good morning it's 8:00 a.m. at amazon headquarters in seattle, 11:00 a.m. on wall street and "squawk alley" is live ♪ i'm carl quintanilla with

morgan brennan and jon fortt at post 9 first, some breaking news from american airlines, and for that we turn to leb lphil lebeau once again. >> american airlines suspending all flights between the u.s. and mainland china we now have the date when that takes av effect and it takes effect immediately, starting today. they will suspend all of their flights between these two countries, the u.s. and china. that goes all the way through february 13th. come february 13th, depending on the situation with the coronavirus, whether or not there is demand for people who want to fly to china or from china to here, they will re-evaluate their operations and whether or not they bring back some flights, all flight, or they continue to not fly at all between the two countries. again, american suspending all flights between the u.s. and china starting today and that runs for the next two weeks through february 13th.

>> phil, is it still too early to know what the passenger airline data has looked like so far for january? >> too early to have a read on that anecdotally, from talking with people at the three major carriers that fly to china, there's a huge drop-off in the number of people who are flying. i'm hearing reports from pilots that some of these planes only have 30% of the seats filled it's not surprising, morgan. think about the number of companies you've reported on or carl has mentioned who said we're not sending anybody to china, not for the foreseeable next three weeks, four weeks, a month, whatever it might be. if that's the case, because so much travel between the u.s. and china is corporate, you're going to see these planes not have anybody in them. that's why american and delta have made the decision to suspend flights and i would imagine we'll hear from united as well. >> we'll keep an eye on the freight data, too, people and goods moving back and forth or

not between the two countries or areas of the world phil lebeau, thank you >> you bet markets are selling off, dow's down 387 points. our mike santoli was just at post 9 and has made his way back as we can talk about levels here. >> yeah. >> in the past week or so, thinking morgan stanley, tom lee have said look for 5%. >> exactly 5% is another two or three from here still in the realm of something normal we went something like 74 days without a 1% move to the market. we go through these thing where is the market kind of ignores everything and once it stops ignoring everything it gets saturated in the risks for a little while and has deferred selling going on i think that's where we are. in terms of levels right now, 32, 40-ish or so in the s&p was the low from monday. i don't know that that really has much significance beyond it being the low for monday but, yeah, that's where we are i think we've in a way on a

macro sense, we've kind of missed out on the trade piece dividend that people were immediately building in after we got some kind of a deal last year, just because of the interruptions to global trade and chinese growth that are happening because of thisvirus >> the dow is down a bit more than the s&p right now the dow's numbers are funny at this point because it's up so much dow chemical, exxon, visa the biggest losers, ibm is up. outside of the dow, a great quarter from amazon, a strong quarter from microsoft given all that and the run we've been on, how seriously do we take this? >> it's not a comprehensive washout in any respect the last three days we've had a huge top-five nasdaq name that holds things together but also it confirms a little where the market's already leaning

its bets are heavily on the giants of secular growth and the defensive stocks today you have true liquidation in things like energy and to some degree the transports >> you have to wonder if it's essentially now going to be a wash in terms of the data we get in the first quarter we already knew it was going to be noisy in the u.s. thanks to boeing, but everything that's going on in china and what coronavirus concerns are going to do and how that's going to rip ail cross the world as well. >> initially for a while, i guess, for months if this goes on, that's going to cause estimate cuts and people to downgrade their expectations for growth and maybe bond yields stay stuck at low levels once the market just starts to sense that you've seen the worst of it, you'll have a reaction like we had yesterday afternoon where everyone's overeager to say, okay, now we're seeing the other side of this and all of a sudden it becomes an excuse for why things weren't good in the rear-view mirror as opposed to a risk out ahead. >> what defines safety now because the dow's negative over

five days, tesla is up 15% >> exactly >> somebody said a moment ago if you told me tesla would be safety last year you'd be committed. >> i would say tesla is not safety but it's idiosyncratic bet. so in other words, i think there's a way this market is defining safety in nontraditional way, but it is in the monster huge nasdaq names that the market essentially has said nothing will disturb their cash flows for years to come they might be wrong or right but they're valuing these things as if that's the case tesla is much more about it kind of doesn't matter what else is going on in the world. if you buy into this tesla story and i would's truly in a crazy froth on some level, on the short-term basis, but if you think they've made this inflection point, it doesn't matter this other stuff we're talking about. >> exposure to china >> what did they sale, 11 cars >> my other question, do you think the debate right now is about multiples or are we taking

numbers down because of whatever reason, shutdown in china longer than expected? >> i think it is about multiples. it does show you, though, that for all that happened in the fourth quarter, nothing liberated us from the late-cycle psychology, this idea that, look, one or two thing s go wrog and we're back on the watch for the end of the expansion i don't think we are in the u.s. certainly, but right now it's multiples initially, but on the cyclicals, things like materials and the stuff really levered, moving stuff around the world, those estimates go down. the airlines are getting cut >> next week we get alphabet, disney, qualcomm monday, tuesday, wednesday you have digital advertising, media, you've got chips. we think the market's really going to pay attention to those? big market cap >> they will absolutely pay attention. what i'm less sure of is that they act as bellwethers on a

daily basis. like i've said this week, you can have the reactions to -- amazon has no coattails today really i think it could work in either direction. qualcomm is interesting because semis have really given up that leadership spot. they're just retrenching from a very high level bhap it's unclear if that's a reaction to a sector that overshot or we have to start deferring this upturn in terms of offensive boarders and activity that got priced in. >> last question, today is an example, but we have seen a pattern of more interday volatility you cup that will with what we know about how much the s&p is relying on five big names, how much does the market feel top heavy? >> it acts somewhat sop heavy but on some days that can be an offsetting situation and they get trapped. the stocks versus bond push/pull

is causing people who essentially trade the indexes or modulate exposure based on what the vix is at, what the yields are at, that's kind of kicking that activity into motion. that's why on a friday i think you're having these little mini waves run through the market, where it's like, okay, we're having to fully cult exposure faster than we thought or we can handle more based on what the volatility levels are up to. >> all right, mike we're going to handcuff you to the desk amazon is surging after a big earnings beat, crossing the trillion-dollar mark join s alphabet and that camp we have two guests joining us to break down the quarter on what is looking like the best day for the stock since december of '18. good to see you. what's your thinking on amazon right now? >> i think just when some investors are starting to count them out, they come out with this blow-away quarter the key here is to understand

that the scale that they've built over the years in terms of their leverage, infrastructure, it's just starting to pay off. this has been amplified by the shift to the one-day delivery. you look at the aws division, there is several positive take-aways there some competition from microsoft, but i think those concerns are overdone all in all, i think it remains intact as we look to the year. you may hear more chatter about antitrust issues and that could create volatility, but i think those earnings have a lot of positive things. >> collin, is it safe to say that amazon with the rollout of one-day shipping on such a big level and all the money that's gone into those costs associated with it, that it's taking more market share from the traditional retailers who maybe before now had a leg up in terms of last-minute purchases >> well, there's no doubt that one-day is resonating with consumers and pulling more

merchants into the amazon platform quite frankly, the strength in the quarter was the services side of amazon's business. those are the fees they earn from merchants to sell on amazon, the fee theys earn from prime membership and a weshgs s. product sales were in line, certainly helped factors impacting retail and e-commerce, but that was the beauty of the business model on display yesterday. >> i was looking at the aws performance and it made me reconsider what i was looking at across megascale cloud when i heard amazon, microsoft, google talking about hiring salespeople, i thought maybe that's because the top line is slowing down and they need to invest to get more gas in the tank but maybe not so does this perhaps mean that they're just pedal to the metal, continuing through 2020, and i know you don't cover chip names, but it makes me wonder if the investment and infrastructure is more likely to continue throughout the rest of the year

because demand is so strong. >> jon, i think the short answer is that those investments, i think you can see proof points, are paying off if you think about the global, you know, cloud market, i think there's still a case to be made that we're still in the relatively, you know, minions of that market. it's huge. that's why you see these top three providers -- amazon, web services, microsoft, and google cloud -- all trying to zero in there, because, you know, granted you're getting a lot of margin pressure from these investments, but a case can be made, if you look at amazon web services, for example, you know, they're down almost 400 to 500 basis points from the peak margins over last year or so but fast forward and see the return that they generated from these investments is scale and how they're able to apply the new learning concepts, whether it's ai or machine learning.

you get a sense that this is a huge ecosystem that's still has a lot of runway ahead. >> collin, there's a lot to like in this report one thing perhaps not to, a still small segment, but the physical store segment which includes whole foods that saw sales drop 1% year-on-year, what's going on with that segment and how much of a drag or how little is amazon right now at least successfully leveraging it? >> well, i think the whole foods segment is the platform for which can they're growing in grocery, broadly speaking, including amazon fresh, including more stores to be launched this year i think underneath those numbers, where there is weak ens in their physical store fronts, there is a much bigger expansion plan for grocery, which is a massive market opportunity for them ahead i wouldn't get too caught up in the decline in that segment. >> is there anything, though, collin, within this report that you see as a risk or something

that you -- disappointed you and your expectations? >> not really. i'd say the risks we're looking at more acutely right now are global risks where the supply chain could come under some pressure so that's what we're looking towards at least for the next couple of quarters the report itself was very good. aws strength was better than what investors expected. margins were better. so they're sort of on all cylinders firing >> i wonder, we've been around the block with amazon for a long time you included there's always that period they go into investment mode and sentiment shifts dramatically. is that cycle smoothing out? duktd we geetd to that day again sometime >> i think it's inevitable for a name like this you'll have that type of volatility as investments continue to fluctuate. my sense is that, you know, where we are today compared to maybe three years ago, there's a lot more, you know, visibility

in terms of the managing that, you know, volatility so my sense is that while these investments are going to continue to fluctuate, you know, when you layer in all of the, you know, new things that you're seeing, aws, even the ecosystem that they have built around prime membership, those are going to, you know, give you some leverage and scale that's going to help to smooth out that volatility my sense is that the transition from, you know, kind of higher margin businesses are going to take hold even more. whether it's third party sellers, advertising, that's a huge opportunity that is just getting started. so we're going to see some stabilization is my sense even as we expect some volatility in the year ahead. >> collin, that's the thing for me i thought we were in one of those investment periods, maybe not majorly, but between one day and the warnings over how much they would spend on that and

cycle back the sales force for aws, that's what surprised me i guess about the beat on this quarter. am i alone there >> well, no. i think you're right i think in aws specifically, they pointed out the success they're having with enterprise customers. that's another leg of growth for aws. on the fulfillment side, you're right. they've invested significantly in air cargo and local delivery. but what we saw in q4 is they've reached scale in that where the unit economics of delivering their own products are now perhaps better than using third-party providers. so that's a big change even though they are still investing significantly in those two areas. >> good to see you two good weekend to you both >> thanks. >> thank you you too. meantime, big news late yesterday. jay stepping down as the ceo of ibm. arvin krishna, who is head of the company's cloud efforts as well as overseeing research,

many other things, is going to take the helm in april the timing for ibm interesting because we're talking right now about all of these cloud giants moving forward very quickly, pedal to the metal ibm has been trying to argue that they ought to be counted in that pack. up to this point, they really haven't been in part because of the legacy business they have that's not growing that has been casting a shadow over those results. jim whitehurst of red hat will be president at ibm, clearly a statement of how important that $34 billion acquisition of ibm's is going to be to the strategy going forward. questions still loom about really how big a change is arvin going to make here ibm has been making i would argue smaller changes around the structure of the company, spinning off some revenue that's lower profit, at first in

hardware, now increakreecreasel software is there something larger that needs to happen or a way he can structure this that solves the investor problem of not being able to see these areas like thai like, the growth areas? >> as you mentioned, a lifelong ibmer. >> kind of >> i wonder what you think about this idea of this first-time leadership structure that is including both him as ceo and kwhi whitehurst secondly as president, if there's more read-through there >> i think there were a lot of questions and still are about how close red hat will be into ibm. ibm very careful to say to red hat customers, red hat's people, you're going to operate with independence and i think that has born out as the transition for red hat has happened thus far. now i think the question is how independent is ibm from red hat? now that you have whitehurst in the presidency, there's so much

influence potentially that red hat's culture, way of doing business could have over ibm we'll see how much of that happens. it's going to take a while you know, jimmy is still in there until april as ceo he'll continue on as executive chairman for months after that but structural moves, leadership changes at the top that arvin will make, it will be interesting to see how he does it our next guest we can talk to about that says the change at the top for ibm is long overdue. moshe katri joins us a good morning >> good morning. good to be here. >> we were just talking about the structural challenges that ibm has had with legacy business what kind of a statement -- what kind of changes do you expect from arvin

>> the way we see it, after seven years, spending $60 million in acquisition that never really materialize kwhad we call life changing events for the company, we see metrics, very inconsistent financial metrics still stuck in a legacy-based model, both in soft kwar a software and services. the changes are making some pretty big bets on red hat's ability to transition the company, but more importantly here, you really need to decide what you want to do with that legacy business. now, when we talk about legacy, we're talking more about on the services side, talking about, you know, capital and people models based on some of the new technology, software especially, cloud, mobile, social, analytics, all that is transitioning more to people and

asset-like models. that's one thing they need to do with the existing legacy services base. you can look at the software baseas well. a lot of that is being delivered via physical infrastructure and not via a cloud base or a rental base model that also needs to change. so these are some very, very difficult changes to implement if you think about this because you're essentially going to can a billionize your revenue base you go to your customer and say this piece of software is about 100 bucks, using the new technology, i'm going to charge y you 30, but i'll ask you for a larger percent that's the only way the transition can work down the road the only company in our large-cap universe that's been able to do that successfully is accenture. they started doing that six,

seven years ago, and the new smack, which stands for social, mobile, analytics and cloud, accounts for 60% of the legacy base it shrinks about 5% to 10% a year, digital grows north of 10% a year, you do the math, that's how you get to barely slight revenues or shrinking revenues at ibm it's all about trying to shift the mix more towards digital and shift the delivery of the legacy base into the newer technology delivery models. >> yeah. it's a tough road to navigate for sure thanks for helping us to understand it, moshe >> sure. >> we have a sell-off of about 1.5% we're down to 3,244. mold mo seema mody has what's moving >> off the lows of the day but the s&p 500 is on track for its second straight week of losses, really a combination of a weaker than expected pmi read for the

month of january, peter boockvar saying the phase one trade deal hasn't had an impact on business confidence thus far. goldman sachs putting out a note on the coronavirus on chinese's gdp, 4% is what they're forecasting. caterpillar, visa, chevron and exxonmobil all responding negatively after reporting earnings caterpillar moving lower on 2020 guidance but weak demand from the energy and mining sectors that have been hit by the drop in commodity prices. oil prices are lower that's being reflected in oil and gas stock, not just today, but a look at the performance, double-digit percentage decline for big oil producers. marathon oil, cabot. apple give back some gains it made earlier this week, down about 2.5% the dow breaking below its

50-day moving average. a lot of pieces here with the dower down 409 points. morgan >> seema, thanks for what's moving the most today. reynolds consumer products, reynolds wrap, aluminum foil, hefty trash bags, is bucking the downtrend, surging its debut at the nasdaq, first multibillion-dollar listing of 2020 shares up about 8% since going public the ceo lance mitchell joins us now in a first on cnbc interview. thanks for being here. congratulations on the ipo >> thank you and we appreciate the invitation to talk with you today about our ipo and reynolds consumer products >> so in terms of the capital you've raised today, you'll take it to pay down debt and also it looks like you intend to pay a quarterly cash dividend as well, right? that's the plan? >> yes we're going to pay 50% of net income, which is a yield of about 3.4% on an ongoing basis

>> got it. given the fact we have seen these coronavirus concerns, it's been whacking commodity prices as of late, including aluminum what does that mean for reynolds overall, and gis what is your outlook for some of those raw commodities you use to make your products >> those commodities for us is coming down will provide us with a tailwind as we're able to be able to hold onto those prices in the marketplace and actually provides a positive forward outlook for our company. >> lance, i wonder how some trends, especially towards sustainability, affect your strategy and outlook going forward. people hate throwing plastic away or aluminum, especially these days what do you do love to adapt to the consumer tastes and the trends when you've got some really strong brands in those legacy businesses? >> yeah, so reynolds consumer

products has a sustainability focus for a number of years. this is not a new thing on our dashboard. we have developed a broad range of portfolio of sustainable product choices for consumers. for example, aluminum foil made from 100% recycled aluminum. waste bags made from postconsumer recycled plastics, fully compostable paper cups and paper plates, sandwich bags made from compostable wax paper and the list continues we're well positioned as consumers' changing occur and habits and practices to be able to participate in those changes. >> how do some of those newer products sell versus your more traditional aluminum foil, for example? >> they're growing moderately faster and we're seeing that in some geographies of the united states so as those changes across different geographies occur from consumer sentiment, we're well positioned to be able to

continue to grow >> we're entering a period here where investors are interested in dividends and yield you say your policy on dividends will happen upon closing, but can you be more specific >> our long-term plan is to continue with that 50% net income and as we buy down debt, we're going to be able to improve that net income and continue to grow in our overall earnings we've demonstrated our earnings growth of ebitda for the last five years it's been 5.2% and our top-line growth over 3%. our product introductions that we have in the pipeline and our history of new product development, 21% of our revenue in 2018 came from products that were less than three years old and we're well positioned to be continuing with that kind of innovation pipeline going forward. >> we've been watching commodity input costs, c reshrv and all ot

this year. will that raise anytime in the next 12 months >> we see it as stable to slightly declining the key products we purchase, aluminum and resin, that was a head wind for a couple of years previously, but it's now providing us a tailwind as we go forward. >> where are the biggest growth opportunities? are they here in the u.s. or overseas >> we are a u.s. and canadian company. we have 16 plants in the u.s. and one plant in canada. our focus and our winning formula for growth has been u.s. and canada our focus is to continue with that winning formula >> lance, as amazon continues to grow, and we saw from their earnings last night that they do, and other players as well, it seems the threat from generics also grows. do you see it that way and do you have to market differently in the e-commerce and digital era to protect your brand and protect what you have?

>> we're well positioned to grow in e-commerce. we had our own team established over five years ago to be able to be prepared for growth in that channel, and we're well positioned with our products because they're shelf stable and cost effective to ship directly to consumers so it has not been radical growth of these categories in the e-commerce it's still primarily traditional channels, but if those consumer habits change we'll be well positioned for growth. >> protecting against the store brands potentially from the like, of amazon? >> across all channels when you look at the channels that we participate in and the products we participate in, the categories of brand and store brands in all of these categories in the last five years has been very stable >> all right lance mitchell, thanks for joining us today reynolds consumer products going public at the nasdaq, stock's up 9% even as the dow is now down 435 or about 1.5%.

a number of global coronavirus cases now in the range of 10,000. meg tirrell joins us as pharmaceutical companies race for a cure meg? >> work is under way at a number of pharmaceutical companies. while some are screaming existing antiviral drugs to see if they work against the coronavirus, other companies are working to develop new drugs one has a variety of antibodies derived from the blood of survivors of sars. those people's immune cells created antibodies to that virus and veer has sortd through to find the strongest candidates to help treat disease they're screening those antib y antibodies to see if it will work with this virus at regeneron, they're taking a similar approach, only they have a technology that allows them to use mice with human immune systems to create antibodies that sounds crazy but they've

genetically engineered mice to replace their own immune systems with human ones. they can select the best antibody the-bodies they createn response >> these are essentially microhumans and you infect them with the virus and select out for the mice that have now made a human response, clone it out of these mice, clone out the human response, and now if you had a whole technology that allows you to rapidly manufacture it and produce it so you could put it into humans, you might be able to save people with infectious disease. >> that was the president and founder of regeneron both regeneron and veer have tested these druks successfully in the field they've shown great responses. they tell us the nearest term opportunities will take a few months to get into humans but that's still pretty fast back to you. >> all right

meg, we know they're working hard on it meg tirrell. let's get to bertha coombs at the nasdaq watching one medical today. >> hey, carl they priced at the bottom of the range at $14 but getting a very nice opening at $18 a share, which will give the primary care health services company a valuation somewhere close to $2 billion. this is a company that does primary care clinics it's really coordinated. it's a $199 membership fee for individuals. they have 6,000 san bernardino prize clients which foot the bill for their workers they try to coordinate care for them, provide access, same-day appointments and also 24/7 virtual care through mobile and desktop and telephone. it's a big debut for them on a day we're seeing health care down with everything else, but health technology today has outperformed the rest of the health care sector and this ipo here, once again,

sort of underscoring the fact that people are interested in health care services they're not yet profitable, however, this is a firm that a lot of people have been watching for a long time backed by carlisle, benchmark capital, oak parkers, and the google inadvertents, one of their largest enterprise client, about 10% of their revenues. back to you guys >> the fact they or not yet profitable certainly notable given the move higher we're seeing in the stock right now. we have the ceo of one medical later in the show, so stay tuned for that meantime, it is time for a news update for that we go to court knee rae gan. a state of emergency has been declared in the australian capital territory after a large fire jumped containment lines. fire is creating its own weather system >> the ict is now facing the

worst bush fire threat since the de devastating fires of 2003. the combination of extreme heat, wind, and a dry landscape will place suburbs at risk in the coming days. >> the company that owned and operated the helicopter that crashed in california on sunday killing kobe bryant, his daughter, and seven others, is suspending its service representatives from the charter company island express helicopters say they are not sure how long the suspension will last. and the family of ann cox chambers says the newspaper heiress has died at the age of 100. he was she was the director of cox enterprises who supported jimmy carter's career. let's get back over to "squawk alley. courtney, thank you. britain, meanwhile, set to formally withdraw from the european union as brexit begins.

we have more from london >> been more than 3 1/2 year, two election, two prime ministers since the public voted by a slim majority to leave the european union 6:00 eastern tonight brexit will legally, politically, and constitutionally become a reality, but for people waking up tomorrow morning, very little will change. that's because for the next 11 months the uk stull has to abide by all the rules and regulations of the european union without being able to impact themselves. in the streets around downing street, parliament, hundreds of people are getting ready to celebrate that moment tonight alongside quite a few protesters the next 11 months are going to be a political challenge for boris johnson and his team trying to negotiate new trading arrangements and security operation with the remaining 27 member states of the european union. >> thank you what journey it has been

we'll watch to see what comes next for the uk. markets selling off here, just slightly off of session lows we're down to 3,240 on the s&p as the coronavirus contagion risks continue our next guest says if the outbreak continues into march, global growth will recede. joining us is the vice chairman of the blackstone private wealth solutions group. byron, thanks for coming to the phone. >> well, you know, it's an important time in the market and a lot of people are nervous about it >> so let's talk about that. when you talk about a full point, are you talking this quarter, talking u.s., china, global growth, what? >> global growth global growth right now, carl, is projected to be greater than 3% if this continues, and maybe even if it only continues for another month, you could knock that down below 3% to something in the 2s.

the two biggest contributors to global growth are china, because it was growing at 6%, and now it looks like it's going to grow at 5%, and the u.s. if china loses 1% of growth at 12% of the world economy, that's going to have an impact around the world. so the longer that this is going on before it is controlled, the more impact it will have on the global economy >> how about for u.s.? goldman is talking 0.4%, maybe, in q1. what do you think? >> yeah. i think a half a point -- based on what i've seen right here, and i'm assuming that they're going to get this under control within three months. so if that's the case, i think it will knock their growth down, but i was expecting growth to run into some trouble this year

anyway and i thought the market would reflect that with a 5% correction >> byron, we've seen this sell-off in global equities, seen treasury yields come down as well, but crude cratering, industrial metals and some of the other commodities falling -- are the moves warranted or overdone at this point >> well, it always seems as if it goes to an extreme. i think the market was overbought it was due for correction. correction is healthy. it'll form a new base. and if the problem is solved during the next quarter, my feeling is the market is okay for this year. we'll still have some appreciation this year from last year's level, year-end level so, you know, as far as what's happening in commodities, the commodity prices look like

they're expecting manufacturing to come to a standstill, and i think that's too extreme a position >> byron, what's your sense of how well companies have factored this coronavirus outbreak into guidance we did see apple give a wider than expecting range in revenue for the current quarter, but we also had some strong guides from microsoft, from amazon, and others are they factoring it in enough, do you think. >> look, this came out of the blue i don't think anybody expects it we have to see how much longer it goes on until we know that it's over, we don't know how much impact it's going to have. right now -- >> byron -- you got the 30-year south of 2 today, watching the ten-year, 1.53 i wonder what your take is on

yields and the chicago pmi number how much do you trust some of this soft data right now >> i think the soft data is probably reflecting an overreaction right now, everybody thinks this is going to go on forever and it's going to knock us into a recession, and i think that's too far -- that's too extreme a point of view. i think lit get under control within three months and the economy will have growth between 1.5% and 2% for 2020, and the market will be all right but right now, that conclusion is sort of hard to have a lot of conviction about >> byron, we were having this conversation earlier on the show i want your thoughts on this idea of maybe a shift in the

concept for investors of flight to safety given everything that we're seeing with the coronavirus concerns and what that means from a global perspective, this idea that you have these big, megacap, teflon strong, showing strong earnings growth tech companies continuing to rally even as maybe the more traditional defensive names sell off. >> look, i think growth is going to outperform value this year, and i think that this experience with coronavirus is going to support that but right now, people are very confused about what the outcome of the virus is going to be, what the industrial and market response is going to be, and so these questions in people's minds, so we're at a maximum level of uncertainty

markets never respond well to that and we just have to work our way out of that. hopefully that will happen in the next few weeks i'm still optimistic that this issue will be resolved favorably and the world will go on to a modest growth rate but it's very unclear that that's the way it's going to work out at this point in time >> yep so many unknowns, byron. personal income, adjust for inflation contracted during the last two months of the year. how much are you continuing? and assuming the consumer is going to not only keep u.s. growth stable but give us any kind of lift in 2020 >> yeah. look, our economy in the u.s. is 70% consumer we're dependent on the consumer. but when you have uncertainty mounting as they are right now and nobody is going to move the

go out and spend, certainly not on refrigerators or automobiles or any big-ticket item we just have to get through this period i'm optimistic we will be able to do that but right now that doesn't seem very clear >> we were just talking, byron, about brexit finally taking effect in just a few hour, though not many changes for months now in the uk specifically what sorts of signposts might you and should investors be looking for as we get closer to bigger changes in the uk's relationship with the eu amid all of these other issues we've been talking about >> look, i think the divorce of britain from the european union is going to work out favorably for the uk just the anticipation of it, carl, has knocked growth in the uk from 2% to 1%

if you're looking for signs that the uk is going to be a better place to invest, watch and see whether companies are willing to commit to capital equipment projects in the uk, watch for a cessation of migration of financial service jobs out of the uk, paris and frankfurt. i think you're going to see london remain as a global center for financial service activities all the things that everybody was worried about i think are going to stabilize over the next few months, and i think the pound and the uk market is going to be favorable. >> finally, byron, you've been pretty confident we would not see recession in this country this year. next year at the earliest you argued

i assume the uncertainty regarding the virus has not moved you on that forecast >> no, but that's still my forecast but i'm getting a little shaky about it or would get shaky about it if this -- if coronavirus extend and spreads more than three months from now. >> byron, we always like hearing from you, rely on it heavily thanks for coming to the phone in a hurry byron wien meanwhile, the dow and s&p near session lows we're going to take a quick break. more on today's sell-off in just a couple

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welcome back to "squawk alley. major averages in the red as coronavirus concerns continue to weigh down the markets wes edens joins us now, milwaukee bucks co-owner wes, it's great to have you. definitely want to talk about brightline and why specifically you're in miami, but i would be remiss seeing that we are seeing average major averages selling off, if i didn't start with the markets. we'd love your take, especially that we are on our worst pace in six months for dow and the s&p >> yeah, great

great to be with you guys. markets are unsettled by all of this coming out of china on the coronavirus. if you look at earnings report, amazon, tesla, there's lots of strong earnings today, but obviously there's a lot of anticipation about what could happen if this turns out to be worse or persists far lo s for r time tough times. >> we've seen a massive amount, bysome amounts private equity for 2020 given the fact there is so much uncertainty out there. how would you gauge the current investing environment? >> i think that it's a good investment environment it's one you have to be careful with we've gone through a very long period of peace and prosperity not just here but around the globe, and, you know, frequently the dislocations are what create some of the better opportunities. obviously i'm not rooting for a big dislocation in terms of this turning into a big health crisis, but it is the kind of situation that unsettles markets

and could lead to good opportunities for sure >> certainly one area you have been investing in that's continued to be watched very closely is this first privately built passenger railroad, the first this decades in the u.s.,. construction continues as you expand that leg to orlando $4 billion in total private investment in florida. why do you remain so confident that the vrd going to be so successful and also going to serve as a template for other markets? >> i am really confident yesterday was a record for the railroad the day before a record. today probably going to be another record so there is tremendous utility for transportation like this in metropolitan areas lastier we moved about 1 million people this year we think we will nearly double that we think over january up 55% people are getting more and more accustomed to the service. as you said, we are building the next part of it. the miami to west palm beach, i

am sitting in the miami term nall right now miami to west palm beach running right now. west palm beach to orlando under construction, on time, and under budget we expect sometime in the middle of 2022 that will open ng that's when you will really see the utility of this line and it is going to be exciting and i think very, very profitable it is great. >> you are also raising capital through private activity bonds to build a rail line down vegas and southern california. what's the time line for that project? how has prospective investor reaction been so far >> you know, i was in las vegas a couple days last week meeting with a bunch of the government officials. we had people in washington today meeting with the fra we expect to get that fully funded sometime this year. hopefully by the middle of the year or so it is a combination of activity bonds from the states and from the federal government, the right-of-way stuff is cleaned up when you look at the map of rail

corridors in the world, los angeles to las vegas might be the most intuitive of them all it is an exciting project. there is 50 million peep that travel from l.a. to vegas every year 85% of them can drive. we think we can move a high percentage of them onto our rail line and can really transform the region that's the second act of this. there are other places we are interested around the country. officers one, then two then we will go from there. >> speaking of los angeles, you are a co-owner of an nba team. and the nba family suffered a big loss over the past week. give us your perspective on the significance of the career and life of kobe bryant both as a player who stayed in one place for his entire areer, someone who started at 17 and really had an influence on the global spread the nba brand >> yeah, i mean, words really can't describe, you know, the tragedy of kobe and his

beautiful daughter and for their whole family i mean i don't think i will forget where i was when i got the first note that there had been this horrible accident and they were speculating he had died or come to pass kobe bryant was a gifted basketball playering one of the best of all time buy any measure. it was very clear in his brief time post retirement he was going to have a equally successful role post nba he was a talented very thoughtful person. it is a huge loss. it is. i feel bad for his family, for jeannie buss of the lakers organization >> a huge loss. >> a huge loss i want to get your thoughts on sports betting penn national taking a stake in a sponsor bar. you invest in emerging marketplaces how do you see sports betting

shaking out? what does that mean for teams and valuations of teams like the bucks? >> i was an investor with penn gaming i think it is a fantastic organization i am not surprised the see them showing leadership in it good for them. adam silver, our commissioner has been in the forefront this over the last number of years. there is no question that when people bet, they consume more basketball they consume for sports. they sit and watch a lot more. i think the numbers i have seen suggest that people that are actively gaming in one form or another are watching as much as three times as much sport. sports are so dominated by media bias for the franchise obviously more people watching for longer times is really good for the value of sports. i think it happens every day anyhow moving it into the daylight, you know, regulating it, doing it right way is the path that the u.s. is on, which i am supportive of. i think it is going to have a big impact

i am a big time proponent of exactly what adam has been a fan of i think it is going to be significant impacts on the valuations of these franchises over time. >> yeah. also get your thoughts on the fact that american investors are taking stakes in european football as well you have taken on a fixer upper with as on the villa it is a hot debate, whether investing in soccer is a folly or if it is a big financial opportunity. how do you see it? >> i think it is a huge opportunity. we had -- i will give a shout out. we had a big win this week i was over there on tuesday night when we won our cup semifinal against leicester. now we play man city that's a big event for a recently promoted club, which astonville is. as big a brand as the nba have, which is significant, soccer is incrementally that much bigger we have players from zimbabwe,

tanzania, ghana, morocco -- throughout europe it is such an international foot print i think many of the same principles that we have used with american sports can be used there in terms of sports science, analytics, data, there is a tremendous platform to really express that on i think it is great. i think the opportunities are significant. i do challenging but significant. >> so much more we can ask you right now but we are heading up against the end of the show. wes stevens, thank you for joining us. >> great, thanks very much appreciate it. >> and another ipo to get to this morning one medical opened for trading making its debut over at the nasdaq shares right now are up some 44, 43%. joining us now, first on cbs, one medical chairman and ceo amir dan ruben >>pleasure to be here. >> you are priced at the low end of the range but you are up 43%. how tough was the pricing

process in this market >> we feel very theenthuse yasi. we see tremendous opportunity to transform health care. a lot of runway, a lot of room to grow this company and to perform kind of quarter in, quarter out. >> how would you like to prepare investors in the idea of profitability? i mean it doesn't seem to be close, the way your model is going. you are spending heavily on marketing and generally, administrative costs you acknowledge that you could get more deeply penetrated with enterprise customers if you invest now, what exactly are you investing in model wise? >> we really believe in responsible growth so this is a company that delivers bundled virtual care with inviting offices. increasingly it is a benefit that's offered to employers. so there is tremendous opportunity to serve consumers through our membership, but also employers.

increasingly we are serving more and more company we have 6,000 companies. we are in multiple cities across the united states, new york, and d.c., and boston, and chicago, and san francisco, l.a and we are seeing tremendous leverage in our model. a lot of that dna was to build out our technology that powers our virtual team, that powers our software now we can spread that out across a bigger volume of members. >> i mere, such a key part of the cost of actually delivering care is the staff itself doctors, medical professionals how are you able to recruit and retain those individuals versus the more traditional providers >> one of the powers of our model is we are not just looking to delight the consumer and serve the employer but we also wanted to be a better environment for providers. so we built software that take out administrative burden. we call it the burdens of desktop medicine, all the computer work. for example, if somebody emails one of our providers, our machine learning software will read that email.

if it can be handled immediately, hey, maybe i left my routine prescription it will take out of the provider's inbox and route it to a different staff member we have less burden of tasks on the physician who in the office can care for the patient then we have a virtual team who is available 24/7 to address the needs on demands of our members. >> amir, with that system in place, have you calculated how much more efficient you can be also, quickly, if you have time, how big of a threat is a change in health care policy given that you are so reliant on employers paying for health care >> with our model, we have seen that our technology can take out 44% of the tasks typically seen in electronic health records for our providers. moreover we can route those requests, that's 24/7 requests that bundled for our members to the right team member. they can help with benefits. they can help with insurance we blev our model primary care

works in kind of any future model. we are showing not only that we can delight consumers, we get letters every day, but we can take out costs for employers. >> fantastic you are up45% so far in early trade. amir, thanks for being with us. >> thank for having me >> that's going to do it for us. we are slightly off session lows enjoy the big game let's get to the judge, and the half no --s this a no judge edition of "halftime report. i'm tyler mathisen in for the uj j, scott wapner, who is traveling today. front and center, earnings hits and misses and is there now big value in big blue it is and this is the "halftime report." >> caterpillar, honeywell, exxon, and chevron, all posting mixed results and weighing on the markets. how to play onnan the sell off