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 1.57 and case

schiller up year-over-year. we have the worst drop since october. investors grappling with fears over the possible coronavirus update. >> shares of 3m are taking a hit after carl just mentioned the company's cutting 1500 jobs. it did post lower profits. and we will speak with ceo mike roman in the next hour. >> and boeing, securing more than 12 billion in financing to help weather the 737 max crisis. stocks are looking to recoup some of the losses from yesterday's selloff. worries about the coronavirus for the worst day and the s&p in four months. death toll now around 106 in 18 countries. jim, we would expect the number of confirmed cases to rise, but the number of deaths is not as algorithmic as the number confirms. >> i think people naturally presume that someone is speaking for fiction than fact because the fact is that 200 people in this country died of the flu so far this year.

140,000 hospitalizations, 15 million got it. and if we were to write that story every day and put that on the front page. now of course what people say is don't be such a pollyanna. the incubation period is so long that each person is going continue to infect two people. that's not that bad a number. then you say, if everybody did that, then suddenly we had 50 to 70 million, we're back in 1917. so the negativeness, the pes mists, i shouldn't say negatives, the missa mispessa m giving you what have to do with 19 set of fie teen 17. we have powerful antivierls. we didn't have that before. so please don't analogize to something that's no longer history given the fact that you can indeed figure out something to stop it via gene sequencing. and that's a very important break-through. >> all that said, we still don't know exactly when the chinese

got their arms around this thing, that's why dr. scott gottlieb, former fda commissioner says we might be dramatically underest mafting the number of china cases by tens of thousands. >> right. that was -- that was the steven king version. >> well, particularly because the virus appears not to appear for some period of time after you've contracted it. it's conceivable that people who traveled and were screened were not showing signs but did have it. >> he's not part of the media. he was the most frightening guy i've heard. he made me feel like that, you know, i need a has mat suit. hazmat suit. >> there are people in china that were using numbers that were frightening in terms of where it could reach in time worst case scenario. >> it's 1917. >> no, but to your point it's not. >> no, it's not. and the genome -- >> but dr. gottlieb was the most

frightful that i've heard. he made me feel very scared. made me feel like i should get a mask. that i should carry wipes at all times and certainly care purell. masks are not the most important thing, it's just not touching your face. but that seems to be something that is regard as being impossible. i don't mean to say that dr. gottlieb scared people, he scared me. >> meanwhile, the business impact coming into view, facebook, goldman, we work is closing 55 offices and now we're seeing reports about what the potential impact could be on apple's ability to make phones which are made within about 200 miles of wuhan. >> the question is whether you believe that the scientific world is going to be just completely hamstrung at this

notion of the ink ccubation per. i know that my job as someone in the media is to say it could be this way or that way. >> but we should be focused on the economic impact, which is real regardless of how bad this gets. >> right. >> it possibly involves the controls on the flow of goods. >> yes. and that's a negative. >> how many people are showing up to work as well. >> that's a negative too. >> from my point of view, look, i said that the balanounce is ridiculou ridiculous. what happened between yesterday and today? >> it's more question marks at this point. >> right. >> but i'll talk to a bunch of asset managers during the course of the day. nobody's got an answer on this. everybody's got a sense of opinion. some people tend towards being more hysterical, others are much more sober. >> i think the ten of thousands is a historical point of view. i do. now, it may happen. >> you're pretty vocal on twitter saying you don't trust

the chinese. >> no, i don't trust the chinese in the is going to be something that no one is every willing to say, but maybe the -- is in trouble. we're not allowed to say that because we're a pitiful helpless giant to quote nixon. but it's very easy to craft a real horror story and then if nothing happens, disavow any knowledge of that hor roror sto. >> there's already reports that the chinese are pledging to make liquidity abundant in the markets and to evaluate the virus objectively. that's going to be a dramatic opening. >> they were the ones that shut down whole cities. >> yeah. >> that was part of the narrative that just said, wow, this is much more -- wuhan, every article tells you that wuhan was just completely ill equipped. but it wasn't ill equipped.

we could also say, you know what we don't have enough hospital beds here for when it happens. and when someone dies here who is not -- who didn't go to wuhan, then you're going to be so gland thd and the market's gg to crater. if someone dies here that didn't want to go to wuhan, it's bad for the market and bad for all the companies we deal with. >> yes, it's not a good thing if you are operating businesses in china and/or relying on chinese workers to make products that you sell around the world. >> but what happens if this turns out to be chernobyl, fukushima, sars, ebola >> that's not going to happen. >> what do you mean? >> it's just not. you think it's going to be worse than this? >> no, i don't. >> well that's my point. but i don't have a good -- >> so why are we talking about -- >> i was at goldman -- >> when we talk about apple earnings or -- >> no, david, how about we talk about the fact that the uk is letting huawei build part of the country's 5g mobile network. >> if we're all dead who cares. >> it was an important story this morning --

>> it's horrible. i thought they were with us. >> apparently the uk has decided not to be and that's going to raise serious questions about the relationship between the uk and the u.s. in terms of intelligence sharing and things of that nature. >> the special relationship. >> another sign that you sway going back to china, be able to continue to build on its growing dominance in terms of 5g networks around the world. certainly not here. >> well, thanks to our city -- >> that hit just moments ago. >> nokia couldn't do it. but remember this company is state subsa sideidized. it's an arm of the communist party. this is how huawei has been able to do it, they're completely sub subsidized they came in under what erickson has and nokia has. >> we don't have an entry as a u.s. company in that world. >> we don't. what do you make of that >> we don't have a national

policy or certainly we didn't specifically to make sure there are national champions. that said, qualcomm is our national champion. >> yes. >> one reason by the treasury stopped the potential acquisition by broad com comconspirac comconspiracy. >> what do you mean you don't know. >> i don't know how huawei is going to spy on everybody around the world or not. i don't know the answer to the communist party. >> do you want them being in charge of your 5g? >> no. >> i rest my case. >> no. >> fifth column -- >> 5g, same thing. >> i'm not sure i want facebook to be a bart of part of it eith. >> this is the most important thing in the world. >> what's that >> the british defected. >> that's thanks for nothing.

the red coats. >> it was an audible. >> it's a huge story today along with the earningsa and the coronavirus draws a line for us to 3m. there's 20 cent charges on the restructure. you're going to talk to mike roman next hour, guys. >> was it great? no. do they have a good path for 2020 i thought yes. you want most powerful story for the virus? >> for the virus >> it's them. their numbers are going to be on fire because they have the mask. and you can't just wear one mask. it's actually bad for your -- you've got to -- you have to buy a whole bunch of masks they're working 24/7 around the globe to produce more masks. there are some growth challenges, obviously. auto remains just another -- look, if you have auto -- >> you're not doing that well. >> transportation down six,

industrial down five. >> they did make that acquisition which apparently is working very well, that's wound care, but they've taken out costs. i'm just saying that the stock went up. you know why the stock went up because tussa remains incredibly powerful. >> he made his name being negative on ge for quite some time. >> because he's negative of gm. >> his stock went from minus 6 to almost 12. >> tomorrow's another day. >> it is. >> thank you, my dear, i don't give a damn. >> i bet you don't. >> they did update their assessment of environmental matters and litigation related to historical operational operations at 3m. >> that was because of clients. >> we will discuss that as well. >> i thought the charge of 214 million was lower than i expected. >> right. >> i think they've become much

more transparent. it's no longer buried in the foot notes, it's right up front. i think roman can tell a story of -- getting better. and they have new erp system, that's the sep system which isn't doing that badly. they're bringing it in, everything bringing in the rp system is really very difficult. i didn't think it was horrible. >> speaking of s.a.p., challenging cloud numbers for s.a.p. down 4% in morning out of europe. along with phillips, challenging corporate prints out of europe today. >> europe was bad for everybody to be talking about. i don't know anyone so far that says europe's doing well. you talk about greg hayes and united technologies and they'll tell you that carrier was bad. carrier was bad in europe. not great, i shouldn't say bad. you want a mask? >> why shouldn't you say bad >> because it was slower than i expected. >> okay.

>> this company's going -- >> they were merging with raytheon. >> and splitting up. >> it's like sell it now, it's almost done. >> that's taking place this year. it's a monumental year for united technologies, the raytheon deal with close and then the split will begin -- >> even the symbols can be changed. >> of carrier and otis. >> i think that the raytheon business which has a fantastic balance sheet is going to be a very interesting piece of business. i'm not sure i want otis, though the otis numbers return to growth, and i don't want carrier at all. not at all. >> you don't want it >> no. no, i don't want it. no way. i like rhee siddway i want risie from honeywell. >> what about the positioning? >> it's china. forget it, jake. >> it's china. >>ness it not china town. >> doesn't matter, i shortened it. it's. >> really quick, hogg's going to

open down 6% they missed retail sales down three, stock's down 14% over three months. actually that sales decline is the lowest, the smallest decline in 12 quarters. >> that's true. it's a level of deceleration. but there's nothing -- i mean, it's still a demographic issue. i mean, just yirng peopounger pe millennials are not going there. you ever go to a harley store, david? i'll go with you. route 10 i'll take you. >> i would never wrap myself around the metal. >> i raised the -- i lowered the age when i went there. >> that's not easy. >> i lowered the age. >> that's crazy. you're taking crazy now. >> who's the young guy you have the goatee. >> i was at a restaurant on sunday with my daughter i was like i got to get out of here. well, you need a ponytail. >> nice big tattoo here of a dollar sign. >> this isn't real. wait a minute. where a tattoo >> lisa would be into it, right?

she could ride on the back. >> my wife's -- j and j. >> well, i'm in the article. >> yes, you are i think that's great. >> my vanity just jumped. didn't say jimmy, just said jim. >> cramer's mad dash to the opening bell. a lot to get to as we said. we'll get to pfizer smachbd tan the other numbers that have come in today. how starbucks is dealing with the coronarus nivitoght. "squawk on the street" is back in a minute. ws right there. i wish my trading platform worked like that. well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions. hm. didn't peg you for a crumpet guy.

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♪ welcome back. let's get to a mad dash as we count down to the opening bell which we'll get in about 12 minutes. spice. >> yes, mccormick. i think you're get an opportunity here, nkc, they didn't make the number. high global stock. they're talk about a surprise transformation investment guiding 2% to 4% versus contentious 3.6%. guiding $5.20 to $5.30. for fiscal year 20, people are

looking for $5.56. so this is not a great number, however, let's go back to the worst case, the dr. gottlieb case which he would say it's not the worst case because he could say that hundreds of thousands. but if people want to be stay at home, this is the ultimate stay at home company. >> it is >> yeah. the cook. >> french's mustard too. and hots they say you can put hots on a lot of things. >> isn't grub hub the ultimate stay at home company >> i watched that last week. he said the journal story was completely smacking of fiction not of fact. what'd you think of that >> i thought that was interesting. >> no, what'd you think of the interview, the job i did >> i thought you did a great job. >> thank you. i'm a lapdog. don't forget. this stock should be down ten. and then right here people are going downgrade it and say, listen, it's no longer the great growth stock and then you can buy it right here and you can have the ultimate stay at home stock and it will be really good. i want to have this company,

he's got to come on. >> he's got to come on >> he's got to come on. >> why >> just tell us about the transformational expense. the surprise transformational expense. >> okay. >> lawrence is a terrific exec who bought french's mustard and he bought -- oh, enrique, you like those guys? >> yes. >> because you talk about them, delphi tech. >> sure. yeah. >> i just think this is your chance. you're not going to get it coming around. built chance comes tomorrow. everybody who owns it for momentum is going to sell it and then you can buy it. >> okay. i can rest easy now. >> now you feel sfwlert nbetter >> don't have to worry about mccormick anymore. we'll hit other things when we come back, including the zeer rox. be sure to stick around. we'll be talking to mike roman,

the ceo of 3m, an importan feature in our coverage as well. and always like to remind you you can watch us live when you're on the go. you don't have to be at ho. me get the cnbc app. download it today. someone i can trust. (impact, click) who is with me for the long-term. who understands i'm dealing with lives, not only livelihoods. that in order to help people, i need more than products, i need quality support and insights. can i find someone who partners with me to achieve people's long-term success? with capital group, i can. talk to your advisor or consultant for investment risks and information.

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make it simple. make it ship sticks. >> announcer: the opening bell is brought to you by nuveen. a leader anyone come, alternatives and responsible investing. you're watching cnbc "squawk on the street" live from the financial capital of the world. opening bell in 3:30. busy tuesday morning as the earnings of parade continues to

heat up. two-day fed meeting begins. we'll get powell's presser tomorrow. the cdc out with travel recommendations, guys, asking the public to avoid all nonessential travel to china. the outbreak is growing, they say, and there's limited access to adequate medical care in the affected areas. meanwhile, jim, as you know, dow's red for the year and this curve inversion which we thought we were sort of done talking about a couple of months ago. >> yeah, look, i do think that we got boeing and you have corona. and that's too much for this market to handle. when you see united technologies, i thought it was a good quarter, but you have $100 million a month exposure, you've got to get boeing flying, don't know what it's going to look like. are they going to absolutely flying the same plane? do you know that those who leased the planes to sell, they've lost 35% of the value of these planes. that was a sucker's game if you release it. and so that's not good. i do think that a lot of stocks

that are just moving on up here are people just hoping. there's a lot of hope in the market. we're not even oversold. so i think that right now core roan and boeing acorona and boe much to handle. >> "x" aircraft, it's the worst nonaircraft print since twine, right? so business investment, we're not seeing an immediate spike. >> non knew, the bonds knew. the bonds have just been -- we don't talk enough about bonds, obviously. the ten year, that's saying that we're back in the nether world. i mean, i don't think you can avoid what the ten year is saying. >> that's been a pretty significant move. again, 1.57 being low, we're below 1.6 now on the ten year. but it was a few weeks ago we were happening out at 1.8. >> right. >> and it hasn't moved down as well as copper. and let's not forget oil.

>> yeah. >> i haven't looked at that time today. >> we forget oil. forget oil. >> keep the $50 mark. why? >> because it's fossil fuel. >> okay. it still powers -- >> no one's been able -- >> the automobiles in the world. >> but they come up with a bridge fuel. but natural gas, i know a great chartest saying the natural gas can spike because the heaviest has never been short. >> it's all natural gas? >> yeah -- well, bouncing around. but obviously you lose money on everything you sell. that's never been a really good business when you do that. that's why companies -- that's why people flare. there's some new pipelines coming out of the pocket and they're allowed -- the pocket has been terrible for flaring, it's one if you were up in space you could see it. you need to get the natural gas off in order to be able to grow your productions. but if you grow your production, it just makes it even cheaper. we have way -- we have so much oil, we are not -- i mean,

people will tell you that, we're much bigger than everybody. we're going to have 18 million barrels. where are you going to put eight peen milli 18 million barrels [ bell ringing ]. >> there's the opening bell and the s&p 500 and the big board this morning, it's on global investors celebrating the recent listing of its ai and technologies fund at the nasdaq health care and health care technology company. blackrock was on our air this week, jim. ahead of fixed income there. ed he could see the ten year going to 1.3, although that's not his based case. >> just go buy something if you have any money. get a mortgage and buy something. you're going to look back and that's going to be when my father got back with the g.i. bill, that's unbelievable to get too 1.3. you've got to gao go buy something, david, or refinance. don't just stand there. >> i did refinance.

>> refinance again. i'm in the market. i mean, it's too cheap. got to find something. >> you have enough. you're not going to buy something. >> i'm going to buy something. >> what? >> yeah. >> more? >> yeah. >> you know, you koln live can in one house at a time. >> that's your big problem. >> i've misunderstood that >> you never used the mexican house, i offered of it many times. >> i want to. i also want to use the other house. >> but that gets booked up. >> you need to negotiate for more vacation is what you need. >> i need to book it for next year, actually. we'll talk about that. >> do the carson thing where he -- carson is still my thing. i can just explain to people at home, i can't own stocks. what am i supposed to do some i use a proxy, they're called houses. look at that green, sea of green, sky of blue, sell. >> yeah. dow really only dragged down by 3. did you get to pfizer? >> i don't have fipfizer.

>> does everything go off pattern at once? ellow quist is not a great drug versus its competitor. si viagra, there's nothing here they got to go buy somebody. they need to buy a biotech company. >> they did the deal which was not enthusiastically received in terms of their spin of business into myland. >> not at all. that's going to be the weakest of the major drug companies. i expect great numbers from america, by t merck. >> you love bristol-myers. >> love. yeah, i do. i think the celgene thing was brilliant. that's that irritable bowel syndrome drug. >> is the market averaging number one in iowa on monday night, sanders again >> that's bad for health care. >> but health care is not expressing it as much as they were anymore. >> some of the big -- send them

down badly which shouldn't be down he wants to get rid of these companies. now, my favorite -- the one i said was going to be a trade, hca, once again, they -- wow. what a company. big up, hca did, remember it was private? >> i do. it was -- it was one of the largest lbos. merrill lynch led, if i recall. >> dollar general -- i think merrill lynch is gone from the name. >> i know. >> it's bank of america. doesn't appear on any of the research. there's no more bam, bank of america lynch. but they did it quietly. >> that was one of hmerrill's. by the way, everybody wants to be in private equity. >> oh my gosh. i'm glad you mentioned that. >> they all want to transform into private equity. no one wants to be in bank, they want to be in private equity. that's all i hear about. >> do you meet a lot of young people on the floor, do you like investments? yeah, i like private equity.

>> no, it's the -- >> talk about the tax -- >> the advantages of it on the compensation front they still have carried interest. how we got the 17 tax bill and they managed to keep that is unreal to me but here we are. and being able to lever, it works. so, yes, everybody wants to be private equity. >> yeah. hca and dollar jgeneral were goo deals. >> they were. >> then you get past the bad ones. >> and by the way, they will be big players in our m&a market this year based on everything i'm hearing. >> when you've got companies tired of certain divisions, that's private equity and spaks, spaks are back. >> again, more of these hedge funds. management won't listen to me so i can pick my own management. and then maybe at least i can dictate the future for a company. nobody wants to be a value investor anymore. >> no. >> that's ute.

out. >> active investment in all these etfs which are now active. i mean, any kind of -- they're active. >> right. >> like the esg, they're all active. they're pretending to be passive. >> because they're making the picks in terms of what's in the -- >> right they can't fool anybody. >> that's somewhat true. >> but price discovery, i don't know who's going to be left for price discovery in the markets when so much of it is -- >> he's got a good point. >> david, we have to mover on? >> move on? >> we do >> no, but i feel like we haven't mentioned apple. >> i want to mention xerox too they come out with numbers this morning. i did have a chance to speak to the ceo prior to the conference call. what's happening here, though, at xerox is they're on plan or ahead of plan in terms of this project owned some time ago in terms of taking costs out of the business. in 18 months they generated a

billion in gross savings, 640 million in gross savings in 2019 due what they say is their disciplined approach they did exceed on earnings per share. they -- 70% of cash being returned to shareholders. and overall, what i'm hearing beyond vthe ceo is quite positive, that they're on track for their three-year plan. although 4.7% decline year-over-year constant currency basis and refnize. they say they're going to get that that back in 2021 and it did disrupt it in 2019 but saw improvement in the rate of revenue decline in the second half of last year as some of their investments started to gain traction. but this doesn't hurt them in their pursuit of hp, it helps. it helps because if they had been off track, certainly hp would point to it and say why should we believe you guys could put these two companies together and deliver in the 2 plus

billion in synergies that you're talking about? and he says, listen, this is our playbook, we're not doing any other acquisitions, smaller things, we're not afraid to give specifics is what he said to me and everybody should have confident, get confidence in that 2 plus billion synergy number that we're putting out there in terms of what we could achieve if we were able to sit down and talk to hp. he wants it to be about price. hp side guys continues to say no. >> but this is a better number -- >> they're doing the strategy here rf, here of, no. >> aren't you surprised that they did this verse what's hp thought they could do? >> i think it's a good quarter in terms of it bolstering the case. >> cash flow. cash flow. >> for why they can be relied on to potentially deliver it.

but, we're still talking about 4.7%. >> which is none -- but the cash flow is big there, david. >> it is. and the question, jim, is whether or not these two companies are better off in this environment being together in which revenue growth is extremely hard to come by but cost savings can bring conceivably increases in cash flow. >> i don't think they can give the heisman after of this number. i really think that someone seriously, the chairman has to take a hard look at this deal. i didn't feel that way after i saw these numbers. it's pretty good. >> you've changed a little bit on this. >> i did. >> come around more. >> you seen polaris, david >> final thought before we go polaris. it will be interesting as they move further into this year, closer to a shareholder vote here. remember the 11 directors being nominated by xerox to replace the hp directors as to whether they can continue to say just, no, our shareholders are not interested or whether they at

least need to sit down and then say no so they can explain to their shareholders we did take a look and we still decided against it. by the way, many people still lining up in the belief that if they do get their there eventually, it makes more sense for hp to be the acquiring company given the huge disparity and size between the two. now on to polaris. >> i think when we're thinking about a harley which is not doing as pale as we thought, i think about the fact that polaris is really doing well. and polaris is -- scott say terrific guy and these are the most discretionary of items. snowbal snow mobile, it's not been a good winter for snowmobiles. >> soft side research to get to. jpm cutting beyond medium to neutral. they shaved 4 bucks to 134. >> i thought that may not go down. that was, by the way, we liked it at 75, it went to 122.

i like that kind of -- i think that's a good one. but beyond meade has become something that millennials there are is the millennial stock and you had the mcdonald's, denny's, they're going to have trouble making demand. it's a fabulous story. i think it's fabulous. i'm still with it. >> you are >> yeah, i am. i think beyond meat say great store. >> the trend is its friend. >> people don't liking to slaughter animals. they don't like the way that they puff the chickens up. they think it's unnatural. >> i know i've talked about the poor chickens that can't even walk. >> you know if you kill a cow that's two years old can you -- eat that cow the rest of the year >> speaking of food, mcdonald's is going to report this week and some news about some additions to the menu at breakfast.

chicken mcgriddle. >> that's hard to find. that might be good. >> the new mcchicken breakfast as well. >> stocks been worse of late. >> see if it can drivetraffic and take back share from its smallier scrappier rivals. >> wendy's is coming hard with the breakfast. i find wendy's is picking up here. when you go to a popeye's, not popeye's if i come from philly, they say, listen, we have none. these mocks, these kind of signs put up, we don't have it. chicken? we don't have it. that's a sign of demand, isn't it mcdonald's would not do anything unless they could meet it. >> that's right. you're not going to find shortages of mcdonald's. and given their size, that's one of the challenges. a couple of board member shifts at cat mullenberg's off the board and at sysco, lisa sue the join the board. >> isn't than fabulous. but not muilenburg, see you later. but lisa sue, do you know i know

people are buying the stock of sysco because lisa jointed board? i was first to congratulate her, i think. >> i'm sure you are. >> you are number one in the fan club, lisa sue fan club. >> i like the stock at five and it goes to 50. i am proud. >> as you should be. and as i pointed out more times than i care to, you have been dead right on this stock. >> amd -- >> thank you, lisa su. >> they do report tonight and between them and apple, hopefully we can get clarity on how the virus might be affecting global supply chains. >> you have to -- when you talk to greg hayes, he's got a lot of china -- he said we don't know, but we're not saying that they're going offline. they're not using it offline. 3m because of the mask business they're a little more sensitive. but remember mask business is 24/7 around the globe. united technologies was good quarter. i do not know why that opened down.

why did that open down what was the line in the conference -- what was the -- you read -- i got the conference call on streaming and you read the release and you say, all right, why is it down? and the assistance because it shouldn the answer is because it shouldn't have been. >> and now it's not. i've got something, it's small but a deal. >> you're talking delphi >> yeah. >> i why do you laugh at me when i said we have to focus on delphi >> because it's not worth focusing on. it's up 61%, i did want to mention it. >> right. it's about making it more efficient. >> it's about propulsion, really. >> pro pulse. >> yes. in fact, what they say is it's a unique more comprehensive portfolio of industry leading propulsion products resulting in greater content per vehicle relative to today, i guess. i don't have that last word.

>> warner is getting hit. >> doesn't require a shareholder vote. delphi shareholders quite pleased, one would imagine, given the premium there. it's .354 shares of borgwarner. >> all right. >> we have to move on. >> by the way, hvac from united technologies, i said it wasn't that good in europe but it's actually came around. emea was up 10%. this is the call. what do these people realize we have to move on. but we're sitting here trying to watch -- read the calls, talk to david about delphi, get the stuff that you feed us. it's not -- we're not in a position had the weers like -- aircraft carrier coming in hot. >> we're trying our best. >> you're welcome. >> apple up 1.5% is going to help. let's see what's moving. >> good morning, carl. biggest one-day pullback for the s&p 500 since october. this morning, markets attempting to rebound after ending yesterday's session. the dow was down over 400

points. currently up 72. there was this defensive tone that was evident in different parts of the market. gold price crisis, the volatility index. oil prices moving lower. we're looking at the ten year yield dipping lower at 1.6%. three m, a lot of noise. it's cutting 1500 jobs. keep in mind, 3m has now miss order lowered consensus expectations ten previous times over the past two years. perhaps a reminder that even though we've seen a recent pickup in global manufacturing activity, it will take time to feed through to profit. utc beat the street but it warned that the boeing 737 max grounding would impact its aerospace division. lockheed martin record sales thanks to high demand for jets and missiles. harley-davidson way disappointing earnings report and that's down by 2.5 %. question now for the industrial space.

general electric, will it be able to deliver tomorrow when it reports earnings certainly could be a moment of truth for the stock which is up about 26% over the past three months. and take a look at the merging markets, they've been under pressure over the past one week. going into this year jp morgan, goldman sachs made the call to invest in merging markets in 2020 point together improvement in the straid strayed story, attractive valuations. key question now, how much did the coronavirus impact china's gdp? that could be a big factor in play. back to you. >> bonds an important story. rick santelli is there today. hey, rick. >> good morning, carl. as you look at a 24-hour chart you could see that we violated 160, we pop back above it. at 161, we're now unchanged on the day. but that's fascinating because if you look at the two-year, it is down two basis points. we're actually getting a bit of steepening opening the chart up to tens for one week.

you can see how we've just deteriorated today a bit of a capitulation-type scenario as we came back from sub-160 levels. year-to-date reveals at 161, we're down 31 basis points on the year. open it up last time we closed here was october. and finally, i mentioned tens to twos hovering at 18 because we're getting a mild bit of curve steepening. but look at three months to tens. obviously at '05 we were getting ever closer to zero and even though the last time we went through this conversation, we certainly saw the recessionary worries diminish as the curve rester resteepen. this could have detrimental outlooks towards the future. carl, david, jim, back to you. >> all right, rick, thank you very much. white house is respond together uk's decision to allow huawei to help build its 5g network. we have more on that this

morning. >> good morning, carl. a senior administration official saying this morning that the united states is disappointed, quote unquote, in the decision to allow huawei to have access to that country's 5g met networks. here's the statement coming out from the white house saying there is no safe option for untrusted vendors to control any part of a 5g network. we look forward to working with the uk on a way forward that results in the exclusion of untrusted vendor components from 5g networks. we continue to urge all countries to carefully access -- carefully assess the long term national security and economic impacts of allowing untrusted vendors access to important 5g network infrastructures. so, carl, a split here between the u.s. and the uk as the uk moves forward on its own against the wishes of the united states. the united states now saying it's disappointed in that decision, carl. >> finally, busy week for the white house ex-impeachment between the usmca signing tomorrow and this peace plan

that will be unveiled today. do we expect to be able to toss some questions out >> we do expect to see netanyahu and the president today at the white house in a joint press availability. not sure hoim how many questiw s they'll take and on what subjects. and not sure about the peace plan that the two men will be talking about. the white house has not provided any advanced look at what the details are here. and of course such a tricky problem over the decades that we'll see whether the white house has invented a new solution to it here. they're going to unveil some of the details, they say, later on this afternoon. >> all right. we'll be talking to you then if not before. still to come, 3m is moving lower after reporting quarterly results and announcing those job cuts around 1500 jobs p. dow.com component going up after the coronavirus outbreak. dow's up 80. com component goingr

the coronavirus outbreak. dow's up 80. om component going e rovis tbak. dow's up 80. m component going ur the coronavirus outbreak. dow's up 80. component going uph coronavirus outbreak. dow's up 80.

it's going to be an important session after the bell tonight when apple reports currently leading the dow higher 1.4 as index up 85 points. we're back to 3258 don't go away. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

jim, what's on "mad" tonight. >> massimo, one health care sharing that would make it to have unbelievable ability to detect illness now fighting him let's get his side. >> jim, it will be busy tonight anatomy. >> this is the worst week. i've got methamphetamine to keep me awake kidding. just kidding. >> jim is not going anywhere because 3m's chairman mike roman up next. dow up 95. dealing with our finances really haunted me. thankfully, i got quickbooks, and a live bookkeeper's helping customize it for our business. (live bookkeeper) you're all set up! (janine) great! hey! you got the burnt marshmallow out! (delivery man) he slimed me. (janine) tissue? (vo) get set up right with a live bookkeeper with intuit quickbooks.

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ameriprise financial. . good tuesday morning welcome back to "squawk on the street." i'm carl quintanilla, sara and david. markets bouncing, dow up 90 points as we watch earnings. virus, of course, two-day fed meeting. >> our roadmap for the hour starts with stocks rebounding. looking at the busiest two-day stretch of earnings and fears. >> first cnbc interview 3m as

the company ramps up mass production amid coronavirus concerns also announcing job cuts a lot to talk to mike roman about. >> largest real estate and investment service in the world, the ceo of cbre is with us we'll talk more about that meantime more data, consumer confidence, let's go to rick santelli in chicago. hi, rick. >> reporter: this is the most realtime day january read from the confidence board confidence jumps to 131.6. we're expecting a number in the 128 zip code this sequentially follows december's read at 126.5 and 131.6, but you have to go way back to find a better number than that. we're going to look towards august at 134.2. let's go through some other levels, shall we, on expectation. 102.5, a big jump from 97.4. present situation, 175.3 versus

170 in the rearview mirror another january read, fed manufacturing in decks su index. sara, back to you. >> rick, thank you getting an update now on the coronavirus with both the number of those infected and death toll rising eunice in beijing with the latest eunice. >> reporter: thanks. the number of confirmed cases has reached over 4600 with 106 people dead. this dramatic increase appears to have motivated the government here to step up preparations for an increase in the number of patients as well as the medical needs. local media reporting beijing, along with central chinese city, have joined wuhan, the epicenter of the outbreak in building prefabricated hospitals. so the one a base for foxconn

which makes several products for u.s. companies including apple, that hospital is supposed to be completed within ten days. president xi jinping has met with world health organization chief here in beijing and he described the coronavirus as a devil that beijing was confident it could slay. however, the public who are might not necessarily be as confident. online there has been some understated public criticism of the leadership here. as you guys well know the chinese public doesn't feel comfortable openly criticizing president xi jinping there have been several photos as well as positive comments circulating online about previous leaders and the way they handled past disasters such as the sichuan earthquake in 2008 now, companies are still unclear

about what they should do. ford motor just a couple minutes ago said they planned to extend the lunar new year holiday and keep closed at least until february 2nd they said it's possible they might keep their factories closed until february 10th that seems to be the general consensus among a lot of companies here recall chinese tech companies said for the most part they anticipate opening february 10th, though they were going to tell their staff to continue working at home in the days before that. other manufacturers that we spoke to said they are still concerned, that this potentially could take a bigger toll on their bottom line if it continues to go on. >> see what happens with apple after the bell thank you very much. dow and s&p coming off worst day of the year rebounding this morning.

jill, how much confidence do you have telling investors to buy the market with big looming uncertainties like where this virus heads next >> right well, we're looking for pretty limited upside to the market s&p targets 3300 for the year end. we had actually gone above that in january we think the market got ahead of itself maybe, pulled forward some of those gains for the last few months i think this year it's really going to be about earnings growth we saw last year the market was entirely driven by multiple expansion. this year we're expecting earnings on the s&p. we think that's really going to be the driver and what investors need to come through as we look to the earnings season but certainly factors like the virus, geo politics, other sources of uncertainty could have been a reason for volatility we've seen with the virus. >> so if it's all going to be about earnings, jill, which

sectors do you like as far as which ones could beat and see improvement over the last few quarters. >> so far, you know, a couple of the trends we're noticing from earnings from what we've seen reported in the first two weeks are that we're seeing strong results from tech and financials reported companies have seen results come in about 4% better than expected. the upside surprise has been that margins are a lot more resilient than consensus has been expecting so that's one positive sign. financials is our preferred value sector right now so even though we've seen a bit of a reversal to growth stocks outperforming again, we do expect to see valerotatiue rotan 2020 one of the biggest drivers is pickup and profits growth which beyond this fourth quarter earnings season, we expect profits growth to continue to pick up throughout 2020. as we start to hear more and more on 2020 outlooks and confirmation that that pickup in

profits growth is real, that should drive rotation into value stocks where surprising earnings, a much better, higher quality sector, less than it was going into the last crisis now it's the highest shareholder return yield sector in the s&p so new high quality income oriented sector. >> there are worse things than having financials lead, jill, that's for sure. some argue even though the percentage of s&pers beating estimates in line with one-year, five-year average, the surprises, upside surprises are smaller than average on historical basis and that does suggest margin pressure in play. do you not agree >> so far the breath has been healthy. not looking for a huge ups beat, 1% year over year, down 1%

we've seen a lot of the margin expansion this cycle the margins i mentioned have been coming in more resilient than expected, which is a positive sign. you know, i think we're going to be watching the commentary from companies, a lot of the macro gauges of margins we track have started to tick up a bit more broadly we're seeing a lot of the more cyclical indicators and other proprietary caters having suggesting a cyclical pick up. overall when you look at commentary on earnings calls so far, the positive is that companies have started to express more optimism and even doing word counts of mentions of things being better or stronger versus worseor weaker on the earnings so far. we're seeing those tracking their highest since tax reform was passed in late 2017. so that's the positive as you're definitely seeing a more optimistic tone now. we'll see if that carries through bigger multi-nationals

report now that we've seen u.s.-china trade deal. as to whether to optimism will carry through to improved cap ex spending, because that has really been a weak part the past several quarters. >> optimism in the consumer confidence numbers that just came out at the top of the hour, rick just reported them. durable goods, i guess, on the headline was good because of defense spending but the core not so hot certainly bogeing is a wait there. uneven manufacturing but the rest of the economy looks good what does it mean for the fed which kicks off a two-day meeting today. >> we're overweight discretionary sector in part due to the strong consumer you know, also because consumer discretionary stocks tend to perform better when the fed has an easier bias relative to typically late cycle fed tightening discretionary stocks stepped tend to underperform we expect them to perform.

no change there in terms of the interest rate backdrop recently the drop in the 10-year yield you have seen yield oriented sentoctors see better flows. expecting no rate cuts this year the economy has been supportive, starting to pick up a bit and the 10-year yield should end around 1. 8% is what we're expecting. >> jill carey hall, thank you for joining us. global restructuring that will cut 300 jobs, the ceo will join us here in a few moments. stocks did like that consumer confidence number, since august and richmond fed was strong but d nds still not impresse ten-year 1.62. back in a minute

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going to stay closed. >> i think retailers, like mcdonald's, starbucks and others are going to face significant problems. >> sands, mgm down, casinos, travel, food and beverage. >> all big hits today in that downside move.

welcome back to "squawk on the street." dow is recovering today at the 135 points got a number of earnings to talk through, guys, including 3m. we're about to have -- david disappeared. >> he's not there. >> he's going to come back a number of earnings starbucks is going to be one to watch. 3m, though, getting hit in today's trade. job cuts, high demand for the masks. overall disappointment down 4.3%. >> on 3m we're still going to look for clarity regarding the charge, whether the street looking for $0.20 restructuring.

on the face 210, look for clarity about what's happening in china and where the savings are going to come. they are talking $11 0 million to $120 million a year as a result of restructuring the loss of the 300 jobs. as for apple coming in asian news wires about the impact of supply chains, not because of the virus itself but because of the controls people can't get to work how are physical goods moved around for fabrication, for sem ply, for testing, for shipping those are all things that happen with the iphone, which is made about 200 miles from wuhan. >> the question is the timing right now, the chinese lunar new year holiday whirlpool coming off results having a good day. we asked him about how the supply chain is going to be impacted by what's going on in china. he said we were already planning on the shutdown because of the china he's lunar holiday we bought forward parts in

preparation for that the question these executives are going to get, at what point do you run out and need to get factories back online. he played down fears that stock is higher today. that's a huge concern. then for companies like apple and whirlpool and anyone who operates, starbucks, especially, it's the demand side what are you going to see -- what are you expecting to see from the chinese consumer given the coronavirus outbreak just as far as the market, carl, it is up for the first time in several days but not enough to make up for yesterday, which was the worst day of 2020. but we are seeing a broad-based rally. at this point hard to tell whether it's relief because of the last few days or whether, you know - i can't tell you how many people came on closing bell and said buying opportunity. these sort of things are a good opportunity. valuations were stretched, sentiment stretched, technicals stretched, take some tips off the table but end up buying. that's what you saw, for instance, with sars and ebola and other scares.

>> a lot of the macro desk commentary talked about a put being embedded in the market not just fed back stock but always the lingering possibility the president could just roll back some tariffs all by himself, completely within his right to do so, which would be an immediate shift in sentiment, positive. >> trump double in the election year after the break, carl mentioned 3m getting slammed in trade. ceo will join us on the quarter and the global restructuring anhey u announced today. just a few minutes away. hey there people eligible for medicare.

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the street." a new survey nfor growth hi, steve. >> let's take a look at the stock numbers. good news, they think gains continue 43 fund managers, economists, gains here seen as modest there is some concern about overvaluation in the market. took yesterday's 32 r50, outlook for 2020, 3365 when it comes to the s&p 500 and 3414 for 2021.

all of this comes with a relatively low bond yield, 2% for 10-year and 2020 forecast going up to 2 1/4 by 2021. are these high numbers extremely high numbers we asked relative to outlook for earnings and outlook for growth, where is the market right now. 15% says extremely high. 51% say somewhat high, 32% say just right not a lot say somewhat or extremely low. you can see where the perception is that the risk is in the forecast right here, the outlook for stocks take a look at the outlook for federal reserve here 100% say rate hold in january. 49% expect a rate cut in november 49% expect a rate cut and average is november 2020 when that would have. 32% say next is a hike, 2021 bottom line i think they will be

on hold. stocks have run ahead of expected rebound in earnings that is needed to sustain the rally. art hogan writes in, quote, we think the market is underappreciating the amount of uncertainty that has dissipated with the u.s.-china trade truce. we could see a close of the gap closing consumer confidence. that should manifest in a pickup in cap ex and potential for better than consensus economic growth in 2020 speaking of growth, the survey says 2%. pretty much 2% this year and next year, 2% funds rate just under 2%. getting the picture there, sara, 2% 2%, 2%, 2%. >> i think that 2%, as you noted, raise as question about whether the next move is a cut or a hike. feels like your respondents are pretty split. >> like i said -- exactly. i will tell you when we look at the median of when the fed will next act, it has gone up from

six months into the future in the december survey to 12 months into the future in this survey so they really think that the fed is on extended hold here, sara, which means, you know, put your feet up, get out your popcorn and gatorade and have some fun because the fed ain't doing much. >> popcorn, yes. gatorade thank you. steve liesman. accepted it over to jim cramer with a special guest. >> shares of 3m down sharp, a miss on the top and bottom line. guidance, let's say falling short. i thought it was a little better than i expected. let's talk to mike roman, ceo, global restructure you've announced. let's lo at stocks you start out on your release, our team executed well in the fourth quarter, results in line. then your cfo, who i like very much, starts talking about fourth quarter organic sales 2.65, down 340 basis points,

every market, u.s. growth minus 3. how is that executing well >> when we look at q4, our businesses, they delivered results that were in line with expectation and guidance we've been facing some challenging key end markets, notably automotives in china we deliver in the face of those challenges, delivered growth in those range. eps at the high end, strong margins. a record for the year, $5.4 billion in cash flow so a solid end to a challenging year but really strong performance by our team. >> i saw the guidance of 9 and change, which was not that much off of what you're looking for, but this is 3m i'm not used to 3m being down 8 points because it's a trusted american company and i'm wondering whether your goals aren't too low. >> as we come into 2020 we see a return to growth it the 3m model you know, strength of innovation, market

facing go to market models were successful come into 2020 return to growth on the top line. with work we're doing well positioned, delivering leverage to epa and cash flow. >> perhaps decline is something dave and i talked about. >> i want to talk a lot about that as well first let's also talk about what you're calling a transformational journey and the acceleration of that, which is actually as a result going to be 1500 job cuts. why is that something you need to do? explain to us and shareholders why it's something that's going to help this journey. >> we talked about today the next phase of our business transformation journey we announced our new global operating model. this is another thing that thinkses us well as we come into 2020 enables us to take advantage of new work we've done, all the capabilities around it end to end capabilities to serve our customers. it alliance us better with customers.

it stream lines the company to really focus on growth and operational effectiveness. >> how do you get to 1500 as opposed to more or less? how is that determined to be the optimal number of cuts that come along with the stream lining. >> this is something we've been working on for the last year in april we announce add move from five to four business units aligning customers in go to market model then set about really putting this in place that work has led to where we are now. this alignment, realignment we're doing, restructuring is to move quickly to the new model. we're ready to launch, our employees are excited about it and energized for the change. >> weakness in china, auto, electronics. what are the green shoots there that give you the optimism that frankly i don't see. >> return to growth in 2020, it's based on a view of the macroeconom macroeconomic, industrial production low but growing

through the year global. gdp continuing to grow low but steady and then the markets that we've talked about, they stabilize a bit. up until the last couple of weeks, we were looking at china as low- to mid-single digits growth for the year. maybe starting off slower with automotive negative build rates but getting better as the year progresses what's going on with the situation with the coronavirus that puts us in a a little wait and see, see how the quarter develops certainly part of those markets getting more stable is part of it we do see some positive out looks in electronics, data centers and 5g there's some positive there. automatic a little better year are year we don't have channel impacts we saw in 2019, so a little more stable but negative build rates again in automotive in 2020. >> let's drill down on the litigation i don't want to freak out. the grand jury subpoena from a u.s. attorney is nothing that is shocking given the fact you're

in litigation. at the same time there are people who when they see that question your level of cooperation. >> well, we are leading from our values around sustainability, environmental stewardship, product stewardship. these are core values to 3m and me permly. we have a strong team pro activity managing it they are guided by the principles of sound science, guided by the principle of -- >> clean water in the ground that is the holy grail of pollution in this country. >> we've talked about two commitments today that we stepped forward. one is continue to resolve the issues we continue with pfac part of our reserve was related to that. we also step forward on commitment we're going to work with customers to be part of the issues where they have the issues as well. >> i wonder what that means.

you're referring you've made it clear you'll clean up your manufacturing. others have question if you've made half the chemicals out there, which some believe is the case, will you take responsibility to clean up all areas where pfas spread. that's the concern and potential liability. what's the answer? >> work with regulatory agencies and deepening the understanding of pfas, determining what we need to do and address customers issues they face and continue to resolve where we manufacture and dispose of that's a pretty proactive plan our team is driving forward on. >> is the new charge, what is it, $214 million, about $0.29 a share, is it related now to more litigation as opposed to the first quarter charge of 2019 that was related to remediation.

>> it's split roughly evenly between the two areas i talked about, mfrg danufacturing dispo, continuing to work that and helping customers address pfas issues they face, related to multiple cases. >> are you able to then estimate what litigation liabilities are going to be? >> one of the things that we know is important is getting more certainty, especially in our stakeholders they want to understand this better this is another step forward we're able to identify what's probable and estimable and we'll continue to move forward as it develops, we've committed with that providing transparency -- >> you're trying the beggs you can to understand it but at the same time it would seem to me to be difficult to come up with a number overall you're taking it as it comes, right? >> we continue to proactively manage it. it is going to be something that we'll have to update as we go. >> there's an epidemic, some

fear may be a pandemic how many plans do you have and are they making them 24/7. >> with the coronavirus, the way things are moving forward, our focus is ramping up our production as quickly as possible to meet the demand. we're working with customers and government agencies, health organizations in china and outside of china to really meet their demands. in that process we are ramping up demand in all of our sites, production sites around the world. we have production in china. we have production in asia, in europe, in the u.s. so we are -- that's the focus from us our personal safety team is very experienced with this. they are responding well and working, i think, very effectively with everybody who has the biggest needs. >> do you have any idea what the ultimate demand would be or what you need to ramp production up to >> we are ramping to full production we're going 24/7 we're supplying into the market where government officials -- >> customers are clearly

potentially going to be a shortage are you having trouble getting your workers in china to the factories? has that become an issue at all for you? >> we continue to pretty that plant full production and we're ramping that up. it wasn't quite as full production starting the year now it's ramped up also our employees in china are really part of the solution, donating respiratory protection, as a company donating respiratory solutions into the market as well. >> at the same time even though you're donating, this has been a time, a spike of $700 million for 3m that could be a billion dollar. >> either part of our larger safety protection business meeting that demand will certainly be stronger growth than we saw in the plans as we started the year it's just part of that overall safety business. >> mike, finally to come back to the quarter and guidance itself. the last year you revived guidance a number of times i'm curious, what do you think

are the key variables in terms of this year's guidance to avoid that recurrence, obviously, that investors don't like when have you to revise guidance. >> the challenges we faced in 2019 were really those key end markets and the slowdown we saw. we took action and addressed those challenges as we came through the year, focused on delivering -- controlling what we can control and delivering strong margin, cash flow, taking the inventory down, positions us well as we come into 2020 with the outlook for macro and those markets as well i think we're better positioned as we look at those markets in 2020, the return to growth will help as well we were facing a difficult slowdown in 2019 we're looking at a return to growth in 2020. >> michael roman, thank you very much, ceo of 3m. david, we had a number of issues, why the stock is down, also an opportunity with dividend the fact expectations are low right now. carl, back to you. >> appreciate that, jim and david, with the head of 3m

back to the market which has intense dow up 167 after the worst day since october yesterday. joining us ubs director of floor operations with us at post 9 on what's driving some of this. confidence in richmond fed >> it's beyond the numbers it's technical what you saw was despite the heavy selling we stayed above 15-day moving average in both the s&p and dow. secondarily the vix, the so-called fear index, shot up by over 25% trader folklore says that any move above 15% ordinarily shows a short-term selling climax. you may have had that. lastly fomc is in session so you've got the fed drift historically the market tends to move up while the fomc is in

session. >> that brings us to what tomorrow is going to sound like. a lot of questions about what a material reassessment of the outlook means, whether this repo facility can go standing and be there forever. how tricky is that for the fed tomorrow >> it's going to be tricky he keeps say don't call it qe but it looks exactly like qe in fact, they are doing more adding than they did when they were full scale qe i'm sure if he doesn't address it immediately, it will come up in the q&a, because if you look back to when they began to do this expansion of the balance sheet to help the repo product, the market has gone straight up since then before we hit the coronavirus. that raises another challenge. if the coronavirus tamps down the chinese economy, maybe china

will be unable to meet the commitments that they made when we get the trade that's something to keep out there. for now all of the technical factors are allowing for a bit of a bounce here and that's just what you're getting. >> a little bit on treasuries as well just wondering what sort of signals you're reading out of the bond market. we did see the ten-year yield dip below three-month yield. some see that as sign economic weakness is coming, come back the other way. how much of a growth scare is this at this point >> i think it could be but if you look at some of the other things, the housing market tends to top out fully four to six months ahead of the stock market if you use that as a single indicator, then we're not close to a meaningful pullback unless there's the surprise with the coronavirus or something like that. >> you're talking about the u.s. economy. what about global? there was a pretty good narrative, strong narrative for

the global economy heading into the year with two trade deals behind us. >> no. it does look good. as i say, the coronavirus is affecting china in particular, so that may throw a bit of a wrinkle in there as to where things go. canada is in the process of okaying nafta, too, we're in good shape that could be very helpful so as i say, most of the indicators, barring some surprise, don't look like you're going to get close to a recession nearby. >> see what happens tonight. good seeing you. art cashin as we go to break, take a look at shares of starbucks they do report this evening, down over the past week as the company is coping with coronavirus in china don't miss the interview with kevin johnson tomorrow morning at 9:30, 10:30 eastern time. "squawk on the street" continues after a short break. this round's on me.

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with capital group, i can. talk to your advisor or consultant for investment risks and information. welcome back to "squawk on the street." let's talk a little about commercial real estate, she we it's a sector that performed well in the economy. an exclusive interview froop president and ceo crbe good to have you here. i know you report earnings a few week down the road how would you describe the environment in terms of what you're seeing in commercial leasing, here in the largest single market space in the country but nationwide >> david, as we got to the end

of 2019, we saw a couple different things going on. sales here in the u.s., commercial property sales's, were really strong, up 11% year over year as reported. really strong sales. downward pressure in the leasing markets here and around the world. we think that came from a little bit of a lack of confidence by businesses earlier in the year we've seen that turn around. we went out to 50 of our largest tenants that we represent in the leasing market recently, companies you would recommend or you would understand their view on, and these are companies that said they are going to lease more space in 2020 than they did in 12019, some of the bigein the work. >> we're seeing that we work, spend time in terms of difficulty that company had had. it has pulled back from certain ambitions. has that had an impact at all in terms of when you're seeing for

space and availability >> in the short run, we think the pullback by wework, which was a huge consumer space here in new york and london, has had an impact on leasing markets in the long run, we don't think that's a big deal. wework occupies less than 1% of the multi-tenant space in the united states. this co-working trend is very real we believe over the next 10 years it's going to go from about 2% of the multi-tenant office space to something like 10 to 15%. >> why >> because it's flexible you can get into it quickly. you can take short-term leases tech companies who are really important in the leasing markets like this, and companies have learned to use it. landlords want it. we believe it's very real and going to continue to grow. >> you've launched a competitor of your own to wework, hannah? >> it's launched the concept we're growing carefully, picking the right markets to go into we're in new york, london,

dallas, l.a. we're bullish on hanna. >> are you capitalizing off their pain right now. >> first of all it's completely self-funded by our company it's institutionalize that's where we think the future is big data security, higher end finishes we think it fits the market tenants want and landlords want. we're quite excited about the direction of that business. >> is retail shrinking its footprint in manhattan if it is, to what degree and what's it being replaced with? >> retail is shrinking to a degree because of commerce retail is real if you look at cities around the world people want to live, increasingly, new york, tokyo, you simply can't attract people to live in the cities without

what they talk about amenities, retail, food and beverages, places to work out, places to shop retail is very real. it's going to be here forever, but it is changing by the way, retail has always changed. that's not new. >> is it repurposed in a particular way health care, hospitals. >> certainly clinics, a lot of health clubs, lots of different things that are experience oriented for people who want to live in cities like new york. >> speaking of cities like new york, when you walk around the streets of my neighborhood and i think my colleagues here, you're going to see an awful lot of empty store front, way more anecdotally i've seen in let's say the last 20 years. is that fog to change? do reins need to come town dramatically to be a market at least some people feel comfortable trying to open a new store in >> what happened there in new york in particular was that rents accelerated dramatically they got a little out of

control. some retailers couldn't afford it some retailers were impacted by e-commerce those dynamics caused some retailers to move out. in certain markets once a few retailers move out, then others have more trouble succeeding i think that space will be reoccupied, repurposed, and in the long run you won't see that. >> you believe that's not a seminal change in terms of we're just going to be living with empty stores. >> i don't believe you're going to be living with empty stores long-term and not a lot of retail space being built. >> foreign money has been an important component when it comes to purchases and having adequate capital and liquidity has that pulled back at all? we certainly hear again whether it's russian investors or chinese, certainly others. thais a factor in terms of values >> last year foreign capital coming into the u.s. to invest in commercial real estate pulled back a bit on a direct investment basis but last year was a very, very strong year for commercial real

estate investment in general driven by the private equity firms, the funds, domestic funds. much of the capital they were investing, though, they raised overseas, and there was actually more capital than there was opportunities to invest in. >> so blackstone is staying busy. >> blackstone is very busy. >> bob, we appreciate your taking some time with us thank you. >> good to be here. >> cbre. all right. 9 ine looking at the dow now up 21pots "squawk on the street" is going to be right back you met on an app. delete it.

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>> control an epidemic in the u.s. if we take the steps to address outbreaks that are inevitable. >> outbreaks are inevitable. >> i think we should be conditioned for limited outbreaks. that doesn't mean large but sustained spread in pockets here because a sufficient number of cases, some of it is going to get imported. >> that was former fda commissioner gottlieb talking about concerns in the u.s. the ebola czar under president obama

joins us from washington what's your level, ron, about this spreading to the u.s. >> i would say i'm concerned but not fearful. i think, as dr. gottlieb said, we have already seen five cases in the u.s. we'll probably see more 8,000 people arrive in our country every day from china we don't -- i think the most important thing to understand right now is there are a lot of unknowns we really don't know how widespread this is in china. we don't know how effective quarantine measures have been there. we don't know what the mechanism is for transmitting it human-to-human we don't know reports that, in fact, people can spread the disease even though they don't have symptoms. i think there are a lot of unknowns i think we need to be prepared in this country and we need to be ready for it. >> so talk a little bit about that, your time in the obama administration dealing with ebola. what similarities and differences can you tell at this point? >> yes similarities are we were worried, of course, about the disease coming from a foreign country to the u.s. that's what's the same. there are a couple of really big

differences here the first is the level of coming from the countries, 500 a day come from west africa, 8,000 a day come from the u.s. to china. a lot more people coming to a lot more airports. much bigger challenge. the second is the screening question we knew with they developed a fever, we could isolate them, they couldn't spread the disease. again, there's just a lot of uncertainties about this new coronavirus. i think in some ways the differences are greater than the similarities a lot of the structures we put in place during ebola will work for the trump administration if they use them. but the circumstance is different. >> if you were the coronavirus czar, given what you're saying, 8,000 people arriving each day from china and not being able to ascertain if they have the virus without symptoms, would you ban chinese travelers from arriving in the united states >> i wouldn't. that's premature it's an important exchange,

important for trade and tourism, and very few of those people will have it what's more, since this virus broke out, a quarter million have come from china, so they're already here in the u.s. americans go back and forth all the time for business, for culture. the cdc issued a travel warning but there's still americans traveling. what we need to do is to be ready. we need to invest in, make sure we are screening people at airports, make sure our hospitals are ready as dr. gottlieb said earlier on your show. and we need to make sure we're making the kinds of steps to prepare for the outbreaks we'll see in the u.s >> ron, how do you read china's response so far? does it live up to global standards in your estimation >> well, i'd say, that's a great question a mixed bag. china has been more transparent than past outbreaks. but there are hard questions about if they're being transparent. their case count is low compared

to what the expert models say about what's going on in china if they've been honest about how it's happened remains to be seen there is a confusion as there is in any outbreak. even if they mean to be candid and transparent, it may be wrong. we have to stay on top of the science, on top of the developmentings. we listen to what the chinese are saying but we don't take their word for it. there's lots of things to be doubted in what they're telling us >> if travel restrictions on nearly 60 million residents is not candid, i would hate to see what cap did londid looks like. how would you characterize the lockdowns they've put in place >> they're reporting a couple thousand cases there are models that say there are already 200,000 or 300,000 cases. that's one question about candid we don't know how effective the lockdowns are. i was struck by the fact the

photos we saw yesterday out of wuhan showed no cars leaving but a long line of trucks coming into wuhan, bringing food and supplies what's going to happen to those truck drivers? where are they going after they drop off the supplies? again, it's early days and we need to be really careful not to assume what we're being told by the chinese is true orb untrue, maybe not trust but verify, and we need to be on guard in the u.s. with our own experts. we have the best experts in the world in the united states we have great leadership in this field. we need to listen to those experts and take their advice. >> you mentioned restrictions on human travel are we at a point where we need to think about restrictions on just physical goods? do we know enough about the virus to think about that? >> we don't know enough. there's no reason to fear trading goods at this point in time obviously, wildlife is a different situation. the chinese have imposed restrictions on that but i don't think there's any reason for us to worry about

this virus coming on television sets or toasters or something like that. >> what about the 250,000 people who have already arrived here from china over the last several weeks or whatever it's been since we first learned about it? i mean, how confident can you be that -- certainly some of them will have it or get it how confident are you the hospitals will respond appropriately and prevent the spread of the virus? >> so, look, we made a huge investment on a bipartisan basis in preparing 60 hospitals around the country after the ebola outbreak in 2014 to be centers of specialty on infectious disease response and control, and those are -- there's almost one in every major city. they're trained to screen, trained to isolate we have very strong facilities one challenge is that funding runs out in may and congress hasn't yet renewed it.

if i were in the administration, i'd be going to congress right now and making sure we're strengthening the hospitals and making sure we're helping state and local governments. the burden will fall on them to track those people in the country to make sure they're not developing or spreading the disease. that will be a big challenge and a big stress on state and local public health departments. they need reinforcements because of the size and scope of this challenge. >> what would it take for the w.h.o. to declare a global public health emergency? >> great question. i think they should have done that last week i hope they reconsider this week and do it. all the standards in the international health regulation for such a declaration exists. disease is in multiple countries. it is spreading rapidly in china. i hope they will reconsider. i'm not sure why the emergency committee voted it down last week they met two days. i think they need to reconvene quickly and change that decision >> ron, thank you so much for joining us

>> thanks for having me. >> obama administration ebola czar >> my guess is when the closing bell comes around you'll be spending time on the coronavirus. kwhaelgs are you got for us? >> and whether this market rally can continue it's looking up. 222 points huge afternoon of earnings that's our theme today apple, starbucks, amd, ebay many more after the bell. today dan niles from alpha one capital will join us at post 9 he's been short apple, long apple. >> he's all over the place >> we'll try to figure out what his performance has been >> he's not afraid of being negative sometimes right, sometimes wrong. >> absolutely. chip stocks too. hot topic with him and that decision on wally today by the uk. >> we'll talk about that on "squawk alley" in a moment after the break, apple is set to report after the bell. what should investors be expecting amid the china risks yesterday was the worst day for

ths&p nce sie october. today it's the best day since october. "squawk alley" starts in a moment ♪ ♪ ♪ ♪

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good morning it's 8:00 a.m. at facebook headquarters and it's 11:00 a.m. on wall street "squawk alley" is live ♪ good tuesday morning welcome to "squawk alley." i'm carl quintanilla with jon fortt at post 9 of the new york stock exchange hard reversal coming off the worst day for the markets since october yesterday. got the dow up 222, some of the ecodata very strong. we'll begin with an update on the coronavirus. with us this morning on how it might impact technology is founda