good morning we are live from the marketsite in times square. i'm becky quick. u.s. stock futures looking to claw back some of the gains after a wild day yesterday selling started early, never let up the dow down more than 450 points this hour, rebounding slightly s&p up by 5. nasdaq up by 31. dow and s&p both had the worst day since october. looking at treasury yields people had those growing concerns about what happens with this virus coming out of china they went into treasuries.

the yields there are down sharply. the yield now for the 10-year is below 1.6% at 1.594% has given up those gains rapidly. two-year yield at 1.49%. breaking news right now. total known cases increasing ne nearly 60% to more than 4,500 cases. raised the death toll to 106 up from yesterday at 81. the growing risk prompting companies around the world and companies like facebook, lg and others to restrict travel. hong kong reducing cross border travel with train lines, buses, ferries and flights. the cdc recommending travelers

avoid all nonessential trips to china. we'll get now to eunice yoon with the latest. >> reporter: it is not a requirement yet to wear a mask in beijing myself and my crew are wearing them they are stepping up preparations for a rise of patients and their medical needs. beijing and the chinese city have joined wuhan with prefabricated hospitals. they have been showing some construction of the zhengzhou hospital that should be completed in 10 days

zhengzhou is hope to one of f foxconn's factories. there has been a push for quiet and public criticism on line for the government people know they shouldn't be publicly criticizing the party, especially president ping. people on line have been posting positive comments of previous leaders and the way they've handled disasters in the past including the earthquake in 2008 this has been creating confusion about businesses and what they should do next several chinese companies have told their staff to work the next several days. once the lunar new year holiday

comes to an end. then they are hoping people can come back to work by february 10 it is a big question mark. the situation could be more serious. but today, we were calling around some of the exporters who said they had planned to stay closed until the end of february anyway orders wouldn't be coming in seasonally at the same time, they are monitoring the situation closely because they are concerned that this coronavirus scare could last for quite some time >> eunice, if someone has mild to moderate symptoms, how would you possibly know they had coronavirus in wuhan and what does that mean the actual number could be if you had a test done randomly to find out people are saying we have no

idea and that this number is probably a fraction of people that probably have it. i don't know hopefully not. >> that's the question the problem and the reason why people are so scared about this coronavirus as compared to sars. i don't know if you have this footage we just shot at the subway station the subway station does require you wear a mask. officers are wearing full protective gear hazmat suits and they are taking the temperature of everybody going in. if you have a fever, they will send you to the hospital to be quarantined. that's only if you have a fever. if you are not showing signs, you are still allowed to go into the subway it is quite crowded. >> you said crowded. how much thinner is the crowds

on any given day in terms of people going out and about do you see that changing and that would have an impact? >> it is definitely very, very quiet these days we've been talking about it. people are worried about getting into public places the lunar new year holiday is really quiet in china anyway it is much more silent on the roads. in the subway, it is more crowded because people have to go on the subway and travel. for the most part, when you look at the numbers of people, it is really really down >> eunice, you showed the new hospitals they are building. if this is something to prepare for coronavirus, that would

assume coronavirus is going to be around longer than february it takes time to build these things >> yeah. that is the indication the way the state media is talking about it is that this was rebuilt -- a similar prefabricated hospital built in 2003 for the sars outbreak they are building a new one on the old spot using the bones of the old one. that hospital in 2003 was seen as a huge success story in treating patients from sars. the death rate was 1.2%. none of the medical staff got sick the way you are starting to see,

they are featuring the prefabricated hospital especially the one here in beijing. they are trying to message to the public that they have the situation under control. whether or not the public believes that is another question all together. >> back in sars days, it was clear it came from a cat that is like a mongoose. there is a push to close down all these wild life centers. will there be anymore push it looks like marketplaces >> snakes this type, maybe >> they still think it is probably from bats >> it hasn't been officially

linked to civic cats >> not this. this is bats >> yeah. sorry. it was bats or snakes. there is still a question mark but what the government has done they have closed down the wild life trade and being very strict telling restaurants and super markets they cannot sell the meats or the animals the transport of these animals dead or alive is strictly forbidden. people are being reminded, don't eat these types of meats, these exotic animals it is a temporarily move it's still unclear what the longer term plan is going to be to have the chinese stop eating these types of animals we talked about this before with

the sars outbreak. that was also originated to people being being close to wild life and eating different wild animals. >> i was reading about it. there are some crazy cuisine dragon tiger phoenix soup is popular but it has civic cat, rat snake and regular chicken. >> you've been studying this >> apparently, you can't get a taste from cooking it. it has a taste that people love. usually, it is people that can afford some exotic meals it doesn't make sense to be eating some of that stuff, i

think. >> a senior writer of global health points out that this is a rapidly changing situation things that seemed true yesterday won't be true two days from now doesn't mean they were lying or hiding or that they aren't >> it would help, i think, if we could speak to like an fda commissioner >> fortunately, we will be >> we'll speak to dr. scott. it was disturbing reading some of his comments. he calmed me down about certain things but there are other things in terms of not being able to test what is going on. it is probably way understated >> clearly, you don't know these things you can't test every single

person >> there are articles about how china has historically overreacted. >> the idea of putting more than 40 million people and telling them they can't travel that's more than the population of the top 20 states in the united states but it may be a little too late. >> looking at both of you. >> coming back from our world travels. >> we are all not feeling great. >> for once, i'm not being blamed you couldn't have gotten it from me >> this is davos >> i always get the davos. >> it happens every time >> no sleep. >> u.s. drug makers.

tamiflu doesn't work we have abbvie, johnson&johnson, gilead it isn't clear whether the drugs will be affected in an effort to contain the outbreak talking more about this today. we watched it happen throughout the globe. decline of 1.6% here in the united states. >> don't you feel silly? >> now there are five people in

the united states. >> it is in the back of my mind but doesn't exist as a real possibility. >> honestly never crossed my mind >> really? still to come, the earnings parade picks up. we'll hear from 3m, pfizer and more after a decline of about 450 poin points yesterday, dow is up. s&p looks slightly higher as well "squawk box" will be right back. >> announcer: today's big number, $51.15 billion that's how much market company the defensive utility sector has uped 6%. making it the top performing s&p sector in that period.

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welcome back the biggest week of earnings with half of the do you and a third of the s&p set to report starting with pfizer, apple and starbucks. paul, it is great to see you

we were waiting for this earnings season figuring this would tell us if we were really pulling the world out of potential slow down. you've got this coronavirus that is hanging over things right now. what are you looking for in the earnings and can that overwhelm what people are worried about? >> well the coronavirus will be a distraction from the earnings season seeing an improvement on part of analysts we've seen a preponderance of earnings there are still more negative than positive earnings that has shown us that low bar set, whereas the opposite. one perfect case is coming into

the q4 earnings period in 2018, we saw massive positive versus negative revisions when we saw the market correct in january. what we are looking for now that we started to see company's report is stock price reactions. that's the ultimate arbitor of how the results are and how the stocks react we intended to see the average gain those companies have gone up less it is more than a muted reaction now people are focusing on other things right now >> my guess is that investors will be much more focused in

terms of the outlook because we had so many other things to change like the china trade deal it is so new to figure out what changes that may hold in store >> that's a great point. harley davidson is reporting today, no company has mentioned tariffs in conference calls more often than harley davidson it will be interesting to see how that company, the discussion is involved in their decision and how they impact things going forward in europe and in asia. interestingly enough, the company in q 4 have historically been weakest in the stock. it has risen in average of 80% of the time to the q1, q2 and q3 reports. >> the stock has not done well

it is not like it is trading up into the earnings. >> it has impacted trade in europe as well >> those are looking even more >> that is still in flux at this point. >> that key, you have to realize has been in decline. it used to be a luxury brand moving into the utility aspect that hurts margins you've seen the multiple that stocks trade at relative to ford over the year. there are fewer people getting harley tattoos than years ago. that used to be a boost of the stock when people are getting the tattoo of a company. >> good to see you coming up, boeing securing a

financial lifeline we'll get a wrap-up of three big stories in aviation. china confirming the increase of cases of the virus to 4,500 and the death toll at 106. swauc "squawk box" will be right back.

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boeing has secured more than $12 billion in financing to help the company weather the ongoing crisis bank of america, citigroup, jpmorgan have all agreed to assist don't miss boeing's new ceo. dave calhoun that's a great picture there that is what he looked like at one point. >> i'm glad he is here tomorrow. >> i'm very glad too >> important conversation. meantime, arconic with job

cuts the company expects to lose $400 million in sale due to the plane's troubles >> shares of airbus are higher after the company agreed to a settlement over allegations of bribery. the plane maker has been investigated for more than a decade the united states joined the probe last year. the agreements required court approval in each country shares are up by $1.22 when we return, dr. scott gottlieb will be with us to discuss the growing concern over the coronavirus. we have three dow components coming up. 3m, pfizer and more.

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the doctor is here welcome, we are live other people want to talk about the coronavirus. i want to talk about my sore throat we have green across the board, the dow about 50 points hire, nasdaq up about 35 points and the s&p about four points higher we have a dow component crossing as we speak. >> earnings per share for 3m $1.66 per share. the street was liking for $2.10. this includes shares not in prior guidance

20 cents per share for relining structure. significant litigation charge of 29 cents a share if you add that back in, they would have had $2.15 without these charges coming out that's probably the number you use to compare, $2.15 versus $2.10 the street was expecting they say this includes charges of 49 cents per share in items not in prior guidance. >> we should take thatdown >> i'm reading this as it is hitting. i'm making may own judgement on this revenue came in line with expectations $1.1 billion which is in line with what the street was looking for. they are talking about organic sales down 2.6%. reading through comments from the chairman and chief executive

officer who said they continue to manage challenges in key markets and manage solity markets and robust cash flow it looks to me -- >> if they get adjusted, we'll see. it seems like stocks will call the company. you've never known what they call analysts. >> they did not give prior guidance on these charges. >> who gives adjusted numbers? it has an adjusted number of 195. the stock is not looking too good >> again, this is a little more complicated. we should talk to analysts about this >> revenue is right there. you never know it could be operating margins. a lot of the activity for trading will take place after

the earnings call. there have been so many significant deals with trade and where trade be be a little more her owing out of that. 3m will be joining us in the 10:00 hour we have earnings from zexerox. that stock up about 3.8% as we first told you, moderna is working to develop a vaccine for the coronavirus. we got a rare look inside the lab there. >> reporter: working with the national int national institute of health it delivers instructions to the

body's cells to make proteins. they first need to identify the part of the virus they want to code then to develop a large enough batch to conduct a phase one clinical trial that's what they are working on now. we'll hear from moderna. >> we have been able to develop a dramatic amount of experience. we are putting every bit of that into experience right now. >> the company's goal is to get this batch in the next couple of months the next challenge is ramping up on a larger scale. >> have they conducted vaccines for anything else? >> they have six clinical

trials >> i put my money on j&j on this >> the time lines they are talking about are shorter. >> gottlieb knows a lot about this let me introduce him he says the coronavirus in china is likely more widespread than the statistic suggests and the global spread appears inevitable a member of pfizer's board and cnbc contributor i think instead of a vaccine, you might think we need a quick detention method that doesn't need to be sent out to determine. there is a way to do that with antegens on the surface. >> i think we'll have outbreaks in the u.s. and we need to prepare for that

we need better diagnostic screening. right now, the tests require samples to be sent off you need a point of care diagnostic that allows you to screen people out quickly. if people have the infection, isolate them >> have we have thinking about the length of incubaton. >> we've hear about a week >> as a former fda commissioner, would it be irresponsible for you to give an actual estimate or are you just saying we are underestimating? >> i think we are dramatically underestimating. >> by the matter of what >> tens of thousands of cases.

>> we are talking about 4,000. you are talking hundreds of thousands. >> right they only rolled diagnostics out. there must be people who passed away that weren't even tested that we'll never capture if you put it in perspective in terms of reporting with you know the numerator, not the nominator. it doesn't make it any less concerning >> when you look at the steps that they are taking, do you say this is an overreaction, underreaction? >> we don't know what they are looking at i think the chinese haven't been fullysharing we don't even know the full scope. i suppose they are facing a very large epidemic some of these are not going to

work the quarantines polite not be effective. >>.0002 with the flu virus >> even if it is.5%. >> do you have a feel for what it might be? what was sars? >> about 10. higher in health care workers. this does look like it could be in that sort of middle ground between something contagious enough to spread efficiently but severe enough to cause a lot of harm things that are severe, cannot spread efficiently this does seem to occupy that middle ground including that we have a symptom magnetic spreaders here. >> you don't think we he had into to be concerned in the u.s. here >> i think we can control the

epidemic in the u.s. >> outbreaks are inevitable here >> that doesn't mean they'll be large. there is a sufficient number of cases. i think china probably missed the globen window to avert the epidemic it seems to be across the entire country. the question is does this keep coming back and coronavirus now circulates regularly >> you worry about vaping and things like that, would you shut down these wild life places where sars came from >> we don't know that for sure one of the early cases rose in november with somebody that didn't have association with that market. these markets have been a long concern because they become a

breeding ground to jump from bird to mammal to human. we've worried about these markets in the context of a bird flu. china has taken steps to clean them up but they still exist >> anything else how should we feel how do you feel, meg do you feel better >> better than what? >> we do here too. this is a davos strain >> this is the davos flu i get it every year. davos cold davos flu. don't sleep enough shake a lot of hands >> need to reintroduce a fist bump >> i don't even want to do that. >> i read an article that says hugging is better than shaking hands. >> i'm not sure about that >> you bring purell.

>> that doesn't kill a virus >> it only kills spores. >> i recently hugged somebody i didn't know. >> that's hiinsane >> she looked at me and she looked like i knew her then i realized i don't know this person. >> i would rethink the analysis. >> hr is on the phone. no hugging >> it wasn't an employee it is okay >> right thank you. >> scott, thank you. meg, thank you another dow component, utx

stock is up a third a percent. >> up 1% for utx we'll drill into some of those numbers. also awaiting results from pfizer later, we'll look at how casino stocks have been hit in the past week check out shares of 3m again now falling slower than expected we'll cut about 1,500 jobs that stock off you can watch or listen to us live on the go on the cnbc app we'll be back in a moment. ures f today's world can make it tough 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.

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pfizer adjusted 55 cents compared to a consensus of 58 cents on revenue above wall street's forecast. there are a lot of metrics for pfizer here. 12.6 >> why the miss? >> you look for that they say they see full year

earnings -- adjusted earnings per share 2.82 to 2.92 cents they see a full-year revenue of $48.5 to $50.5 billion the street is right in the middle they are talking about full year on fiscal year you are talking about first quarter. early being able to anticipate what is coming for the rest of the year this year is down from last year in 2020, it would be down from this year. $2.97. >> partly because they said they would only raise drug prices a bit. >> okay. what is it doing i don't know if it is trading or

not but down just fractionally coming up, shares of disney down we'll talk about the coronavirus and the impact on theme parks across asia. that's next on "squawk box." apps are used everywhere...

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made the choice to close about 70,000 movie theaters as well weighing on shares of amc and imax and joining us now is the media analyst. good morning. >> good morning.

thanks for having me. >> so, help us try to understand how long do you think -- i mean, you don't -- i don't know if you know but how long can this go on and what is every day worth? >> it's going to go on for awhile i think every day is worth a lot shanghai is profitable it's closed. to give you a perspective hong kong disney land while it was still open and dealing with the disruptions of the protests and stuff management guided to an $80 million loss in the fiscal first quarter so you have to assume that the hit per quarter would be greater than that. >> how big of a deal is this for disney overall >> i don't think it's a huge deal from an investor perspective or stock perspective right ow

you mean six weeks. >> at least. >> we were talking about schools being closed down for the middle of february. if authorities are worried about kids going to school, something like an entertainment that you don't have to do. >> people aren't going to go and then you start talking about the hit to the movies: the live action mulan in the end of march. that also begins to impact the studio business a little bit for disney. >> when you think about amc and imax, how much can they lose

>> we know imax better since we don't cover amc. 30% of revenues of imax comes from china movie theaters are closed. they had four films coming out after the lunar new year is this a buying opportunity this is a six week or two month hit and then it goes away and things resume as normal. is that your best guess. >> i would lean toward that but the problem is that, you know, any investor that wants to buy a stock and have a sense of what the earnings impact wants to be and we have no idea if it's two weeks or two months. you're going into it a little bit blind. a bit more of a deal for imax because it's a bigger percentage of the revenue than for disney because they're less relevant. >> you mentioned this idea of certain movies that won't be a release. what other media companies will

get hit by this because of movies supposed to come out in the next two or three months that may be mpacted. what do you think happens to the business i mean, that to me, amc to me will lose even more money because i would assume that you're looking at a company that -- what's their number now? it's more than 30%. >> what did you say for imax >> imax 30% of revenues comes from china. >> what's the percentage for amc. >> i have no idea. i never covered it so i don't know the take rate of china is 25% versus close to 50% so a little bit of a different story. >> we'll leave it there. thank you.

>> any time. when we return casino stocks getting hammered as companies take precautions over the coronavirus outbreak. all down on the week plus take a look at today's big earnings movers. much more on what the companies have been reporting. right now you can see utx and xerox a little higher. squawk box will be right back. r? 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. we get in over our heads. way over... asking for help is a skill we learn early.

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stocks set for a rebound we'll tell you what'sgiving wall street new hope this morning. >> the spread of the coronavirus. >> and earnings kicking into high gear. 3m and others reporting this morning. a break down of the business conditions and what companies are saying about the coronavirus as the second hour of squawk box begins right now

good morning, welcome to walk box we have green across the board dow looking like it will open up 108 points higher today. nasdaq looking to open up 106 points higher. we have some earnings that have just crossed in the past hour as well it's helping some of this. >> other headlines making news at this hour but mostly earnings dow component pfizer reported earnings of 55 cents a share was shy of estimates although revenue was above forecast pfizer for the year said it was looking at 282 to 292 compared to a consensus estimate of 290 so it's a little less than a percent. the government will be out with december durable goods orders in about 90 minutes economists are looking for a decline of .3% following a 2.1%

drop in november and boeing has lined up more than $12 million in financing according to people familiar with the matter that spoke to cnbc. the money will help deal with the on going grounding of the 737 max jet. that's good isn't it >> are you excited about durable goo goods. >> i don't know. >> but are you waiting for durable goods? >> business investment that's what we talk about. >> so up if i could. >> it's one of a two-day fed meeting and many on wall street say the central banks recent rate cuts are helping support this market. steve joins us with the results of the latest cnbc fed survey. >> we have some unique data, andrew i'm talking to you, right? >> yes disregard. disregard. >> helping support the bull

market. >> we're going to talk about that put also we have unique data on the expectation for how long this hold is going to be. and the expectations for the hold keep getting extended 100% think the fed will be on hold in january. not much happening 49% and we ask what is the next move going to be they say a rate cut and not until november 2020. 32% say the next one will be a rate hike. but take a look at when the next meeting will be. it's october it said five months out. in december it said six months out. >> when you're looking that far all the way to november and beyond -- how much can happen. >> how much can happen because the reason we ask is not because we think they're right about the future, we want to know what

people today think about the future and today they think the next move is 12 months out so it's actually doubled let me take a look at the reasons for the rally. before you get excited as to why these things don't add up, we asked them to name the top two choices and heres the top three of the choices so 66% said it's easier fed policy why this rally is in the second place and then easing of recession fears. a couple of quick comments. >> wouldn't the top one and the bottom one -- >> >> the top reason here is the fed has the economy's back so that that also puts a floor on the stock market decline followed by a quick and complete rebound by the dips they say and it's the combination of modest growth inflation and makes the case for no need to change

policy and it will not be until 2021. we have a lot of commentary about that >> so it's the fed. >> i think it's the fed. >> points the chairman and therefore you want to give the president credit or no >> you can give the president credit he didn't really like his fed chairman. >> after two. >> now he does. >> eventually i think powell got around to the right policy i think where the debate is on the board that i can hear is expansion of the balance sheet. >> there's a lot going around on twitter and in my inbox. that leng, the movement of the market up with the expansion of the balance sheet. >> questions of liquidity. >> i just think of the news cycles between now and november. it boggles the mind. >> this january is a great example of that. where you thought you were coming into a lot of the things out of the way.

>> last year. >> and then you have straight out of the gate and then the coronavirus. it tells you how rapidly the situation can change. >> we can group those together all the things that you mentioned are things that would tend to cause the fed to reduce rates. maybe bringing the fed back in to thinking about cutting. what kind of inflation is required for the federal vefsh -- reserve to begin hiking again. the risk is there to the down side and not to the upside. >> some people think that's building up a lot of risk. to be lulled into a false sense of security with inflation that's one of the things

>> that take a lot. >> the bubble risk which is the one we don't talk about enough. >> but maybe, you know, innovation is going to keep us -- we're in this new world. it's different this time. >> i love that phrase. great to see you we'll talk to you again soon. >> in the meantime, markets will look to rebound from monday's sharp sell off that saw every single sector in the s&p 500 close lower. joining us is the chief investment strategist and jim, none of us are experts on the coronavirus but how do you model that when you see markets sell off around the globe on news of the coronavirus. >> you know, i think this is one of the things that you diversify for. that's why we diversify for these unpredictable events i don't think -- i think it's hard to handicap this thing. i think a few things around it though, we have sentiment that was extended going into this

we were probably due for some kind of sentiment gut check correction here whether it was the coronavirus it probably would have been something else that's the biggest part of this pull back is more of that than anything i also think it's not like we have had no experience with these epidemics. we certainly have and i think the odds are strongly in your favor that we'll get this under control. it could take a few months but i think the markets reaction will lessen if we start to see a path out of this again and we'll get back to what really matters and what investors should stay focused on is policy and the economy and right now i think both of those still look pretty good so beyond your normal diversification i don't know if i do most of this unless, you know, it gets very, pessimistic

market sells off more i might be trying to buy into that. i try to stay focused longer term. >> do you mean by bonds or other markets or other sectors what are you talking about >> i mean, you know, i hope every investor is out the gate diversified. doesn't have all the things in one basket has a little bit of a lot of different things it's predictable events like this epidemic so what i'm suggested is that your already prepared for this outcome and you probably shouldn't do much more for this trying to predict epidemics that i think is a losing game from an investment perspective. >> just in terms of the economy, if we go back to basics and look at the earnings reports we get this week action we look at the economy, i had been thinking okay you got through you got a china trade deal signed maybe that means that we're going to see more capex spending coming in from companies but somebody pointed out to me this weekend that there's different ways of

looking at these things. maybe we were watching people buy ahead of the tariffs trying to get things in ahead of time and activity we need to work on and trying to get in ahead. >> it's possible we had some of that activity becky but i think more likely firms were reacting quite a bit in the last half of last year to manufacturing recessi recession. >> i think as confidence rebuilds there's going to be more that's my guest. on the investment front. it's interesting i did a piece awhile back of

dividing investment between new era and old era and what i found is that there's definitely been a rollover in old era investment that's manufacturing, industrial equipment, transportation equipment. that's definitely rolled over but new era, information process equipment, intellectual property spending, that's actually been accelerating since 2016 and continues to do that and i think that explains a lot that old style business spending may have rolled over but new style has been doing okay and that might explain why tech stocks have continued to do really well. it also explains why productive has probably picked up so i think that we're a little overly negative that there's been such investment spending. i think it continues to do real well >> thank you i know it's difficult saying that the policies and the economy and all of these things

are great. i see you wince as you concede those things but thank you for being agnostic enough to admit it since this is what you should be doing you shouldn't be, you know, you shouldn't be colored by your personal feelings. >> he's very good at that. >> he is he's very good at compartmentalizing things. thank you. >> that's his job. >> you bet >> coming up -- see we go way back i know exactly how you feel about things. >> you know exactly how to tweak him. >> i do. i love tweaking. tweaking and tweeting. playing the oil patch, is now the time to buy energy stocks? find out how you should play that sector as app investor after the break. what do advisors look for in an etf? i tell clients, etfs can follow an index,

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adjusted number of $1.95 a share. that would compare to $2.10. however there's a lot that you need to dig through on the release. that included a 20 cent charge related to job cuts that total 1500 analysts have included restructuring charges in their estimates in the past but they may not have included this newly announced set because they hadn't given this guidance they hadn't told analysts about this yet mike will be on the squawk on the street this morning. it's unclear at this point we'll get the answer as to whether or not the analyst knew about this in the release the analyst didn't know about it you'd add it back up and that would be $2.15 versus the $2.10. but we'll see. >> people that own the stock the big players in the stock are -- it could be up by the end of the day. >> we have watched some of these companies, some of these shares trade very differently after the earnings call. >> they should have known by now they should be making their own. >> we'll be hearing more about it. >> also dow component united

technologies reporting $1.94 a share. that beats the consensus by 10 cents. revenue was above what the street was expecting and that stock is up by 7 cents. >> oil prices as you can imagine have been weak falling for five straight sessions and are now down about 14% over the past month in part because mostly because of fears that the coronavirus could slow travel and global growth. a look at what happened during past outbreaks like sars in 2003-2004. prices fell sharply in the weeks and months that followed we're joined by the senior portfolio manager at tortoise capital advisers. >> i'm so fluent in french that you can probably tell. that i just can't help myself. so amazing first we have iran at the beginning of the calendar year now we have coronavirus. it's crazy

there is going to be some volatility but much less than you would expect if we were not the swing producer all of a sudden. >> no that's absolutely the case we had ups and downs in oil prices over the last several years but in general, oil prices broadly have stayed very low commodity prices in general have been very low and that's all because of what you mentioned. the u.s. has been able to increase production globally and really keep inflation from an energy perspective very low which has really helped global expansion around the world. >> could we use oil as a proxy or as a barometer for global growth anymore or it's not the canary in the coal mine that it used to be >> i think oil is is still relevant but it's becoming less important. natural gas and renewables are basically part of the new energy revolution that's happening not only in the u.s. but around the world as we look to decarbonize

and reduce carbon emissions and i think oil is still important and the other thing about energy is the energy sector is very resilient. if you look at global energy demand it's increased 36 out of the next 37 years. we had issues in the middle east but we're on pace for another year in 2020 of additional and extending the street to 37 out of the last 38 years of energy demand growth and that's significant. that shows you how the central energy is around the world. >> where we are right now says what about the producers in this country turning things on and turning them off can they make money where it is right now or could you see that dampen activity? and you know they have a lot of debt, a lot of these small companies. >> so you have seen a big shift in mind set and we're going to see that in the earnings calls that have started now and we'll severe the next several months you'll see a shift in the mindset from the oil and gas producers in the u.s

it's something like we have never seen before. it's going to be capital discipline they're going to spend cash flow and generate free cash flow. the energy sector needs to prove to investors that it's a good business and it will prove that it's a good bisby generating excess cash flow that will be returned to the shareholders in the form of dividends and share buy backs and once that happens and as that continues we think investors will come back to the energy sector. >> really. okay so it wasn't great last year do you think this is going to be the year it's a transition year and what are your favorites >> so what we like is the energy infrastructure sector. now energy infrastructure is already generating free cash flow if you look at the ten year treasury it's 1.7, 1.8% today. the s&p 500 dividend yield is 1.6, 1.8% as well. energy infrastructure stocks are generating substantial yields. significant infrastructure name.

6.6 dividend yield it's grown as dividend every year for the last decade 6.5% dividend yield. really strong dividend yield they'll buy back $750 million a stock. so energy infrastructure offers investors significant yield when investors are just clamoring for yield all over the world with these low rates that we have all throughout the world >> so did you come up with that or do you just work there? >> i have to give the credit to the founders because they came out with the name. >> is that the tortois we wins e race is that why? >> we have been long-term investors in the future and we're going to win the race. >> so are the kansas city chiefs that's where we're headed. >> you know what a nail says as it's riding on tortoise. >> i'm all for that.

we're together we'll be happy. >> she knew the answer a snail riding on a tortoise thinks he's really flying. >> we have breaking news. >> see you later. >> news out of the u.k. that may have a big impact on our relationship with that country chinese telecom giant huawei will be allowed to have a limited role in building british 5-g networks but will be excluded from the sensitive core of the network the trump administration wanted the u.k. prime minister to ban huawei completely. mike pompeo talking about this decision and questioning some real questions now whether it's going to strain our relationship what it's going to mean to whether our networks will ultimately be connected to their networks whether this is going to turn into a grander decoupling and what it means for the relationship with china. there's about a million different component parts of this decision and what it means.

>> they're trying to please both sides. both the chinese and the americans on this. the americans, the trump administration said look, you can't use any of it because we're not going to share secrets with you if that's the case, we won't feel safe with any of those secrets being hacked into but this is the way boris johnson had been eaning. >> this is going to be a very interesting test and a win for huawei today whether the entire argument that's been made over the past year or two is about national security or whether it's on -- >> love it. >> but that's always been both. >> here's the thing. i don't know how you can do

anything. >> but at a larger point here -- >> 5 minute ads. >> all right what's the larger point. go ahead we have to go to break. >> we'll come back to the larger point. when we return. >> you promise. >> casino stocks falling. >> this is actually serious news in the business world. >> i know but i saw it a half hour ago. >> i think that this is going to be a situation that really is the after effects of what happens with the phase one phase. and what happens. >> might be a little >> it's not going to put everybody out of business. we're not talking about that. 'lta adio stocks folng wel lkbout that. find out if you should hold them or fold them ♪ we're carvana, the company who invented

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earnings beating the street. retail sales decline by more than 3% and that was the lowest sales rate of decline in three years. >> new data on the deadly coronavirus this morning the total number of known cases in china increased 60% yesterday to more than 4,500 cases china also raised the death toll to 106 people. the growing risk of contagion prompting governments around the world and companies like facebook and l.g. and standard charter to restrict them also overnight hong kong announced it would reduce cross border travel to china u.s. cdc also issuing new guidance to travelers recommending that they void all non-essential trips. a scary warning for him on

squawk box earlier this morning. >> we're going to have outbreaks here in the u.s. we need to start preparing for that that doesn't mean we're going to have an epidemic here. but we need better diagnostics >> right now the tests require samples to be sent off it takes a number of days to get a positive result back you need a point of care diagnostic that allows you to screen people out quickly and isolate them. >> the deadly coronavirus is sending shockwaves through the world's largest gambling hub they're seeing a sharp drop in the number of visitors through mainland china through the start of the holiday that's including las vegas sands and contessa brewer joins us with more. it's connecting these dots it's unfortunate but it's interesting to try to see the fall out. >> the thing isthey didn't kno what to expect last week before the celebration started. it's off 69% from last year

according to government numbers and the drop in visits from mainland china is even more dramatic on day four of this holiday, an 89% decline in chinese visitors seven cases have been confirmed so far the region is cracking down. now, las vegas sands, mgm resorts all told me they're following order precautions to a tee. their customers and employees wear masks they have cleaning and hygiene in the front and back of the house. the chief executive has the option of closing them all together if the outbreak intensifies. meanwhile, shares have plummeted oh the last week but down 12% it gets roughly a quarter of its revenue from macao

nearly three quarters of its revenue coming from macao and they just punished down nearly 20%. bank of america downgraded to neutral on the significant near term risk. dropped it's price target by $10 to 150 and the thing that you have to look at now, take for instance las vegas sands which has its casino once it starts spreading beyond the border then other casinos get hit. will there be an impact on las vegas. so far that's not clear. >> probably not a surprise to see the dramatic drop. 89% in visitors from china the places we were talking with eunice earlier today talking about people don't want to send their kids to school you don't want to send your kids to school you're not going to do something that's an optional

entertainment. >> that's right. it's just not surprising and already predictions for flat to slightly negative so this is going to be a big hit to the bottom line do you think that they ultimately shutdown some of these things >> it's hard to know how long this is going to last. it's really like an episode from the show black mirror. you have just this is the busiest time of the year in asia for chinese new year you could see daily play

typically is double what the normal would be. but you look around the casinos now in macao and it's very sparse some areas are closed and your dealers are wearing masks and it's happening right now. >> would it make sense for them to shutdown? >> it's still early. we don't know enough information but from what i see and what i hear there's extraordinary precautions being put in place. >> is it open or shut? this is what disney is probably thinking about. >> it's right where you really wonder, you know, if it's worth staying open but the continuity of the mentality in the casino industry is 24/7 stay open but it's still too soon. we don't know enough information about the incubation period. >> what happens. contessa you were mentioning before some of these people are still gambling, just not doing it in the casino.

>> that's the real interesting observation i have over the last several days online play which is mostly unregulated in asia. it's illegal in china, it's regulated in the philippines is up 90% online play is up 90% over the chinese new year versus last year should be converging around the world with the online operators. >> none of these casino operators have an online presence >> it's very much the wild rewet it's very unregulator. the online operators and philippine licenses and other areas around asia are picking upmost of the play you think this is going to be an opportunity and maybe this is a time when they say we need to buy one of these online operators. >> they think it's a wake up call it's not just in asia. it's in the u.s.

>> if it's illegal to do this would this put them at risk? >> china is a black market philippines is a legal regulator and licensed market. >> they're such tightly regulated industries, i can't imagine one of the casinos being allowed to buy an online casino here in the united states. >> they have online here in the united states. >> you can separate it and not worry about the regulators getting involved in that. >> they do worry about it because the concessions all come up in two years so they're doing their best to expand and make macao a tourist destination the way las vegas is that's not the case. they're getting the revenue still from gaming as opposed to las vegas which is getting it from nonrevenue largely but they see that in the future and they

can see macao going that way which is one reason why putting the plans in the works about the online market. >> this is really more of a wake up call for the governments right? in europe and the u.s. now we're all moving more toward higher taxes, more regulation asia lost business and lost tax revenue, legalize tax and let them participate just as it's happening here and well developed in europe and i think that's really the trend from all of this. >> thank you >> thanks contessa. >> when we come back, stocks on the move and what you need to be watching in today's trading session. let's get a look at the futures this morning right now, dow futures up by 135 points after being down by 450 points yesterday s&p futures are indicated to open up by 18. the nasdaq indicated up by 76. those gains have been building through the morning. we should let you know tomorrow on squawk box, a first on cnbc

interview with boeing ceo david calhoun after the company's quarterly result make sure that you don't miss it you can always watch us live on the go on the cnbc app we'll be right back.

it was clouded by some issues in regard to co comparability however revenues were in line with estimates and 3-m will cut 1,500 jobs as part of the restructuring effort. those shares down 2.5% next up fellow dow component united technologies which are down about 1.5%. 20,000 shares of premarket volume the aerospace and building systems company posted a profit and sales beat it's planned spin off of its otis elevator and businesses remains on track as does it

merger plans those shares off by .5%. the motorcycle maker is down 25,000 shares of premarket volume after profits came in better than some analyst estimates but revenues did fall shy. the midpoint for forecast range full year 20 motorcycle sales also fell below estimates though those shares are up 7.5% back over to you. >> dom, thank you. let's dig into some of this mornings earnings. the flood is coming. which one caught you azarenk as trader. >> it seems as though this is the one that the time has passed baby boomers are done riding

motorcycles, right it seems like it's secular decline. they're trying to run into electric vehicles, who is going to do that you want a real powerful one so i think that is the one that i leave by the wayside >> no i had a honda. >> i used to ride the faster motorcycles and i don't want to be on them and the millennials they want to be in smart cars. you would never get on one. >> i don't want to ride around in a minicooper. >> it's too small. >> i want to be in the biggest truck. >> and then you have nothing. >> so just to jump through them, 3-m, hit with china slow down. it was hit with a lot of industrial weakness.

and there's environmental issues too. they have so many different skews. they're in so many different segments so that something can hit but that is going to be a little bit if you want to wait for a turn around for that stock price. >> what else caught your attention today? >> utx utx some of the activists don't like the merger but the market likes it activists like things that make a change or they can stir up they don't see a good strategy for this break up to merge but you're okay with both of those companies and i think it's pretty good going forward. >> okay. steve, thank you. >> thanks, guys. >> good to see you. >> good to see you. >> have you done some things already? >> no, i like to see the real action flow because i think they get too whippy so clients will trade if you have to be in the market prior to.

>> do you have plans when things open what are you thinking? >> all of these names have gotten beaten up recently i'm looking at its a little bargain hunt i'm looking at apple i'm looking at snap. i have a bunch of chemical names and paper product names. all of those names that i think are going to be rich if you can hold them. >> i hit iowa last night >> oh, okay. >> came back right at the very end. and i won by .5 point. >> he is trading he is trading. >> call trading. >> i love draft kings. >> yes, i am but they're a little higher. >> okay. coming up when we return, bernie may be surging in the polls but the latest cnbc fed survey showing a different story on wall street. we have the details on that next as we head to a break, here's this morning's biggest premarket

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>> but the u.s. fed survey says the more they learn about the policy and those of senator warren the less they like. steve has more on this. >> it was hard to imagine that their ratings could decline. we asked our 43 respondent strategists and fund managers and economists to rate the policies on the economy of all of the major candidates

the economic apruproval rating f trump is at 63%. that comes very much with the trade truce that seemed to have happened last year this group's approval rating of the president is very tied to what's happening with tariffs and trade and then 58% chance of re-election. the importance there is its not seen as an economic factor we have these open ended comments and we say you can say anything you want. everybody is writing about the fed's balance sheet. a lot about tariffs but not the election it's not seen as a risk because i don't think right now the street is banking on or discounting sanders or warren

re-election or election. >> for more on this, let's welcome the founder, chairman and ceo of operation hope and it's great to see you. thank you. >> honor to be here. welcome back from davos. >> what do you think about what steve was just telling you the idea that trump's approval ratings have gone up among this group of forecasters. >> it's not surprising wall street is dealing with logic and money. this will be a conversation of morals versus money. people will believe the president lacks in some values but they're going to vote their pocketbook and then you have communities and you guys did a fed survey, you need to do a hood survey. i'm going to do a survey of the hood coming up with all of my clients from operation hope and give you a real pulse. you'd be surprised at how smart they are but the emotions and what is happening is that some of the candidates elizabeth and

bernie are appealing to the emotions of people that feel they're not getting a fair share. >> what's your general sense you haven't done a formal survey but what's the general sense you get about how they're feeling about it and where you think they're going to vote. >> they're going to vote their pocketbooks. and that's as old as presidential races as you can look at. >> so it really is the economy. >> it's the economy. it's all about the economy the color is green it's not black or white. it's not red or blue as in political party, it's the color green. now the question is are you feeling that there's a ladder? the ladder of internships. >> the inequality part. >> so you have some ownership. stock, bonds, small business then you're like yes and you're waving away the ethical issues

that are important but you're voting your pocketbook if you're starting to get a good paycheck and they're saying break it up, redistribute it give me some of that they must be crooks because i'm working my tail off and i can't succeed why are they succeeding? there's a bit of bitcoin politics. >> you say they're going to vote with their pocketbook. does that mean they're going to vote for sanders or elizabeth warren because they think they will have more. >> that's a very good question this is where it becomes a starring attraction. most people, including those in government don't have a clue how the economy works. so it's what you don't know that you don't know is killing you. so you think you know. if you think you understand the economy and somebody that's saying we distribute it is singing your song, to you that is the economy so there could be a rise in this view that we just need to redistribute it. the socialist message. that's not sustainable and of

course it's not a good business plan what we need is not more, but you need a proper economy where people work hard and play by the rules and succeed and somebody they think has values that they would like their children to emulate. perfect world. >> john, why do you think, give me the insight into why bernie sanders is surging in the polls and elizabeth warren is dropping even after bernie had a heart attack why do you think >> he's a man. we live in an interesting world. >> well then what happened when hillary beat bernie last time. >> hillary -- >> i don't like that answer. >> i don't care if you don't like that answer >> how did hillary bury bernie then -- i thinkhillary was mor credible than bernie she was secretary of state.

>> elizabeth warren is not more credible >> by the way, i believe all the people mean well i mean to say that but i think elizabeth is much more excitable she wants to reimagine and blow up everything. >> isn't the answer that the clintons had a deep personal relationship with really the african american community the bidens seem to have that as well. >> that's incredible, yeah. >> other than vice president biden, is anybody of the existing candidates have that relationship >> we'll have to come back to answer that. >> somebody should play the speech bloomberg did on martin luther king day. >>ha y. rilliant tnkou great to see you squawk box will be right back. when we started our business

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we're going to take you live to beijing for an update. >> corporate earnings driving markets as well. dow components 3-m and united technologies and pfizer. >> what to watch from wall street's most valuable company when it reports later todayment we'll get you ready for apples critical first quarter report. the final hour of squawk box begins right now.

good morning and welcome back to squawk box here on cnbc live from the market site on times square i'm joe kernen with becky quick and andrew ross sorkin we're up triple digits and we're going to rebound after a couple of rough sessions that have given back the gains for 2020. but we are indicated up 127 points now on the dow s&p would open up higher nasdaq up around 68 or so. treasury yields responding to prospects for slower global growth back above 160 earlier they were 159-158 and

now back above and if anything is keying off of all of the latest developments out of wuhan and globally i think it's equities too. >> especially certain sectors. casinos. >> those too in the stock market, yes. but growth, if you remember, people didn't go anywhere near that part of the world so months and months >> earnings this morning from dow component 3-m. a variety of products from scotch tape to post it notes and surgical maps. 3-m says adjusted quarterly profit was $1.95 a share compared to $2.10. however the quarter did include a 20 cent charge that was related to newly announced job cuts that total 1,500 positions. analysts have them in the past but they may not have included this newly announced settlement the company said in the release it had not guided analysts on

these numbers before look at the answers from the ceo of 3-m he'll be on squawk on the street this morning that stock is down by 2% earnings also out from united technologies the industrial conglomerant beat estimates at the top and bottom line you can see that stock right now down by about $1 we also got quarterly results from pfizer. earnings fell short of what the street was expecting results were impacted some what by the loss of exclusivity and the british government anunsing a short time agatha the chinese telecom giant huawei will have a limited role in building networks. that decision was expected the trump administration wanted the u.k. prime minister boris johnson to ban huawei completely it's a huge point of convention he may be trying to please both

sides. >> trying to please both sides did president trump fire back on twitter? called this a national security threat and said we're not going to share information with you. if they do, what does that say there's a lot to unpack here. >> there was so much that was kicked up in the dust ahead of time look, you can't cut us off from a very affordable option for these things and tell us that we can't do some of these things. on the other side, wait a second if that's what you would have heard if you were building a system. >> or was this just used during trade. >> standing at 106 people with more than 4,600 sickened

china's president calling the virus a devil today and china is confident that it will beat the illness. most are in china with the majority located in the province tens of millions of people are living under travel restrictions and more will evacuate them from the central city and companies including facebook are he stricting travel now. >> it isn't a requirement and nearly everyone is wearing one out of an abundance of caution including myself as well as the crew the escalating numbers when it comes to the confirmed cases is really scaring a lot of people and it looks as though it's also

leading the government to step up it's preparations for an increase of patients as well as their medical needs and local media have been reporting that beijing as well as the central chinese city have joined them in building prefabricated hospitals. it's the epicenter of the outbreak and it is building two new prefabricated hospitals. president xi jingping has announced or met with the world health organization chief. he is very confident that the country will be able to slay what he described as a devil, the coronavirus and it's still hasn't gone unnoticed by public fear about what they believe to be missteps, major missteps by the authorities. in fact, people here don't necessarily want to criticize president xi jingping openly but what we have been seeing are positive comments about previous leaders and the way they have

handled disasters in thepast including the earthquake in 2008 now companies are still unclear exactly what to do chinese tech companies that we have spoken to have said that for the most part after the lunar new year holiday ends on february 2nd that they have told their workers to stay at home and work from there until february 10th when they're expecting for the most part that companies -- that the companies will reopen. still unclear. nobody really knows. but for manufacturers, the situation could potentially be much worse workers actually literally had to go back to the factories and some of the manufacturers that we spoke to said that for now, they're not too concerned for the next couple of weeks just because this normally would seasonally be a slow period they

are worried about what happened. >> he criticized china for not being forth coming enough with information on the spread of the virus. >> the problem is we don't know what they're looking at. the chinese haven't been forth coming with information. so we have been patting them on the back for being good actors in this case they're still not behaving well. they have concealed key information including that this was spreading to health care workers that they didn't admit to last week so we don't know the full scope of what they're facing i suppose that they're facing a very large epidemic and some of these are not going to work. the quarentines might not be

effected inch well, i think he was right when he said we have to be concerned about the beijing government because they're often not forth coming and they often don't tell the truth about what's really happening. it's not a free society with much transparency and on the other hand, our own agencies, nih cdc here in the u.s. are telling us that we shouldn't panic. they're saying that people should not travel where this is centered but they don't recommend travel to china at all. they just recommend that you take certain precautions there. this doesn't seem to be something that's going to have an impact in the u.s

the main thing is don't travel to the province in china which is the center of most of the disease at this point. >> mr. chairman, i'm sorry we have been reporting that the cdc is saying non-essential travel to china shouldn't take place at this point. is that not the case >> no, no, i agree with that but what i'm saying is they're not saying that people shouldn't go there at all. i'm assuming that people still have to go there for, you know, because they have product or they have business i mean, you know, you guys primarily focus on business -- the business community you know, i'm not suggesting that people shouldn't -- should plan a trip and, you know, necessarily go there but i think at this point if you're traveling there for business reasons, we're not, you know, they're not suggesting that you not go or even suggesting that you can't go for tourism activity but you do have to stay away from the province that's the

center of most of this at this point. >> how often are you briefed on this almost daily >> we're trying to set up a briefing for all the members of congress my staff obviously is aware of it because we deal with -- >> right. >> health concerns on a regular basis. but i think that the biggest concern that i have right now to be honest is that there's a lot of misinformation out there so that's why i wanted to be on your program this morning. particularly on social media and i think it's important for social media, you know, to try to get a handle on this misinformation because people hear all of these things about how this is a major epidemic that's going to impact the united states and so i think right now it's important for me and others to say let's not panic, you know? our health agencies believe that this is something that right now is not a serious threat to the united states

>> i think we should obviously they're screening people and particularly people coming from that province whether it's americans or others that travel abroad they will be -- they will be screened when they come in but the information that i have right now is that we shouldn't, you know, panic. and the biggest concern is that there's a lot of misinformation. not on broadcast and cable but on social media. >> like what what is the most inflammatory stuff that's untrue that you're talking about? >> well, i think the biggest concern right now is that we don't really know with this coronavirus is there's not a lot of information. you're dealing with beijing which is not a free transparent

society. so we need to know how it's transmitted and the impact and there's not a lot of information right now. >> they certainly sometimes in china might be talking about don't panic and maybe being complacent i don't want us to make the same mistakes. >> no, i agree but i'm trying to explain particularly for business people because that's what you focus on that they shouldn't feel that they can't go to the country at all they do need to stay away from the province. >> okay. thanks for the update. >> keep that in mind appreciate it. >> meanwhile, when we come back, what investors need to hear. we'll help you make sense of

yesterday's plunge and the balance we're seeing this morning. plus kathie jones is here to tell us how to play the bond market yields down nearly 10% over just the past week. as we take a break take a look at futures one day after the dow saw the worst session since early october. you're watching squawk box right here on cnbc this year... the world's most spellbinding journey... will take its wildest turn yet. prepare to face the forbidden forest and join hagrid to encounter... the rarest of magical creatures. in the epic new addition to the wizarding world of harry potter™. only at universal orlando resort. stay at an amazing universal hotel with rooms starting from $79 dollars plus tax per night. restrictions apply.

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that one is down by 7% we spoke earlier and she reminded us that it comes from macao. these are stocks that got hit hard and we'll see how they continue and the income strategist. i think the center for financial research along with our own mike

santoli. senior markets commentator what do you make of what happened here? we teased this and it's been on such a -- it's like a roller coaster. the idea was a little bit of economic momentum in europe. china stabilizing and the u.s. economy continuing to shug along so the idea was that rates probably would be a little bit higher and it raises a lot of uncertainty. we're seeing a response to that. >> overdone, underdone >> if i knew a lot about the coronavirus i could weigh in on what was going to happen with it i'd have a better answer for you but i think for the moment it's a reasonable expectation that, you know, if you lock down millions and millions of people in china and you disrupt supply chains you're going to get

slower growth so that's what the market is responding to. i think we'll probably see ten year yields hold above the 1.5% level because below that you would discounting a global recession or a significantly more fed easing. the bar is pretty high here in terms of doing anything and it's in the direction of easing if they're not making their inflation target so the market is responding ahead of the fact that this has not happened on time so to speak. and now they have softened up a little bit so you're starting to see a typical concern of an

overoptistic market having a little bit of a head check >> what do you think it is at this point >> we're 2.5% off of the highs this is going to be a balance attempt right here if all it was was sentiment and valuation got to be a little bit in the short-term and a little bit too overexcited then 2 to 5% down side from the highs is probably enough to skim that away >> what do you think the market is expecting what is baked in what are they thinking >> one of the things in the bond market that he was illuding to is that credit spreads are

tight. you look at high yields. the yields were very low almost record low levels and part of that was the expectation that growth would continue with very easy monetary policy. so we have the easy monetary policy but the growth prospects, especially for commodities has shifted because global demand could be down. credit spreads about 12% of the high yield market is energy related and they had gotten hit. so what the market is saying is this could last awhile i can't put a, you know, six months, three months, six months but a coup of quarters of very slow growth. >> bond market looks like it's hunkering down for that. the stock market is assuming that it's going to be more or less containing and we're going to get to a point where we go from this is the headwind to the first quarter results and global growth a lot of these companies to if it's contained in two months it all of a sudden is like the reason that you get a pass on last quarters bad numbers. so i think that the stock market is looking at it more like we don't really in a sustained way

have to worry about this. >> okay. thank you. appreciate it. >> coming up, what to watch from the most valuable company on wall street. reports earnings later today and whether the shares of apple belong in your portfolio and a reminder you can always watch or listen to us live on the go on the cnbc app or you can listen to us, right? on the squawk box. >> yeah. >> squawk box coming right back. i consulted with your grandmother's doctor. we can do the screening at her house.

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welcome back to squawk box and take a quick look at futures. we are in the green across the board after a big down day yesterday. dow would open up 130 points higher s&p 500 looking to open about an hour from now and the nasdaq also higher close to 69 points higher >> we will get the final look at durable goods orders from last year after this break, we'll have that number and much more. stay tuned you are watching squawk box on cnbc

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welcome back to squawk box on cnbc live from the nasdaq market site in times square. we're just 30 seconds away from december's read on durable goods. up 140 points. 137 points on the dow. 72 on the nasdaq s&p indicated

up about 18. the ten year has moved back above 1.6. earlier it was 1.62. today rick santelli, just had mike santoli rick, the numbers should be there right about now. >> yeah. drum roll please our december preliminary i want to underscore preliminary the read on durable goods up 2.4. holy cow, that is multiples that we were expecting but there's a bit of a fly in the ointment last month's final read on november was down 2.1. that now stands at down 3.1 but nonetheless up 2.4 prelame nary is solid making it look at the two together and if we strip out transportation, we zap all the strength away. down .1 and if we look at capital orders, nondefense

aircraft, a proxy for business spending, capital spending, it is also not a good number. down .9. sequentially following up .1 shipments versus orders, also down .4. so if we look at this, it really doesn't paint a great picture although transportation obviously was the negative we see that on the headline and there is your good news. dollar index up a little bit as joe pointed out, andrew. 160 was our bottom yield yesterday and here we're maybe trying to build on it but in the grand scheme of things we could talk about coronavirus and obviously it's an important issue. at the end of the day it's not as though interest rates had been firm at any point in 2020 back to you andrew. >> thank you for that. in the meantime, steve is looking at some of those numbers as well. and what are you suggesting?

>> 16% month to month increase in defense aircraft. that's aircraft and parts. so i guess the government counted a big order of defense department of military aircraft and that's why you seem to have this out sized increased in new orders and you take x transportation it's down 0-1. >> it's down 0.9%. >> that's the one that we watch. that's the business investment one. that's the one that people believe was hurt by trade and around trade with tariffs. it will not come back in the month of december and you didn't even have the deal by then this is the one that we're going to watch to see if this rebound that's going to help the economy this year because of the phase one trade deal and see a business and return to better business.

and it came to capital equipment. there was no knock on effect on the tax cuts the thinking was perhaps this was because of trade. >> and that's december's number before the trade deal was signed. >> right. >> so period whats and that's the question that we put to a lot. >> davos becky that's what i want to know. >> jamie dimo says he thinks you will see an increase this year businesses will step up. but he didn't say it with massive enthusiasm >> so what our fed survey showed when it came to the issue of trade is every positive had another negativement good phase one trade deal bad, the bulk of the tariffs are still in place good, we have this phase one trade deal but bad we don't expect any improvement in the relationship with china and now the survey also showed it's concerned about what happened

with europe. >> it's the administration and business investment and gdp if the trade issues are the reason for this decline in business investments huawei, protests in the united stat states good morning to you. this looks like a win for your company but also raises lots of questions about the relationship between the u.s. and the u.k.

and then the u.k. and china. i wanted you to try to weigh in on that given the commentary that we heard not only over the past couple of months but the past weekend with mike pompeo warning the u.k. again not to use your technology calling it a security risk and saying that if they did go ahead and use it, that we might not share sensitive information with them. >> frankly, we don't see this as a win per say. this is a very small step in a process that began 15 years ago with the u.k they have taken a very measured and sombered approach so they can get the benefits of technology much easier to overstate the significance of this than to understate it. >> it can't be used in the core of the network

>> there's much more risk mitigation in it than that they limit our participations in those parts to 35% very significant limitation and we can't be at those locations. >> do you think this satisfies pompeo in the trump administration or this is, you know, the u.k. went -- again, we were spinning it as if the u.k. just, you know, filled us in you'd like, i'm sure, a lot more access. >> this is an appropriate approach given the needs of the u.k. we can't predict what it's going to mean in germany or the eu or australia but it's really an effort to address risk and make the technologies available to the people of the u.k. and, you know, frankly, my biggest concern that we talked about on the show is what is the longer term impact of the larger effort

on american jobs a lot of which are at risk in the current administration. >> what kind of back channel conversations are happening between chinese leaders and u.k. leaders over this decision because it does seem like there's a little bit threading the needle trying to satisfy both sides. >> well, we don't know of any communication between the u.s. and china governments except for a number of governments and around the world i can feel a number of countries meet with us and they're afraid to talk about it. >> how many countries are actively considering banning huawei from all or part of the network right now? >> well, the larger focus and i think the only one that has actually banned us is australia. back from july of 2018 but what is interesting and very valuable is that all of this publicity has brought greater focus and attention by governments and

carriers and mobile operators to what is really necessary to address security risk in a way that's transparent and in a way that the government can know that this is being addressed so those conversations are important and on going not as much focused per se but what is really necessary to address the security risk so folks can take advantage of the technology. >> one of the things that we did mention earlier and i'd love you to weigh in on it is if the united states continues to share information with the u.k., sensitive information in the future, whether it will be some form of a test for the claim which i no he that you have objected to that you do represent a national security threat that's not just in this larger trade >> it's a two way street

it's not just the u.s. to the u.k. and other countries and it's important to be able to hear the information but no technical reason why the information can't be shared if huawei is in 35% of the radio access part of the u.k. network. it's a technical reason. the information is going to be secure it's not in some way it's more of some bargaining chip by the u.s. to convince other countries we have to make sure that we can share information two ways with our allies. >> we appreciate you checking in with us this morning as this news is breaking thank you. >> you're welcome. >> coming up, is wall street actually hoping for a steeper market pull back than the one we saw yesterday? technical levels to watch. and a programming note, don't miss a very special first on cnbc interview with boeing ceo dave calhoun tomorrow here on squawk box at 8:00 a.m. eastern. stay tuned we're coming right back. (soft music)

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welcome back, everybody. an hour to go until the opening bell on wall street. dom is here with a look at the biggest stock movers. >> let's check out the notable analyst calls out this morning starting with beyond meat that is down fractionally at around 300,000 shares of premarket volume after the maker of plant based meat alternative foods

gets downgraded by analysts over j.p. morgan from a mutual to a overweight it was 138 it's pretty much a valuation call after a 67% run in the stock to start the year. a lot of that optimism and good news is already baked into the shares and that street estimates, the 2020 and 2021 are still too conservative they're taking that side and downgrading the stock. now we have shares of uber which are up over a percent on 175,000 shares of premarket volume the ride sharing giant getting help from analysts at ubs that started coverage of the stock with the buy rating and $56 price target which is54% highe than yesterday's close they see opportunities to unlock asset value and grow market share along with better overall industry trends and room for share price appreciation given the more depressed levels relatively speaking and then we'll end on shares of wells fargo which are up around 1% on shares of premarket volume

getting a reprieve from a very rough start to 2020. downgrading from a neutral to underweight and putting a $50 price target on the shares saying the drop reflects appropriate resetting of investor expectations and it expects the stock to be range bound in the near term back to you. >> thank you. >> sure. >> apple is set to report it's first quarter earnings after the bell today this was going to be an important report for wall street's most valuable company as apple's fiscal first quarter covers the holiday shopping season and it's the biggest quarter in terms of revenue. investors will be watching for any comments or any operations in china given the outbreak of the coronavirus. they'll be looking for the 5-g iphone it's higher margin services segment and demand for wearables like airpods joining us to talk more about it is dan morgan. and the research analyst at

deutsche bank. welcome to both of you let's start off and just talk a little bit broadly on this you think that there is still room for some of these fang stocks to run even though they have all run up to this point. what is it that you like about apple here >> apple is a stock that doubled in the last year we have owned it since 2005. we have a cost base of 550 a share so it's a huge winner for us what is going on with apple is that you have a bit of a revision in terms of the multiple if you look at the average p.e. over the last ten years it's about 15 times earnings and now trades 25 or 26 times earnings and some of the things that you just mentioned in terms of the excitement surrounding the stock and in terms of going into the close of this year in terms of 5-g, you have air pod and apple watch which is kind of picking up the slack until you start to ramp up at the tail end of the year so i think that you're going through a bit of a revision in terms of how we're valuing a company like apple

i don't think it's a slow growth company in the past where you carry a 10 or 15 times multiple. so i still think there's some going forward for apple to continue to perform well in 2020 you obviously see thing differently than dan >> yeah. i think ultimately we think the fundamentals do a slight upside versus three months ago and that's why we're raising numbers but i think we caught investors just because the stock to dan's point has seen a pretty potential valuation increase and most of that price earnings expansion that he cited has actually happened in the last three months and so, ultimately we see fundamental, some upside for the stock but with a sharp increase in the last three months we think there's some caution that investors should take. >> let's talk about why you

think this is reevaluating the company taking place this is based on apple pushing it's services out to all the people that live in the apple eco system. >> you're right. services is a big part of it you have talked before about how services are a greater ability to grow margins. i mean, your gross margin is about 38% on the aggregate company and your service margins are much higher than margins in the rest of the business so, you know, the idea as the model changes going forward with potentially less reliance on iphone and more on services and wearables and that could pick up and allow the company to be thought of as different and being able to grow going forward as opposed to just being completely reliant we're looking for 66 million a little over 51 billion in revenues on the quarter.

and grow those margins overtime. >> what ult m do you think the stock deserves a year from now. >> i'm comfortable about where it is now. that's pretty reasonable you're looking at a company growing revenues at about 5% with 10 to 11% earnings per share growth i don't think that's too off the charts you mentioned earlier the fang stocks before. you have amazon trading, 60 times earnings maybe netflix around 50 or 60 times n earnings so it's not excessive when compared to a microsoft or a google who is also in that same multiple family. >> what is wrong with dan's argument >> for example, google example

and really the consensus revenue for a company like that, they're really almost 10 points above the revenue per growth estimates at this point in time. so apple really has to have fundamental growth upside. both the revenue and eps in terms of being factored into expectations as opposed to just present multiple. >> dan, i want to thank you both for joining us today we'll see what happens after the bell today >> okay. thank you, becky. >> the dow and s&p saw the worst days since october but our next guest says the market is overdue. he is the senior management director at wolf research. what's going on? >> the s&p has been up for 13 of 15 weeks which is an 87% win rate. >> okay. anything that does 87% win rate

you kind of think there has to be some give back here so the coronavirus may have been the push but we were due anyway. >> technically this has happened. >> it was built in and it should have happened already but it didn't and now it's happening. >> now it's happening and how far down give me the upside, the down side, where are we >> he we. >> 37.51 would be reasonable. the long term indicators will not get oversold on a 5% pull back. but i don't think that this epidemic is going to be the top. there's a top it will come later. >> you're a technical analyst. but one of the things i'm trying to understand is how the technicals follow or don't follow in this case coronavirus, which is a thing, a real thing. >> so we don't follow it. we have to dance with the girl we brought and the girl we brought is price. so we're paying attention to price versus the his tryst action history of that action. it's extended a pullback is overdue. >> it's overdue.

we're going to see earnings this week. if the earnings come in better than expected, what does that do >> the intel beat the numbers last week and the stock gapped up and on a down day it was strong performance. you talked about apple a minute ago. apple has added since the end of september the added market cap. that would make it about the seventh to ninth biggest stock in the s&p 500. there's more than fundamentals going on here. they could beat, the market could go higher. but if we're playing in a probability here, there should be some giveback. >> thank you, john. >> thanks a lot. >> joe. let's get down to the new york stock exchange. jim cramer joins us now. it was apropos that we had a technician because you worry about two quick abouts on the co.s and we don

s&p easy and s and that could h. >> i think the companies have to address that they don't know anything and i wish that people would stop saying that the chinese are being idiots they sequenced the gene and that's what you wanted. but obviously china is a vast country of which some people handle things much better or worse than others. i think when the who gets in the w.h.o. gets in there we have to prepare for them calling it a pandemic. we have some people in this country i don't want to say it, fatal, but then all this rally disappears. think you're coming in in quicksand here. i think that -- i don't want to be part of the media that overstates this thing, but don't you think we should have some more knowledge before we just start taking it back up? >> i'd like to have -- >> it's only a 1.6% drop too. >> i'd like a little clarity on human to human. >> exactly right. >> and if we keep everybody out, that's good, but those are people that may have gotten it in wuhan, but then again, if

didn't get it in wuhan and got it from somebody else that got it, then i don't know. >> exactly. i think they've prepared for that. it's kind of like when we had ebola and someone's on a cruise and someone's at a bowling alley and i think that you could easily make it so that that was -- i don't want to make it a scare. but i also know that we got things under control. and we don't have it yet. >> the scariest thing, i think that's what congressman pallone was talking about on social media, but there have been semi simulations that people have performed on sars like coronaviruss and it scared me. >> but we don't know what we don't know. that's the -- >> but remember when sars and ebola, we were very scared. and i had -- look, chernobyl we

were very scared. when it was local authorities trying to make something of it. we know that from the documentary which is close -- well, from the dock cue dramaud look, it's justsome s suboptima situation. >> i don't want to be influenced by fiction. some of the scariest movies are involving things, and you've got to leave that out of equation. >> i know. it's not the stand with the lincoln tunnel scene and, you know, it's not an drommaious strain. but people can craft these things because we've all seen them -- we've seen them. >> right. >> and there's -- and 90% of the time that's nothing to worry about. but then there was 1918, but then -- >> i've heard that, the 50, 60 million. how about the 8,200 people that

have died in the flu in this country. >> right, this year. >> but people say that's not nearly as bad as when you have 14 days of incubation and you can't tell people -- i mean, like eventually china can get this under control. i think china has done a poor job until the party got involved, top guys. >> right. how about utx, 3m, some of the other numbers, harley. >> harley is the 12th quarter deteriorating. i don't know what to say there. i can craft a positive story about 3m, i know it's down. but they're trying to get to the problems. technology, what can i say, they're hostage to boeing. and boeing and the corona are the two things that are hurting -- hurting companies. so that's what i'm worried about. >> all right. so at this point, you think that the long term health of the stock market might be okay when we get through some of this? >> yes. but, i mean, like the market's

rallying on nothing. not on earnings, not on the statement we're getting from china, not anything that we're hearing from w.h.o. there's a bounce, but i feel the bounce will be short lived. there we go. >> all right. we'll be watching. >> thank you. >> we'll see you in a couple minutes. don't miss the first on cnbc interview with the chairman of 3m, mike roman. that's going to be coming up on squawk on the street. we'll be right back meanwhile, with more "squawk box.." >> announcer: don't forget to subscribe to our podcast. you'll get interviews, original content and behind the scenes access. look for us on apple podcast or on your favorite podcast app and subscribe to squawk pod today. at synchrony, we're changing what's possible every single day. and if you run a business, that means a lot. we create financing options for your customers. to help them get the things they love instantly. our data provides insights into what your shoppers have already bought.

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america's getting sicker. sick of donald trump, there are one million more uninsured americans every year under trump. and he's repeatedly tried to repeal obamacare. mike bloomberg will make sure everyone without health coverage can get it, and everyone who likes theirs, keep it. while capping fees to lower costs. as mayor, he helped expand coverage to seven hundred thousand more people. and championed women's reproductive health. as president, he'll give access to everyone. i'm mike bloomberg and i approve this message. all right. let's take a final check on the markets this morning before we hand things over to "squawk on the street." the futures again have been indicated higher. right now dow futures up by about 118 points. this comes after a decline of 450 points yesterday. s&p is indicated up by about 16 points. and then the nasdaq up by 68. the dow and the s&p had their worst day since october yesterday. as in dam had its worst day since august but you're seeing a little bit of a bounce this morning. also look at the ten year note.

earlier this morning the yield fell below 1.6%. it's back up 1.62%, but well below the 2% it had been challenging last week. finally a quick look at gold prices. gold this morning down by $3.5. that does it for us today. >> you going to be here tomorrow. >> yeah, i'll be here. join us now for "squawk on the street." ♪ good tuesday morning, welcome to "squawk on the street." i'm here with jim and david at the new york stock exchange. coming up, three m's mike roman on the restructuring that the cut 1500 jobs. futures look for a balance as the coronavirus mortality rate seems to be staying in check. much is still unknown. fed meeting begins. ten year gets to