and analytics to find and target certain voters he spent $34 million more than biden, sanders and warren combined it's all done in a private company imbedded in the

campaign including the former facebook marketing chief gary briggs. they helped take control of the virginia governorship and legislature for the first time in decades back in november and now they aim to take that strategy across the country. now bloomberg also wants to level the playing field with the trump campaign that spent $36 million so far on facebook and google and has of course been working for four years on voter databases that are defining their messages so people focus on all the tv adds, this is really about bloomberg bringing the data fight to the trump campaign. >> thank you for more on mayor bloomberg's campaign spending, let's bring in our guest joining us right now. the 2020 campaign manager and everyone has talked all along

that when you've got that much money and the will possibly to use it that it's going to be a game changer looking at some of the numbers and i know we're waiting until super tuesday but he's ahead of a lot of people already which is where -- i mean, it's thinly traded still at this point >> listen, mike bloomberg will build the best possible campaign the trump campaign is incredibly strong but where he is really strong, you talked about this, is in digital. he has built a campaign which is probably running a decade ahead of anyone else in the democratic side to meet voters where they are and they're very smart about

it they're investing in swing voters in battleground states and they're in iowa focussing on the state that trump is going to win. >> let me ask you a question do you believe that voters are ultimately rational actors in so far as they say to themselves who can beat trump meaning this is the democratic base and some of the polls showing that bernie sanders is going on a nice little run here but he gets more complicated do you think he says i really like him over here this is the guy that i really want >> do you think that's what people do? >> the most important issue for democratic voters, but now there's certainly voters that believe bernie sanders has to be present and that he can ultimately beat president trump. >> bernie sanders is almost in a different party.

>> outside of an election year he is in a different party he switches into the democratic party for presidential races. >> are you counting on a brokered convention. >> no, i think mike can win. i think there are chances that you could have a brokered convention but the way that -- chlts do you think millennials are going to vote for a billionaire? >> i don't think any candidate has 100% of the primary vote is so i'm not going to tell you -- >> but in a general election, the energy in the democratic party seems to be on people like bernie i'm shocked that bernie -- bernie is now predicted as well above biden. so i don't understand. >> i'm ready for anything. >> here's what you need to recognize. we don't have a national election it's going to be wisconsin, pennsylvania, michigan, north carolina, florida and arizona.

that's it. he gets independent voters voters that trump won in those states by probably 12 points when he beat hillary clinton and those are votes that mike can win and to your point, voters will come to realize that if the most important thing is removing the actor and putting in a rational actor, bloomberg wins. >> i don't know if there's lessons in davos or not to be had but given where the stock market is today and the way the economy is chugging along, even those people that dislike the style points of trump and maybe even more than just the style points of trump, where do you think they just vote, i can't tell you how many people i ran into and i know davos is its own strange bubble, people that have said the nastiest things about donald trump as an individual, all sorts of things like this but then they say, do you know what andrew, it's actually kind of working.

>> so here's a little secret, davos is not a leading indicator of what happens -- >> yeah. >> i know that. >> but it's liberalism in davos. >> if you think if you whisper back what do you think about mike bloomberg that they wouldn't say i'd support him here's what business wants more than anything else and i appreciate where the job numbers are but what business wants is predictability and rational behavi behavior a set of rules that they know that they can follow what business wants is a business man that can actually increase the economy without the chaos that is brought. does anyone think for a minute that if you gave donald trump control of new york city the day of 9 l/11. >> head to head on a national election if you just had the

business community vote, you're probably right but do you think that you'll try to get business leaders to the extent that you think they matter to actually endorse. >> i think they'll make a lot. >> i think business leaders that talk about the importance of business in this country and what that means are going to be incredibly important in the general election. >> he has 90 plus percent or even if it's 80 plus with republicans so some of them might shift to bloomberg. >> democratic business leaders. >> but i worry about the real heart and soul of the democratic party is not where mike bloomberg -- >> he apologized for stop and frisk. has he apologized to me for big gulps. >> you could take a pound or two off -- >> that's not from that. i only do -- >> public health is porn. >> i can't do sugar free >> do you have to go into a

movie theater and getting a soda this big. >> i don't want someone telling me i can't. >> that's your number one issue. >> that's not. i've got other ones. all i know are climate change, guns and big gulps. >> mike bloomberg is a big believer he thinks it's an threat. >> he looks at all the hotspots

is bloomberg prepared to spend up to a billion or more on biden, sanders or warren if they're the candidate? or is it a game of poker. >> he thinks it's going in a new direction. that trump is a dangerous president. he had to get off the sidelines because he felt he had the best chance but regardless, it's the same i actually think at this point that mike bloomberg is probably the only candidate who in a general election. >> no, they're different goals one is elect bloomberg. >> right now we're focussing on it. >> my guess is in november, we get joe's vote my guess. >> you won't get my vote. >> no. >> he is disqualified because he's a billionaire and i can't tell you how many people that say that because i say that. >> i say mike bloomberg was a man whose father never made more than $6,000 a year and was fired and started his own business and has been incredibly successful

think about the people that you have on this show? someone that's started from nothing and lived the american dream. who for your audience is a greater role model than that >> thank you. >> working on joe. i'm going to get it done. >> you called me fat >> okay, kevin, i hope to have you back thank you. >> coming up, the latest on the coronavirus. the death toll rising 81 and the markets looking to open down 450 points off we'll talk all about it. and then later the house minority leader kevin mccarthy will talk to us about the latest from capitol hill. squawk returns in a moment legendary terrain in telluride,

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his neighbor even got started. because doing right by our members, that's what's right. usaa. what you're made of, we're made for. usaa impact on the global economy. the risk to both and what we can learn from the past. >> and house minority leader kevin mccarthy is our special guest. he's going to join us live to talk tax cuts 2.0 and impeachment as president trump's defense kicks into high gear the final hour of squawk box begins right now

good morning and welcome to squawk box on cnbc live in times square becky is off today u.s. equity futures for the 2 or 3 days i don't know it was either thursday or friday probably but we're down 438 points 169 points on the nasdaq that is smart. and the s&p indicated down almost 50. treasury yields as you might expect on global growth concerns based on a possibility even if it's remote on the pandemic. down 1.62%. >> meantime, the death toll from the outbreak in china has risen

to 81 with more than 2,800 people stocks are down on concerns about the virus spreading. among the hardest hit sectors casin stocks the airline sector also getting hit hard disney shares are down as well many movie theaters also closed. they're looking with both numbers down you can see it over 7% right now. steve has been doing a lot of math over the weekend on possible economic cost to this outbreak but before we get to anyone, go to eunice that is in beijing this morning. >> hi, andrew, this part of beijing that i'm at right now is normally buzzing at this time of the night because it has popular restaurants and bars but

wouldn't be as busy but it definitely is normally not as quite as it is right now this is what we are seeing all over the country people are not going out they're worried about gathering in public spaces and the government here has been moving much more aggressively to try to contain the virus. he is currently in the hotzone he is there at the same time when a city is constructing not just one but two to try to ease the shortage of beds there the state broadcaster has been airing footage of the construction of these two hospitals. they are going to add 2,500 beds by as late as next week.

they have already constructed that first building in 16 hours. so that building has now been moved over to the military the big question that a lot of companies have been asking is whether or not they should stay shut for a longer period than the lunar new year extension so the government has expanded to february 2nd. this is a the three days more. a lot of companies have said that they are trying to figure out whether or not they should stay closed for longer shanghai announced that it's going to extend it's holiday until like companies can't go back to work until february 9th. and that's starting to unnerve people here about what the economic cost could be and impact it's not only effecting consumer companies and travel companies

but also potential impact that it could have on the supply chain is something that people are worried about. especially for global companies. >> economists are trying to figure out the impact that it could have for that. >> they have to factor in vast uncertainties from the specifics of this virus to have changes in medical, organizational and communications technologies could alter the outcomes the world health organization at resolve to save lives. costs ranging from around 33 billion in 2003 to more than 50 billion in 2013. overtime, massive efforts, all of them were contained though they hit developing countries much harder. something that the world bank is trying to deal with separately.

>> the annual global cost of a moderate to severe pandemic estimated 570 billion. all of this is measured against the 1918 influenza that killed 50 million people. the united states entered a recession in 1920 that lasted 18 months blamed on the great influenza that hit the working age population the hardest the world bank said in it's report estimates suggest that if the world were to face a fast moving airborne disease such as the spanish flu outbreak that would kill more than 33 million people in 250 days and erode about 5% of global gdp or more than $3.6 trillion that was 1918. there's been dramatic advances in how health officials combat such outbreaks in medical technologies that you heard on the show this morning. and maybe most importantly in communications technologies that warns of an outbreak

if you read the book, you find out that they didn't know it was existing in different military bases. so three lessons from history. one, a pandemic is ever present. can't get rid of that. two, they mostly don't happen. three it takes a very serious and unique virus to have a major impact. >> 1953. we can sequence the genetic structure of this r and a virus. the one offset is how many flights a day connecting. >> right the enter relationship you can't confine anything anywhere. >> first of all, you want to be careful and say it's different this time. it may be. it may be different. >> communications cuts both waysment when you read that quote, it was in one army base they didn't know it was in an army base. it was in another army base and didn't know it

so the communication has the ability -- you think about saving lives on the other hand, it has the ability to spread panic maybe earlier than it otherwise would. so we all know about it so people get worried about it. they stop me and say what's going to happen. i don't know but economist versus to try to estimate this number one, we know how to handle it a lot better i'm moet gratified about how much we know about molecular biology and this virus that's concerned and quickly design either a therapudic or vaccine. >> the idea that it's still going to be bureaucrats. >> that's the kind of viruss that we use for that. >> sometimes. >> but it's still bureaucrats implementing this thing. whether or not they're different is the most interesting.

>> thank you for that. >> for more on the viruss impact on the global economy, we want to get to the cio and also the asia economist and to ai and good morning to both of you. peter, i'll start with you you listen to what steve just had to say how do you think about it? what kind of path are you doing? >> i am of the opinion that come springtime this sort of dies out. so the economic impact is obviously immediate rather than anything long lasting and i think perspective in theworld health organization said that 3 to 5 million people a year get severe flu and about 250 to 500,000 die from it so i think we need to put this in perspective before we all freak out. i don't want to downplay the economic impact but we only have a few months of it before it actually just goes away. >> derrick, where do you land? >> similarly, i think the short-term economic impact is going to be very stark because of the nature of chinese

decision making. information moves slowly in their system they tend to intentionally overreact because they don't have good information so you see the shutdowns. you're going to see a very big blow to economic activity in china in the first quarter but activity is not productive somebody said earlier workers being effected in this case, we don't see a blow to the labor force. we don't see a blow to the capital stock yet and we all hope we're not going to see it the first quarter is going to have some terrible numbers but a year from now we're not going to, economically, we're not going to notice this any longer. >> i know that you're not a stock picker but one of the things that we're always trying to gauge and figure out is when you look at a market fall this way or this morning, is more bad news to come or whether it's an opportunity, hate to call it that but that's the question of the morning. >> i too think that it's

contact. >> that's only fair. >> sentiment got extremely boiled up so that's the backdrop for this you look at investors intelligence last week just shy of 60. cities panic according to their numbers there's an 80% chance that a year from now stocks are down just based on their statistic. so it's all one sided. so that's the backdrop and this just so happens to be the catalyst for it. >> i wonder in the analysis that you have here, is it different this time? do you put all the different advances that joe was talking about, that i was talking about and say, you know what, it's probably more likely, in other words, it's probably more unlikely this time than it might have bp in the past. >> well, obviously i'm not a medical expert i would say i'm guessing we

would know it was different already. the reason being the changes have been as you guys talked about the communications you can fly directly from cities in the united states and cities around the world if we had seen a very quick spread out of the area we're seeing the spread. we're seeing the tragedies it's spread and part of it has to go to the heavy handed. i don't think it's different this time. we know already that it's different. >> you know it's different at this point. >> it may be but i was going to ask joe a question >> meg has known him for years

>> are they good now in terms of being able to keep not just the initial virus? you talk about this morning but also the way it muy tates into others they try to focus on something on the virus but what scares me, i don't know enough about it but that's the coronavirus. they muy tate so quickly we can't cure the common cold seems like you could cure that there is an r and a virus. so inhib tos i think we ask them that too so therapudically we may be able to treat that. the real people at risk are elderly and children the spanish flu is interesting in that it hit the 15 to 44-year-old range.

had a dramatic impact. >> when was your number? >> it was interesting. two interesting facts. per capita income in the 1920s went up. and higher employment levels are associated with higher levels of flu. so it's something that they can do >> look. the per capita income goes up. >> exactly all right. anyway, peter. thank you. >> thank you appreciate it. remembering the life and career of nba legend kobe bryant.

we'll talk about his impact on and off the court. as we head to break, take a look at the futures this morning. almost 500 points now. stay tuned you're watching squawk box on cnbc

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we are in the red down sharply on anxiety and nervousness around the coronavirus this morning dow looks like it's off about 480 points down right now. down about 177 points down s&p 500 looking to open down over 52 points. >> fans and even people that aren't necessarily fans of the nba are mourning the death of kobe bryant, the nba super star and his 13-year-old daughter they were among the nine people killed in the helicopter crash yesterday in calabasas 30 miles from los angeles. he was oneof the greatest basketball players of all time he also left a mark on the business world joining us now is the cnbc.com

sports business reporter we talked about. not everyone knows that he had private equity interests and pretty successful in a lot of different areas. not just sponsorships. >> great business men and came up covering high school and before and after he was gone yesterday hurts and it's going to remain that way for a long time it's such shocking news that kobe is no longer here. >> he was just back here in new york city for the u.s. open and he was almost an ambassador of

sports when he was in town at the open, he was on a lot of the -- and you know, i felt like i had just seen him he was almost like a friend and i just remember he couldn't get the smile off his ace. he really saw things i have a daughter myself and waking up and see your kid running around and they are you. kobe's daughter wanted to be like her dad she wanted to rule the wnba and she is going to get there and that made this day even more tragic you knew she was coming. you knew she had her dad it was so great to see her one day get to the wnba and to have

a life taken like that is so sad. >> can you assess his career from a business perspective for us we were having a conversation about kobe and michael jordan versus lebron. not necessarily simply as basketball players but as business men. >> i think the world was still waiting for kobe to just explode and do something great he had some equity in companies especially the performance drink, body armor. he was smart tech savvy andre is a guy that i look at and they're on the same trajectory but he was very smart and very savvy and that's what i think another piece of the business, the sports business we're going to miss because nike his nike shoe was one of the highest rated shoes of all time. kobe was right there.

he was special you knew to bring your a-game. if you didn't he was going to send you home crying >> a look back at what l.a. -- it was one of the greatest of all time >> he said he was an l.a. guy now. even for a philly guy that hurt. i just think when you see these guys come up from kids and they make it to the pros there's a part of youbecause you got a chance to follow their journey and it hurts even more so like i said, today is just very hurtful

>> it doesn't feel real. it doesn't feel real >> we mourn for his family and the other families coming up when we return a lot more on squawk box we'll talk facebook whether it's worth your investment dollars. as we head to a break take a look at futures. weighing on the stock market dow looks like it would open down right about now nasdaq off 168 points. about 50 points in just an hour from now we will see where it starts stay tedun you're watching squawk here on cnbc. at comcast, we didn't build the nation's

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investor fears and it had been facing. ahead of that to talk about the facebook rally the senior research analyst. good morning to you. let's do facebook. we'll talk a little apple. we all have talked about the terrible headlines every day and the stock would keep going up. >> i think what is notable is its delivering value for the

users and that's ultimately what is driving the growth. if we think about the company needs to do better it needs to improve the level of transparency and explain it's a business model and what it needs to explain to governments but at the end of the day it's delivering value. >> at this price, at $214, what kind of overhang is built into the stock. there's a moderate regulatory overhang and look into this quarter and ensuing quarters if the company is able to deliver attractive revenue growth in earnings per share the stock can work it's way higher through this year and into next year. >> how much are we talking >> the substantial upside for the stock over the next couple of years. >> could you give us a 12 month target >> we can't give a specific targ

target. >> how much of this is what they do have to innovate? one of the things that's been overlooked is even core facebook was updated and actually updated successfully in a way that i'm not sure was fully appreciated at the time. >> i think that's right. all of these platforms and if you look at facebook, facebook, instagram, each one of these platforms has to be constantly invested and innovated in so nothing stands still and if we look at the history of the industry, we all recall america online not all the platforms have been able to move from era to era so we think facebook can. >> if he gave you $10,000 to invest in facebook or $10,000 to invest in apple what would you do >> 70% apple and 30% in facebook. >> you're more bullish about apple. >> you asked me to choose. i'm giving you my view apple, this is another story of reinvention. think about the air pods, the

watch, remember the ipod nearly two decades ago. apple takes categories that are viewed asthma tour and it changes the story. it's about the user experience and so if we think about it it's the iphone, the franchise is better than people think services, we think this is a significant opportunity over the next several years and wearables we think they're just getting started and that takes them into newer areas like health care. >> how much is that reliant on 5-g and this super cycle that people talk about potentially happening as early as this fall. >> 5-g could be an incremental positive but everyone is going to have a 5-g phone and if you think about apple it's about the integration of the hardware the software and the services and that's what it is about. the other piece that i think is important to remember is that this ecosystem is incredibly powerful apple paid out over $155 billion to the application developers since 2008 that's harder for people to appreciate but that's a very

significant part of the story. >> thank you for coming in. >> thank you, great to see you that's who is going to get you on facebook. >> i like that i may do it. is it fun to go on there will i get these ads where i don't know what day they are. >> block everybody. >> can i block people? >> any messages from the liberal left. >> yeah. >> i get them on twitter there's a lot of twitter hate. anyway, coming up, house minority leader kevin mccarthy joins us to talk about another potential round of tax cuts and the gop case this week in president trump's impeachment. take a look at the futures down 458 points on the dow this

morning expected to open on triple digit losses and then u'me yore watching squawk box on cnbc ♪ ♪ ♪ ♪

america's getting sicker. sick of donald trump, there are one million more uninsured americans every year under trump. and he's repeatedly tried to repeal obamacare. mike bloomberg will make sure everyone without

health coverage can get it, and everyone who likes theirs, keep it. while capping fees to lower costs. as mayor, he helped expand coverage to seven hundred thousand more people. and championed women's reproductive health. as president, he'll give access to everyone. i'm mike bloomberg and i approve this message.

we are closely watching the markets as red arrows and dow open down 480 points 175 points, s&p 500 and all of this on the back of anxiety and nervousness. we have red arrows in asia and red arrows in europe and the big question this morning is whether he was right he said it last week in davos on our air whether you're supposed to wait this out some people are probably going to look at this as a buying opportunity and we're just trying to figure out which one it is. >> with all the other things we just got back from dx avos and last week in davos we spoke to the treasury secretary that told

us that tax cuts 2.0 are on the way. we should expect to see a proposal sometime in the next three months. >> he asked us to start working on what we call tax 2.0. tax cuts for the middle class and also working at other insen theives to stimulate economic growth. >> joining us now, house minority leader kevin mccarthy great to have you on the show. do you have any details? will the administration talk things over with you and brady on how to do this? >> yeah. he is the ranker on ways and means. one thing that you have to remember is all tax reform starts in the house. unfortunately on the democrat side they're only proposing racing taxes especially on with holding they have a 19% increase with 206 democrats co-sponsoring the deal and going in the opposite direction. there's something that we always talked about there's a number of provisions that did not get made permanent.

no democrat would work with them even though they wanted to nancy pelosi would not allow them to do that. i remember after we passed this when i was there, every other country when they stood up in a room at a luncheon said they wanted to pass tax cuts. now we're improving it when we're looking at our economy today there's two things that i learned. a buying opportunity when it looks like the market is going to be down and you join facebook. >> i may do it i may do it. >> all right i'll be your first friend. >> to show my support. you're going to have to look at the great vacations that i go on while you're back there slaving in d.c. you're in a place where obviously the government is watching this very closely do you have any information. >> i just wonder what this means for phase two. china is going to be dealing with a will the of things.

i can't imagine we move in >> looking much like ours and calling it the same thing. we remember about others this is something we're all going to have to tackle together china has woken up they do have a capacity to contain this and do something about it i think they got their attention. i also think somebody around the world has to continue to be able to share to make sure that we end this and it doesn't continue to grow. >> this could impact the gdp in china which they're already some people that say that the actions of president trump in terms of the trade war, you know have dampened or at least slowed the chinese economy a little bit at this point this could even throw it more

theoretical theoretically. >> they're going to feel it by what they have so far but the other thing, think about this. what president trump is able to accomplish we have never seen this type of downturn before. because why the president always believed in a level playing field and he used the ability of having tariffs and actually lower taf riffs when it came for america and it was a smart play in the long-term and something that no one thought he could do. the united states, mexico and canada trade agreement number one and number two trader america is only going to be stronger that's why when i continue to look i think it's a buying day of any other day to buy. >> okay. i'm reading from a quote here. john bolton's book alleged trump tied to investigation. the first thing that i look at is the predicted betting market and today i'm looking at will the senate convict donald trump

on impeachment in his first term and it's down a penny to 9 cents and i'm waiting for something to happen so i'm trying to understand what this means how do you think, how will they respond to that? will they continue to say it's alleged and this guy has a book deal or will it come to the point where someone says look the maximum power for the executive branch is in dealing in foreign policy maximum power. and if for whatever reason president of the united states decides to do something like this, it is within his right and it's certainly not an impeachment offense. which way do you think it oes?

>> bolton's lawyer confirmed. >> regardless, you heard the facts. ukraine got the money. there was nothing held up. if you based upon that you have the transcripts which the whole world does if you stick to the facts there's no reason why this carries on beyond friday if you look at what the democrat said when he was in congress proposing this impeachment that they proved it beyond a shadow of a doubt it was not the senate's role to have witnesses come in i don't think they make the case i think they repeated the same thing. they went overboard. when they said they're going to put people's heads on a spike and others they did everything many their case to make sure that this is ended. >> how long would it go so -- romney, you never know with mitt romney he says that he's likely to support witnesses. that will go to the end of february if that were to happen. >> that would go longer because you'd have to go to court to

determine from executive branch what they can say, yeah. this would be forever. that's really what the democrats are rying to do here they know their case is weak they know they cannot win the case so they'd rather drag this out for a long period of time. it's purely political. it's the worst example it's what alexander hamilton warned us about. that the animosity would be so great on one side that you would lower what impeachment meant and use it for raw political politics and this is the biggest example. the one thing that i think we should all learn from this, the tides will turn. we'll be on different sides in the future but we should not do the same thing we need to rise above this and learn from this and never repeat this back of what the democrats have done because they have been trying to impeach this man from the beginning. you have managers that voted for impeachment a year before the phone call ever took place you have members that ran for committee chair based upon impeach the president. they have spent more than 70 million investigating this man

while what he's signing a china deal? he's signing a trade agreement we're sitting in one of the strongest economies and andrew even you talked about in davos how everybody around the country and the world even if they didn't like the president said i can't believe it. >> true. >> this is what i could see even actually happening and we have to go, so let's say it does happen and, you know, adam schiff demand -- even though we can't. let's say there's witnesses and it goes all the way. can't the people decide in november whether -- even if he did pressure -- he wanted investigations of corruption and we finally say he did. they get a chance in november to decide whether they want to reelect him or not, don't they >> they made a very clear case

here that's another indication why. >> thank you for coming on and hope to see you again soon. >> i look forward to your friend request. >> good to see you. >> good to see you. >> he's watching >> yeah, i know. >> all right >> do i have to accept your friendship >> yes, you do. >> you are blanket acceptance. i can just tell you that you don't have to worry about that you i don't know. >> you're going to block me. >> coming up, when we return, futures down sharply this morning. questions about how to navigate all the turbulence we're going to bridge you ideas to make money amid allhe t turmoil. we'll do it after the break when squawk returns quadrupled their money by 2012? and even now, many experts predict the next gold rush is just beginning. so call u.s. money reserve, the only precious metals organization led by a former director of the united states mint.

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they're going to be outperformed today and also what is happening with southwest and not as bad as united and american are big casino presence and down almost 8% of this stage and remember in davos you told us that they're trying to help develop vaccines and treatments along with u.s. health regulators they're up about 4% in the premarket trade there. chinese stocks in general. especially the internet related ones this is the etf ticker it's almost down 5.5% at this stage and this move lower that has been about 9% since the highs that we saw a couple of weeks ago. this is a huge ramp up since the summer and watch the china related stocks there and then we'll end on that macrodivergence. oil is taking a leg lower.

you can see here part of the virus concerns driving that trade. global demand is a huge focus and gold catching a bit on the safe haiven demands. so gold, oil, ones to watch along with anything biopharmaceutical related. i'll send things back to you. >> global slow down. we'll talk about it. joining us now is the president and investment strategy. and we have -- this is episodic tv. it's not like a one shot deal with you it would go back years watching you predict rates on the ten year we're going to stay low most recently i again said you're going to be wrong because there's not going to be global slow down

you said if it wasn't this it was going to be something to cause growth to slow globally. >> people can say this is a black shawan event. the probably i the problem is five or six black swan events are floating around and can happen if it is not a pandemic, you're talking about president trump said he has fallen in love with kim jong-un and the north korean leader needs to resip cat. you have china supposed to buy double imports from the united states from 2017 through 2021, they're not going to do it the global growth was slowing as it is and this is one more element in the whole part rather than a new development >> i think the last time you were on you said 1.5 would be

the low this time on the ten-year have you revised that to below 1.5 now? >> i gave myself more time for reaching 1.5 we are 1.61, 1.62. we may reach the mark before the end of this month and in which case we have to reassess as the pandemic scare excessive, we say okay, after having gone to 1.50, it goes up to 1.65, 1.70 if it turns out to be much worse we have to say that's on this point. i'm not going to tell you how much lower to 1.50 it can go but there are very, very few pressures, none exist to push it up to 2% again unless you are looking for an absolute perfect world, where everything works normally without any problem that's the problem with --

>> the goldilocks strategy >> exactly, andrew if that is not the case, you're not going to get the bond yields going up growth is slowing down, inflation, if anything is going to be more suppressed as a result of this >> we have a lot of companies reporting earnings this week are you expecting them to be in line better than expected worse than expected? because one of the things people are going to look at, irrespective of what happens with the coronavirus, no >> i think the reporting will be in line with expectations but the guidance will be much more guarded for the rest of the year because they did not take this into account and it was a very rosy outlook before. now, once they take that into account, i think they are going to become more guarded for the remainder of 2020. >> and you don't think that is baked into the cake. when we're looking at these markets down this morning, you think none of this is about earnings this week you think it's coronavirus all

>> that is correct that's why i said to joe that it is not just one single black swan event you have so many of them happening. you have other elements. you don't expect flat app in the middle east, i didn't but one of five or six possibilities. that is not baked into prices either so that is what i think investors have to take into account for the rest of the year, that equities are priced for perfection, so you shouldn't be surprised if they take a hit. and a hit is significant, because they've gone up substantial. >> so global growth at this point where we are right now, you don't know how much of an impact coronavirus has you wouldn't say 0.1%, 0.2%. you don't have any actual numbers? remains to be seen, right?

>> it remains to be seen how much it totally is, but i wouldn't be surprised if about let's say a 3% growth that people expect for calendar year 2020, it goes down to 2.5, which would be very significant, a half a percentage move for the whole world. keep in mind that china is a big contributor to global growth, and that is through the country principally affected by the virus. >> okay. thank you. >> thank you very much always good to be here >> you're welcome. good to have you >> thank you meantime down to jim cramer, down at the new york stock exchange this morning and get his thoughts on all of this red about a half an hour before the mark opens jim, what do you do? what's the trade >> i know that you can buy a couple of stocks that are beneficiarie beneficiaries, strangely, clorox is a beneficiary, the moderna, i met with them at the jpmorgan

conference and they're working on something similar this is an r&a derived virus, that can work. but there's, you're not really, there's not a lot of opportunity to profit on this, more opportunity to sell on it. >> so you'd sell ist sounds lik? >> if i owned let's say wynn resorts i would. if i own anything related to travel, i would. >> airlines? >> it's too early to buy yes. i think those are the ones closer to being able to bottom but they went down about 25% in the last one, which was sars this doesn't sound as bad as sars, but boy, is it spreading >> okay, but play this one out for me i don't know if you got to see the screen maybe we can flip it back to where we were in terms of the big tech names in china and i'm thinking about alibaba, jd, baidu, what do you think the impact is? >> a think alibaba is a buy. >> that's up almost 6%

>> alibaba is a really good company i don't think it's necessarily going to impact going out to dinner. i mean, i think you'd rather stay home. is it too early -- the chinese market was week, lunar new year but the japanese market was incredibly weak last night i think asian markets will stay week that's the one i'd start if i thought this could run its course it could run its course. the idea that it's all over is a little bit aggressive. >> any thoughts, by the way, on this boeing situation? this morning plane down in afghanistan, airline operator saying it didn't happen. what did you say >> i know, i still think it's too early to buy boeing. i want them to come up and say here's what happened, here is the fix, it's ready to roll. we haven't come to that yet. >> hi, david david just sort of came into our shot there nice to see you. jim, we will see you and david in a few minutes

in the meantime don't miss a special presentation tonight of fugitive ceo: the carlos ghosn story. premieres at 10:00 p.m. eastern time i'm going to stay up to watch it stay tuned you're watching "squawk box" on cnbc we made usaa insurance for members like martin.

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this is cnbc breaking news, market sell-off. >> i'm carl quintanilla with jim cramer david faber at the new york stock exchange the dow is set for its worst day in four months as concerns about the coronavirus get worse. fed meeting, q4, gdp, the two busiest days of earnings season. europe is down about 2, 2.5% asia mostly closed, japan down road map begins with virus fears spooking the street. stocks take a tumble headed toward their worst day i