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. we'll tell you how low oil might go and later, the one bright spot is amazon climbing back to a trillion dollar market value. one trader is going to tell us the next stop that could join the trillion dollar club hi, morgan >> hi, tyler i'm morgan brennan here's where we stand in the sell off the dow down 2% as investors get spooked ahead of china's stock market reopening on monday after the lunar new year holiday stocks are on track for their worst week since october and check out the earnings disasters that are helping fuel the losses chevron, exxon and caterpillar all weighing on the dow after disappointing reporting this morning. but u for more on the big selloff on wall street, let's bring in seema at the new york stock exchange >> and morgan, losses started to accelerate following that weak pmi read for the month of january plus those elevated concerns around coronavirus. goldman sachs estimating it wil

lower china's gdp by 0.4% which economists say will have an effect on u.s. growth in the first quarter. no relief for the oil and gas producers. of the energy companies who have reported, about a third have fallen short double digit percentage declines for a number of energy players noble down 20% no surprise, energy and materials, the two worst performing sectors this year and those industrials under pressure yet again. caterpillar's ceo very cautious on 2020 saying sales expect to come in flat to down 5%. >> and now for the latest on the coronavirus, which is contributing today's sell off as it has been on sell offs over the past couple of weeks the number of cases worldwide now nearing 10,000 and that includes six confirmed cases now in the united states more than 200 people have died all of them i believe in china

none here in the united states and today, russia confirms its first case let's go to eunice in beijing with more. >> thanks so much, tyler i'm at the beijing train station. people are slowly returning back to the chinese capital even so, beijing has issued a directive today saying that people even if they come to the chinese capital, should work remotely until february 10th this is even as the government and businesses as well as people are all going to be going back to work on monday after the lunar new year holiday ends this weekend. there's still so much that's unknown about this virus and the capital here is still seeing a lot of buildings decide iing tot up temperature checks. also setting up barricades as well narin order to try to prevt

the spread of the virus. masks are in short supply. the city of shanghai today decided to set up a quota as of this sunday. so that each home address is only limited to five masks the schools in hong kong have also decided to remain closed or at least the territory has directed the schools to stay close ed until march 5th. and you could imagine this is all having an impact on the economy. in fact, the transport ministry today put out some numbers about travel during the lunar new year holiday saying that during this time, overall trips were down by 16.5% and for january 30th, this is day when most people were supposed to and had expected to travel because today was supposed to behe first day when everybody got back to work, that for january 30th, the number of trips was down by 84%. so a lot of that making people

very nervous about what's going to happen for business activity more broadly and then we'll get a gauge of that when the markets open both shanghai and shen on monday >> there's markets and a lot of anticipation about the reopening of those markets on sunday night our time monday your time is there any possibility, any talk, that they might not be allowed to open? >> i haven't heard that so far most people do expect to go back to work on monday. but the discussion here is exactly how things are going to all work out because of as i was saying, in beijing, any way, there's been a lot of encouragement for people not to work in offices and the point for beijing is they don't want people to be gathering at all.

that's a situation that's replicating itself in other cities, so a lot of different offices and brokerages are trying to figure out how they're going to be able to operate and pull this off on monday. because there is a concern about people going back to the offices and gathering together there again is so much unknown about how contagious this virus is >> all right, thank you very much obviously taking precautions in beijing. the markets are in sell off mode for the week and the month. the dow on track for its worst day sips back in october early october the 2nd. should investors brace now for more pain ahead? let's hear about this from michael farr down in miami i'm told something's going on there this

weekend. gentlemen, good to see you ron, start with you. january started off so nicely. everything was good then something happened was it that the market was looking for some excuse to sell off or was it always as weak as it now seems to be or what >> i think you and i talked two weeks ago about the extent to which the market was at least technically overbought the valuation had risen to levels we had not seen in some time the concentration of market value now including amazon above a troll kotrillion dollars we talked about the likelihood of a 5 to 10% correction now whether the coronavirus is a reason or excuse remains b to be seen, but clearly the market had been overextended and we don't know now the extent to which this virus and eunice showed some extraordinarily stark number, how much of the spillover, which i would compare to the cocooning which happened

in the u.s. after 9/11 if you go back to the two weeks after 9/11, no one left the house. no one traveled. it had an impact on the u.s. economy at the time. seems like something similar is going on here. but it may affect the entire global economy that would reduce first quarter gdp. >> interest iing there. michael, were it not for amazon, the s&p would be far worse than it is. were it not for ibm, the dow would be worse than it is. the european numbers out this morning were not good at all italy and france in contraction. and obviously china is slowing the chicago pmi now at the lowest level since december of 2015 are we in for more trouble here? is this potentially a longer slide than just a transient one

based on the coronavirus >> tyler, i think the answer is clearly yes. there's the potential, great potential, for a continued slide. will it happen we don't know yet. and i think the key is is going to be the duration of the asian cocooning. the shutdown we know that parts for b automobiles aren't getting to ford plants all of a sudden from that huge area in china that is responsible for a lot of those parts. so companies like ford are going to have to start shuttering production once they run out of inventory to produce cars. we know the airlines are doing it we've seep three of the domestic airlines today united, delta, american, join british airlines and say we're going to stop flights to china so when you see this cocoon iin and this shutdown, we know that economic activity is going to face a significant head wind it did happen during sars.

we saw it then, too, and a lot of airlines suffered northwest airline chairman told me at that time, said it was hundreds of millions of dollars many top line revenue. if this lasts, yes, it creates an economic head wind that will affect china first but in this global economy, is going to effect all of us will that drive markets lower is the you know, big question out there. >> yeah. >> i think after a market run like this, you have to be cautious >> yeah. ron, we've seen yields come off pretty dramatically this week. flatten, even invert what's the bond market telling us >> that's a very important piece. we now have ten year yields below those three month yields for the first time in quite some time the curve had steepened after the federal reserve lowered interest rates in 2019 and so we were concerned in the middle, latter part of last year about the message of that inverted yield curve

tending a recession six to nine months down the road this recognizes the fact that global growth is now in question and whether or not it also leads to an easier fed is an open question as well because we have june fed fund features now pricing in a rate cut. something that really wasn't talked about much so far this year everybody assumed the fed would be on hold for all of 2020 as we moved towards the presidential election as well as sarah pointed out this morning and i thought this was an interesting observation, the fact that bernie sanders is now running neck and neck with joe biden creates another piece of uncertainty for the market on the political front that may help to be exacerbating this sell off >> even before the coronavirus and all the uncertainty we're seeing there, you had all the issues around boeing and 737 max and what the halt is production is going to mean to economic growth and those readings from a macro level here in the u.s. in the near term, is it safe to say that at least for the first quarter based on what we know now, it's essentially a wash in

terms of getting any kind of proper accurate economic reading? >> i think morgan, you're right. it's going to cloud exactly what outcomes are so this is going to cloud the earnings pictures in those reports we get in april for the first quarter earnings every one of them is going to be referencing this and how long it's lasted and if it's going to have spillover for the rest of their years or not i think that one of the things that i think ron said, too, was part of the expectations here, what are market expectations they were for the coronavirus to be a nothing and while that may be true, thank goodness in terms of mortality rates, we might be underestimating those economic head winds, so more important than ever, look at your portfolios and find where you have exposure. markets correct. they do go down. and owning companies with solid balance sheets and good returns

on equity an and cash flow becomes really important if this downturn lasts longer. >> gentlemen, see you over the weekend. >> thanks. >> coming up, big e sell off on wall street. coronavirus fears hitting stocks ahead of the opening of china's market on monday but is the sell off good news 'll llme wete you who might benefit when "power lunch" returns to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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. look at that chart of bond yields and they are falling again today. 1.5% on the ten-year even lower mortgage rates for home buyers and people looking to refi. diana oleic is in washington with the details >> yeah, they've fallen to the lowest level in more than three years as investors worried about the coronavirus rush to the relative safety of the bond market they loosely follow on ten year treasury the average rate is at 3.49% acorying to mortgage news daily matching the lowest levels since october 16 that's town from 3.8% at the start of january and 4.8% a year ago and about 9 $.4 million

could save $272 per month if they were to refinance at the lower rate, which defines refinance candidates as 30 year mortgage holders with a maximum at least 20% equity and credit scores of 720 or higher and they could save at least .75% off their first lien rate. the highest potential savings in 20 years and that's not even include iing cash bout refinancs they're sitting on a record amount of equity >> mortgage rates are down realtors say traffic is up, so demand is high but will people buy? there's still a shortage of homes on the market and the economy seems to be sending mixed signals but here to help sort things out is the chief economist at moody's analytics, mark zandi great to have you u on so as we see these rates move

lower, is this a tail wind for housing? >> sure. 3.5% fixed mortgage rate is pretty attractive in the grand scheme of things and i think home buyers have been b very sensitive to moves in morning mortgage rates so anything around 3.5% will get buyers out. you did point out an important point. while there's demand, there isn't a lot of supply. the amount of inventory is at near record low levels and new housing construction is also improving but still very low by any historical standard. even if people buy homes, they may not be able to find it that's a governor on sales, constraint on sales despite the low mortgage rates >> certainly that supply shortage is something we've been following shortly. with rates as low as they are with commodity prices coming off as well, is this going to be enough to spur builders to create more supply and more houses >> i think they'd like to.

the economics are right for them to particular ly at the lower mid priced points. the economics, the problem they're having is the zoning, permit, getting construction workers because of the tight labor market and they can't get the pieces together to build those homes. at least not as fast for the demand for them. i think they'll get it together and we'll see more housing construction but it's a slow build so to speak because of those constraints. >> mark, let me broaden out the conversation to the economy as large in the united states are you concerned at all that it is slowing and it's kind of hit sort of stall levels at 2% or is that just what we should expect? >> 2% is the potential rate of growth if we stay there, we'll create

enough jobs to maintain the current rate of employment and life should be good and expansion should continue on but if anything kind of goes off script and growth slows a little bit r, we get down to the 1.5% range then unemployment will start to not tire. as soon as that happens, recession dynamic begin to take hold a lot of things out there that could send things off script that could derail things so yeah, i think recession risks are, they're lower than they were end of last year, the threat of the president escalating the trade war was a real risk to recession this year, that's off the table, but i think recession risks are still quite high, uncomfortably high because we're traveling at a rate of growth that's a little slower and we'll have a problem >> so what's off script? is coronavirus 737 max production off script? what would constitute a railing

of that 2% growth rate >> 737 max doesn't help. a one time hit and hopefully that comes back online later in the year we understand that we have a pretty good grip on it i don't think it scares anyone too much it's not great, but i don't think that's the thing coronavirus, that qualifies because we can't handicap it just very difficult to put a number on it and you can construct some pretty dark scenarios. even though you attach probableties, it's a problem and what the stock market discounted today. adding to that nervousness is the fact that valuations in the equity market are very, very high about as high as they've ever been they should be high because rates are low, but they are stretched and the market is is discounting nothing but good news and coronavirus is not that so yeah, that would qualify. we need to watch that carefully. >> as bond yields on the ten year come down, how much attention do you pay to the

so-called yield curve and whether it is inverted or positive >> i pay attention you know, there's arguments, good arguments why the yield curve may be overstating the case historically, when ever the ten year yield falls below on a consistent basis and it did that last year, you get a recession roughly a year later pretty foolproof thmay not happen this go around. the b global quantitative easing, so it probably overstates the case, but it's making a case. the case is growth will remain slow right around that 2% level and again, i haven't looked today, but i'm guessing you know this, probably >> it's a little negative right now. here's one cheer for an overstated case i guess. >> yeah. >> mark, thanks a lot. >> sure thing. >> you bet amazon shares bucking the down trend today up more than 8% after reporting

results. and the stock rejoining apple google, microsoft in the trillion doll club, which of these tech trillion nairs is the best buy now plus, the coronavirus sparking fears about the global economy as we've been speaking about and sending oil into a bear market oil's bad week almost over we'll have the closing numbers coming up. orting innovative companies that will shape tomorrow and building workforce development and tuition-free college programs to generate the talent companies need. with a $150 billion investment in state of the art, modern infrastructure, and a nation-leading commitment to low-cost clean energy, new york is doing more than any other state to build for the future of your business. new york state, the state of the future. learn more at esd.ny.gov. with td ameritrade tools, and help from pros. it's almost like you're training me to become an even smarter, stronger investor. exactly. ♪(rocky theme music) fifty-six straight, come on! that's it, left trade right trade. come on another trade, i want to see it!

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amazon have been topping $1 trillion in market cap the stock joining microsoft, apple and alpha a bet in the exclusive trillion dollar tech club amazon, the only president obama ty one today, let's bring in your trading nation team d daniel, which stock stands out to you >> i love microsoft. i think it's one of the best long-term investments out there. there's a variety of reasons you have the ceo that has basically changed the landscape of the company, right. microsoft is now a cloud computing power house. they got the jedi contract from the dod last year. that was a huge win, especially over amazon and they've shown

consistent quarter over quarter and year over year growth, which is something a couple of other companies have seen a lot more volatilities so for me, i have to pick microsoft. >> bill, you're tracking the technicals what do you think? >> microsoft as well it's hard to choose from these bell weathers, but apple hit my 324 upside target. i want to see consistent closes above 2000 for alphabet, 1370 is the next, but for microsoft, we have strong support it's a breakout level. i think good support there and below there, you have great support at 4.5% away at 163, a trend line coming up so i'm leaning on microsoft as a buy here >> microsoft it is bill and danielle thank you for joining us and for more, head to our website or follow us on twitter. back to you. >> thank you ahead on "power lunch," we'll continue to monitor the sell off as the dow sinks more than 500

points now down 600 points. plus, energy stocks under u pressure the xl energy etf having its worst month since may. we'll discuss when "power lunch" returns.

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welcome back here's your cnbc news update at this hour. authorities say officers fired shots at a vehicle that breached security at president trump's mar-a-lago resort in palm beach. two people from that vehicle tatw were taken into custody. no word on injuries. the president is scheduled to arrive there today mark esper holding a news conference with his italian counterpart at the pentagon. he made a case for giving u.s. military commanders latitude for

using land mines as a need to protect american forces. >> the land mine policy we will be rolling out was developed during secretary mattis' tenuremetenure aga again, i think land mines are an important tool that our forces need to have available to them in order to ensure a mission's success. zblncht and while all the attention has been on the coronavirus, new data shows the flu still remains a bigger threat in the u.s. the cdc says it's widespread in every state except hawaii. there have been 19 million cases. more than 180,000 hospitalizations and at least 10,000 deaths. that is the news update this hour guys, back to you. >> thank you very much it is a sell off across the board. the dow down more than 550 points what is it 528 right now. down nearly 2% both the dow and s&p 500, on track for their worst month since august

january began beautifully, but not so much anymore. the russell is down 2% 6% off its 52 week high as you see right there. >> it's time now for the power movers ibm is up almost 5% today bucking the trend after the company announced that the ceo will step down in april. stock has lost around a fifth of its value during her tenure. now star soaring over 50% after volkswagen made a $2.9 million bid to acquire the rest f the company. on pace to have its best day ever wwe getting body slammed the firm has lost its confidence in the entertainment company after it missed its guidance on pace to have its worst day since 2014 the coronavirus is also taking a bite out of oil in bear market territory let's go to dominic chu. >> so, tyler, oil prices are

lower on the day as you pointed out and it's the coronavirus fears again. will it put a damper or not on china? world economic growth as well. those crude prices, they're $51.64 off their worst levels of the day. ice brent crude features world benchmark gauge down by .2%. it's a reversal. both prices were in positive territory at one point in the day. now there's a sense some traders may not want to be exposed to owning things like oil or stocks ahead of a possible coronavirus update the baker hughes weekly report show ed the number of active oi rigs in america fell traders will be looking towards the open of chinese markets after being closed for the lunar new year holiday so a big focus still down back to you. >> thank you energy stocks getting crushed today. worst performing sector down more than 3% if you look at the etf that tracks gas and oil exploration

stocks, it's having its worst month since 2011 so how much lower can energy go? with us now, global head xh commodity strategy at rbc and senior analyst at raymond james. good afternoon to you both i'm going to start with you. the cratering of crude prices has been swift and dramatic to say the least. on the heels of this coronavirus concerns i would imagine opec and other major producers are watching this closely >> we're getting r reports that they're considering having an emergency opec meeting the president of opec was out this week talking about a february meeting the russian oil pin manipulate center was out today signalling they'd p prepared to meet in february the emergency meeting could be held next week so it will be very, very important for the producer organization if you're going to move up an opec meeting, how do you manage this because there's so many moving parts it's unclear what the demand will be on jet fuel demand

how do you target sentiment in this type of environment they're concerned. they want to be proactive and get ahead of this. >> what you're telling us is a new and developing, a new and breaking i should say development right now. the fact that opec could potentially be meeting next week >> that's what we're hearing we had heard sometime in february floated and now we're hearing they could move it up to next week. this is happening quickly. i think a country like saudi arabia and their leadership shows they want to get ahead of this the saudi oil minister indicated they would be proactive on this issue. i believe they want to go too long >> if a meeting next week, an emergency meeting, isn't that tantamount to saying they're going to do a production cut >> very likely saudi arabia is already very disciplined with its output. it's been that way before the aram ko ipo last december and they've continued to be

disciplined so there's room for them to cut even more if they choose to, but you know as the other guest mentioned, libya just shut down an 800,000 barrel a day pipeline you know that in and of itself can easily compensate for the demand impact of the virus outbreak but nobody seems to care this is the classic one hand clapping approach. right? sentiment is so negative that the market headlines ignores the bullish things happening on the supply side whether it's the u.s. red count continuing to fall iran continuing to be an issue venezuela not to mention the libyan disrupg >> i could not agree more. we've had libyan production off the market for now close to two weeks. there's a huge production cut going on right now we're talking about a million barrels of b libyan production off the market libya is looking like t going into full scale war situation.

that is not environment to get this oil back quickly. when libya went off initially, people were saying oh, it's a negotiating tactic it is not. they want to win and this is a sort of starve out the central government so i think this oil could be off u for a significant period of time but again the market is entirely focused on demand. >> yeah. i wonder what you think all this means for nornenergy stocks especiallywhen you have both stocks weighing on the dow >> exxon, i'm continuing to be negative on individually because of its chemical business you're right both of those guys missed. but exxon's chemical segment is is such a structural head wind, this segment posted its worst results in more than a decade even during the global financial krcrisis the chemical business was not losing money a lot of people don't appreciate the fact that exxon is the third

largest chemical company in the world. when they're losing money in chemicals, this is a big deal in contrast to the other multinational big oil. so that one i would avoid but there are plenty of oil stocks that you know we continue to like precisely because we think that the commodity is oversold whether it's the saudi and additional cut or eventually of course the virus will subside. ultimately, oil needs to be back in the 70s to rebalance the global supply demand equation. >> back to the point you just made about sum of all fears. when you have delta, american, united, all cutting flights in and out of china right now, you're seeing it on the freight side as well how much could that actually dent at least in the near term crude and fuel demand and is this something we've seep pln py out with sars for example? >> that's 850,000 barrels a day. if we wipe that out and have the

libyan outage, we are in a deficit situation. but again, think about the broader picture. we know that jet fuel prices in asia are crashing. and so where he just have to see how long is this virus go on when does it pique are we talking about a multimonth situation we heard that for example workers in shanghai have been told to go back to work on february 9th if that's not the case, i think that will lead to a lot more concerns about the trajectory of this virus >> what does that mean oil and gas here in the u.s. does this actual help to buoy u.s. producers or is that just not the case when crude continues to fall? >> well, as you mention e ed, t u.s. rig count is at multiyear lows it's been pretty drastically since last summer. at the current level, the u.s.

oil industry cannot grow it's just not possible it's going to be best case scenario flat lining here on out. could even decline for the u.s. industry to grow, there has to be a stimulus a catalyst and that can only be in the form of higher commodity pric prices, so if u.s. oil production is not growing as is likely to be the case in 2020, the demand globally is going to be fundamentally undersupplied so again, we get back to the simple math. unless oil prices recover from current levels, there will be a structural shortage of the commodity for many years to come >> all right what has been a big week for crude prices we thank you both for breaking this down for us >> thanks, guys. treasury yields getting crushed this month rick santelli tracking the action at the cme. hi, rick >> i like the way you think u,

tyler. this month meaning year to date, that's a good place to start let's look at a year to date of two year notes, it's not been a good year unless you're long looking for low er rates down 23 basis points on the year moved to tens, down 39 bayses points there's your curb flattening three months and ten year looks to have its first official weekly close inverted territory meaning under zero since october of last year look at the six month chart of barclay's high yield spreads this has moved from under 350 to over 400 so you see the amount picking up now now granted in historic terms, it's not bad, but it's more aggressive than it was several weeks ago and fiblly if we look at what's going on with the euro versus the dollar, the euro is having a big day and big week. well above 110 what's going on? many traders are thinking if bernie continues to rise

the dollar is down on the week about 3 slrks 8 of half a cent and all those losses are coming because we're shifting those longs to the euro currency morgan, back to you. >> thank you stocks sharply lower across the board. the dow and s&p 500 are now lower for the year the airlines getting hit particularly hard in the sell off as they have had to can a sell flight to and from china. united having its worst month excuse me in four years, we've got much more on the airlines and the oabrder markets that's coming up.

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mainland china primarily shanghai, beijing. a few other the cities nights between the u.s. and hong kong at least with american and hong kong, those continue. now here's the flight cancellations that were announced today. american through march 27th. delta and united, going to take up to a week for them to wind down their flight operations but by the 6th, they will have canceled them. when you look at the number of people who are flying in china, this says it all this is the world's largest airline market in terms of the number of people flying and there are 31 international airlines that have either cut or curtailed their flights in and out of china, that number is much higher than that likely. the numbers keep jumping every hour when you look at the stocks of the u.s. carriers that fly there, the real sell you have happened after january 17th. look at that the huge drop off, especially for united airlines. down 17% you saw all the coronavirus story accelerating

china eastern also trades here in the u.s not surprising that it's seeing a huge sell off. china eastern serves 16 u.s. cities i placed a call to the company but have not found if they're curtailing their flights i will be curious to see how many people are on those flights. >> how do they come up with a timetable? when i see halted flights through april 30th, i mean it's, we don't know how this is going to develop >> right >> you just can't moou it around day to ta. are people likely to do that even if, say coronavirus clears up next week ma lack lousily, it's gone are companies going to send somebody back immediately? a few will, but some will say let aes wait

have glyou go back in march or april. that's why the airlines are trying to get their best estimate in terms of where they'll be >> thank you we've got developing details on the senate impeachment trial. a source says they're negotiating a potential deal that would put a final vote on this trial on wednesday. now u under that proposal, it would allow for closing argument as be made in the trial on monday floor speeches from senators to happen on tuesday and then the vote on the articles of impeachment themselves to happen on wednesday now i will caution that this is all still in flux. this is an idea from leadership and senators still have to say whether or not they are on board with it. now here is what we know will happen today so far. which is house managers are wrapping up their case for calling more witnesses if they haven't done so already. after they're done, the white house will thep have up to two

hours to make its case for calling more witnesses then there will be a vote on those witnesses. we know it will fail bauslecause because lisa murkowski and lamar alexander have said party leadership is trying to do is figure out how to wrap things up after that guys, one republican senator, john cornyn of texas, said they need to find a way to land this plane. back over to you. >> this is a little bit of a change or at least from what they've been talking about from what has been assumed was going to happen and that was the failure of the vote today on witnesses some time later today and then a very quick move to dismiss or acquit the president. i want to get a sort of sense about how did this come about, who does it help, and right in the middle of this if i'm not remembering incorrectly is the state of the union address is it possible that the president of the united states

is going to go to the house of representatives next tuesday night or wednesday night while a trial is still going on and give a speech on the state of the union? >> reporter: tyler, that does seem to be on the table. under the timeline that is currently being floated, both sides would win some and lose some democrats are facing the iowa caucus on monday night that would mean that senators would have to be here for the trial and to make their floor speeches at least on tuesday republicans would also face a hit because president trump, as you said, would be still having this trial hang over him even as he gave his state of the union address and would not see that final acquittal until wednesday. perhaps if both sides lose, both sides can win here but this is part of what is being negotiated as we speak and we'll have to see eye it lays out. >> thank you very much, interesting news there. all the major indexes are deep in the red as weak economic

data and coronavirus fears permeate wall street let's break it down with our traders. joining us is cnbc director jim euro and jonathan corpinas gentlemen, good to have you both here john, let me start with you. i wonder how much the market is looking ahead to the re-opening of the chinese mashltrkets on monday, monday local time and sunday our time, and expressing a we are that theorry that thera real major selloff in the double digit area that's just my number, not anything i've seen and that would certainly reverberate back to the u.s. >> exactly, tyler. that's the message we're seeing and that we've seen. while this has played, the chinese markets have been closed we've been trading our markets and waiting to see how the

markets are going to react, both the u.s. and internationally we saw this activity last friday the risk off trade went on very fast we're seeing it again today. no one wants to be long going into the weekend all indications are going to show us that there's going to be significant pressure on those markets and rightfully so. they haven't had their opportunity. the news cycle continues to be one way. the news is all negative we haven't had any positive headlines relating to this just yet and until we get that the selling is going to continue so this has been pent up for a long time and we're going to start seeing that market hit sunday night. >> jim, put this into context for us i don't mean to minimize it. 556 points is 556 points it's almost 2% decline in the dow but that's not cataclysmic. >> not close to cataclysmic. to me you can say that in a month and a half we may look

back and go that's the correction we need and i think that's what's going to happen. it would amount to about a 7 or 8% correction. what we're seeing is the friday multiplier the chinese market opened up, that's fine. but in two days when you don't have market access and you ask what's the likelihood of a negative headline versus a positive one, it's overwhelmingly disproportionate to negative. we're in the early stages of this the earliest we could start to hear good news would be in a couple of weeks when the people who have been contaminated -- one thing i'd like to point out. there's the health risk that's obviously grave and huge but we're talking about the market risk and that's about fear and perception and consumers' behavior if you were scheduled to go on a cruise ship this week, if it was me and i'm not trying to cause scare but i would have trepidation about doing that people feel the same way about crowded restaurants and bars it's at the infant stage but

that could be a big deal and it could be a huge economic lock-up. >> just to follow up on jim's additional point, this market, this pullback that we're seeing now, 2%, is probably going to be insignificant. go back to december 2018 we were expecting a santa claus rally. markets sold off after rallying the prior months leading into that and january, too. if you look at the 2019 chart, december and january from '18 to '19 traded down and we went straight up. this might be our beginning. year flushing things out we're flat to where we ended the year in 2019. >> i realize the coronavirus angst is playing out in markets the world over but how much of this is also the fact that we've had disappointing earnings and outlooks coming into 2020. you've had softer than expected data and then of course you do have all of this uncertainty in d.c. amid impeachment, iowa caucus, et cetera. >> i think the earnings thing is

mixed because if you look at both apple and amazon, they did quite well and they're kind of the bell cow of earnings season. tech week, in my mind, is like 40%. if i have to give the kroe coronavirus part of it, of the fundamental part of it is 90%. remember, when this kind of thing happens, for the month before the end of the year -- i talked to scores of people and they're like, what do we do now? i said you rebalance nobody rebalances until markets begin to correct and that's kind of the life of a correction. at first you get the big pullback, i try to make it higher and people are like, wow, i got too much risk and that's not just on the personal level but the hedge fund level too the second stage of correction comes now and that's predicated on a bad close today because i think the market's held up relatively well considering what the story could be. >> gentlemen, thank you very much have a great weekend. >> thanks. much more on the markets coming up. and don't foetrg, you can always watch or listen to us live on

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amazon, tesla, the reasons why he's number one. >> two names that have held up very strongly in this market despite the fact you have the dow and the s&p on pace for their worst week in six months >> i can't believe january is over >> i know, right >> yeah. nice having you here. >> great to be here, thanks. thanks for watching "power lunch lunch.". >> "closing bell" right now. >> welcome to the "closing bell." i'm wilfred frost at the new york stock exchange. we have a big selloff. the dow was down 600 points or 2% on the dow. with 59 minutes left we are down 543 points >> welcome, everyone i'm sara eisen let's look at what is driving the action fears of the coronavirus as american, delta and united all suspend flights between the u.s. and china. the chicago pmi number plunges