>> i do too. emeril sauces, cream of white. >> joe >> the exchanges, there are four of them. cme, ice, nasdaq, any of the four. >> good stuff. and great to be back with all of you. that's it for us "the exchange" starts now. welcome to "the exchange." i'm brian sullivan it is a big day for investors, a big day for your money the dow and s&p having their biggest sell-off in nearly three months the markets trying to gage just how large the impact from the coronavirus will be to the u.s. and global economies companies with huge exposure to china. we will dig in on these sectors putting oil, restaurants, travel, casinos. it's a big hour. but let's get a look at the markets and the numbers. dom chu has more. >> we talked about the lows, about 550 points but if you're

more of an s&p watcher, the highs of the day are down about 36 so we're right near the best levels of the session. we are down 60 at one point so the s&p markedly lower, 1 quali 1/4%. we will be watching closely. and now the 1.6 level we are seeing has been the move lower yields going all the way back around to october. that's the last time we saw yield this low so buying up the safety of the treasury debt. and you mentioned companies with exposure to china in that region three dow components, apple, caterpillar and nike those three dow components seen as having business impact from either consumer spending or economy in china keep an eye on those names i will send things back over to you, brian. >> dom, thank you very much.

now to more on the coronavirus outbreak and what we know at this hour. 82 people have died. all of them have been inside of china at this point. there are more than 2,800 confirmed cases, including now five in the united states. we're live in beijing with the latest with eunice yoon. and meg terrell is in the studio with more on how the american government is trying to help eunice, what do you have >> they just confirmed the first death this morning in beijing. a 50-year-old who traveled to the epicenter of the outbreak. authorities here have been recommending everyone wear a mask, which is why i'm wearing a mask here in this normally very popular and very busy night life district in beijing. it wouldn't be as busy because of the lunar new year holiday, but still not as quiet as it's been today

the government authorities have moved very aggressively to try to contain what they describe as a strengthening virus. the chinese premiere of in the hot zone of wuhan. and this after jinping convened an emergency meeting over the weekend and described the situation as grave the question now is exactly when will companies return to work? the governor announced it's extending the lunar year holiday to february 2. certain cities such as shanghai, very important to international business, have also extended their holidays to february 10th or after the february 9th and february 8th for suzhou. and some companies are making decisions like tencent said they asked their workers to stay at home until february 7th. sea trip.com said it told its

workers not to come back to work until february 10th. so we're starting to see what could be a longer-term impact on the economy as well as global business, brian. >> yunice, you're our colleague and friends and we want to make sure you're okay what was your weekend like how do you -- obviously you're working and we do appreciate that, but what is your day like? if you need something, food, something to drink is anybody going out or are you just literally staying in your apartment? >> well, it's a little bit of both people are going out i myself am going out. but you do feel quite nervous about it so everybody you see now is wearing a mask, and then when you go to the grocery store, it's really, really quiet. people are getting supplies but i know -- there are plenty of other people who are ordering their food or their water online and are so paranoid about the possible spread of disease and germs that they're asking the

couriers to just leave the food outside. and then after that disinfecting everything before it comes into the house. i was just in this district. there are currently not a whole lot of people but i went over stott hotel and had a temperature scan every single time i entered the hotel and was told to sanitize my hands. i was at the starbucks just getting a coffee, and after i moved, they were spraying around the area and sanitizing everything so it's kind of all fed into the mentality here i think it really gets into how people are really nervous about the potential for this virus. >> very dramatic and scary personal anecdote there. eunice yoon, we're thinking about, you obviously thank you very much for joining us be well. now, let's turn to the united states. five con firmed cases and race in the drug industry to find any kind of vaccine. where do we stand on both fronts

right now? >> drug companies are moving very quickly johnson & johnson said they started working on a vaccine two weeks ago. and humana are hoping to have a trial within a few months. we went into moderna's labs to see how they're doing this work so quickly the technology is messenger r & a and essentially a way to deliver a blueprint stott boto cells to make a protein. they're working on a batch to supply the nih to run a phase one clinical trial. >> while they run that phase one study we will need to start planning for the next stage of the program, which is requires a large scaleup so the vaxpine can be available if the pan demme

eck skpr -- pandemic spreads out of control. >> and that's a big if first if they can develop the right vaccine and then ramp up to scale if it's needed. and everybody hopes it won't be. >> they do and the market is hoping for solutions too there are extreme reactions in some cases you had gone on in "the halftime report" with i market flash saying there was a company effectively thinking about going after a vaccine and the stock spiced 27%. >> they are looking for advancing therapeutic and screening existing compounds they have in their library, something we heard from several companies. people in the stock trade world public the trigger quickly too. >> meg terrell, thank you very much prepared or not, is the united states responding to any kind of coronavirus outbreak here joining us is the rm toer health and human services secretary and governor thank you very much for joining us here on cnbc.

is the united states prepared for any kind of spread here? >> i think it's safe to say there's no country on earth that is adequately prepared or prepared as we would like to be. as your reporter indicated, we're at least five, six months away from a vaccine. i think it's reasonable to expect that we will see more cases inside the united states the important thing will be for us all to keep this in perspective, and by that i mean, taking it seriously but at the same time not engaging in rhetoric that inflames as opposed to informs there will be a period of time if this begins to spread inside the united states where people will need to change their behavior and we -- these are the same kinds of provisions that every family, every business, every community, every employer needs to be thinking about not just a

pandemic virus but for my kinds of emergencies. >> but we also have to walk, i would imagine, that very fine and difficult line, governor, which is you don't want to scare people unnecessarily we do have five cases. nobody is minimizing any of those five cases or what is happening. but you also don't want to create a situation wherepeople may begin to act irrational. >> so here's the problem, anything you say in advance of a pandemic seems alarmist. anything you've done after it starts is inadequate this is not a situation where government is able to just come to the rescue because it happens essentially everywhere at the same time. and so it's -- by necessity, that means families need to just ask themselves, how prepared are we businesses need to say, if this were to mature, how would we

respond? could we operate remotely? how much could we do school districts need to begin to ask themselves at what point in time will we respond? public health officials need to be doing same lar kind of thing of the but pandemics happen. they happen every 30 years or so it's just long enough apart that we forget how impactful they can be and there's a pattern of neglect over time that we suddenly have other priorities and we don't prepare as well as we could or should we find ourselves in the position not only us but the rest of the world finds themselves in. >> what would you do what is your recommendation? >> i would suggest everyone should be asking themselves exactly the same questions they would if there was a worry about a big snowstorm coming or if

there was an earthquake to hit your community you would want to make sure -- if you had to stay home for an extended period, a couple of weeks, would you have the capacity to do that? it's a good thing to think about. and not just because five people in the united states are sick and there's a lot of worry around the world, it's just a good idea. if you're in business, it's a very good idea to say what would happen if we needed to operate remotely could we do that is our technology such we would have the protocols in place? >> yes, hope for the best but plan michael levitt, thank you for being on cnbc. we have a bond market now, five-year notes up for option. let's go back to rick. >> brian, this is the second of our two auctions today, $41 billion and $81 billion down this auction, we moved from a

c-plus in the last auction to d-plus this auction. yield, 1.448 the issue mark was 1.44. it tailed, big recover 2.33, weakest since september. only thing on spot average was indirects 16%. 13.9 are under x was light and priced right $32 billion seven years ago tomorrow capped, $113 billion in supply and it's probably safe to say with the big rally we had, pushing yields down, it seems as though investors are reluctant to step up and buy at these auctions back to you. >> rick santelli, thank you very much coming up -- are stock being sold only because of the virus or are buyers looking for any reason to make profits plus, coffee, cruises,

casinos, we saw them sell big. but there's one sector you have to watch and we will have that name and how much will this affect oil demand and stocks we will break down a piece you will only hear on "the exchange." hey, our worker's comp insurance is expiring. should i just renew it? yeah, sure. hey there, small business owner. pie insurance here with some sweet advice to stop you from overpaying on worker's comp. try pie instead and save up to 30%. thirty percent? really? sure! get a quote in 3 minutes at easyaspie.com. that is easy. so, need another reminder? no, i'm good. reminder for what? oh. ho ho, yeah! need worker's comp insurance? get a

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stocks are continuing to sell off at this hour, although we are well off our lows of the day. you can see the dow is down about 350 points we were down over 400 at one point, which took us negative on the year we're actually still fractionally positive in 2020 on the dow, about .4 of 1%. no one is doubting the seriousness of the coronavirus, either from a human or economic angle. but in what's been a red hot stock market over the past year, is it possible some nervous investors are using this as a reason to sell for other reasons? we're joined by jerry castellini, president and chief investment officer of castle arc management and the chief investment officer of hennessy funds. jerry, what do you think >> you don't get markets up 30% very often when you listen to the technicians and folks who follow momentum, they've been trying to give a warning signal for a while that maybe it's time for a rest so you take that and throw something out of left field like

a pandemic, and i would expect a fair amount of people to just say i'm going to put some money on the sideline. it's actually an outstanding opportunity for fundamentalists to actually take what's really going on behind this and pick your stocks. you're starting to see some of those opportunities today. and let the wave of selling get through. unfortunately, it might take three, four weeks. >> neil, are you getting those calls from clients we made a lot of money, let's sell some stocks if so, what do you advise them what are you telling them to do? >> i think you have to just step back and look at the big picture. this is one sphere that we have seen the last couple of years, if not the last ten years, from the standpoint of the russia investigation to impeachment to tariffs to dysfunctional washington it creates an opportunity for the fundamental managers to actually make very good purchases. this is where the difference comes in, brian, because we've been talking for the last three

years about index funds versus managed indexes or managed money. this is where it starts to peel apart saying, okay, the market will go down it's just a scare. we have already had 22 corrections since 2010 and we've come back, 2016 between 5% and 10% and 16 between 10% and 20%, so the market corrected itself. as much as this is a serious scare health wise, it doesn't have anything to do with the fundamentals underlying the market going forward. >> let's get some of those specific ideas it does appear, jerry, people have just sort of hit sell now and they will think about what they sold later. you think this is a great opportunity for what you call the morgans -- j.p. and morgan stanley. >> yes i have three groups. the morgan brothers are the easy ones ment really attractive valuation. just reported dynamite record

earnings and everything is on go for both of those franchises i think you will just look back in the next six months and go wow, remember when we had a chance to buy both of those companies as their cycle is turning and valuations are heading in their direction i would lean into those right away i would also look at once you have the opportunity in the energy stocks, which now are being valued although the entire economic expansion will go away and price of oil drop to $30, $40. it's kind of silly but that's what's happening in the last ten days since this thing got started. you can buy conoco and eog about 10%. those are powerful names in the market i would throw apple in who has had an entry point in apple they could fall back on? >> i guess if you need an iphone, you'll get it. maybe just not receive it now but after the all-clear.

stick around 20 minutes. we will do a deeper dive on the math to talk about conoco. neil hennessy, nrc and itron you believe have been sold again, maybe undeservedly, and present an opportunity why >> both have low price-to-sale ratio. both will earn around $3 a share and neither one happen to pay a dividend you start to think about smart meters for the gas, water, heat in homes, businesses, that itron. if you look at ncr but a lot of people don't realize the scanners in the store when they scan your food or kiosks at the airport. these are solid companies. they're more or less like a coin-operated laundry mat. it's one of those things that are really not exciting, brian, but you never see a going out of business sign on the outside of their doors. >> real world stock examples from jerry castellini and neil hennessy we're watching those names

guys, we appreciate it thank you very much. have a great day coming up, we just talked about it oil and gas stocks getting hit as hard or harder than every other group. the question is, how much worse might it get or might not? we will walk you through the china oil map. you will only see this on "the exchange." six days for the super bowl but the stadium it will be played is in it for the long game when it comes to climate change te idon't want to miss our lastnstallment on the "reminding risk" series. an even smarter, stronger investor. exactly. ♪(rocky theme music) fifty-six straight, come on! that's it, left trade right trade. come on another trade, i want to see it! more! ♪ 80s-style training montage? yeah. happens all the time. ♪

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as bad as the market numbers look now, down about 360 on the dow, if you go back to the morning, our low of the day was down 550 so we've come almost 200 points off of our low right now the dow, s&p and nasdaq are having their worst day in a number of months but the market has come off its bottom. right now we're about 360 points to the downside on the dow all 11 sectors are down, led by energy, tech and materials. energy falling hard as oil drops again on demand fears. we will dive into that later on in the show. leading the cow is united health, intel, american express and dow. it is not all bad. you have walmart, pfizer, dr horton and akonic actually in

the green. let's turn to the average yields, standing at 2.1% but thanks to stock erosion pushing prices higher, the income hasn't been all that attractive but do not throw that proverbial baby out with the bath water yet. because mr. dominic q has done some diggings and found names in the sector that stand out to him and others, don. >> yes, sir. there are some stocks with materials that held up better than others despite the fact that they sold off by the way, material is the worst performing sector in the last 12 months, second only to energy if you take a look at the reasons why we look for these particular stocks, we wanted to find ones because of the emphasis on dividend yield at the time when ten-year treasury note yields are only 1.6%. we say what happens in the material sector if you find stocks with positive price performance over 3, 6 and 12 months, so nearer, medium and

long-term price division and then we pass the simple screen with dividends and materials are names like air products, that carries a 3.2% yield and positive price span. and fmc, 1.9% yield and avery denison, 1.8% yield. it's not that they have been gang busters for stock, but those are some of the names that held up relatively well and still do, brian, pay you to wait in some small way. i will send things back to you. >> rocking out the lithium play, thank you very much. let's get a cnbc update with sue herera hello. here's what's happening at this hour a military official confirms a u.s. air force place crashed in a taliban-controlled territory

of afghanistan the cause of the crash is under investigation, but does not appear to have been brought down by hostile fire. officials have not confirmed the number on board or if there were any fatalities revelations made by john bolton in an upcoming book are causing chaos in the senate impeachment trial, bringing the issue of calling witnesses to the forefront. at least two republicans, mitt romney and susan collins have signaled they're more open to that idea. >> the u.s. attorney overseeing the ongoing investigation into jeffrey epstein said prince an drew provided zero cooperation, end quote. he has not responded to requests for an interview and mackenzie bezos cut her stake in amazon about roughly $400 million or 200,000 shares bezos received 4% of the company in her divorce deal with jeff

bezos. you're up to date. >> sue, thank you very much. coming up -- investors taking their chips off the stocks today because of coronavirus fears. we will look at getting back on track when the fears calm down plus, what may be the number one consumer brand with china exposure that almost nobody is talking about? we'll talk about it coming up. and a sneak peek at phil lebeau's candid interview with carlos ghosn, all aheaded of our documentary released tonight

welcome back coronavirus viruses concerns are mounting to slow its spread, parts of china's economy have nearly calm to a complete halt and shares with the country's large finance consumer, they're being slammed. let's look at three specific groups of those. kate rogers here looking at the impact on fast food and coffee

seema mody with the travel names and could tessa brewer is drilling down on the casinos welcome to you all let's begin with kate rogers all of those restaurants closing across china and unlike many things like a jean or iphone, you do not get that restaurant sale back. when you mess it, it's gone. ooh ps oops. >> and the biggest of them all, brian, is starbucks, which is closing some stores in china as confirmed cases continue to rise, a spokesperson telling cnbc we're working closely with health authorities taking action with the health of customers top of mind, closing stores in some locations. we will monitor closely as the situation evolves. china matters in a big way to starbucks, which has seen growth there even in the face of competition from local start-ups. there are some 100 starbucks in wuhan itself the company also faces more reasonable risk because they own the chinese companies, they're

not owned out to others. >> with starbucks earnings are out tomorrow no one is suggesting the earnings don't matter but those are roughly 90 days when we were talking about the coronavirus. i imagine the folks you're talking to, analyst are already looking at what this quarter's earnings hit might be. >> last year they had third sale growth of 35%. i think they're looking for the same number this quarter i talked to j.j. of morningstar, he said he had been tracking for month sales 3% to 4% but because of coronavirus, it could be negative low to middle digit comp starbucks does call china its second home market it is a very big deal to them. >> if it goes on, the numbers might go up. that seem like a small figure. kate rogers, thank you very much let's pivot to the travel names. 18 cities across china are under

some sort of travel restriction. are people steering clear of the company due to coronavirus fears? airlines, hotels, cruise lines, as you can imagine, they're all seeing heavy investor selling. let's find out more about this group from seema mody. >> the coronavirus has disrupted travel during the critical lunar new year but the question is how much the largest china on-line operator and in the cruise lines both suspended sales this morning, and said this loss in revenue will result in a 5% to 3% hit respectively. but it's not just cruise operators. hotels had been building out their pipeline on the mainland in fact china leads the world in hotel construction with over 228,000 rooms currently being built. that's up 13% from a year ago.

marriott, hilton, hyatt among those putting work in the country. >> tell us how long it may recover, if they announce the all clear, do people get back on a plane or train tomorrow? does travel recover that fast? >> that's the big question history has shown, as with other health scares, travel stocks tend to respond pretty negatively for a period of time. but over one to three months typically these travel stocks tend to rebound. it just depends on the coronavirus, how long it takes to contain and also the size and magnitude of the scare if it does spread really beyond just china to other parts of the world as we're already seeing, but how bad it could get >> it may take another quarter after its over to recover. seema mody, thank you very much. now to the third group taking a hit perhaps harder than any other, that is casinos

wynn, las vegas sands, mgm tumblings and china's casino macao turning away individuals travel has all but stopped to these casinos? >> it's down 50% from where it was the same holiday period last year maybe 60% if you include the thishd day and visitation over the first three days of the chinese new year that's a precipitous decline, showing from mainland china. those numbers coming to us from the makoa government the impact on casinos with resorts in macao are showing up. with knee try three-quarters revenue coming from macao, stocks down almost 6%. 17% in a week. bank of mirk downgraded wynn from buy to neutral and lowered the price target to $150 because of the short-term risk

las vegas sands translates to 65% of its stocks there and down 50% for the week hong kong-based melco is getting punished, down more than 19% over the last 7 days morningstar points it it may be more insulated than its competitors because 47% come from the philippines but the philippines then get a hit from lack of tourists mgm resorts relies much more heavily on its u.s. operations but still they're down 11 1/2% and the chief executive in macao has held on to this possibility of closing down casinos entirely if this outbreak worsens. >> what about las vegas, any impact seen there? >> last week i asked about the impact for las vegas because chinese new year is a very big holiday in las vegas, with chinese tourists coming into that big tourism mecca they said there have been no cancellations. makes sense, right if you're in a virus situation,

you want to get out of town. the question and analysts are looking at this, with all of the travel restrictions in place, quarantining, will there be an impact >> we will find out. thank you very much, contessa brewer many companies and stocks like the ones we talked about that are be impacted seem obvious. big names in china like nike and tapestry but there is one you may not thought about, and that is estee lauder yep. 17% of its sales come from china, far more than many of its peers. stock is on pace for its worse day in a long time and certainly is not helping helped by a downgrade out of oppenheimer today. let's bring in the man who made that call, managing director and senior analyst at oppenheimer. ra pesh, thank you for joining us i mentioned some sales are gone forever. you can't go back in time and go to dinner. you lose yourself. won't much of estee lauder's sales ultimately come back just with a lag >> yes, as you look at estee

lauder, a key part of their business is retail and that's due to travel at airports and other corridors. our worry is some of that business will go away permanently. >> got it. because those passengers are passing through, ostensibly one time they will not come back by the way, those travelers as we know from the data are either not going or numbers have been cut a lot. have you been able to do any channel checks at all? i know it's probably a difficult situation. >> yeah, still very early. some of the data suggests there's more than 25% decline in passer-through traffic year over year on the first day of lunar new year afl travel in china is down 40% so it's having a significant impact on flow traffic. >> do you think there's any chance those numbers are conservative >> yes, i actually do think it is conservative. >> 25% down number was, i would imagine, a couple of days ago. things have arguably gotten worse and restrictions imposed by the government have gotten tighter.

>> that's correct. the second impact that's hard to determine at this point is there could be an economic impact. if estee lauder sells high-end cosmetics and that's the other angle they're worried about, a pullback in spending. >> let's hope it does not move or spread more but we know other countries who reported maybe one case. how important is an india to estee lauder >> india is a growing, ee mothering market they still have low exposure to the indian market. i would say a growth vehicle but no driver. foresty, the chinese consumer is about 25% of their retail business so estee is struggling in other markets, such as the u.s. >> a double hit there. pushe, thank you very much up next -- six days to go excitement is building for super bowl liv but the very stadium where the chiefs will face off against the 49ers may be facing long-term challenges of its own.

dianna ulic is here with more. >> extreme brightening and ams en flooding and not just in mii'hard rock stadium. we will explain the risks on climate exchange their business. (second man) virtualize their operations. (woman) and build ai customer experiences. (second woman) we also keep them ready for the next big opportunity. like 5g. almost all of the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready.

welcome back there is less than one week to super bowl sunday. onest most lucrative sporting events in the world, if not the most lucrative but the game and the entire sports industry is facing fast-growing challenges from climate change diana olick takes a look at her series, "rising risk.. >> reporter: on super bowl sunday about 65,000 fans will stream into miami's hard rock stadium to watch the biggest battle in football, but the very venue in which they are cheering is already in an epic battle all its own. >> the last three years in september, we've had climate issues >> reporter: tom gar finkel is ceo of the miami dauphins, which

just paid $500 million to renovate the open-air stadium. >> we had lightning strikes we never had in 30 years where we had to delay a game, longest delay in history of the nfl. >> reporter: a random extreme rainfall produced these images from a college game at hard rock in 2018, and that's just one stadium. in florida alone, the industry contributes $57 billion and 580,000 to the local economy by the florida source foundation. american airlines, home of the heat, sits on the edge of biscayne bay. >> the arena will swell with two feet of rise, 20 years or less, three feet for the hard rock stadium. >> reporter: henry researches climates impacted by water his thoughts on major league soccer expansion team proposing a stadium by the airport >> they would be putting their

future in its hands. >> reporter: it extends beyond florida to san diego where in 2017 the padres petco park flooded to last yun when record rainfall did this -- and to davenport, iowa's stadium where rising rivers turned it into a field of dreams into a nightmare. >> every community that hosts a professional sports venue is going to be affected by global climate disruption, either through storm surges, more precipitation, stronger hurricanes, wildfires, droughts. >> reporter: alan hersch cowits is an environmental science environmentalist to the new york yankees. only known in professional sports he advises the mlb, nba, nhl, and major league soccer. >> we're dealing with very large real estate infra structure investments. rashdless of who owns them, they're going to be affected >> reporter: as a result the sports industry is one of the

most aggressive going green and that sends a powerful message. because while very few people follow climate science, the vast majority of americans follow sports. >> no one looks at the new york yankees and thinks there some kind of left wing radical organization >> reporter: the new york yankees, among others, are investing in carbon concentration projects this year the dauphins are eliminating all single-use plastics cups will be aluminum. >> in sports you put something up, you are really hitting an audience that's very broad if it impacts sports, it really makes it that much more important. >> reporter: steven ross is both owners of the miami dolphins and chairman of the related companies, one of the nation's largest real estate developers as the owner of a team, do you see any risks to your investment from climate change? >> oh, yeah. if we don't do something now, we are looking at extinction. these are our issues that have to be dealt with today

>> diana joining us now. another great piece there. if we built a stadium 20 years and weren't talking about this, we get it. but apparently there are still new billion dollar stadiums being built, hard up against water? >> yes, we talked about the one in miami, the soccer stadium but oakland a's are proposing to build a stadium right on the edge of the san francisco bay. they talk aboutreye'sing the foundation, putting in green space. but the question to me is if you build this island of resilience, stalled, how do people get to it if it's flooded all around it? >> there's an attractiveness to water. you look at san francisco, one of the highlights, somebody hits a home run, mccorvey koeb. makes good television. >> that's the argument you want to put the sports stadiums where the people are and the biggest growth in real estate development is actually on the gulf of the coast. >> "rising risk" and pretty dramatic coverage of petco park, among others

diana, thank you very much coming up, carlos ghosn an international fugitive but you llear from the man himself in a sneak peek of cnbc's documentary "fugitive: ceo." ♪ limu emu & doug and now for their service to the community, we present limu emu & doug with this key to the city. [ applause ] it's an honor to tell you that liberty mutual customizes your car insurance so you only pay for what you need. and now we need to get back to work. [ applause and band playing ]

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welcome back the world's most famous, maybe only ceo turned fugitive, carlos gone, recently spoke with phil lebeau about his escape from japan. we'll hear from him himself about u how he felt during his first moments on run >> it's mid afternoon when ghosn departs alone from his three story home in the upscale neighborhood as he walks, a restaurant security camera spots man believed to be him >> carlos, the day you leave your house, there's video of you walking down the street. were youed somebody might recognize you? >> no, i was walking down the street i wasn't hiding. >> you weren't scared? >> b absolutely not. i was walking on the street, nothing wrong. >> using added caution, he takes an indirect route to the hyatt hotel nearby here, he meets the men he's

counting on to spear him out of japan. >> you can hear more from carlos ghosn during our new documentary, fugitive ceo, the carlos ghosn story, that will appear tonight do not miss that incredible story. up next, the math behind china llote todemand and why hisry wi n ba good guide

welcome back to the exchange oil and oil stocks hit hard on coronavirus fears. oil stocks have taken a huge hit as well with many down 15, 20% this month is this kind of reaction deserved let's give you a cbs cnbc walk through the numbers. china uses about 13.5 million half barrels a day now half of china's use just under is from transportation let's call that six to six and a half million barrels a day for plane, trains and automobiles. as of two days ago, government data shows that driving, flying, trains is down b about 30% and likely to fall further

so if 30% of those 6 million transportation barrels are no longer needed, we'll call that 1.5 to 2 million barrels per day of excess supply or about 1 to 2% of total daily global demand. now now falling oil prices have slammed our stocks, but china isn't that important for our oil market except for price. united states is just the tenth largest exporter to china. you got russia, saudi arabia, even angola in the top three we export about 200 to 300,000 barrels per day to china basically one sort of small to mid size ship. there's your list. we are coming in at ten. now there are big u.s. companies with direct exposure through joint ventures in china. namely the names you might imagine. exxon mobil, chevron and

conocophillips so what exactly might history tell us about where oil demand goes probably not much. the closest comparison we have of course is the 2003 sars outbreak that sent oil falling from 38 bucks a barrel to 25 about a 30% haircut in just two monlts but that's not really a good guide because china's economy is 720% larger now than it was then. their gdp was under 2 trillion and oil use has nearly tripled d from that outbreak so if the virus continues to spread, let's hope it doesn't u, but if it does, travel will slow sending an oil market reeling with a million or two excess barrels on the market every day. look for two things r going forward. opec could extent their current cuts or make a new cut in the debt heavy oil and gas stocks. whitings, oasis, the names we don't talk about much. look for those to take a bigger hit than they already have let's dig more into this and bring in claudio

welcome. those are the numbers. we're just running them over the weekend. what do you think? what are you numbers >> thank you i think these, the number you have are very, very large probably too large our worst case scenario is say as of this morning is 800,000 barrels a day before the reduction u. that is primarily out of global aviation so it's air transportation would be impacted dramatically we have seen 30% drop in the travel in china. our best case scenario is lower than that. it's not 800,000 barrel. it's around 200,000 barrels a day as of this morning >> of all due respect, i just did the math 35% is transport down 30% 30% of 6 million >> it's fast developing. our number will increase quite significantly and we are going

to have our new estimate out it's going to be much closer to our worst case scenario, but again, we don't have enough information about the virus so we don't know how much people will be affected if we sars as an example, 8,000 people were infected with this, we are ranking up to those numbers and as we come closer to those numbers of course -- >> the world hopes it only gets better from here do you think opec has to take action >> it might need to take action if the oil prices fall below a certain threshold. probably they are already at about the threshold. the national benchmark is about $58 per barrel as of today so might need to take action. >> and quickly, this 52 buck, 53 buck u, it's bad new for the debt heavy u.s. oil and gas producers. when you get those new number, i expect to see them, my friend

and we'll put them on cnbc thank you very much p. luckily with not quite the severest mats yet, we'll see what happens thank you very much for watching the exchange the market's down over 300 still. "power lunch" picks up the coverage right now >> thank you very much and welcome, everybody, to "power lunch" for a monday i'm tylerson with the market selling off as brian pointed out, stocks are gettinging hit hard as the coronavirus continues to spread globally the dow and s&p both having their worst days since october and stocks briefly wiped out all of their 2020 gains so far got full team coverage appears the coronavirus outbreak gripping wall street and seema is covering the biggest moves there. china continues to clamp down on travel and meg with us to break down how the u.s. companies are attacking this virus seema, we begin with