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i'm carl quintanilla with jon fortt at post 9 of the new york stock exchange. interesting session. the sell-off is clearly in place. all the major averages are in the red today, on the dow, on pace for a fifth day down, s&p looking for back-to-back losses for the first time since december dow brief ofly went red for the year let's talk about what's happening at the moment, what's driving the market dynamic good to see you both kenny, thoughts right now, and how much of the experience from past episodes like stars are informing what traders are doing today? >> well, you know, you have to -- each one of these is different. what we saw in sars back in 2003 was the market that backed off about 12% over a period of time as kind of that whole virus took hold around the world. the same i suspect is what's going to happen here you can see it starting on friday you see it now continuing today. as the headlines continue to be

as negative as they are, you're going to get some more angst i think this will come under control, but until it does, there will be that angst this gives the market a reason to kind of back off. we've been talking about this for a while now. it's done nothing but go straight up with zero kind of pullback negative headlines like this really give everyone a reason, you know, take a breath, take some money off the table and let everything come ba ck to settle in i would be of the mind-set, sit back, watch this happen, don't jump in to buy something because you think the market is down 1.5% we could go down another 4% or 5% in the next cup daleouple das just be patient. >> morgan stanley says the sell-off will be contained at 5% or less in part because there's so much liquidity around the u.s. and around the world. what do you make of that >> it's really hard to quantify

the extent of the potential sell-off i mean, we've soon these types of issues with the market before whether it's coronavirus, sars, ebola, legionnaires' disease, right? i mean, this stuff tends to crop up every now and then. typically they stay in the headlines for a few weeks and then it peaks out, you know, three, four weeks into it, and hope through th hopefully that's the case with this it is a head wind to stocks, and like kenny said, i agree with the assessment of the market is likely to, you know, sell off with these negative headlines, particularly because we've had this strong run-up uninterrupted for like six months now. so, again, we can expect this pullback but it's important to identify, you know, kind of great long-term opportunities and be ready to pounce when they come in your area to invest in. that's been our strategy >> kenny, what's big tech's role

in this environment? apple and microsoft both report earnings this week by the way, but they contributed nearly 15% of the s&p's gains last year, 25% ofthe dow's. do we have to really look at them and see how much of these coronavirus concerns and other issues echo in their earnings to know what to do from here? >> well, listen, i'm not sure that the coronavirus itself is going to echo in one of their earnings at least in this earnings report, right i think what you have to be wary of is with the market kind of in this negative tone in v they're in, the last cup dales of what could be another week or so of angst and nervousness, when they report these numbers, apple was up 125% last year, 47% the last quarter alone in anticipation of christmas and the wearables and the cloud service, all that stuff. if they come out wednesday or thursday this week and announce and miss any one of those number, it will give everyone to

say a reason to say let me take some money out of apple. i don't think people should make too much of it because it will be more the trader types that are doing that the long-term investors will trac take it in stride and use it as an opportunity don't be surprised if we have this kind of buy the rumor, ahead of the holiday season and the shopping, and sell the news when it comes out, especially in an environment that's a little anxious right now. >> i'm thinking ta ining about guidance apple has 42 stores listed on their webwebsite, mainland chin that's a lot of people you wonder if it affects their guidance >> it might. a lot of the tech suppliers, too, are also probably going to be put on hold a little bit, so you might get some concern about that here's the deal. we're all living this right now so we know we're having this conversation, you're kind of half expecting that's going to happen, so they'll take some of

that out of apple now and maybe even ahead of what they announce so i don't think anyone should be surprised about that at all, but, yeah, you do have to understand that that possibly is going to be part of the narrative that you hear on wednesday or thursday when they come out with their earnings in kind of an anticipation trying to prepare investors in the market that potentially this could really affect them in the next quarter, but we'll see. >> speaking of wednesday, that's the day we'll get a powell presser. the thinking going into this fed meeting had been maybe this is a chance for powell to address the debate about whether or not increasing balance sheets are driving asset prices does the coronavirus now push -- at least the quality of the commentary on wednesday on to the dovish side? >> yeah. i think the fed has been and will continue to be on the sidelines at least through the end of the year. i don't think this changes anything look, the end of the day, the

global macro starts to face some headwinds because of this in the short run. that gives them more impetus to continue to stay on the sidelines. we think that's certainly the case how it relates to stocks, obviously there are certain areas and industries and exposures that are more important than others. and i think you have to be patient in picking your spots to those areas that have those kinds of exposures but, again, this will create a really good opportunity for those companies with good long-term fundamentals and secular growth areas to pick them up at much more reasonable valuations >> kenny, one last point you mentioned how these episodes don't necessarily repeat, they rhyme in a way our producer patty has done some work on how the bond markets reacted to the coronavirus and yields moved sharper than it did in the early days of sars, getting help from wells fargo. how should investors absorb that >> it's interesting because i was trying to go back and remember what the headlines were

like when sars hit in 2003 versus the headlines we've seen in the last couple days. for some reason i'm getting the sense maybe it's because technology the further along, the internet, linkedin, facebook, the news sources are further along today than they were in 2003, but the headlines appear to be more negative to me like over the weekend when china came out, they said it's a crisis and spreading out of control. those are kind of really hot headlines. and for some reason creating certainly more angst in the marketplace. i think creating more angst than what sars did. to see that move in treasuries, that flight to safety in gold and in utilities and treasuries i think made some sense, but i think it's the tone of the headlines and the speed at which those headlines travel that's causing that reaction. >> yep for sure and the machines that are reading them instead of human beings thanks, guys we'll talk soon. appreciate it. >> thank you

>> in the meantime, a fifth patient has been diagnosed with the coronavirus here in the u.s. a total number cases in china nears 2,900. meg tirrel has the latest. >> yesterday the cdc confirmed three additional cases in the united states bringing the total to five and all were people who had travelled from wuhan, china, the epicenter of the outbreak. the counts mounting around the world, with australia, france, and canada also reporting their first cases. the cdc said yesterday it believes the immediate risk to the u.s. public is still low, but it says the situation is evolving quickly and it expects to see more cases in the coming days it's received just more than 100 samples to test and in addition to the five it's found positive, it's found 25 negative so far. still unknown, many details about how the virus sprelds including whether it's contagious before symptoms show.

the cdc says human to human transmission has not been ok served in the united states but it has been in china we're learning more about the response from the pharmaceutical industry johnson & johnson said it started work on a potential coronavirus two weeks ago. it did similar work were ebola and zika, with the ebola vaccine being used in the field. >> we have an exceptional upscaling platform where 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. in parallel we'll start the upscaling process and do the big kickoff for the multimillion upscaling if we find one >> we're going very quickly. more updates will be coming soon back to you. >> meg, what is the bar for the w.h.o. at this point to declare this a global health emergency >> we expect they will be meeting again probably soon.

they said when they declined to declare that emergency they'd meet within ten days what feeds into that decision was the lack of international spread at that time. so we'll be looking closely to see if they'll be meeting again and if that decision has changed. >> meg, thank you. after the break, shares of boeing selling off with the broader market today also though this reported plane crash in afghanistan does not appear to be one that belonged to the company. we'll get the latest on that developing story in a moment w dn 9.doisow42 ♪ ♪ ♪ ♪

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new details emerging on a plane crash in afghanistan philip lebeau has the latest >> this ayeppears to be a u.s. aircraft this is video from on the scene in a territory that's controlled by the taliban so there's not a whole lot of information coming out from there. this is an aircraft that, when nbc has reached to the pentagon, the pentagon has no comment, typically has a two-person crew, certainly a limited aircraft in terms of size. there were reports earlier in the day that there might be dozens of people perhaps who died in this accident. that does not appear to be an aircraft that could hold dozens of people. earlier today, by the way, guys, there was a report that this came from a government spokesperson in afghanistan saying this was a boeing aircraft it is not a boeing aircraft. boeing does not make that aircraft as you take a look at shares of

boeing, the focus today in terms of investors, when they look at boeing, is what happens when the company reports earnings before the bell on wednesday and specifically what does ceo dave calhoun say about a potential charge relative to the 737 max and his outlook over the next couple of quarters that conference call with analysts will be crucial to what happens in terms of how boeing shares react after the earnings are posted on wednesday morning. >> all right phil, thank you. it's not just boeing and airline stocks in the red amid today's sell-off coronavirus fears having an impact on several travel and tourism names as well. tom white and james hardman join us now good morning >> good morning. >> good morning. >> now, james, i'm wondering specifically about the impact here when it comes to guidance for some of these companies which have not been faring so

well up to this point in the market what do you expect to hear what should investors listen for? >> yeah, i think timing is critical here, right the hope is that over the next couple weeks and certainly the next couple of months this virus will begin to stabilize and die down unfortunately for a number of these travel names, starting with some of the cruise lines next week, royal caribbean, they'll have to report amidst a significant amount of uncertainty. so my expectation would be this coronavirus thus far has been a material impact. the cruise lines canceled all the cruises coming out of china over the weekend each voyage that's lost we estimate is $3 million to $4 million of lost revenue and two cents of earnings two royal caribbean. unless major positive developments come between now and the report next week, they'll have to be extra conservative in terms of how

they think about guiding for the full year. >> tom, is this potentially an opportunity for investors who are thinking long term >> yeah. when it comes to china specifically for the online travel names like booking and x pedia, china itself doesn't have much direct exposure there it's been trip.com that really had kind of the point of sale business in china. if we see that coronavirus expands kind of more broadly throughout asia-pac, then you have to worry a bit more for these companies, particularly booking.com. they've invested a lot of money in the brand even then, you have to sort of look at it between destination travel and point of sale when it comes to destination travel, which we think maybe is 20% of booking.com's business,

asia-pac destination travel, those people will decide to go somewhere else >> down 4% is that an overreaction? >> i think it's down 8% before the close on friday and the long weekend. i wouldn't be surprised to see it down a couple more especially if this is a zika-type time frame. you could see the stocks sliding more >> james, hotels, can we talk about where exposure to asia and china lies the strongest >> well, i don't follow hotels specifically, but i guess one of my concerns would also just be, you know, how is this going to impact western travels we talk to about 400 people over the weekend to try to get an idea of, you know, whether people would be scaling back on their travel and to our surprise, we found that about 20% of people either western consumers, are at least a little bit nervous about either certain

types of travel, air, train, cruise, or just travel in general. so my concern would be tlooe eat temporarily this will depress bookings in the short term >> so much will depend on headlines and person to person transmission are there benchmarks for how stocks underperform in prior periods like this? >> we look at the online travel space. you can't look at sars unfortunately. that was sort of too early for these businesses they didn't really have asia-pac built out or china as a mshgt yet. for us, zika is the most instructive there. you certainly saw less destination travel to the caribbean and to latin america, but thankfully, companies like booking.com, expedia, they have big global footprints. if you decide to go on vacation but not to the caribbean, they can still kind of capture that

revenue. in the case of zika, the stocks were weak i think for about a month and a half and then actually ended up surpassing where they'd been before zika launched again, as long as coronavirus here doesn't follow a horribly different trajectory in terms of timing, you know, that's how we think about it >> hoping for the best for all kinds of reasons tom, james, thank you. >> thank you >> thank you we want to turn back to the tragic death of nba legend kobe bryant sara eisen is with us back at post 9 with a statement from nike's former ceo, mark harper >> reason i went to him because he was ceo during much of kobe's relationship with that brand, with nike, creating 19 shoes together here's the former ceo of nike. he said our relationship started as you would expect through shoe design he always came prepared with creative ideas, thoughtful questions, and strong opinions

pushing us into new territory with every project one thing was always certain, though rising to meet the expectations of kobe made everyone better another personal tidbit from mark parker. over the years that exchange would grow into a deeper friendship he was fascinated with the process of how others became great in all facets of society some will remember that as his competitive side i always saw a sincere passion for learning he wanted to know because life for kobe was about constant progression and improvement. thought that was a nice little personal tribute from the former ceo of nike. in fact, when cnbc asked kobe a few years ago who his business heroes were, he cited mark parker first among them, johnnyize, tim cook of apple and bob iger of disney one of the ways they formed this relationship besides design, which i don't think is getting talked about as much, was the preach to china. as the nba became more global

and more digital, kobe was out front. he famously learned mandarin his sneakers sold very well over there. in fact, in the 2008 olympics, lebron said, i thought i was famous nothing like kobe here in china. south post says in kobe they lost a kindred spirit who really had a curiosity and an interest in the chinese culture that went far beyond the commercial relationship a big part of that nike relationship with kobe as well >> there's no doubt. the news of his death is a global story, not just one here in north america our thoughts are with all the families involved in this tragic accident "squawk alley" will be right back how's the it department liking the now platform? every time it takes care of something for us, we celebrate. how often does that...

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to take care of yourself. but nature's bounty has innovative ways to help you maintain balance and help keep you active and well-rested. because hey, tomorrow's coming up fast. nature's bounty. because you're better off healthy. the world's largest etf conference kicking off in florida. bob pisani is a special guest. >> hello, carl, from sunny,

florida. we have 2,000 registered investment advisers down here to talk about ett trends in global investing. dan draper, head of etfs for invesco. got to start with coronavirus. investing trends, 2020, 2,000 advisers here. what are you telling them they should be telling their clients right now about this >> these are guy who is showed up thinking about senate hearings, global trade, earnings season, and all of a sudden you have the virus this is a lot of new information that's coming in i think people are defensive going to cash, seeing the rally in treasuries. we're trying to say, look, longer term, interest rates remain very low here, so we're talking about if you need to remain in equities think about low volatility, splv, think about buying the lower volatility name until you hear more >> that low volatility was a surprise hit, came out of nowhere in the early part of 2019 huge inflows you're saying that's a possible alternative. >> for those no who need to go

to cash should be thinking about it but long-term portfolio allocation, more information comes out potentially around this and other macro events, you need to remain invested in equities low volatility is a consideration. >> sars was an event for about two months for the market about 15 years ago and passed. hopefully that will be the same case is there some indication it will be different this time around? >> i have no idea. this is kind of all breaking for those investors who can stay focused on long-term outcomes, nothing is changed in their personal circumstance, think about making some ajustments to portfolio but remain long-term focused. >> you manage the triple qs, secondly most actively traded etf in the united states, largely a technology fund but not completely do you expect inflows to continue and growth? this is a ultimate growth etf. >> it is. >> do you expect that to continue in 2020 >> it's been the leading etf and

growth mutual fund over the last decade i.t., telecom as well as consumer discretionary i think in this low-interest rate environment that's favorable to technology. if we continue to see some improvement global trade, it will do well >> qqq is the anti-valetf. no banks, no energy stocks in it >> that's right. >> do you think it will outperform value once again? an old story i wait for it to change but it doesn't. >> that's a tough call growth has had such a decade-long outperformance versus value, but i would say if you look at a strength of the underlying companies performing well in the index, the outlooks are good if you need growth in your portfolio, this is a good name to look at >> number one topic before coronavirus hit was etf, environmental social governance. a little bit of a joke many tine last two years

a great idea but not many people put money into it. all of a sudden in 2019 money came roaring into this sector. it's a big topic do you think it will continue into 2020? we'll see big, big inflows >> well, i think if you look, certain parts of the world like europe, your peeuropean investoe focused. here in the u.s. it's been more thematic clean energy, solar, water you had good, environmental related. i think the focus more on governance now, the stakeholder, the business roundtable, so those elements are coming together i think the theme of esg is playing itself out, but the long-term potential is likely to be impactful >> we're reaching economies of scale, clean technology. you run the solar etf, t.e.n huge inflows, up 70%. >> 66% last year, absolutely >> and finally hitting economies of scale >> absolutely right. >> dan draper, the head of

invesco. we'll bring you updates on what's going on and what everyone is saying about coronavirus throughout the day i'll be here tomorrow as well. guys, back to you. >> bob, thank you. bob pisani sue herera has a news update at this hour, charred wreckage is still smoldering following a fire overnight on an alabama boat dock along the tennessee river. fire officials confirm there are fatalities but would not give a number 35 houseboats were destroyed survivors of the auschwitz death camp and a thirty families walking solemnly through its gates to mark the 75th anniversary of the camp's liberation by allied forces. more than 200 survivors were have estimated to make the your journey, many in their late 90s. and the state of the union response will be delivered

general motors is investing over $2 billion to make one of its plants 100% electric all the trucks and cars built will be electric vehicles. production will begin late next year you are up to date that's the news update this hour back to you, jon meanwhile, the pain continues overseas with european markets closing. seema mody has the breakdown you could say it started overseas with stocks in europe decisively lower the big question that global macro strategists are trying to understand is the impact on china gdp and the effect of the coronavirus. capital economics forecasting the outbreak will have a significant impact even if it is brought under control quicker than sars was back in 2003 the economic impact now looks likely to be at least a similar scale to sars. keep in mind, sars lowered china's growth by three percentage points in the worst affected quarter back in 2003.

worries about pullback in travel, consumer spending in china is weighing on the travel operators. luxury retail names lower today. lmvh, earnings tomorrow. sales in asia and japan account for a third of the company's total sales and analysts say any quarantines in big urban centers could have an impact on the company's china sales and business last quarter of the company largely avoided the unrest in hong kong but there was a report that it's closing some of its stores in hong kong. that stock has had a tremendous one year, up 53% finally, we'll keep an eye on britain's decision on huawei that is expected tomorrow. back to you. we are monitoring a telebriefing out of the centers for disease control. in the past few minutes they confirmed three new cases of the coronavirus in the u.s., one in arizona, two in california as that gets ramped up, we'll turn to meg and talk about what

we may hear in the next several minutes. >> hey, carl the call is just getting under way. we could potentially hear about more u.s. cases being confirmed. we expect we'll probably get an update on the number of cases the cdc is looking into. as of just yesterday, it was investigating more than 100 cases. back to you, carl. more from the cdc, i suppose >> let's listen in >> to date we have 110 of what we are calling persons under investigation, or pui, through 26 states. this is a cumulative number and will only increase we still only have five confirmed positives and 32 that have tested negative there have been no new confirmed cases overnight. this information will be posted on our web site and will be updated on our website on mondays, wednesdays, and fridays. a short update of the laboratory side of our work last week we mentioned that cdc

has developed a diagnostic test called a realtime reverse transcription preliminary chain reaction that's rrtpcr. it can diagnose the coronavirus in rest ra toir and urine ses mens from clinical samples last friday we posted the protocol for this test this is especially a blueprint to make the test currently we are refining the use of this test so that we can provide optimal guidance to states and laboratories on how to use it. we are working on a plan now so that priority states get these kits as soon as possible but in the coming weeks we will share these tests with domestic and international partners so they can test for this virus themselves our longer-term plan is to share these tests with domestic and international partners through the agency's international reagent resource additionally, krecdc upholded te

entire genome of the virus from the first and second cases in the united states to gen bank. all the sequences we have e, tracted are similar to the one that china initially posted a couple weeks ago this means that right now and based on cdc's analysis of the available data, it doesn't look like the vaccine has mutated and we are growing the virus in cell culture, which is necessary for further studies including the additional genetic characterization once isolated, the virus will be available in the dei resources repository, which is an nih resource that supplies organisms and reagents to the broad community of microbiology and infectious disease researchers as we have said since the beginning, this is a rapidly changing situation both here and abroad 16 international locations including the u.s. have identified cases of this new virus. i'm sure you've seen the

reporting and videos coming out of china in wuhan particularly our thoughts are with the people on the front lines of this emerging public health threat in china. right now, we are continuing to screen a few passengers from wuhan at the five designated airports this enhanced entry screening serves two purposes. the first to detect the illness and rapidly respond to symptomatic people entering the country. the second purpose is critical, to educate travelers about the symptoms of this new virus and what to do if they develop symptoms i expect that in the coming days our travel recommendations will change i cannot provide details on this yet, but know that we are working on it. given the aggressive public health response we are pursuing tlshs may be some disruptions experienced by some. cdc recommends avoid iing

nonessential travel to the province in china. as of yesterday, we beagain recommending people traveling to all other parts of china practice enhanced precautions including avoiding contact with six people and discussing china with your health care provider, especially with if you are an older adult or have underlying health conditions. returning travelers with symptoms in close contact with people confirmed not a coronavirus may be asked to take precautionary measures we understand that many people in the united states are worried about this virus and how it will affect americans risk depends on exposure right now, we have a handful of patients with this new virus here in the united states. however, at this time in the u.s., this virus is not spreading in the community for that reason we continue to believe that the immediate

health risk from the new virus to the general e americamerican is low at this time. every day we learn more and every day we assess to see if our response can be improved as this response evolves, cdc will continue our aggressive public health response strategy, working to protect the health and safety of the american public thank you. >> thank you, doctor we are now ready to take questions. >> all right let's get now back to meg tirrel we were listening to the director of the national center for immunization and respiratory diseases meg, what did we learn about where this is now and the further steps that are being taken here in the u.s. >> a few important things popped out from that call just now. one, we don't have any new cases yet confirmed in the united states the count is still five. they have a new additional samples they are testing, up to 110, but they've confirmed more

negatives, 32 negatives up from 25 yesterday they also started the call out by talking about diagnostic tests. that's important dr. scott t gottlieb, former commissioner, wrote an op-ed on cnbc.com talking about the importance of getting rapid testing at the point of care so right now, samples have to be sent to the cdc dto be confirme. they are trying to get their tests out to states and hopefully even more broadly once they've confirmed that these tests work well in order for people to be able to test and get those results back quickly gottlieb in that op-ed is saying that is going to be key to identifying and isolating cases because he is concerned that the spread will not be able to be contained through screening measures and things like that. also the cdc suggesting that travel recommendations may soon change people should keep checking in on that if they are planning to travel to the china region they said those might change

soon those were the main take-aways from the cdc just now. >> conversation or a statement about advising avoiding travel to hue province and check with your health provider, particularly if you're an older person >> we haven't seen the official judgme update on any travel advisory changes but they do imply we might start to see that soon in terms of the older folks comment, it does seem that older people are more at risk from the severe form of this virus. >> she said the virus hasn't mutated. how important is that in trying to isolate everything? >> it's really important because we know that work is going on right now to develop potential vaccines and drugs and, you know, we talked with j&j's doctors this morning, talking about isolating the correct part of the virus to

target with their vaccine and they're going after five different constructs of that target at the same time in case it mumutates they need to make sure the thing they target remains the same for the vaccine. d derma they are pewters have identified a target protein on the virus they're going after. but if it's not the right one, the vaccine won't be effective being able to track how it is mutating if it is is incredibly important. >> meg, thank you. so important to have your deep knowledge on this issues as we continue to cover this we'll have more on the market selloff straight ahead "squawk alley" is back in two. a, 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

to take care of yourself. but nature's bounty has innovative ways

to help you maintain balance and help keep you active and well-rested. because hey, tomorrow's coming up fast. nature's bounty. because you're better off healthy.

the $40 billion in two-year notes up for auction two minutes ago. rick santelli. >> it was just a bit above average. i gave this auction a c-plus for demand at 11:30 eastern. we have another option coming up at 1:00 eastern. but it kicks off $113 in supply, that i gave c-plus to, the yield atthe dutch auction 1.44, spot on with the big side of the one issued market. if we look at all the internals, 2.65 bid to cover a bit above average, 49.1, smack on ten auction for indirects. directs a little less, 0.3%

less dealers take 32.2. everything about this auction was basically average. as for what's going on in the marketplace, not as easy to interpret as the auctions -- or is it? coronavir coronavirus, and i don't mean to at all take away from all the issues and the humanity involved in something like this, especially as it continues to somewhat move around the globe, is that many comparisons to corona, like sars, basis points affected on the treasuries take tens. we're in the 1.85 camp, now at 1.60, 1.61 if you look towards history, the bointsz involved there for the markets to move lower are somewhat in line with sars numbers from 2003-2004 but here's the difference. we had a much higher yield back then, so as a prercentage, that changes the dynamics

but maybe the best way to understand this. you ever had a car stuck in the snow you never get your neighbors to pull the front of the car. you push the back of the car it's easier to push than pull. think about how far markets have gotten over their skis with regard to too a high and too low a rate on treasuries, maybe a little bit too lofty on equities, well, these markets are easy to push they are ready to be pushed. if you consider, look at the chart going back two years on ten-year note yields does that chart looks like it needs a whole lot of help for yields to move lower the answer is no as a matter of fact, many economist, analysts, chartists, many that look at only fundamentals have pegged rates lower anyway i'm not trying to dismiss the impact of the coronavirus. but markets and investors are a bit more on the nervous side, and when uncertainty hits a nervous side risk on type market with low volatility, i think it's very normal to reduce risk

and take profits i think when you add in all the other issues about the questions about china's economy, how truthful they are, how it figures over the last 20 years and account for how they've lost gdp, i get tired of analysts saying 6% gdp, we would die for that in this country but we wouldn't die to have the rate of change be so negative as it has been on gdp over the last decade as it has in china. so we could summarize quite easily i don't know how corona is going to turn out, but the market certainly seems to be taking several additional helpings to cover the cost with respect to what the ultimate impact may be. carl, back to you. >> all right well said, rick. thank you. rick santelli, got to keep the bond markets' behavior in some perspective. join us to talk about market response to the coronavirus, kevin korroan and chris meekins.

good to see you. kevin, how good of a tell is the ten-year yield right now >> well, it's the go-to, that and gold, the go-to defensive assets for anything that would be unsettling to the market in the short term this coronavirus scare is the easy trade for the time being, but the next two or three weeks will be very telling to see if this is going to go the way of sars because ultimately that was a relatively short-lived kind of thing as opposed tosomething much worse 1918 was a very difficult situation with the spanish flu that resulted in a 30% decline in the dow so overall the market is still trying to ferret out whether this is something that is ramping up to something more troubling or whether it's something that will be able to be taken a little more in stride

as public health officials begin to get their hands around it >> to that point, chris, we just heard on that cdc telebriefing, 110 being monitored as possible cases, 26 states, but the spread is not happening within the community of the united states, and for that reason they say public health risk at the time being is considered low. how heartening is that >> i think it's encouraging as long as your viewers accept the fact that we are going to see more cases in the united states. i anticipate we'll probably have 10 to 20 cases by the end of the week in the u.s. and in china, really, you're probably looking at ten times the number of cases that have been publicly reported so what i'm telling my clients is that if you're underappreciating how bad this can be in china and you're overappreciating how impactful this is going to be in the u.s., u.s. probably not a big deal, china, way worse than what people are anticipating. >> so, kevin, does it make sense

to punish stocks with china exposure it seems like some of that is what's happening here. i'm looking at stocks that are down less so far today ammon, ibm, microsoft, for example, among sizable stocks that are down on the lower side. apple is down quite a bit more it has 42 retail stores in mainland china does that make sense >> i really like the way that rick set this up because a lot of the move in the market in the last year, especially with the higher volatility, higher beta sectors, the more economically sensitive sectors, those have run very fast and ahead of underlying earnings growth so to any extent that the narrative, the popular bull narrative today, which is that the stock market is forecasting an upturn in the global economy, we are just waiting to see that happen anything that would upset that narrative from unfolding would

be a negative. yes, anything that has had a big run, that is tied to global travel, global growth, china, you would expect to see them pull back particularly given that they have had such a good run and it is rational given some new uncertain information to take to mark down those prices just a bit. but so far, the gains are still pretty hardy when you look at them year over year. >> chris, you mentioned the asymmetry and severity regarding the virus in china strs united states how does that -- how do we maintain that assem tree without extreme travel restrictions coming into the united states from china. >> well, the good news is as someone who worked at the department of health and human services in the area of public health emergencies i can tell you from the leadership of secretary azar all the way through the snooerds the u.s. is the global leader in infectious disease detection and response we have got great local public health departments that are

tracking the people coming in and looking a of the who they have impacted. so our public health setup is really encouraging i think we probably will see the transmission of some case from human to human inside the united states but even if that happens, it doesn't mean it is a huge issue, it doesn't mean the markets should be heavily concerned about this from my perspective, we are in a good shape, u.s. is the global leader, the impact on china is going to be weeks or months, not days and in the u.s., this is going to continue to be a story for the next little while. >> kevin, given that valuations in the market in general are where they are, pretty high, and that this is a global issue, one might argue that stocks have not fallen that much what does that say about investors' mentality >> it says that investors have placed a relatively large bet on the 2019 global slowdown turning

around and starting to show some momentum mere. wh -- momentum here. when you look at the manufacturing data around the world, purchasing managers' index representing the more cyclical parts of the economy it does look like things have settled down a little bit in terms of the decline in greowth it looks like things may have started to pick up what we want to see is the momentum build as the year goes on the market has priced in an expectation for a turn to positive growth and a pick up in earnings growth. starting to see it and hopefully, this coronavirus turns out to be something that does not really threaten what seems to be an emerging positive growth story for 2020. >> finally, kevin, i wonder whether you think earnings season so far, and the qualitative commentary about 2020 supports, ratifies, confirms the expectation for an inflection in growth post phase

one so far at least? >> a little bit. when you take all the data and put it together including what we hear on earnings calls there is some sense that we might actually get some lift in growth top line and earnings. the challenge of course is going to be that profit margin generally speaking are also elevated so it has to really be a more solid global growth picture. and the trade deal has been helpful at getting at least the forward view looking a little bit better so to the extent that we see some pick up in topline growth, that should support some gain in earnings, and that could help feed a bullish case as emove our way through -- as we move our way through the first of the year we need to see a continuation of that theme next quarter, too. >> something that we have to just wait for. thank you guy, kevin and chris appreciate it. >> thank you. there has been a sea of red

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the investment committee is debating what to do with stocks. the coronavirus is spreading and earnings season is about to heat up big time. we are following that. and one stock an investor says could rise 40% all just ahead. tonight at 10:00 p.m. don't miss cnbc's original documentary fugitive ceo, the carlos ghosn story. phil joins us with a preview. >> carlos ghosn's escape from japan is a wild story, the kind of thing you would see in a hollywood movie. we asked him, is it possible that we will some day see this become a major motion picture? >> i think it is going to happen with or without my collaboration, yes. >> would you like to collaborate on a movie >> i want to make sure if they tell the story they tell it right. >> are you shopping your story >> i am not, but -- i mean, if there is no story, it is fine. but if there is story, i'm interested to making sure that

the record is straight. >> so at some point you could be part of a project? you are open to that >> yeah, but it is not -- for me, it is not the commercial thing. but it's just making sure that they have enough elements to build whatever story on facts and not on fiction and certainly not on the fiction which would be totally contrary to the truth. >> just a taste of what you will see tonight in fugitive ceo, the carlos ghosn story carl, i believe we are going see a hollywood movie with or without mr. ghosn, but most likely with mr. again to playing some type of role in terms of shaping the story at some point in the future. >> which he is a microsoft master of. my question is where you found the time to report this in the midst of max reporting on boeing and earnings season for airlines. >> a very, very short trip to beruit we did a lot this on the way back that's how it went

>> unbelievable. we cannot wait to see this tonight. phil 10:00 p.m. eastern time. cnbc's original documentary, fugitive ceo, the carlos ghosn story reported by our phil lebeau. >> safe to say there is going to be a movie. tomorrow morning, 3m, lockheed, utx, and more. let's get to the judge and the half. appreciate it carl i'm scott wapner, front and center this hour the wos selloff for stocks in months the make it or break it moment for your money is under way. it is 12:00 noon and this is the "halftime report." >> the bizziest week in earnings, a fed decision, and the growing threat to a virus. what will investors do from here apple getting ready to report tomorrow will it save the day or add to the selloff? plus the stocks that are most exposed to the deadly virus spreading across china and around the world the commitment committee is ready to go. "halftime" report starts