discount to the group. >> jim >> sell roku this thing is headed lower. >> all right josh, last word to you. >> i am staying long amazon. nur new to the trillion-dollar club. >> you or the company? >> just staying long as a small shareholder. >> all right, folks. thank you. that does it for "the halftime report." "the exchange" begins right now. thank you very much, tyler welcome to "the exchange." i'm dom chu. investors grow more cautious about the potential economic impact of that fast-spreading coronavirus and fears are building about what will happen when china opens for business again next week after being closed for the lunar new year holiday. the dow wiping out the january gains, the first january loss for the dow since 2016 the s&p 500 and nasdaq are

narrowly holding on to the gains for the month of january let's get more on what's driving today's moves. seema mody live at the new york stock exchange what can you tell us >> dom, the dow on track for the worst day since october 2nd. we just off the lows of the day. we started the day down around 220 points as a number of dow components reported disappointed earnings the sell-off in the morning. elevated fears around the coronavirus. biggest laggards that the hour -- caterpillar, chevron, exxonmobil reacting to those earnings reports among the energy companies that reported about one third have fallen short of expectations this quarter and there's a look at some of the biggest percentage decliners main question of analysts, how does the coronavirus impact gdp growth and demand for oil. back to you. >> thank you so with the major indices now on

pace for the second straight week of declines and the dow looking at the first january loss since 2016, are fears of the coronavirus outbreak drives investors to sell or is there something more just below the surface? for more now, i'm joined by jim bianco and matt mayly. thank you for being here perhaps, matt, you're the market watcher, watching the technicals what does the trading action today tell you about the market sentiment given what's happening with coronavirus >> well, you know, it's obviously this coronavirus is seems to be or at least the concerns about it are spreading significantly and going into a weekend so people are like, geez, if it is worse over the weekend i want to take chips off the table before that happens and china opening on monday as you mentioned after being closed over a week and then of course we have the iowa caucus on monday and bernie sanders is doing really well and if he

does -- wins there, especially if he wins in a big way, there's reasons for people to say, hey, we have an unbelievable move in the market why not take some chips off the table? >> so, jim, this very much comes down to a conversation about whether or not the coronavirus will have an impact on economic activity and thereby markets in relation is there a real cause for concern given the fact that china is the world's second biggest economy and seems like the economy is still in lockdown >> yeah. there's a big cause for concern for exactly that reason. sars is not a valid overlay because the chinese economy was only 4% of world gdp today it is 16% of world gdp this virus has been doubling every three days so, matt, i hear you saying if it's much worse but it will double by monday unless they tell us that something has

changed. that is going to keep a major cog of the world's supply chain in lockdown. it is going to keep their economic activity at a crawl and it's going to be felt everywhere goldman sachs is out saying it will knock .4 off of our gdp the chinese government back on wednesday said it was going to knock a percent and a half off theirgdp and the amount of cases doubled since wednesday so it is a big deal and it shouldn't be underestimated. >> matt, where are we seeing the most impact? we heard from seema. the energy complex driven by some fact of earnings reports, are there hot spots to the up or downside that traders need to be paying attention to given the coronavirus concern? >> well, you know, i think that the whole market in many ways especially in the tech area, apple computer, no question that great company, but you look at on a technical side, earlier this week it's weekly rsi is 90.

it's only more overbought one time in the history of the company so i guess my point is a lot of people saying, geez, the fed's providing -- limits downside but market doesn't need a reason to go down 3% to 5% and there is a reason for the market to go down a little bit and with the impact of algos in the market today it should overshoot that easily so it's not out of the question of a correction i think the key thing right now is for a plan in place in advance to take advantage of it if and when the baby gets thrown out with the bath water. >> i'm going to step through the door with you. he mentioned the fed the fed had a meeting. seem like they're on hold. it is an election year it is fay to call them perhaps a huge variable in this mix. how does the fed or central bank intervention overall play into the coronavirus thesis at this stage? >> well, they are a big one and

it's one of the reasons that the yield curve has reinverted, that the 10-year yield fallen below the 3-month yield for the first time since last october. when that happens i've said that's a signal that the market is thinking that the fed is too slow in cutting rates. they don't want to cut rates it is an election year 1980, 2008, they were forced to move in election years and they have to be forced. so right now i'm sure if you ask fed officials, they say we're on hold no problem but if we talk about more problems in the global supply chain, they may be forced back to the table sooner than they think but right now they're not going there and why the yield curve is inverted. >> traders keeping a close eye on the market. thank you very much. we have breaking news. let's go out to phil lebeau on united airlines. ful? >> united joining american and

delta suspending flights between the u.s. and china so that's really from their hub cities in the u.s. to the three cities in china they serve, shanghai, beijing and mainland china. they have flights going into hong kong and starts effectively february 6th so the last flight from the u.s. over to china will be on february 4th which is next tuesday and then they're going to have the final flight from china over here on the 5th and then starting on the 6th they will be suspending all of their operations again, to main larnd china they continue to have flights between san francisco and hong kong so now you have united, delta, american all of them basically saying, within the next week, american's immediately but within the next week you will have no service between the u.s. and mainland china. >> those are the u.s. airlines the list is growing for international. >> over 31 airlines, dom, that are now internationally that have cut or curtailed their

flights into china and increasingly they're moving from just curtailing to outright stopping flights altogether. >> all right thank you very much, phil lebeau, for that update. a big jumpover night in the number of confirmed coronavirus cases which now stands at over 9,900. almost 10,000 including 6 in the united states. the total number of deaths at 213. all of them in china at this stage. eunice yoon is live for us in beijing with the latest there. also with us, meg terrell with more on the race to find a vaccine and the drugs here in the united states, as well eunice, let's start with you what do we know now about the numbers and what the government is goidoing to contain it? >> reporter: dom, i'm coming to you from the beijing train station and people started slowly coming back to the chinese capital to go back to work on monday after the lunar new year holiday ends this weekend officially even so beijing tonight, the

city issued a directive saying when people come back to the chinese capital, they should work remotely at least until february 10th. much is still unknown about this virus and more and more buildings not only here in beijing but also in other parts of the country have started to set up more temperature checks and other barricades to try to prevent the virus' spread. masks as well as other protective gear are in short supply in fact, shanghai, the city, just today launched a quo that for masks. as of this sunday, saying that home addresses, each home address is limited to five masks. all of this as you can imagine is having an impact on economic activity in fact, the transport ministry today put out numbers saying for the lunar new year holiday the overall number of trips dropped by 16.5% from last year. and for january 30th, the day

when most people had expected to travel to work today those number of trips dropped by 84% dom? >> all right of course, we'll be watching the transportation numbers a big indicator of whether or not the economy will slow down in china meg, you have been inside some of the labs of some of the big drugmakers what can you tell us about the status of the drugs, either meant to treat or prevent the spread of the coronavirus? >> these companies are working incredibly quickly and some instances it almost sounds like science fiction the work they're doing and we want to give you a glimpse specifically into what's going on at regeneron. they have engineered mice to have human immune systems. that enables them to create human anti-bodies exposing the mice to parts of the virus to fight. we were told how they successfully did this for ebola. >> it was very exciting when we

got the news that the world health organization tested the ebola anti-body okay tail and really worked compared to standard of care saved lives and people who would have otherwise died this horrific ebola infection. >> now the company is taking the same approach with the novel coronavirus. they're partnered with a government agency and see the potential for human testing within six months. >> this is an amazing story now because in many ways the ebola scare was the most recent example of a huge mobilization of the industry towards this do we get a better sense now whether it's the same kind of effort or even more so because this could be a faster spreading virus than ebola >> it is remarkable to compare the situation six years ago with the outbreak in west africa versus now then companies were trying and they weren't extroomly forthcoming about the work here we are seeing a dozen

companies stepping up immediately being forthcoming about the work they're doing and must be bolstered by the success they have had in ebola merck got the first vaccine licensed by the fda last year. j&j is used in the field in rwanda and democratic republic of congo in the current outbreak right now. these companies have had success. they know how quickly to do it and talking about it and getting down to work very quickly now. >> how critical and important for the companies to have a robust partnership or sharing of information with government regulators and health officials like the cdc or nih? >> very important, not just for the potential funding sources even more helpful for small companies but we heard from regeneron it is helpful to know the right people and who to talk to to get things done and having the partnership to connect you

within different organizations, public health agencies around the world so it's very important that everybody's working together and nih is giving guidance to companies, working with how to select the targets for the vaccines and so much collaboration going on between government and private industry on this. >> a huge evolution in communication since sars, mers and ebola and the coronavirus here thank you very much for that reporting. >> thank you. coming up on the show, with many chinese cities essentially coming a screeching halt, the retail sector could see major supply chain disruptions we look at who could be the biggest impacted by the particular changes. semiconductor stocks on pace for the worst performance since august will the disruption in chi pna t more pressure on that sector we'll explain. how's the it department liking the now platform?

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welcome back stocks selling off right now and one sector is getting hit particularly hard this month and that is retail check out the xrt, an etf that tracks the industry group, poised for a worst month since last august. coronavirus fears and disruptions of supply chains are taking a toll. with us now on the cnbc news line is brian nagel from

oppenheimer. thank you for being here it seems weird to talk about coronavirus and then throw retail into it but there's real world tangible effects of the coronavirus and the economy on retail how are you views changing because of the developments here >> thanks for having me on you look at -- we're obviously watching the situation just like everyone else. i think about it, retail is a big sector with lots of different companies and luxury names of tiffany, obviously getting purchased shortly and not trading as it normally would but, look, for tiffany, a large portion of their sales within the united states are done to excu consumers traveling from overseas and a chunk of that from china to the extent that coronavirus limits travel, the traveling habits of shoppers around the world that could have an impact

in the nearer term upon sales to like luxury retailers in the united states. >> are you focused specifically on the luxury side of things we oftentimes talkabout companies like tiffany, oftentimes talk about lvmh or caring because they make the high-end stuff that many east asian shoppers want. is it mostly luxury that's going to be affected in your opinion >> initially i guess as i step back and say how should we think about coronavirus and retail broadly, one is the effect i just described an ento the extent it impacts the consumers traveling around the world the second would be and take a longer time to play out but if what the coronavirus does lead to slower economic activity in the united states and across the globe and takes a longer time to weigh out that could have a more -- a wider impact upon

broad retail broadly >> now, the american consumer has been championed and cheered over the course of the past soef several months and many the year for the gains in the u.s. and maybe abroad does the u.s. consumer then still maintain that kind of lead, that leadership role, when it comes to being able to power the world economy despite the fact that coronavirus is in play >> well, look. it's an interesting question you know, i think it will depend upon how severe this gets and how long it lasts. right now, in fact, i published a note this morning and was discussing with the clients and my sales team here at oppenheimer and talked about an interesting fact i see happening is with the concerns of coronavirus now perk latting or turning more severe, interest rates dropped significantly. the yield of the 10-year bond back to the lows of 2019

gone, very simplistic view, should be positive for the u.s. housing market and retailer it is an are tied to the u.s. housing market like home depot, lowe's and like william sonoma in that it drives better housing activity again, all depend on how long it lasts and how severe it gets. >> thank you very much for those tha thoughts we preernlt it. >> thank you. coming up, fears of the virus outbreak, investors pile into government bonds. part of the yield curve inverting again. we'll head live to the floor of the cm e for an up trait there. with xop having a worst month since at least september 2011, we'll dig into the big name laggards and a bright spot coming up. you can always watch or listen to us live or on the go on the cnbc app. e"s ckn o ng iba itw minutes.

welcome back let's gate check on the markets rye now. the dow, nasdaq and s&p right now just about near session lows the s&p off by about 55. nasdaq down by about 124 points, all between 1.3% to nearly 2% drops and keeping an eye on the markets. yields are also dropping as

investors rush into bonds with the 10-year u.s. treasury note yield on pace to post a largest drop since august. rick santelli is in chicago. rick, this is interesting. yields are falling people are rushing to the safety of government bonds r. you watching which part of the yield curve and tell you about whether or not this is going to be an important development over the next couple of days? >> you know, the entire yield curve is all important, dom, but your point is not lost maybe a good way to summarize it is 2-year note yields down 7 on the day and down 17 on the week. that is even a bigger move than the longer maturity 10-year note down 6 on the day, down 16 on the week the point is that the buying is everywhere on the curve. if you look at an intraday of 10 you can see we have been down as low as 151 not to be found on the short end. look at one book of 10s minus

monday see the way we have fallen off the cliff. september comp best way the look at this. we have taken out the 153 even though we are sitting there from october. what's left is the cycle at 146. open the chart up. this is eye opening! if you go back to july of 2012, and july of 2016, double bottom at 136 you add in the 146 lower getting ever closer to and those areas are going to be guns hot we want to watch next week as we test the long-term milestones as investors continue to look at treasury buys not only for safe harbor but also as a hedge against the really nasty trade going on in the equity markets look at three-month to 10-year and really referring to and there it is. it's a negative inversion going on three-month yields higher than 10-month yields and with 2-year underperforming, seeing 10s to

2s moving in and the dollar index normally safe harbor is clobbered today down almost half a cent back to you. >> really quickly, which part of the market on the macro side is most impacted by the concerns right now? watching gold prices dollar versus yen? treasury yields? which is the hottest spot right now given the market dynamic >> i think with the entire globe obviously monitoring this spreading of the coronavirus i think the long maturities and the complexion in the yield curve gives you an instant global look at how much buying is coming in that is at the investor psyche of just how nervous they are with the events of the day. >> rick live on the floor of the cme in chicago, thank you very much we have breaking news on president trump's impeachment

trump. >> lisa murkowski is no on calling for witnesses and all but assures the democrats will not have the votes they need to get more testimony or more documents in this process. in a statement murkowski calls the house's investigation rushed and flawed, she said it is so partisan that she does not believe a fair trial is possible and that continuing this process will not change anything now, dom, even though there will be no witnesses in this trial, that doesn't mean it is going to wrap up tonight. there are growing choruses of senators who say that the final chapter in the trial may not play out until next week but the trial has just resumed today in the past 15 minutes or so, we will have to see how all of this plays out this evening. >> so the drama continues, perhaps into next week ylan with the details on the impeachment of president trump, thank you. now sue herera with a news update. >> indeed, dom thank you very much. here's what's happening that the

hour, everyone senate minority leader said the acquittal of president trump in the impeachment trial is meaningless with no new evidence and witnesses and will have no value. >> if my republican colleagues refuse to even consider witnesses and documents in this trial, this country is headed towards the greatest cover-up since watergate. if my republican colleagues refuse to even consider witnesses and documents in the trial, what will the president conclude the first person to enter the 2020 democratic presidential race has dropped out former maryland congressman john delaney announcing this morning that he is ending his campaign he first entered the race in july of 2017 and brexit supporters celebrating in central london as the united kingdom prepares to officially leave the european union. the uk is set to leave theeu at

11:00 p.m. london time you are up to date that's the news update, dom. back the you. >> thank you very much for that. coming up, transportation stocks are falling semis are falling. energy is falling. the list goes on and on. the two names that aren't falling -- ibm and amazon. we'll dive into both of those companies straight ahead heading to break, here's the biggest losers on the dow. you have dow, chevron, exxon, visa all down between 3.5% to 5 35% at this stage. weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style.

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welcome back lots of sectors on the move today with the dow and the s&p on pace for the worst week in the last six months. let's get to all of them or as many as we can here today is art hogan at national securities alongside our own morgan brennan and our own jon fortt. thank you very much for being here we have to talk about amazon those shares, a bright spot in today's trade. you have got shares surging nearly 9% after beating earnings estimates across the board on

pace for its best day in more than a year. the move sent amazon's market cap above the rare $1 trillion mark for the first time since 2018 and never actually closed above that threshold jon, morgan, we start with you guys jon, how big of a move for amazon and can it keep it that way? >> i don't know if it can keep it that way but it's big because of the surprise factor the earnings about two things i would argue. cloud momentum and one-day shipping they set the market up for, ah, 1 1/2 billion in costs hard going into investment mode and then not only did the move drive more revenue it didn't cost as much as everybody expected and profits tushed out to be better and then the set-up of microsoft and amazon maybe amazon's not doing well but they have decent growth in the cloud. at a good margin and so when you

got that top line growth and profits from amazon expecting investment you get happy. >> a thing that stood out is how good and robust the prime membership is. for this particular company. >> more than 150 million members. >> every year they get the credit card charged to the bill and going well for them. >> the services, subscriptions are what helped propel amazon to these growth numbers, as well, right? 30% growth year on year. margins very much in focus or aws. shipping costs up 43% still came in a little better than expected and i think notable, too, seeing same store sales disappointing at retailers already and seems like one-day shipping means it is taking market share. >> is amazon the new market leader it wasn't in 2019. how important is amazon to the market thesis on the bullish side, art? >> we talk for the year is the u.s. consumer and a good report

card on the u.s. consumer. grown to 150 million paid subscribers means that consumer is also very sticky to amazon. very difficult to make a decision to shop somewhere else getting the free delivery and drives business so i think it's more important to say amazon is a better report card on the consumer. >> all right leave amazon there next up shares of caterpillar, lower despite a fourth quarter earnings beat and missing on revenues the ceo saying, quote, we expect global economic uncertainties to pressure sales to users in 2020. morgan, you are very familiar with this company and many other industrial ones. >> i sure am. >> how big of a deal when cat says things may not be that good in 2020? >> a big deal. they're a barometer for the global industrial economy. machine sales in the fourth quarter down 14% in north

america, 16% in latin america, down 16% in europe and flat asia and of course now what happens in asia given the coronavirus concerns and everything playing out there? it's not just caterpillar. honeywell talked about being cautious this year 3m, stanley black & decker i could go down the list >> so, morgan, i want to halt us for a second here which is the dow down 555 that does represent the session lows right now for the markets overall. art, morgan rengsed the reasons why caterpillar is important dow component. every time i think of cat i think of high watermark. remember those words a couple years of with the cfo there? how important is caterpillar as parent of a global bellwether as we make it out together? >> i'll say this consumer confidence has never been higher and corporate confidence is never lower.

the gap is amazing that manifest and lower cap-x and manifests in companies not going out and taking on new projects so that uncertainty by the corporate and industrial world slowed down. what it takes to close the gap is an unknown. >> there's another - >> i would just throw in it's interesting the dislocation here between what's happening in the digital world and the physical world. who do you think is paying for aws and azure? companies buying that stuff, buy the drink and not buy a huge piece of equipment to do it. look at deere also going through a situation where their distributors working down inventories because the customer is uncertain it is a very interesting time to have more of a cloud and buy the drink model. >> our next topic here is the semiconductors speaking of that bridge between tech, the people who spend. they're clearly feeling the heat

of uncertainty around china. smh of the etf we track on pace for the worst week since august and, jon, how important -- we talk about cat as a bellwether, semiconductors a lightning rod coming to u.s./china trade and now the economic activity in china, as well. >> i don't know if we can read semiit is way we used to because of the run they have been on lately they're not quite as stable. when i looked at today's -- last night's numbers of amazon and microsoft before, i thought, boy, intel was being really cautious when they said we're afraid the mega scale cloud players go through a digestion period in the second half. maybe they should have been less cautious given the fact that the pedal to the metal in terms of margins and revenue despite the fact they're investing in salesforce and factor that in, amd with a console sales messed with numbers and guidance, i'm

not sure you can draw a story from the semis the way you used to. >> is it important, morgan >> yeah! >> there are micro economy companies whether it's memory, d-ram, data centers. what stands out to you coming that semiconductor trade >> two things. first is despite china phase one trade deal you do continue to have the tech decoupling of chinese tell comes and huawei and when they cancel flights in and out of china those air freight numbers are closely linked with semi billings. that's going to be something to watch and interesting to see how all the coronavirus concerns play out in terms of semi inventories. >> like you're teeing me up perfectly. going from there to what's happening with transportation stocks all right? because they're tacking a big hit following the american airlines release we heard,

delta, united canceling chinese flights to the mainland out there. amid the coronavirus outbreak. the dow transportation index falling through the 200-day or longer term moving average art, this market dynamic is important because oftentimes traders look to transportation stocks and the industry to get a theme, global bellwether. >> right there's never been a longer term barometer for global economic activity than transports but not usually right. right now the transports sending us a message of a global recession. probably not correct and overcorrects all the time. dow theory tells us that the dow transports need a new high to prove that that's not true for ten years. i think that's broken. obviously tied to nobody traveling to china for the next -- pick the period of time and slows things down. >> that means with the coronavirus scare, with airlines

a huge focus - >> not just airlines freight carriers, the tankers. absolutely cratered if you look at the rates, as well. the commodities, the dry goods that are moving back and forth esch's concerned are now going to not be in demand in china right now if people aren't getting back to work in factories. cratering right now. >> morgan brings the vessels into the conversation. jon, coming to that activity, what part of the market structure you think in your mind would most represent maybe either a turn for the better or worse coming the overall market? >> i don't know. i think the traditional bellwethers as we said before aren't working i think you have to look also at the digital economy and see what it's doing it's not like people in china have stopped doing everything. they're probably at home on screens, on devices. >> watching streaming videos. >> somebody benefits from that the real uncertainty is we don'

know how long the coronavirus outbreak will last and whether the numbers taper off. you heard some people in china at first concerned that the government didn't have the arms around this. and now the w.h.o. saying china is doing a pretty good job i don't think we get a good sense on balance of how this is going for a couple of weeks. we'll see. >> great market discussion we covered a lot of ground art hogan, thank you morgan brennan, thank you. jon fortt, you will stick around thank you. the dow erasing the gains for the month of january is this the start of something bigger a top technician joins with us the key levels you want to watch next. as we head to break, take a look at the homebuilders etf itv falling more than 2% today but still up 7% just for the month of january homebuilders are a big focus "the exchange" will be right back imagine traveling hassle-free with your golf clubs.

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welcome back a steady drip of negative headlines over the past week causing markets to slump on the final trading day of this month. let's take a closer look at the technical side of this sell-off. joining us is managing partner katie stockton thank you very much for being here this is a good time every time is a good time to have a technician on because you use history as a basis will things repeat themselves? what is it about this market move that is similar to ones you have seen in the past and what does that mean are we due for more downside >> first i would emphasize that the up trend is intact for the major indices. pullbacks tend to be fast and furious and when they are that way, they tend to be short lived and also counter trend so this to me is a reaction to what was an overbought sentiment reading. we have had a few of those over the past year or so and they're often worked off quickly meaning

weeks not months and i think that will be the case this time around, as well. we did have a sentiment downturn in one of our preferred gauges january 22 gives way to a pullback which i think is under way here still. i do still there's downside risk and not seen that sentiment risk worked off entirely as a contrarian reading to suggest that fear is high enough to really give us a market low yet. >> katie, you make a living giving your clients targets. you tell them where we think it will go so where is that downside target? where people start thinking about putting this shopping list to work or going long stocks if they've been on the sidelines or taking profits in the move >> there's no magic number to say that's the entry point but we can use support levels as gauges of downside risk. they can be very reliable at times but we want to use them in conjunction with indicators that

help us understand whether we're at those sentiment extremes at the breadth extremes and i would argue we're not there yet. the initial support of the s&p 500 is right around 3150 it's based on a couple of technical factors. that to me would be very reasonable as a stopping point for the pullback after today's action it's not too far below and then secondary support which would to me be a worst-case scenario is about 6% below current levels in the 3030 area. that's a breakout point from late 2019. i don't think it's going to get that bad based on the relief we have already seen from the overbought conditions and really wait for that upturn in momentum regardless of the level for the s&p 500 before recommending getting back in. >> all right one of the places you also watch closely is the sentiment of the marketplace. are there any telltale signs right now that the market is either in this state of yeuphora or total shock with what's going

on >> i think it's safe to say that the euphoria is worked out here. the virus did that effectively unfortunately and yet we don't have that fear in the marketplace yet. we like to enhance the sentiment readings with breadth. we look at particularly the percentage of stocks in the s&p 500 oversold and running about one third of the s&p 500 right now. that's not quite enough to suggest we have that low in place yet. it tends to peak around 50% of the s&p 500 so not too much more downside if indeed we are in the same kind of pullback mode we saw about three time last year. >> all right katie stockton with some target levels to watch there, thank you very much for those insights we appreciate it. oil and gas etf down more than 19% on the pace for the worst month since september of 2011 the one bright spot in the sector is coming up next at fidelity, online u.s. stocks and etfs are commission-free.

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welcome back we are tracking this market sell off and looking at energy now.

that sector down more than 10% over the course of the month and in bear market territory, down 20% from its 52-week high we saw in april last year now leading the declines today, you've got shares of phillips 66, exxon mobil and chevron, both of those names sliding to new 52-week lows in today's trade and the etf tracking the oil and gas exploration industry xop, is down nearly 20% for this month but it's not all doom and gloom out there. you've got shares of marathon petroleum up slightly today after a report that the company is exploring a sale of its gas station arm, speedway. they've said the unit could be worth 15 and $18 billion shares of ibm falling nearly 23% since jimmy took the helm and accord iing to one tech expert, not even jesus can at a bect big blue now th'sig statement

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holding up better than the others up 4%. could tech be the saving grace for investors or the best bet right now? joining us is paul meek, portfolio manager at independent solutions wealth management, also jon fort and perhaps paul, are you worried at all tech was a leadership person's sector, anything in the markets last year. is it due for a bit of a steeper fall if the markets do fall more steeply themselves >> i think it is because if you take a look at the tech sector within the s&p 500 last year, that's measured by the xlk spider etf you know that etf was up 50% in a year in which the s&p was up 30 in a era in which stocks typically do b about 10% per year so clearly overbought and tech stocks are cyclical.

particularly the hardware and semioriented stocks so sure, there should be some hell to pay but i feel good enough about the long-term fundamentals that when we have a correction and i don't think it's going to be as steep in the fourth quarter of '18 maybe something to the tune of 5 to 10% i will buy with both hands when that comes >> wow, that's a big statement buy with both hands. so jon, when you cover the tech sector, you're looking at everything from computer chips to data centers to web services to everything else has there been a place over the course of the past 12 months that's really stood out in your mind that is a place that might be in some ways, more resilient to a downturn in the market? >> so far, big megascale tech has been pretty darn resilient this earnings season for apple, for intel, for amazon just last night, microsoft, i think has performed very much up to expectations even facebook, which is on the lower side as far as how they

performed. at least so far today, trading above 200 bucks a share, which isn't bad considering where we've been over the past six months, so i think the scale players, the ones who have sort of driven the s&p throughout 2019 still doing pretty darn well and given all the uncertainty and volatility au d around the other name, hard to draw conclusions >> jon brings up a big driver. microsoft and ibm. very much o focus over the last week one year highs in fmochicrosoft is ibm this general race's microsoft going to turn things around >> well, that shouwould be a ta order because a lot of people don't realize and maybe it's counterintuitive just because you're a dominant tech player in big iron or the personal computer era, as we morph into cloud, mobile, net, you know why would you expect a company from

the first era to be as good or a player or relevant in the second era? and one of the things that microsoft has done since '14 is pivot and embrace the cloud. been a home run. that is the playbook that the new ceo of ibm should copy, but man it's going to be a tough road because ibm is in a much worse shape. >> jon, does ibm have a shot at bachi in becoming a microsoft story >> absolutely. let's not forget how much people hated apple in 1996. amd. sure but those are previous powers that people thought nothing could fix and something could. everything's not wrong at ibm. i think it takes a distinction wishing investor takes research the to know what's wrong, but what do you like you have to have your own theory can't rely on the idea that everything aes wrong he's got his work cut out for him for sure, not just telling

the story, but also isolating certain businesses and we'll see what he does structure wise. >> thank you very much for those thoughts and paul, great to get your insights. that does it for the exchange. markets are hovering near their lows of the day. now the "power lunch" team picks up all that coverage again, the dow down 540 points good afternoon, everybody. i'm tyler mathisen welcome to "power lunch," as dom mentioned, we start with the big selloff on wall street we are very, very near the lows of the day the dow dropping nearly 600 points turning negative for the year as fears of the coronavirus outbreak spook traders ahead of the weekend and ahead of the reopening of chinese markets next week. they've been closed for the chinese new year plus, crude getting crushed. on track now, worst week since may of 2009.