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 in nearly four months.

plus the latest on the fast spreading coronavirus. health officials race to control the new strain of the virus. and nba superstar kobe bryant and his daughter, killed in an l.a. area helicopter crash. we'll take a look at kobe's legacy for the league, for the business of sports, and even for this program we'll begin though of course with the coronavirus, the death toll from the outbreak in china has risen to 81, more than 2,800 confirmed cases in the country, according to chai neelz health officials. cases of the virus reported on four continents, the fifth case in the u.s., confirmed yesterday. all u.s. cases involve patients who recently traveled from wuhan, where the travel restrictions, guys, in china affect 56 million people, and xi warning we're entering potentially a more challenging period now >> this is different from sars, where they seem to hide it they've now passed on all the genome factors which will come up with something that stops it. it's hard to get perspective on

this, but here's this year's flu numbers from the cdc as of this morning. they estimate so far this season there have been 15 million flu illnesses in our country, 140,000 hospitalizations, 8,200 deaths, that's why you could argue, get the flu vaccine, even particularly because it will stop the confusion from getting the symptoms to the coronavirus. easiest way to stop, to make sure you don't get it is not the mask, even though that seems to be the prevalent way it's not touch your face keep your hands below your waist. i know that sounds a littlery kick it kult ridiculous >> the fact is it's not spreading in this country. >> no, i just gave you -- >> right it's not what are there, five cases >> do you want it to not spread to you >> good advice, by the way, regardless that's always good advice. don't shake people's hands, don't touch your face. >> but that's, i mean i don't think that's wrong -- >> although i was in japan last

year, people wear face masks as a rule anyhow. if you go to tokyo you'll find 25% of the population at any one time in the street is wearing a face mask. >> we want the people who are sick to wear the mask. the mask is not -- it's being translated by touch. you get it from a door handle. you get it from holding somebody's cell phone. you get it from your keyboard, if you don't put the wipes in. i like clorox. >> in this period of time, we've been it in, in prior outbreaks, there is a great deal of concern and we're seeing it reflected in people staying home in china and certainly -- >> gdp will be dropped >> travel restrictions, and then has thankfully been the case, life goes back to more or less normal >> yes >> these viruses are contained or burn out and we look back at a brief economic dip >> why not buy the stocks that are not going to be affected d.r. horton is down. that was a remarkable quarter,

really fantastic home builder, does seem right. there's an article, piece today recommending facebook. where is facebook in terms of the hierarchy of china nowhere. do you go and buy alibaba? arguably maybe >> it's getting hit today. >> the airlines were down 28%, the hotel company is down 25%, 30% during sars, and sars is so far not as viral, but certainly -- >> the latest outbreak is less lethal >> thisis more contagious than sars but not as deadly >> like i'm so pro, i feel like an idiot, this is mott my thing. lancet had numbers showed a lot of people recover and they just recover but the older people don't recover, because it's very hard >> this is typical of the flu as well >> right that's all -- you get pneumonia in the hospital, and you're older, there's a great chance that you're going to die >> the most, the newest wrinkle this morning is the suggestion that it's asymptomatic

transmission, meaning you might be contagious and not showing symptoms which obviously makes it much harder to control. >> that is the hardest thing, which is why i think you want to spend a lot of time just being sure that you're cognizant of how it spreads cognizant that it's -- if i touch your hands, and i have it, then bring your purel, like i did today, and be ready. i brought the purel. there's no reason -- that's not a panic. seems like a reasonable. >> it's a hedge. >> we by the way every morning wipe, where is the clorox wipes? i've become more germ conscious over the last ten years i'd say. >> if you have the flu, i'd beg to you stay home >> without a doubt and i would when i had the flu last year, i couldn't get to the door so there was really no question about my ability to get here >> i took a day off last year for the flu. i had never taken a day off since i don't know, i had perfect attendance at school >> i hadn't missed work in a long time. the flu will take you quite -- >> ten cent asking staff to work

from home until the 7th, which is beyond the golden week and as b of a cuts win to neutraled to, macau traffic is down 60%. 65 >> it's going to be down 80% that's an example do i want to bottom fish today? no i'd rather bottom fish in facebook with the note today where things are good, there's not a lot of exposure. do you bottom fish knowing it was down two bucks on friday and they have the cocktail in china that they're using against this, which is an hiv cocktail of course we have no idea whether it works but they have to try everything. >> well it is early days we'll get a better sense all of this how quickly it's spreading. >> there's a lot of the companies. >> and effective therapies soon enough >> in a couple of days it was time to buy for sars you had to start buying in to sars because it did peter out. this isn't showing any sign of petering out but look, the

medical professionals involved right now have the genome. it's sequenced by a thermo, by a tmo. tmo is doing it. >> it's amazing how quickly the advances allow for vaccines to be at least created. we're still talking months if not a year, but it has been truncated, the amount of time that you can respond to a virus with a vaccine >> many of us have experienced the flu, after they get the shot so it's nothing, you know -- >> that's true we're looking at a week this week, over 5 trillion in market cap from dower companies, the key four and next week we get alphabet amazon, facebook, microsoft all this week. >> tomorrow is a better day to bottom fish than today all the people who didn't figure it out last week, they seemed to have been oblivious are discovering it today, let them

panic. >> we'll be talking about earnings without a doubt >> of course we will >> will they be able to sustain what was a rally until this latest concern >> yes >> all right >> there is another breaking story, government officials in afghanistan say a plane operated by state-owned airline arianna crashed in one of the country's provinces held by the taliban. the airline's acting ceo is denying the reports. phil lebeau joins us with another story in which we have less than perfect information. good morning, phil >> carl, you tweeted out o suggested to me we should look at a tweet of some video from the ground this doesn't appear to be a commercial airplane. to give people perspective in terms of where the plane crashed relative to kabul, it was suggested it was a plane operated by arianna airlines,

the state-owned airline. they have four 737s. this is not a 737 you're looking at footage of right here take that, along with arianna ceo denying losing a plane it was initially said there may be 100 victims there this does not look like the airport that would have at least 100 passengers that said, guys, this is in an area as you mentioned, carl, that is controlled by the taliban, and therefore it's hard for media to get in there to do any true reporting, so at this point, it looks like a plane crash where certainly more questions than answers, but it does not look like a commercial airline, airplane. it also does not look like one that arianna airlines owns >> phil, we'll watch that with your help today. a lot going on ar and overshadowing the maiden flight of the 777x from sports fans to business leaders the world is mourning

the death of kobe bryant today the basketball legend and his 13-year-old daughter were among those killed in a helicopter crash in southern california it was back in 2016 that bryant and partner jeff stibel unveiled their capital front at the nyse. on that day we asked kobe about his legacy in 20 years, are we going to be talking about your legacy in basketball or investing? which would you prefer >> investing you know, listen, playing basketball, you know, the focus is always on winning, winning championships, winning championships, win championships. championships come and go. there will be another team that wins another championship, another player that wins another mvp award. if you really want to create something that lasts generations, you have to help inspire the next generation. >> came on again this past summer and talked about the firm and new rounds of capital raises and jim, this one hurt a lot >> it is funny to -- yeah, it did. this one is where we'll remember

where it was where were you crossing sixth avenue downtown, got it from my daughter. didn't believe it. seems indestructible, right? one of those people that -- saturday night lebron passed his record in philadelphia so i was watching that game, when my daughter mentioned what do you think what happened to kobe? it's okay. he can't go back and fight lebron because that's the way you feel, competitive, competitive, competitive it was interesting, i remember when he was here and i said he's being very gentile but i bet you he's competitive about this. that was what you thought about competitive, but in a really positive way competitive in a way that you ever heard anybody say anything bad about him? i remember watching a little bit, the last time he played in new orleans, little kid had a kobe, the ritz-carlton a kobe jersey and he was crying i said what's the matter and he said kobe just signed my

jersey i asked him to sign my jersey and he signed my jersey. how come he said because i think kobe's like that. he was a genual competitive individual >> like most people, i didn't even get a chance to meet him. he wasn't here on the day that he visited >> oh, geez. >> i obviously admired him greatly for his talent and incredible work ethic which you saw not just even after, of course, his incredible, amazing basketball career, but his work ethic, his enthusiasm, and the beauty of his play on the court, just a tragedy, and then his daughter, i mean, just -- >> the tributes have been coming in from bob eiger, tim cook. nike called him immeasurable impact on the world of sports. >> nike website is pretty good in terms of remembering. i don't know this one just kind of struck you, it's like life is short life is short.

>> we'll pay more attention to that as the morning goes on. obviously the market's got a lot to understand hassle as we look at the premarket, we'll get to some of the other news that's headed our way this week, talk about the implications for the fed meeting, gdp number on friday, inflation data and a lot more it is the busiest two days of earnings season as well, starting not really today but tomorrow, 3m will roll in, jim, lockheed, utx, hog, and then we'll get to the apples and starbucks tomorrow night >> wow big. just big you know, the worst -- i mean you have no idea how to interpret any of these you just won't because you'll be thinking about the virus. >> you will. but numbers are numbers and we can get a good sense as to the company's businesses apple's surge has been incredible this year, it is still a feature. >> 20% of the businesses in china, so what do we do? 3m, double digits, businesses in china and don't forget the mask is not that effective.

i shouldn't say it's not effective, it's not impactful to the numbers. >> also keep you from touching your face, by the way. don't forget >> you got to stop touching your face >> all right, if i got a mask on, i can't hit anything >> that was from my friend dr. lapook, cbs doctor he said tell people get the flu shot so that you know which version of this you have and just don't, you know -- keep your arms to your sides. >> eunice yoon is in a mask on air. >> that was scary. >> anybody in the field knows it's your call if you're there, it is your call >> i'm just one last thing, people, dr. mark bristow was in the height, in the epicenter of the ebola virus, and all he said was they just didn't shake hands. that was all he did. he said everybody was in it, they just do not shake hands don't touch.

yeah >> elbows now. >> elbows is good. >> there is a look at the premarket. we're in for a rough on. more "squawk on the street" continues after the break. (vo) in every trip, there's room for more than just the business you came for. whether that's keeping up with what you always do... or training for something you've never done before. that's room for possibility. ♪ but how do i know if i'm i'm getting a good deal? i tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if i'm getting a great price. this is how car buying was always meant to be. this is truecar.

welcome back to "squawk on the street." time for your "mad tasdash." eli lilly caught a downgrade >> sorry, estee lauder >> excuse me >> no downgrade for eli lilly. this is really important estee lauder during sars was not nearly as involved with asia, just wasn't as big a business. hong kong and china really represent the key growth drivers. opco downgrade, if you want to say what companies are going to bounce back the fastest that are in epicenter so to speak, it would be this one, because they've done remarkable work in travel but that's what's been curtailed, so let this one come down and then when you think it's low enough, make a move

>> but china is an important part of their system >> growth venture. >> you've talked about it many times. >> those of you who feel like this is overdone and that we're being too dramatic, which i don't think we are if you think this thing is going to be contained, this one will snap back the best that's what i'm saying >> so this move down is coronavirus related. >> definitely. their quarter was really great i'm looking for companies whose quarters were great. some of the ashlz are great, some aren't. fa breeze yo goes over to china regularly, deals win flunsers, younger people he has cutie free stores where he makes a lot of business he is a fantastic businessperson if you think this is under control, boom. this is the one you buy. >> down 4% keep an eye on starbucks and

yum! that are getting hit for the same reasons reminder by the way, you can always watch us live on the go, it's the cnbc app, download it today and stick around we've lot more "squawk on the street," including an opening bell ten minutes from now. at fidelity, online u.s. stocks and etfs are commission-free.

and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk while our competition continues to talk. you leave it to me. i'll get your taxes in an ok place. what? just as soon as my audit is over, this gets my undivided attention. you take a lot of trips to the islands, phil? pretty great, right? oh phil's legally dead. fell off a boat. going by denis now. celery. long story.

what do we got here. oh. not going to want to see this. i don't think this is going to work. at&t has america's best network, now with our best plans, at our best prices, starting at $35 a month per line for 4 lines. new from at&t. concerns about the coronavirus intensify this morning as the confirmed cases number approaches 3,000, and the death toll is at least 80. we're looking for a fifth day down for the dow, and the first back-to-back losses for the s&p since december 9 back in a moment this piece is talking to me.

yeah? so what do you see? i see an unbelievable opportunity. i see best-in-class platforms and education. i see award-winning service, and a trade desk full of experts, available to answer your toughest questions. and i see it with zero commissions on online trades. i like what you're seeing. it's beautiful, isn't it? yeah. td ameritrade now offers zero commissions on online trades. ♪

the opening bell is brought tout by nuveen, a leader in income, alternatives and responsible investment you're watching cnbc's "squawk on the street," live from the financial capital of

the world, busy week on tap obviously as we monitor concerns about the coronavirus. we're a week from the iowa caucus, where sanders is running number one in a number of polls, jim. we'll monitor this bolten bombshell in "the times" last night and goldman's investment yesterday, first ever. >> i think that it's interesting you're sitting there reading, the bolten thing rather large. i predicted the recent days where you're genuinely worried if you are pro-trump that something bad was going to happen to trump, but this is what happened. this is the so-called smoking gun, it doesn't seem to be impacting tell me if you think i'm wrong, david, the republican senators in any way that make it so that you should be concerned that something's going to happen, he did' like him >> based on the public commentary and the various new shows on sunday and the other ways thaw monitor the sentiment,

the chamber amongst the republican majority that they are not even going to still vote to call witnesses, but again as carl referenced the report from the new york times, picked up by "the journal" and others about the manuscript for his book he indicates firmly there were payments withheld to ukraine at the direction of the president, we'll see. >> the republican arguments which is witch hunt in the president's view didn't attempt to go against what the democrats are saying he was a prosecutor, very interested and you listen to the republicans, listen, we're not going to deal with this. talk to the hand i think that's it. will robbers call someone?

i don't know maybe you'll hear first about the car which is not in china. look for that to talk about the idea that apple wants the car in china, very big deal >> can you believe morgan stanley is back to where it was? >> speaking of morgan stanley, strategist michael wilson out with his warmup, we suspect the first correction since october has begun. >> yep >> it will be contained to 5% or less because liquidity is so flush. >> sectors for travel down ala sars you think of influenza, how many people died here that's more deaths, many people contracted it.

i look at the number of people recovered in china, makes me feel a little more certain the fact that the chinese are approaching it so aggressively but then you watch the video, i don't know if you watched the video of the number of steam shovels, whatever you want to call them. >> back hoes >> holy, they're treating it as seriously as possible. so far other than the combination and no one knows that's working it's an hiv drug >> the curve now is the 310 spread is single digits. >> 1.6 on a ten-year again >> do we need to start trimming levels for china >> i think you have to how can you not? absolutely [ cheers and applause >> 56 million meme is a lot. >> in lockdown

>> yes, people not able to travel >> i think the one that's most important is tim cook. [ bell ringing ] give that guy a positive, as we like to see. that stock seems vulnerable. why not wait now if you don't own it >> apple reports tomorrow night along with amd, starbucks and ebay there is the opening bell. s&p 500 and the cnbc real time exchange, alyssa energy and at the nasdaq miss usa top models and owner and producer of new york fashion week the shows. very negative, jim >> right this is the panic people have been baiting for we've been saying over and over if we get an exogenous event that's when you get the sell-off and have to buy. i think it's only timely when you have to buy.

knowledge today other than to buy clorox, ab-v, owens and minor bought hallyard for 700 million, sells hospital gowns and apparel for when you think there is going to be an infectious disease, so you can buy that i want to emphasize clorox because this has been always the time to buy it, whether it was h1n1, it had a nice 7% rally, the h1n1, but ab-v made up what it did on friday we don't know'cocktail is going to work. when i speak of the cocktail, they have an hiv cocktail that worked against sars. it definitely worked against sars so you're going to see that tried and i wish i knew whether it was working or not. the chinese will try to tell us. w.h.o. has still not called this thing an emergency when is that going to happen maybe that's the second let when

w.h.o. says it >> they're going to meet again >> they are. >> the person to person transmission ex-china could prompt them to declare a public health emergency >> the incubation period, you don't have any temperature and don't think -- it's like when you go to the doctor, they ask you whether you visited certain areas, still there >> you mentioned ab-v a number of times >> several times, three times now. >> coming out of the corporate news front that ab-v is getting closer to closing that acquisition of allergen. they reached agreements to sell two key drugs part of the process in terms of getting the final approval from anti-trust regulators astrazeneca is buying one for

crohn's disease and nestle will take ownership upon zen, treatment of pancreatic insufficiency due to cystic fibrosis the allergen deal is much closer in terms of the close for abbvie >> and botox, the abbvie people told me was undersold around the world and a new one, last week, ten days ago, allergen was approved for an acute pill against migraine yes i am a spokesperson for the american migraine foundation $100 a pill, i'm getting mine today. it's fast-acting, never anything on the market for it if abbvie which does not have a good marketing plan that i've seen, if abbvie markets this drug for $100 a pill and 30 million people have migraine, it is going to be remarkable. you take one and two hours later, most people have beaten the thing.

we have certain drugs, shots that that have been successful, and i used to have a migraine 27 out of 30 days i know, hey, listen, i'm america's actor. now i have four or five and i will take this thing for 100 bucks, i'm going to get ten of them and be aware that that drug is not in the numbers. not in the numbers pause it wbet was just approved. lilly as a competitor not approved keep in mind the numbers for allergen are per se too low. >> those names are in the small winner list this morning along with the cloroxs and 3m rz and the hortons. >> very good quarter >> the rally at home builders continues, given how little inventory there is, jim, we know that we need people to start building >> those are less expensive homes, very, that number just so

we know earnings up 53%. revenue plus 24% pre-tax margin increased 230 basis points typically at this point the margin goes down because there's so much demand for wood, so much demand for supplies. it's not happening sales increased 13,000 they've bought 3 million shares. the companies used to spend, spend, spend they are no longer doing that. by the way, on just a little light note on housing, lowe's, this morning announces that they've got honda outdoor power equipment. why is that important? home depot has had exclusivity for 25 years marvin ellis breaking exclusivity of some home depot products however, i think home depot are well prepared for the growing season, that's their christmas >> right >> i always check in, i want to be sure they've got the right flats tomato flats, i want them during the week and i think we're going to get them. get my way on that >> when does that begin, when is

that period? >> second week of april. >> second week of april. >> will you go with me david, you will not believe, i'll blow you away with my trip to h.d it's even bigger than some of the other trips i take, some of the more exhausting trips. >> really? >> home depot is a two-part trip, because it has salesforce.com, and good registers, varoom, right through. home depot is still more contractor than is lowe's but look out, ellison is good. i still think home depot is best krig minyard is doing a remarkable job, ceo of home depot. >> down less than the overall market, down about 1.5%. still up for the year barely, 0.47%. >> last quarter they had a glitch, very open about it it was a glitch that had to do with their market, software. that i think is going to be solved this will be -- by the way, it is an investment for home depot. people get more and more excited as we go through it.

>> as you would expect on a day like today with the focus continuing to be on the coronavirus in particular in china, 56 million people have been at least prevented from extensive travel >> right >> yum! china, starbucks, getting numbers out of macau, so wynn, las vegas sands, all down sharply. young china shares down over 6%, starbucks, which we talk about so often because it is vieweds as a positive, so agreative. per capita coffee consumption in china is so far below anything in the u.s., which you could imagine the growth pattern there. on days when there's concern about people getting out, stocks are going to get hit >> that might be a terrific buy. kevin johnson on "mad money" when the stock got to 83, he was at the u.s. air force academy, said he was backing up the truck. i think he'll do the same. i don't think he's going to be as impacted as people think. he's a believer and it will

matter tremendously. david, i want to ask you, at what point will an activist say i to have code >> it's an interesting question on fedex i made the rounds on that. it's certainly been on any number of activist's radars but what's the plan? so you try to force fred smith out in some fashion or say okay the board has to undertake a search what is the real plan there that you could see implementing a number of things or getting in a board fight to implement certain ideas at fedex that would reverse the slide in those shares and yeah, we take a look short term but longer term, please, that's where the story is >> how about this? have you noticed spent a fortune at u.p.s. and i think he's gotten ahead

>> activists are typically in a stock for a long time, a very long period of time. they need a plan you can win with >> the staff is not that great and there are issues i like the company >> you're admiring of fred smith. >> i think these people, what a bum now. he spent a fortune so that he was going to be the way you got goods from china in a hurry and that was going to be a good business sometimes you need it overnight and he owned that business and so the idea that he was somehow wrong because we went to war of economically with china, it turns out a lot of people bought a lot of stocks that were

after phase one and those turned out to be ill-advised. that's important by the way, i'm going to give you one that is, two that are acting incredibly well thermofisher if you go to lancet this morning, the best i've seen on the virus, talking about how many people recovered already. the chinese are using thermofisher gear to do the genome and it's mentioned over and over and over again, and then one other that i keep thinking by the way, moderno has something that was fatuous that they don't >> thermo fisher are a $130 billion market cap company >> it got the high-end product general electric reports this week >> yes >> what are you thinking >> i'm going to focus on it when it's ready >> wednesday morning >> yes >> wednesday and thursday are the two busiest days of the

season kind of nuts >> really good days to watch us, where we are like being given stuff while it's happening, and we're not there. >> we're not there yet >> you've called the game and wear he not there. >> not there yet >> if the market tries to bottom here, give it a little break people who are smart enough to sell on monday, they might come in, people who were on friday come in, i don't know. i just, this is not the day necessarily where i say you know what i want to take the big swing at apple. it's just not the day. >> beyond meat's actually one encounter they have a deal with denny's to offer a plant-based burger at 1,700 locations in the u.s. and canada. >> ethan brown, he's spent ten years developing this burger this was not some overnight sensation and i think he should be appreciated far more than than almost anybody doing green.

he's not green washing what did you think of the burger so far >> it's funny. i tried a meatball hero, a beyond meat hero the other night. >> hero? >> yes, it's good. >> was it? >> yes, it was good. >> he tried something. you went out you did something? what'd you do? >> yeah, we went out >> you went out? >> yeah, we watched a movie, ate while we watched the movie you ever do that >> just when the virus may be coming here, you finally went out. >> that's when david starts. >> david finally goes out. i'm staying in and you go out. that's perfect let's go to tjx with purel and clorox wipes >> i like to go out. >> let me get you some surgical gloves after this. >> i just don't like going shopping i just don't like to go shopping >> how about movie theaters in china, how are they doing? >> i would imagine not doing well >> some companies. >> i imagine not doing well. >> that one scene with eunice,

where she's at the most popular area and it's empty except for her and she's wearing a huge surgical mask, i found that -- >> that was beijing. >> okay. >> that's not even in any way the center of the outbreak >> no, but it did chill, i was a little chilled >> by the way, imex 2011, the most recent low to where we are. >> imax is ground zero, you probably want to wait a little before you get excited richard gelfan i'd love if he were to come here. >> not much he can do. >> if you're richard gelfan? >> no. >> going to start serving beyond meat i don't know >> you could do that >> ethan brown is a hero i talked to the co-ceo of whole foods walter robbins you think this is put together he tried formulation after formulation, formulation, until it tasted great. pretty amazing

>> that's a lot of test kitchen time >> my. the question, can he deliver, of course mcdonald's really goes for it, i thought mcdonald's was lukewarm they had franchisees that may not want to check off. how about if you buy hca >> iowa say week from today. >> oh, geez, yeah. >> "the des moines register" endorses warren over the weekend. >> wasn't that something >> sanders and biden appear to be pulling away from the pack. >> warren was a gutsy move how many people the "new york times" endorse, two people that was new >> amy klobuchar and elizabeth warren >> two >> last week >> yeah. >> but iowa is now close >> finally you ever cover elections >> no. >> oh, my. what a circus! >> no. iowa also remember it's a caucus if you're second place, if your first place person doesn't get

15% you go for second place. it's not completely clear. >> how about the way speaker pelosi delayed, took the long way and make it so that elizabeth warren was not in iowa >> sanders as well >> yes >> having to be present. >> or klobuchar. >> or klobuchar, but not biden >> no. >> look, speaker has not endorsed anybody >> or buttigieg. >> true. >> so we're off the initial lows, dow is down 425. let's get to seema modi. >> 2% loss for japan, south korea, markets there, europe down 2% as well. here in the u.s. we're coming off the worst week since august. look at the s&p 500 sectors, utilities, the only sector trading in positive territory. of the final week of january shaping up to be a busy one. nearly 150 s&p 500 companies set to report earnings we also have the final read on

u.s. gdp and the first fed meeting of the year and the brexit deadline headed for this friday in terms of the coronavirus and the fallout, that's showing up in different parts of the market travel being the most obvious. still a lot of analysts saying it's hard to assess the financial damage when the numbers keep changing, although we're looking at the online travel operators, marriott, china being its fastest growing market you can see down about 3% and some of the airlines lower as well for the cruise lines that have sailings to china, royal caribbean and cairnal, monura trimming earnings estimates for 2020 by three to five cents as the two operators suspend their china salgz. royal krabdown 6%. within retail, luxury has been under pressure not just today but over the past week especially looking at a name like lvmh and carrying the parent of gucci, makes up about 35% of global luxury spend speaking of lvmh we have earnings tomorrow.

we'll see if the company can address what we see on the ground as the lunar new year gets started 3m only stock higher when you look at the industrial sector. that company also manufactures those face masks that are seeing heightened demand amidst the virus spreading beyond china an oil, goldman sachs about a $3 mitt to the price given the virus and the concerns that could have on economic growth. that's pressuring some of the oil producers. guys, back to you. >> seema, thanks so much let's get to the bond pits, ten-year 161, rick santelli is at the cme in chicago. hey, rick. >> reporter: good morning, carl. you know, could you say what you will about technicals and of course we follow fundamentals and technicals on cnbc, but once we closed under 190 after not getting over 2%, and then we closed above 1.80, adding fuel to the fire and then this couple of sessions the end of last week we made the close under what had

been an intraday low from the 8th of january right around 1.71, building more momentum, as you see yields across the entire curve moving down. now, many could try to tie this to politics but it's pretty clear, coronavirus is at the epicenter. look at the two-year note yields as they continue to move to levels on the next chart we haven't seen since october on a closing basis. twos through 30s are at levels the lowest closing yields since october. one week of tens, we could clearly see is the corona news started to come out, the market really started to give it up finally, what's going on overseas, really not much difference, but the pace, this is why you don't use percentages and yields here is a chart two weeks of bund yields. we've gone from minus 15 to minus 38 that is a move, especially at a time where it looked like christine lagarde was getting some love with respect to maybe

getting rates closer to zero, and finally the dollar index, having a good week, it's the flight to safety currency, best level since december carl, david, jim, back to you. >> rick, thank you very much dow briefly goes negative for the year at 28,538, slightly above for now. down 405 points. we're back in a moment when it comes to your customers' expectations, there's one thing you can be sure of. they're changing by the nanosecond. that's why cognizant created a unique engineering approach to design and build new digital products. learn how cognizant softvision designs experiences and engineers outcomes. ♪ cool.

♪ ♪

there's room for more than just the business you came for. ♪ whether that's taking in every moment... or capturing a moment worth bringing back.

that's room for possibility. ♪ how far we can go, oh oh ♪ let's look at faang and where the laggards are apple the laggard among the megacap tech companies we're slowly repairing some of the initial damage dow down 393 we'll get stock trading with jim in a moment. i'm really into this car,

but how do i know if i'm getting a good deal? i tell truecar my zip and which car i want and truecar shows the range of prices people in my area actually paid for the same car so i know if i'm getting a great price. this is how car buying was always meant to be. this is truecar. rowithout the commission fees and account minimums. so, you can start investing wherever you are - even on the bus. download now and get your first stock on us. robinhood.

beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond.

stock trading. >> you want to look at merck we had it down graded but credit suisse likes it very much. i have to tell you i think this is one where they're making incredible strides the ceo really addressing the younger people 50% new signups from millennials. if this one comes in i'm adding that to the list of buy it period end of story. >> jim, how are you going to

handle this tonight? >> i'll tell you what. i don't want to capitalize too much but i am going to tell you what makes sense, too. >> all right, jim. >> buy tomorrow. >> see you at 6:00 "mad money" here on cnbc when we come back a lot more on the sell-off in place and the wns fe wh e w itthdo do 393 to infrastructure, we're creating state of the art, 21st century transportation hubs, constructing new bridges, bringing high-speed internet to every corner of the state, and committing to low-cost clean energy. with infrastructure built for the future, the companies of tomorrow can thrive here today. see your future at esd.ny.gov.

man: how can i deliver superior long-term results? it begins with a distinctive approach to managing money. that for over 85 years has focused on keeping confidence up when markets are down. an approach where portfolio managers work well independently. and even better together. who don't just invest, but are personally invested. can i find a proven approach designed to deliver results? with capital group, i can. talk to your advisor or consultant for investment risks and information.

good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen along with david faber great to have you. welcome back, sara an eventful day. dow down 400 concerns about the coronavirus in china intensify the number of cases approaching 3,000 and the death toll 80. very few cases reported in u.s.a. but strongly on watch. we have offered china and president xi any help that is necessary. our experts are extraordinary. that's pretty much the main driving dynamic for trading at this hour ahead of what is going to be a big week with a fed

meeting on tuesday and wednesday. gdp later in the week. inflation data and the two biggest days of earnings season so far so a big check and test for the market maybe one of the first of the year in the meantime economic data crossing the tape. let's get to rick santelli for those numbers. >> reporter: we're waiting for a december read on new home sales and anything about housing has been doing pretty well in 2019 and carrying over. this number is a miss, however expecting a number between 725 and 730,000. 694,000 seasonally adjusted annualized units that represents a drop of close to half of 1% from last month's slightly revised number, which was 719, now stands at 697,000 for more added color we'll aim toward diana olick >> this is a disappointment. we were expecting much better on new home sales especially because mortgage rates started

to fall in december. these numbers represent people out shopping, signing contracts. not closing. so people out shopping in december for a home. we did see the median price of a newly built home sold at $331,400 that's up pretty significantly from $329,000 a year ago we were hoping to see the prices start to ease up a bit as the builders start shifting more to that entry level product that's where the demand is we also have an extreme shortage of homes for sale of existing homes on that entry level. that's why we want to see the builders pivot that way. we're also seeing the supply of new homes jump up to 5.7 months supply to 5.4 months the months before we want to see that number move up a little bit higher so we can see the prices start to ease up. again, a disappointing number given that we saw home builder sentiment jump to a 20-year high in december and housing starts jumped to the highest level since 2006 again, not great, 694,000. back to you guys >> all right diana, thank you for that. stocks are selling off the week with more cases of the

coronavirus confirmed over the weekend. the death toll from the outbreak in china has risen to 81 more than 2800 confirmed cases in the country according to chinese health officials cases of the virus have been reported on four continents. the fifth case in the u.s. was confirmed yesterday. all u.s. cases involve patients who did recently travel from wuhan. our eunice yoon is live in beijing and has the latest on all of that. >> reporter: thanks so much, carl this part of beijing is usually buzzing. it has a lot of popular restaurants and bars but it wouldn't be as busy because of the lunar new year holiday but it wouldn't be as quiet as it has been over the past couple of days. what you see here is happening all over the nation. people are scared about going out and gathering in public places that's one of the reasons why the government has been moving very aggressively to try to contain what they have described as a strengthening virus over the weekend the chinese premier was named in charge of managing this epidemic

and he -- this decision had come after president xi jinping convened an emergency meeting as well over the weekend describing the situation as grave the premier is currently in the hot zone of wuhan, which has been in the process of constructing two prefabricated hospitals and that construction, which is going to ease the bed shortage by adding another 2500 beds has been featured on state tv as well as the state media. one of the state media hasbeen bragging that the first building has already been set up in a matter of 16 hours so the workers are moving very quickly and that is being featured very heavily in the straight press likely because there has been quite a bit of criticism of the response of the authorities. in fact, the wuhan mayor offered to resign today after he said over the weekend that 5 million people were able to leave wuhan because of the lunar new year as well as the outbreak and this is

despite the lockdown so there's been plenty of concern about what this actually means and for the authorities they've taken other measures they've extended the lunar new year holiday now to february 2nd. and there are a lot of questions now as to how long companies are going to stay closed the city of shanghai, as well as suzhou very economically relevant cities to the international community have extended their holidays as well past that to february 9th and february 8th and a lot of companies that i'm talking to here have said they're not sure if they're going to continue to stay close order what they should do and they're all making that decision as well. the shanghai stock exchange also just in the past couple minutes had made an announcement saying that it is going to stay closed until february 2nd, reopening on february 3rd guys >> eunice, one of the sort of scarier elements here for

investors and for people on this side of the world has to do with the transparency of the chinese government what can you tell us about that? there are questions as to whether they're being forth right about the number of cases, about the deaths, about how the government is handling that. i mean, is there still -- is there that kind of skepticism there as well? >> absolutely. there is definitely a trust gap. and that's one of the reasons why people have been reacting so strongly and why there is so much fear. one of the developments that happened over the weekend that really unnerved people was when the health officials said that the incubation period for the virus is ten days and that it could be as little as one day or as long as 14 days but that during the incubation period, you can still be contagious that is very different from the sars virus in 2003, which had people contagious when they're only showing symptoms.

so people are just not quite sure what all of this means and whether or not the information is forthcoming and that's been adding to a lot of the fear. >> eunice, thanks. as always, so important to get your view on what's happening on the ground in china. our eunice yoon is in beijing tonight. stocks selling off as we are on pace for the worst day in about four months. s&p looking for its first back-to-back losses since the beginning of december. our guests are joining us to talk about the sell-off and where we may go from here. good to see you. >> good morning. >> do you expect a multiple bleed-off or do we have to start making hair cuts to real fundamental numbers? >> i think for now it is going to be contained to multiples we think about the run we had in markets over the past couple of months, fueled by a lot of optimism around u.s./china trade and the fed and rebound in global growth. i think it is reasonable to expect things to come out of the multiple firsts. we look back to 2003 with sars multiples dipped by about 7.5%

from peak to trough and then resumed the upward trend as everything got under control i think there was room for markets to pull back before. now there is even more room for markets to pull back i don't think the initial reaction is necessarily to cut earnings i think the street is too optimistic for 2020 as a whole but not sure it is going to trickle down quite yet >> i wonder how sentiment plays into this fact the market had been doing quite well how do you look at the level of say euphoria to panic and how it sets us up for the pullback we're seeing today >> in a way this came as sort of the worst possible moment at least for in terms of the market because we had this big runnup as david said into year end and now into the current year. you know, the forward p and the s&p reached i think 18.9 most recently and that's pretty lofty. a lot needs to go right for that to be justified and as we know in 2019 the market rallied in anticipation of an earnings recovery and i think that earnings recovery is going to happen but maybe this, you know,

this outbreak if it is systemically important, maybe that delays the earnings recovery and then we have some risk to the multiple as david said you know, at $160 per share of earnings for 2019, a one-point hair cut is a 5% decline in the s&p and a 2-point hair cut is 10%. the high reentsly was 3330 on the s&p so that brings you back to 3,000 which coincidentally was the breakout area that had contained that 21-month long stalemate in the market. to your question about sentiment, obviously things have gotten more interesting. the fund flow side has been positive for the past few months it hasn't been that impressive clearly people have been optimistic that the earnings recovery that i think is going to happen was so imminent that the market was justified in rallying and my guess is that the market needs to take a step back now and allow for this 5%

to 10% correction to happen if the virus is not contained quickly. >> david, if not, of course, there is concern around the virus, we'd be coming into this week with a focus on four of the five largest market cap companies reporting earnings many of which have helped sustain the rally coming into this most recent downturn related to the virus how important are those earnings still in terms of at least generating perhaps new momentum if we're going to see any? >> so i think that investors obviously are looking at fourth quarter numbers so they just want to see the companies ended the year on positive footing i think the bigger risk as we look forward to 2020 is we're not terribly clear these are the big, globally exposed names that have been leading the charge and people are going to be looking for them to report results that are in line with their prices but the big risk this year has been that the dollar actually doesn't get weaker, that global growth remains relatively contained and what is happening in china is now just kind of adding fuel to the fire. you look at energy and tech

leading the sell-off today obviously it is those global names which we'll need to deliver going forward but i think probably did deliver into the end of last year >> that's definitely been the narrative that's been spun in reents days is that for all the enthusiasm equities showed earlier they were never truly ratified to yields and to a lesser extent the curve. is this a matter of equities confirming what the bond market suspected all along? >> i don't think so. i do think that the recovery scenario or story for 2020 is correct. i'm looking for 8% earnings. but i think the risk is that it's delayed we saw this in 2002 with sars, not that there are, you know, overwhelming number of similarities because in 2002 the s&p was just on the tail end of a 53% bear market, whereas this time around it's been on a tear as we know but, you know, i think that is the risk it is worth noting, though, that the ten-year yield has had a lot

more trouble rising than falling. it took a lot to get it even close to 2%. now in the blink of an eye we're back at 162. whether that's just deflation or demographics or a fear of a relapse i don't know my sense is that the global cycle was due for recovery it'll still happen but maybe it is delayed and then the market is just a little bit too expensive for its own good here. >> which brings to mind one last question what does powell do on wednesday? i mean, one of the first questions, repo operations right? >> our base case isn't the fed is going to do anything. i think the fed is erring on the side of caution and whether it be with respect to repo markets, whether it be with respect to global issues that are difficult to quantify, i think this adds further credence to the idea that the bar for another cut is high but the bar for another hike is even higher. so no big moves from the fed we actually think this could be one of the least changed fed

statements that we've seen in quite sometime the press conference obviously will be a bit more interesting >> right all right. david, jergen, thanks, guys. >> good to see you meantime government officials in afghanistan saying a plane operated by state owned airline ariana crashed in one of the country's provinces held by the taliban. the airline's acting ceo is denying those reports. phil lebeau joins us with the latest >> reporter: we're getting a bit more information and it does not look like this is an airlines aircraft in fact, this footage that has been out on twitter of the crash scene, this is clearly not an ariana airlines aircraft now, the taliban is claiming responsibility for shooting down a u.s. air force aircraft. exactly what it is we're not sure at this point by the way ariana operates 737 aircraft that is not a boeing 737 this was a question earlier this morning. was this a boeing aircraft involved no it is not. not a boeing aircraft involved

in this crash in afghanistan don't forget boeing reports earnings on wednesday. that's what the market is focused on right now what exactly will new ceo dave calhoun say about the fourth quarter and more importantly what he sees for the remainder of 2020 or at least the next two quarters that is going to be the focus as you look at shares of boeing today. guys, back to you. >> all right the rest of the dow. phil, thank you. after the break two former health care industry ceos will be here to weigh in on the coronavirus and risk for investors, the stocks still nghe worst day since october. dow is down 415. - [narrator] at southern new hampshire university, we're committed to making college more affordable. that's why we're keeping our tuition the same

through the year 2021. - [woman] i knew snhu was the place for me when i saw how affordable it was. - [narrator] find your degree at snhu.edu. ♪ yes i'm stuck in the middle with you, ♪ no one likes to feel stuck, boxed in, or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different. it's open and flexible enough to manage all your apps and data securely, anywhere, across all your clouds. so it can help take on anything from rebooking flights on the fly, to restocking shelves on demand, without getting in your way. ♪ ♪

beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond.

global markets tumbling. the dow experiencing its biggest drop in four months as the coronavirus spreads. nearly 2900 confirmed cases now in china cases of the virus have been reported on four different continents joining us now with how this may play out the former ceo of sharing plow and currently chairman of the carrot group and the former medtronics ceo. fred, what is going on behind the scenes at major drug makers? how much can they do to help >> i think they can make a big difference the private sector in the end comes up with the products that solve the problems and as you saw merck did a spectacular success with ebola

vaccine. that is a frighteningly deadly problem and merck came up with it this time around i believe we'll get the thing done in less than a year it used to take a lot more time but thanks to the new diagnostic approaches and the naked vaccine technology i think we'll get a vaccine very, very quickly here. >> in less than a year, in the broader time horizon it sounds quick but doesn't sound fast enough for what we need right now, fred. >> i think we need help right away and, fortunately, there is -- there are existing drugs out there. tamiflu is there as the drug which is supposed to be very effective. hopefully the existing drugs will help reduce the incidence and, hopefully, we'll get the vaccine very soon. the most important thing is to find out as quickly as possible how long is the incubation period is it really ten days or is it

two weeks? what is the peak virus shedding cycle? if the virus sheds early then that is problematic because at that point you don't know if the person is ill or not if it is later then it is a lot better because by that time the fever shows up or something shows up and people are able to go and get help right away >> bill, let's look at it from the broader economic view and corporate view of course which you can help us with particularly if you're a company that's got a lot of activity in china. a starbucks. young china trades here. we can go on and on. apple. how are you thinking about things or how should you be thinking about things? >> well, i think in china it's going to be very serious they'll have -- they are having a terrible problem with containment as big as that population is, as spread out as it is, all the different modes of transport i think they're going to have a very serious problem it is going to be hard to get it under control. i think retailers like mcdonald's, starbucks, dominos, and others are going to face

significant problems and they're going to have to go to very severe containment measures in china. as far as the u.s. goes i think there is good news i agree with fred and maybe faster the head of the national institutes center on infectious disease says one to three months for a vaccine. they've already given a contract to a very good firm and they're optimistic they will have something. so in the u.s. i think we have to focus on containment for the next 30 to 60 days until we get a vaccine out there. the problem with the vaccines is you have to have one tailored specifically to this particular strain they have sequenced the gene in china, so their institute of health has done that that's good news i think it is going to be rough for the next few months. >> the good news is the sars epidemic occurred in 2003 at

which point things got clamped down and the news got held back. now people have iphones and they can get the images out, which is fantastic. you can alert the health authorities around the world very quickly >> that's very true. >> i was just going to introduce, bill, the fact that the government announced this weekend they were using hiv treatments in some cases to deal with this and i'm wondering how promising that is. >> i think we have to wait and see. i think fred's right there's a possibility there. but we've got to apply it to people, there are very few cases, i think only five confirmed in the u.s we've got to see how well that works and get a vaccine probably that's tailored specifically to this and in the meantime use interim measures like that i think right now it's focused on containment anyone that's been anywhere near wuhan, it is a city of 11 million people, we've got to contain those people and

probably put them in some kind of incubation which americans don't like but i think it's got to be done >> fred, is that the right way to go? there are some public health experts who say that would never be the response if this was in fact taking place in the u.s., these sort of travel restrictions, very much from at least what i've read unproven as a way to really stop the spread. >> it's unproven i think one should be very specific to the issue. this one, we don't know how the thing spreads. does it spread through droplets, respiratory droplets does it spread through other means? we need to learn more. and i think wholesale lockdown is somewhat controversial because now there's a lack of medical supplies in these towns and that's pretty tough. you don't know how to reduce the incidence of disease if you don't have the medical equipment there. the one very important thing i think we need to learn is that

this thing can hit in unexpected places so having enough local supplies in hospitals especially tamiflu and this hiv drug is i think very important >> bill, any thoughts on at least from the u.s. standpoint the ability of the agencies to monitor and contain any kind of global pandemic? there's been a lot of concern about staffing and the ability of the white house to get personnel placed that is not on an interim basis how would you rate that right now? >> i'd say they're just going to release, i believe senator schumer is going to release another $85 million. i think they'll move very quickly on this. i don't think it will be a political issue. i think the center for disease control in atlanta is very capable. they've been through ebola, been through sars, been through h1n1 so they've seen this and i think the u.s. is well prepared. that doesn't take care of the global problem particularly in china and everyone spreading all over asia and frankly all over europe from there. i think that is a much more

severe problem but again, here in the u.s. i don't think there is any reason for panic. i think we've just got to respond very quickly when we identify cases and people have to be extremely careful about their travel into that part of china. >> fred, i wonder how much collaboration there is whether nih or cdc officials are going there. how important that is from a u.s. perspective and a global perspective that we've sent our folks over to figure out what is going on >> they are working very closely together fortunately w.h.o. and the u.s. authorities. so this time around the private sector, the public sector, they are really working very well the one comment i wanted to make was you may remember those images when the sars epidemic hit people were being scanned for fever. that was an early indicator that that person was a carrier. there is no way to know that this one has fever as an early problem or not if that were the case, that would make the job a lot easier because you could have these

infrared scanners at airports, bus stations, railroad stations, and be able to find people very quickly. >> i think just to add to that, it could be up to a couple weeks as they revealed yesterday before you actually identify that somebody is carrying the disease. >> yeah, we'll wait for an answer on that one bill george, fred hassan, thank you both >> thank you as we go to break you can see them right there, the worst performing stocks on the s&p this morning many of which of course are connected to the spread of that coronavirus. a reminder you can always watch us live on the go it's the cnbc app. you'll want to down load it today.

i'm sue herera with your cnbc news update at this hour a huge night at the grammys for that young singer/songwriter 18-year-old billie eilish stole the show sweeping all four major categories

democrats are demanding former national security adviser john bolton testify during the senate's impeachment trial after a leaked copy of his upcoming book revealed explosive allegations. in the draft first obtained by the "new york times," bolton says trump told him to tie ukraine aid to an investigation into joe biden and more than 300 amazon employees are publicly protesting the company's stance on climate change and risking their jobs in the process. the workers signed an online post violating the company's external communications policy and with one week to go, polls of likely iowa caucus goers show bernie sanders surging among voters taking the top spot in one poll and statistically tying with joe biden in another. you are up to date that's the news update this hour i'll send it back downtown to you, sara. >> sue, thank you. the world is mourning kobe bryant this morning and that includes major companies including nike, kobe's long-time

partner and sponsor. in a statement nike saying along with millions of athletes and fans throughout the world, we are devastated bay today's tragic news. we extend our deepest sympathies to those closest to kobe especially his family and friends. 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. we will miss him greatly mamba forever. bryant of course spent more than 14 years with nike they released 19 signature shoes together 11 of them were the kobe 1, 2, 3. that went up to 11 after retirement they released two called the a.d., three nxt and an updated version of the older models adding new tech features he was one of the top sellers of sneakers along with michael jordan and lebron james and he traveled the world with this company. he was also a savvy investor, guys one example was body armor remember he was an early

investor in the sports drink company, reportedly invested about 10% in 2014. four years later coca-cola bought a minority stake in body armor turning his $6 million investment into $200 million according to espn. it was marketed as a healthy alternative to gatorade and was actually a pretty big bet going up against the two power houses coca-cola and pepsi and the duopoly they shared in that market and eventually, actually it's helping coca-cola when it comes to growing outside of traditional soft drinks. savvy investor amazing athlete. and i think had a real impact on corporate america as well. "squawk on the street" will be right back (vo) in every trip, there's room for more

than just the business you came for. whether that's getting a taste of where you are, or bringing some of that flavor back home. that's room for possibility. ♪ let's get to living

welcome back to "squawk on the street." stocks are down sharply this morning with coronavirus fears propelling the sell-off. steve liesman is back at headquarters taking a look at

the virus's impact on the global economy and of course that all starts in china i would assume, steve. >> it does, david. economists what they do is look to previous influenza outbreaks to gauge the possible impacts of the coronavirus but they have to factor in a lot of uncertainties here, from the specifics of how this virus spreads and who it affects and how changes in medical organizations or communications technologies can make the outcomes better in some cases. the world health organization and resolve to save lives note five separate outbreaks this century cost range from $33 billion for sars in 2003 to more than $50 billion for ebola in 2013 over time and with massive efforts all were contained though they hit developing countries much harder than developed nations. something the world bank is trying to do something about right now. experts estimate the annual global cost of a moderate to severe pandemic, $570 billion or 0.7% of global income. all are measured, though, against the 1918 great influenza

that killed an estimated 50 million people the u.s. entered a recession in 1920 that lasted 18 months and blamed on the great influenza that uniquely, by the way, hit the working age population hardest, unlike other flus the world bank said in its report estimates suggested if the world were to face a fast moving airborne disease such as the spanish flu outbreak of 1918 to 1919 it would kill more than 33 million people in 250 days and erode 4.8% of global gdp more than $3.6 trillion. but of course that flu was -- that spanish flu was 1918. there have been dramatic advances in how health officials combat outbreaks and medical technologies to treat and diagnose them and communications technologies that even just warn others of an outbreak that didn't exist back then so three lessons from history. one, a pandemic is an ever present risk you 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 economic impact. >> steve, i wonder if there is

any way to quantify or to look at the fact that there are so many more linkages between the global economy now especially from china on the industrial side. >> yeah. >> on the consumer side. on travel. it's hard to sort of wrap your arms around the difference even in 2003 from sars to now in terms of china and the global economy. >> right you have to look at both sides of the ledger when it comes to changes. on the one side you have these increases of linkages out there. on the other side it looks like the world global organizations that handle and deal with these things have learned a lot from this and they have better technologies to deal with it one interesting fact that i came across in looking in the economic research on this, sara, is in times of greater employment you have more spread of the flu with the retail sectors and health care sectors being the two areas that are hit the hardest so even knowing that can help emeliorate the

outcomes >> steve, thank you. >> a pleasure. steve liesman. according to our next guest this disruption couldn't have come at a worst time for china, the former imf china division head joins us now why is this, i mean, one can imagine why, but why in particular do you say it couldn't have come at a worst time >> china's economic growth has been slowing, which is one factor and the other factor is this is a very important period in china when there is a lot of consumption, a lot of travel so what we are going to see is a sort of outbreak right now around the spring festival time is a hit to both consumption as well as to production. on consumption we'll have lesser consumption of durable goods, of consumption goods in general but also consumption of services including tourism, travel, restaurants, retail trade all going to take a hit. the other unfortunate aspect is

that consumer and business sentiment which has taken a hit in china were just beginning to bounce back up thanks to the u.s./china phase one trade deal and this is going to hold that back that is going to have potentially longer-term effects even if this outbreak can be controlled >> is there any way to estimate at this point what you think the economic impact will be on china given we have 56 million people under some form of travel restriction and obviously we've seen our reporting from beijing, not a lot of people doing much of anything right now? >> it's a little difficult to quantify at this stage certainly the 6% growth target for china for 2020 becomes somewhat harder to attain but a lot also depends on the policy response and how persistent the proves to be if it is done so in the next few weeks this outbreak can be controlled then there will be a significant hit to growth in the first quarter but if the government pulls out some stimulus measures both in terms

of fiscal and monetary policy, the total growth for the year can still be sustained but if this lasts into the next quarter or beyond it is going to have fairly significant effects not only in china but also many other economies in asia and beyond >> how are they managing to build thousand bed hospitals in a matter of days and how much power to address the problem lies beyond that rather interesting video they've managed to put on social media >> one of the interesting questions is whether the chinese government is being more open this time than during the sars outbreak because that is going to be crucial in terms of assessing the extent of the problem and how soon it can obtained all appearances suggest the chinese government after some initial hesitancy is becoming much more open in terms of admitting the scale and scope of the problem which provides some ground for optimism.

in terms of constructing hospitals china can always put together resources in a way that few other economies can so if an economy is capable of controlling this it is probably going to be china. china is also heavily populated economy with many populations centers where there is very high population density there is a lot of travel typically around the country this time of the year. so channels for transmission of the virus are also much greater even if the containment efforts are going to be very serious >> yeah. this time of year, i mean this also coincides with the chinese lunar new year holiday how does that impact the stimulus that holiday traditionally brings and the fact that it's sort of been extended indefinitely or into february >> that's where the consumption and production become very important. this is a very important time in china for families to get together, where people go back

to their home towns if they are migrants so the amount of travel and consumption usually gives a pretty good boost to q1 data and particularly gives a boost away from investment driven growth towards consumption driven growth which is something the chinese government has been trying to push for, for a long time so this is certainly going to set that back. and certainly the negative effects on consumer and business sentiment given that this unfortunate shock comes at this time is going to be much greater than it might at a different time of the year >> so what is the ultimate impact going to be on the global economy in your opinion? again, understanding that it is too early to sort of in a real way assess the damage. nonetheless we know how important china is you do seem to be talking about shaving significant amounts of growth off gdp what would be the broader impact >> the channels are quite clear.

very important in terms of consumption from the rest of the world. china imports a lot of commodities and we've seen the shares of many commodity exporting firms already falling. it's hurting the exchange rates of many countries that export to china. china is a crucial part of supply chains. china sends a lot of tourists to many countries in asia so it is not just china but the fact that many asian countries are going to get hurt and asia has become a key driver of global growth in recent years. so now we have india slowing for a variety of other reasons and the chinese economy also proving to be something of a drag on the world economy. that's going to be a fairly significant hit on world growth. >> any way to estimate the impact on world trade? volumes last week were weak and that is one reason the global economy didn't perform as well as expected. >> china's point of view, it is going to hurt china's exports, it is going to hurt china's imports as well.

both of these had begun to rebound toward the end of last year and that rebound is certainly going to get set back by what happens. it all depends really on how persistent this outbreak turns out to be and how much it can be contained within the first quarter. if it spills over into the second quarter and beyond, one can very easily see the staking up to a quarter to half a percentage point of world growth though that will again depend to a great deal on what sort of stimulus we see from china once this outbreak is settled >> yeah. we can only hope that it is settled soon if possible thank you for your time. appreciate it. as we go to break let's look at some of the worst performing names on the dow at least. amex, intel, sisco, unh and dow. dow supported minimally by some defenses like proctor and pfizer we're back in just a moment. legendary terrain in telluride,

the unparalleled landscape of park city, or the famed peaks of whistler, you've faced the hassle of lugging your gear through the airport. with ship skis, you're just a few clicks away from having your skis, snowboard and luggage shipped from your doorstep to your destination. with unrivaled pricing, real time tracking ship skis delivers, hassle free. ship ahead and go catch those first tracks on fresh snow. ship skis. your skis. delivered.

a pullback could be right around the corner. find out what could trigger it on trading nation.cnbc.com more "squawk on the street" coming up. (sensei) when i started cobra kai,

the lack of control over my business made me a little intense. but now quickbooks helps me get paid, manage cash flow, and run payroll. and now i'm back on top... with koala kai. (vo) save over 40 hours a month with intuit quickbooks. now for our etf spotlight. today we're taking a look at the vanek vector semiconductor etf ticker tumbling from record highs set on friday. still in positive territory for 2020 apparently trading down 3.5% top five holdings in the fmh all in the red this morning including intel pulling back from its best day in two years which was sparked by a blow out quarter and upbeat guidance. guys, down 4% on nvidia. 4% on taiwan semi. really linked to the china trade, the supply chain potential slowdown as a result of coronavirus last week in davos i spoke to

micron's ceo there is a lot of optimism on this group and from people like him as a result of the phase one trade deal, the protection of intellectual property, the fact that it could sort of stimulate the cycle but, clearly, this coronavirus is a potential stumbling block for a critical market both on supply and demand >> absolutely. we'll hear from amd tomorrow night. get a better picture on how the quarter went in the meantime let's get to the cme group this morning in chicago and get the santelli exchange good morning, rick >> reporter: good morning, carl. i'd like to welcome my guest seth carpenter ubs chief economist and also formerly held positions at the treasury and fed. seth, good morning and of course i'd be remiss not to have you weigh in on how ubs and your research anticipate the coronavirus to continue to infiltrate in market space >> yeah, i mean,i think your earlier guests were right on that it is really hard to quantify things at this stage but there is a clear, clear worry in markets and having a big effect on sentiments that's totally important i think the other part to try to keep in mind is people are always going to look for the

effect in gdp. when you think about the cost, some of it will be in the flow of spending but some is just going to be in terms of extra -- you'll see extra spending by governments to contain things and that is going to go the opposite direction so it has the potential to be disastrous but i think we really need to see how it plays out before we're sure about the macro effects. >> reporter: it's a big week as well of course with our fed meeting and i find it somewhat ironic that we lost the two biggest uncertainties in the form of brexit which will occur friday and of course trade which phase one was already signed and even without coronavirus, seth, i'm not sure the fed would take those three eases away. does the coronavirus figure into that at all? >> i mean, i think this absolutely just gives them another reason to be cautious to wait and see what happens. but i don't think anything was going to happen at this meeting in terms of policy even the statement that key about this particular meeting is how does

jay powell talk about the balance sheet adjustment and interest on reserves because there they have a chance to really spook markets the markets, there is a widely held sentiment that the expansion of the balance sheet was boosting equities and now that they're on hold with the balance sheet and maybe even walking back a little bit, i think how he describes it could be another moment like the auto pilot comment from december 18 >> no argument there as a matter of fact, let's take it a step further. the non-qe form of liquidity in the form of repos and you mentioned what is going on with interest on excess reserves. now, if they raise that, that is a form of tightening it will affect its liquidity provisions and services it is currently rendering into the market place do you really think that will occur even this meeting? >> well, i think it's a really close call our baseline view is that, no. they will not increase the interest on excess reserves but remember they put that discussion into the minutes for a reason to signal that it's on the table. fed funds is trading only four

basis points above the bottom of the range for a few days that breaches the threshold on the opposite side they had a year or so ago it is clearly on the table they will clearly discuss it but i think right now they will say let's err on the side of caution. if it's not broke don't fix it but all of the discussion aboutt to do, that's going to be the thing that could affect the markets. >> the world of politics italy, their italian ten-year note has dropped quite a bit in yield and tightening the spread rather dramatically against booms. this all occurred because a more centrist candidate was elected in the u.s., we see iowa caucus numbers reflecting a surge for bernie, which the "wall street journal" says is making many nervous regarding tax policy is politics going to continue to be a predominant issue not only in italian markets and the u.s.? >> absolutely.

judging from the conversations i have with clients here in new york, in europe, in asia, everyone, everyone, everyone has their eye on politics, especially in the u.s. where there's -- i think people see a potentially wide divergence of paths between trump on the one hand and some of the democratic candidates on the other. i keep tell mig clients keep an eye on the congress as well. what happens in the senate is just as important as what happens to the white house >> thank you for your thoughts it will be one heck of an interesting week david faber, back to you >> rick santelli, thank you. jon fortt has a look at what is coming up on "squawk alley." >> nasdaq and s&p both down 1.5% or more, but we've got apple, microsoft, amazon, and more reporting earnings this week y tthey going to tug this one waorhe other we'll take a look coming up on "squawk alley. ♪

♪

looking to get your business off to a fast start in the new year? it's go time! switch to comcast business and get fast internet on the nation's largest gig-speed network. plus, complete reliability with 4g lte backup. and, cloud-based security to help protect the devices on your network.

greenlight your business in 2020 with fast internet and voice for $64.90 per month. switch now and get a $100 prepaid card when you add comcast business securityedge. call today. comcast business. beyond fast. dow, down 549. headed back in that direction as fears of the coronavirus grip the markets. dominic chu has a look at some

of the movers. >> we'll focus on the chinese consumer and bigger themes intraday action and many consumer food and beverage-related stocks in china, luckin coffee, yum china, starbucks, mcdonald's selling to consumers there. of course the economic selldown concern is people propagate around, don't spend money, so those shares down. in the last week, look at these, luckin down 24%, yum down 16%, starbucks down 5%. travel stocks getting hit. the royal caribbean, intercom hotels, norwegian, carnival. over the last week or so some of these down big trip.com, carve value, all down double digits. and the casino operators, las vegas sands, wynn resorts, melco and mgm have a presence, all ranging from down 7%, down 4%, all of these over the past week,

check out this, melco, wynn, sand, mgm down double digits as well casinos, travel, food and beverage big hits today in that downside move. back to you. >> wynn and sands rely a lot on that for the profits dominic chu back at hq now we can start doing it again. i turn to sarah and ask -- >> i almost believe you. >> come on of course. what is coming up on "the closing bell"? >> obviously we'll monitor the sell-off, intensifying, 466 on the dow. jeremy siegel will break down the market action, the economic risk after the bell we'll get whirlpool's quarterly results. we have a rare first on cnbc interview with that company's ceo. and a new segment today called "the closer. big-name guests you need to hear from today's closer is slack, stewart butterfield, kicks off 3:00 p.m.

eastern for the closing bell you get the closer >> and you have the market zone still, right >> market zone >> i'm going inside the market zone for the first time. >> going inside? >> sounds like a death match >> into that state of mind >> very careful there. it's crazy >> we'll see you this afternoon. so good to have you break. after the break, more on today's sell-off, the dow down almost 460, ten-year hanging on to 1,604. woman: what does the word "partner" really mean?

someone i can trust. (impact, click) who is with me for the long-term. who understands i'm dealing with lives, not only livelihoods. that in order to help people, i need more than products, i need quality support and insights. can i find someone who partners with me to achieve people's long-term success? with capital group, i can. talk to your advisor or consultant for investment risks and information. markets. the business

of trading goods and services. nasdaq operates among the largest markets in the world. and our technology powers markets from indonesia to chile. great markets are built on a foundation of trust and integrity, forged through leading edge technology and a smart regulatory framework. as technology advances, regulation must keep pace to allow the markets to evolve. today we see an opportunity to modernize regulation, to make markets more accessible to investors and entrepreneurs of all sizes. from the graduate buying her first stock, to an institution investing in thousands. the markets belong to everyone and stand as a symbol of economic advancement, social progress and limitless opportunity. that's the tomorrow that we envision and to get there, we'll have to rewrite it today.

good morning 10:00 a.m. at boeing headquarters in chicago, 11:00 a.m. on wall street, and "squawk alley" is live ♪