thanks to brian and michelle for being here tomorrow. join us tomorrow "squawk on the street" begins right now. ♪ life doesn't discriminate between the sinners and the saints ♪ ♪ we can do it anyway, regardless if we fall, if we break ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla, jim cramer, and david faber. record highs in sight at the open despite a round of q1 earnings somewhat underwhelming. investors focusing on signs of renewed economic strength and the president's ability to leverage that in november. will the bond market confirm ten-year around 1.64 road map begins with easing virus fees, stocks set to open

sharply higher on new hopes for a vaccine and drugs to treat the fast-spreading coronavirus a big spin-off from merck. the company announcing plans to split a number of its slower growth products into a separate public company next year disney plus growing at a faster than expected clip, nearly 29 million subs, and counting yesterday's rally saw the dow and s&p best day performance since august nasdaq's eighth record close of the year jim your point about the president, the lead headline in the page one of "the times" is a buoyed president a lot of that about the country. >> you contrast what the democrats and republicans talk about is extraordinary the president is making the strong case there's a lot of money in the market. $12 trillion is being created wealth the democrats saying that wealth is not so-called trickled down, it's not helping for people in transportation costs, student

loans, prescription drugs. it's almost like we're dealing with two different countries you've got a country that the president cites all these people that have now at full, not full but great employment and taking regulations away, and the wealth being created and then the democrats say it's not created for our people but for our purposes here, there is tremendous wealth being created and what it's doing is making people i think not wanting to sell stocks remember baby boomers, doing work on baby boomers with my research made for "mad money" ben stoto. the baby boomers were supposed to be selling. they don't want to sell tesla because it goes higher it's self-fulfilling i'm troog even-handed. like him or hate him the president is great for the stock market but previous presidents have not cared about the stock market, because they don't think it's that big.

i'm listening to him thinking i understand why people are buying stocks because employment is good and employment is always correlated with economic development, and with better numbers. so that's why i was being a little facetious he took up numbers for the country but in the end you listen to this i've never felt this way after a state of the union, geez, i see why people are buying stocks >> how do you separate it from the fact that the faang plus index is now at its highest relative to the s&p ever, right? ten names. separated from the sentiment around tesla >> i did some work yesterday with carolyn boroden does fabulous fibinac 'e analysis nasdaq is separating itself from the s&p. immediately i'm hearing wait a second, that happened in 1999. i come back and say yeah, you got this absurd rally where if you held on, you doubled the nasdaq so i come back and say well

look, these companies, they're loved but their valuations other than amazon are not crazy. they're not. i mean, alphabet reported a number that was traffic, went back and forth and felt that now you know the benchmarks. facebook was pretty good number. when i look at snap, facebook's really good. apple, if they really are doing what jeffries says, breakout year for wearables i get it. amazon quarter was stunning. they are making so much more money than wall street thought, and a lot of it is cloud, which i thought was supposed to be taken away by the people at azure, microsoft microsoft's expensive stock, but so what? >> yes, it's got a growth rate and obviously cloud is growing quickly. move sort of out of the key parts of earnings season here, certainly not a bad reflection in terms of as you say the overall economy and the strength of these companies >> versus gm versus ford. >> not to mention versus the

ten-year yield you talk about the president, but i mean, what are your alternatives, continues to be also a theme >> right president said swap out a bond for the stocks >> when you can get -- >> i'm being facetious >> i know. >> you know but our viewers may not know >> no, i don't think they do i'm pretty confident they don't. >> it doesn't matter bonds are no good. >> right >> and then the coronavirus comes along. >> we moved up sharply in the yield over the last day. >> bonds are good. >> on january 24, when we last had a high for the s&p, ten-year was in the 1.75 range. we're not getting, not repairing that >> right >> but we're getting there >> i know, but it is, look at 3:3 3:30 last night, at 9:30 we knew about the yokohama carnival cruise, princess krucruise off yokohama with ten people who with corona. david? >> i don't need to look at you to listen. >> you're like my father

>> am i? nice thing to say. >> "jim, i'm listening." you're not listening 3:30 we get word from china maybe they have something. cowan comes up today and says there was a positive data point total new cases ticked down tuesday. you've got this on the one hand the virus takes in rates so they're lower. on the other hand, we're getting good news about good news about the coronavirus. there's something for everybody here but there shouldn't be >> nike last night says it will have a material impact on greater china ops, up in the premarket. >> stock went down $1.50 when they announced that to 99 and blink of the move i come back, it's up. who are these people buying? what does it take to have a stock go down, for heaven's sake other than ford when they said sell our stock >> we should get to ford next week is important as we know in terms of the workers

returning to the factories, potentially. >> right >> or whether they will. >> that's a great point. do you think they'll return to apple? >> i have no idea. they're supposed to. >> hyundai took down their 2020 revenue guide. some workers coming back to work, some not able to interact with other workers it's not all get back to work february 10. >> 50 million people are quaranti quarantined. >> listen, jim, we know the number of infections is far most likely far beyond what we're being told by the chinese. >> right >> the deaths are far beyond that as well the question is how much >> you're saying the prc is lying to us? >> yes >> welcome to the club, my friend >> which club is that? >> the club that knows the prc knows about it the entire time they had it december 20th, they came here a delegation >> and signed a deal in the east roll >> and went to davos, shaking

everybody's hand did you bring purel to that conference >> i wasn't at davos but yes >> davos you had to bring -- honestly, they knew! and they came here and we discovered -- >> what? >> december 23rd, january 23rd they went to is ada santa rosa >> in wuhan trying to get sick, you know, you make it sound like they intentionally did it to somehow spread a virus it's horrible, and not true. >> it's obviously a story for many corporates. disney last night says disney plus streaming service ended with 26.5 million subs, added more than 2 million since the beginning of the year. snaps down on revenue miss hurt by a shorter season. ford tumbling after disappointing full-year guidance and earnings miss, jim >> call me too optimistic. i like the snap quarter. they talked about consumer cpg the cpg spend is going up. >> you were saying that yesterday as well, i think you were talking about ralph lauren

and how very effective on snap or something >> yes >> i was listening >> you did >> yes, i did. >> pop said he listened, too >> dau is up for but rpu up three. >> i thought the rpu number was great. they talk about new product, short video that are selling i think the consumer companies desperately want to be in anything that's online, and snap has become something that was profit-taking. 20 million people, david, i bet you your kids are on snap constantly >> one of them is. he uses it as his communications platform >> right >> let's say i'm colgate if i could reach your son, i might have, and he's trying to figure out what toothpaste to use. i target him with colgate. maybe he stays with colgate forever. >> it's possible >> yes >> or it's whatever we buy for him. because he's still not actually going -- >> brain washing, manchurian

candidate? let him make up his own mind >> i'm looking forward to the day he goes to the store and buys his own stuff >> i'm sure he is, too >> i don't know about that >> i'm just saying that it's going main stream. i never felt that way. it was a captain morgan problem, you can't, you know, you're captain morgan, they do the thing? >> yes >> the people from snap are underage but i remember dealing with somebody who was in charge of the colgate advertising he said if there was ever a way to reach the 13 to 18, we could block crest. guess what it's been found, and it's snap >> as for disney, that 28.6 number is approaching hulu's 30.4, which is incredible given their goalor 60 to 90 is a 2024 goal, david, and basically a third of the way there >> they are. listen, when this was announced back what was it in april of last year, and then obviously the roll-out in the fall, if you

told people a number, this early into the rollout, they would have been quite surprised. and the market perhaps anticipating it, because they reached the 10 million subscriber number so quickly, that's the last update we got. in the early days in november they told us 10 million but 28.6 million is, there's just no doubt it is an incredible success. it's costing them a lot of money. we all know that >> right >> it will continue to, but iger has done something that few ceos are able to, which is get investors focused on the opportunity that is being created, the future cash flows that are being created, as the existing business slowly but surely runs off a bit. he's done that, and spending the money to do that the revenue number is up dramatically at the company in terms of revenue growth, spending to get the revenues the number is all that matters 28.6 million

they estimated 28% came from the verizon promotion you get one year free. >> right >> the numbers are very strong >> yes, very strong. >> and point to its continued place in the marketplace, one that is going to see the addition, by the way, of hbo max, not too long from now and then the ad supported peacock service from our parent company later this summer that is going to get even more crowded but disney clearly carved out an important place for itself, and espn plus and hulu have also done fairly well huely live and hulu. >> espn to speak of, advertising wasn't as great but that may be year over year, anomaly. something about espn plus is good >> yes >> swimbird is a smart guy for morgan stanley, talking about earnings per share doubling, 2024 spotify is buying the ringer for undisclosed terms and daniel

eck said he thinks it is like buying the next espn >> well, spotify is doing well but not well enough. no one ever seems to think it's doing well enough. i think it's a terrific story, but so what? it's good. but no one cares i thought the acquisition was smart but every time they make an acquisition, doesn't do anything i think a lot of it is people just think there are so many >> q1 through spotify, the numbers of overall and that's what you see reflected in the stock price. podcasts that rare appearance. we're moving strongly, and love to know what they're paying for ringer, given how he spent so much time building that company, kind of failed partnership with hbo that he had for a while. >> do you think it's opaque? >> i don't know. >> this is what gave us in terms of sound on the ringer take a listen. >> what we really did with the ringer i think is we bought the next espn, and we think that's going to be a tremendously

valuable property as we looked at, you know, the development of sports over the next decade, on the billions of people that will start listening to audio so we're just very excited about it, and yes, we will invest in that trend >> spotify of course well-funded in the private space, has been able to carry some of that through into the public markets. >> i think they're taking a long-term view i don't think they care about the near term. that's what i think is going on. they have a long-term view i think it's -- they're using an amazon model we're going to keep expanding, doing what's right long-term and the market isn't used to hearing long-term. they want to have short term, but short-temple doesn't mean much to spotify. it's run like a private company. merck announcing big spin-off plans we are on track for another strong open. we'll get close to that all-time high s&p 3333 when the opening bell rings in about 15 minutes legendary terrain in telluride,

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the separating out of the slower growth drugs from the fastest growth company what merck announced this morning in addition to its earnings, it is going to be spinning off from its women's health, trusted legacy brands what they call and their biosystem similars business, it's going to create a new independent company, new co for new that will have $6.5 billion worth of revenue and will begin trading let's call it a year plus from now, as an independent company with its own dividend, its own ceos, its own

board, all of it the sxin pin is intended to be free you get the new shares as a current merck shareholder t will have a new management team, kevin ollie will be the chief executive officer, over 10,000 employees and merck will receive a dividend of what they say between $8 billion and $9 billion, from newco. again, it is this idea of separating out the slower growth products, so that big pharma, which conceivably is fairly good at discovering and commercializing drugs can focus on that. merck of course has a number of quite successful drugs, led by ketruda, cancerer this in a finds more and more uses and may become the largest selling drug company in the world this is not unlike other companies doing as well in the future so this will trade lower

multiple than merck but the hope is of course that you get a higher multiple on what is left from merck, you have a sort of very stable cash flow producing company here that radically reduces its cost basis by sort of slashing the sales force. so many other things in terms of what they can do organizationally, and then you have merck focused on oncology, vaccines, hospital specialty and animal health. that is where they're headed this new company in terms of where it stoods is a percent of merck, it was 15% of revenue, 25% of its manufacturing, 50% of its products and that sort of gets to this idea here, where they can potentially cut costs, and 60% of its skus. guys, important point here as well, the dividend, $2.44 a share for 2020, at merck, is not going anywhere remember the pfizer deal, the deal with mylan is not well

received by the company. you got back to the payout from pfizer here merck keeping its den depend and newco will have a dividend of some kind as well. it is dividend additive, jim, is what they're saying. merck is down as you see, almost 4%, at least thus far on the news these have not been overly particularly well received by the marketplace, at least thus far when you look at the pfizer deal spinning up into mylan >> you're so right, david, they make so much sense to me but they're not paying off glaxo doing the same thing and reported a number this morning that was sub par, down a couple bucks but they're splitting into the old and the new. >> right >> and the feeling is that the old was the great cash cow that supported the new. >> right >> they're getting rid of the cash cow >> they'll be differently valued, merck. >> i know. >> in some ways you are demanding a somewhat different shareholder base because it's about finding those big drugs,

developing and commercializing them, and not as much relying on the things that are either not growing, coming off patent >> novartis did it >> novartis, yeah, sandoos ther. >> j&j stock is doing okay >> spin-off expected to be completed in the first half. we'll go tote what the president said last night about drug pricing in his state of the union, cramer's "mad dh.as futures up 280 don't go anywhere.

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plenty to watch on this wednesday morning. adp strong at 291, tons of earnings, couple press

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"the opening bell" is brought to you by nuveen, a leader in income alternatives and responsible investing. >> welcome back. let's get to a mad dash and we'll roll right into the opening bell what have you got? >> david, i've got clorox on today. and i think what's important to note is that yesterday clorox, we've got from the w.h.o. that clorox bleach can be used against this strain of coronavirus. it does kill it. i always felt it would kill it i said that clorox kills anything, but what matters here is that clorox is boosting bleach prounduction to meet it to boost their cash cow they make a fortune on is significant. even though they had zero percent organic growth this product is the gross margins are extraordinary on here say bit of news about the coronavirus, they found something that works and i can

imagine every hospital every building they're going to use it to wipe down because it does kill the virus. you see what happened on the princess, the diamond princess last night, off of yokohama. what do you do you have to wipe everything down, and what works clorox because it kills everything. i think it does matter on hump day. >> and we'll see what benn benno dorer has to say on "mad money" tonight what is the multiple on this stock? >> very high >> you always pointed out versus some of the other fast growing >> colgate has a high good quarter. these companies if you step back in the interest rates were higher, these companies i think would all be lower right? interest rates are that's like a fantasy world and this is another reason [ cheers and applause >> let's get the opening bell here on the s&p 500 at the cnbc real time exchange and the big board it's shenier energy

celebrating hits 1,000th lng cargo, at the nasdaq scheiner dental products and services [ bell ringing ] if you bought tesla at the highs yesterday you're about $100 a share poorer this morning. >> i think they've had a level where there are sellers, but the bulls on this are just, they won't stop, and i think that their analysis is linked with what's going on with gm and ford there was a fabulous interview phil lebeau did with the cfo of gm and there was a moment, listen, more of a rhetorical question your stock has done nothing. look at tesla. the answer is that gm has growth as a matter of fact, they're down a lot of regions. ford saying things are bad about europe and there's elon musk doing a jig that he's opening a

big plant in berlin. you've got on the one hand electric vehicle growth, on the other hand the companies are all claiming growth at the top of the gm release but you know what it doesn't matter if they're not buying it. >> ford is having a very tough go of things, as they continue to try to cut costs and adjust and putting up numbers obviously that we're not particularly strong china is still a challenging market for them. >> they talked about poor execution. >> yes >> take a look at the execution of musk. it's great execution >> you know, they made that unexpected leadership change at ford a number of years ago at this point >> yes >> i'm not sure, certainly hasn't shown up on the stock price yet. >> not yet not yet. >> is that implied that it will? >> trying to be a gentleman. >> you were, jimmy chill >> jimmy chill it should have happened, but jimmy chill says not yet >> does tesla, we always, people

want to make comparisons between that move in tesla or i should say make comparisons to the dot-comdouble when we see par bo parabolic moves in stocks. it did get nuts on no news that was, now this is a profitable company at this point. >> right >> but we are a couple weeks out from earnings, and there's nothing new. it did remind me a bit of some of the moves we got accustomed to seeing. >> it's funny you mentioned that peter bookvar lookeded athe seven-day relative strength index of 97 out of 100, compared it to qualcomm which got to the low 90s. on a seven-day basis it's a sharper swing than qualcomm. remember the thousand dollar targ target >> it went up every day, nothing new, no news >> pure multiple expansion >> nothing investors could decide this was the fair value for the stock based on new information. that's the same thing with tesla. >> when you talk to people about

the stock market, the young people, they talk about tesla and beyond meat. i understand there's a competitor for beyond meat coming, lower priced but right now the stock is hanging in there. i look at tesla and say it brought out sellers yesterday in the 900s that was the first time. whether it was short selling, i don't know what is the borrow rate here, david? it's hard. >> enormous. sell short the stock >> you don't want to pay what the borrow rate is it's very high >> but it is an exciting story, because the more cars he builds, the more people buy them, no advertising needed, you don't see any tesla ads in the super bowl, and i keep thinking what he'll say in battery what is he going to say in april in battery does he have something for national battery day which we're still trying to determine. >> that's national lead battery day. >> he's got a good battery there's something to be said about a company that goes from big losses to giant gains, if he

can do $10 a share next year it's still expensive but at least you see a better than what qualcomm is doing. >> qualcomm, the number of the companies did grow in. >> they're going to report tonight. >> eventually they did justify it >> worldcom did not grow >> many others that i can recall did not. so many others, but -- >> xo. >> there was one called amazon that did yahoo! didn't. yahoo! never made it >> bought broadcast.com. >> i can go back in mind and remember some of the others. >> memory lane >> that never got there. tmgi, david weatherall you remember that guy? >> they were an incubator, david, of virus that caused to you lose money >> by the way -- tesla bear market would be 775, a lot of jokes deep value buying

happening right now in the low 800s >> down a yield play >> chipotle guide comps mid single digits. street looking for six where are you on chipotle and interesting, wendy's is really talking some trash on their breakfast launch, which will happen early next month. >> i believe in the breakfast lunch. buy chipotle they double the number of stores the news came out in the internew with hartung, the cfo the chipotle make lines and chipotle windows, maybe chipotle airport stores they have some already, but they're going to expand much more than people realize, guac prices are down, avocado prices are down, they have conservatively guided over and over and over again. look, just think about a few years ago when the stock was getting hammered, because of illness, what did the company do they bought back 10% of the company. how smart was that it's just a great american story. and there's plenty of room for

some more. >> yes reminds me that mcdonald's marked market cap for a time yesterday was below that of tesla. surprising to some >> remember, i said that there is a certain time where you could put the price, the value of gm and the value of ford and then double it, and it's still not equal to, you know, where i thought tesla could go and it hit that level, and finally tesla sold off a little bit. >> it's coming back, by the way. it's coming back >> buyers are coming in? >> seeing something they like, yes. ooh $10 in earnings. only 82 times next year's numbers maybe? >> only. you are a 1999 creature. >> there you go, i remember it well >> you have paper, you were going to talk about something. >> speaking of 19d99, ebay >> geez. >> feels like yesterday, doesn't it ebay yesterday the news was reported by "the journal" that ice, owner of this place, down in atlanta, owns exchanges

typically has been involved in buying a lot of them, jeff sprecker the company, aggressive ceo who likes to do deals approached ebay. they confirmed it at ice they put a statement out they approached ebay to explore a range of potential opportunities that might create value for the shareholders of both companies and they also added that ebay had not engaged in a meaningful way and they're not in negotiations regarding the sale of all or part of ebay right now. ebay comes back late yesterday, this morning i got the statement, ebay board they say is aligned and opened to all value-enhancing alternatives the board's highly engaged, and has acted and will continue to act consistent with its focus on shareholder value. it's interesting not sure where the leak came from, perhaps designed to in some way pressure ebay of course remember you've got elliott in there, you got starboard with a letter, about 1% of the stock, maybe a little bit more than that, unhappy with

the pace of change at the company, failure to sell the classified business at least at this point the idea would be for ice to own the marketplace, so it would be a significant move for that company away from exchanges, at least to a very different kind of exchange, one that's not about financial instruments, but the stock got hit yesterday pretty badly not clear if and where this goes from here. one person close to ebay said, tells me the approach was vague in nature. listen, typically you don't put a price on this right away when you go in the door hey, we want to talk we want to see what we can do here they're claiming it was vague in nature it was an approach to talk about things but clearly they wanted to potentially talk about buying the company. you don't put a number out there day one. they didn't get interest we'll see if that changes paced based on ebay's active shareholder. >> what does the ceo say >> i haven't talked to him

>> because there is none >> there is an interim >> what a hero he's become >> the split of, i mean look at paypal's market cap. >> oh, geez, doan shulman, the whole segment square broke out, mastercard, visa the only one that didn't but fintec ebay has been floundering. there's no growth. >> i know. >> there's amazing no growth >> it's difficult to get the marketplace growing. paypal's market cap is $140 billion. ebay is 28, 29 >> paypal is about to break out. sounds silly >> donahoe, icahn saying split it, i looked back at it and we'll do john left, took a reps pit and showed up at service now and now running nike >> he'll show up on cnbc later today. sara has john donahoe at 4:00.

i don't have him >> he was my guy and became your guy. >> and now sara's guy. we're all one network so i salute everybody >> we're all one network but not one family [ laughter ] >> john would take to being calling someone's guy but i don't know >> we don't want to do that. >> he's very tall so he could be a lot of people's guy. sort of the knees down, you could have it. >> you mentioned retail, jim, macy's closing 125 stores over three years, 2,000 employees, 10% of corporate and support staff. flies in the face of r rail, b of a goes to 132 as r rail is shifting away from wholesale models in favor of international. >> i think rl is on a really good growth path they've gotten rid of a lot of their bad stores macy's, seem to have new bad stores now it's 125 i thought it was interesting,

the 2000 misses the corporate staff. how many people do you need in corporate? they seem very bloated remember, they had the two-headed, there were two companies that have two offices. >> not anymore >> amazon and macy's >> now they're cincinnati. moving the top personnel to new york >> jeff is taking big actions but going to use the rights above herald square to do some construction but these were actions i think should have been taken before but they're being taken. >> we have a rich real estate portfolio, how they go about monetizing is the question, what they can do and how they do it it >> 1.5 billion by 2022, a nice gross margin improvement, becoming much more fashion retail when you look at the malls that are closing, they're in a lot of malls that people just kind of don't go to as many anymore. i was talking to people simon property group, they've got a

lot of malls people go to. they've had $33 aboutle billionn dividend >> it's brutal for simon, tauman they're down based on the concerns of the mall >> or else order from amazon >> quick, jim, 3% move in oil here, back above 51. opec plus is having a two-day meeting wrapping up today in vienna we'll see if they cut 500 to a million a dead head fake or not >> i think we'll make it up. the united states is the big swing producer, producing 12 million a day. i know scott sheffield, runs pioneer talking about doing 15 and then 18 million barrels a day so yes, i'm going to say head fake unless you know that china has really solved coronavirus and i'm not willing to do that, despite the cowan piece that says we got our first case of downtick on use of how

many cases there are in corona david you are suspicious about the prc figures. >> as you are. >> i get these, my stepson is a chinese scholar at georgetown, gives me these videos that are underground videos >> there's stuff that we can't say on air regarding the number and what ten cent put up online for a few minutes, not good. >>you're risking your life there's a woman i saw one, that is giving you 90,000, say and they call, in order to be able to get around the censorship, instead of saying president xi, they call him president trump, it's a way to get around like a code like homeland over there you seem tired >> i seem tired? no, i was just thinking about what it would be like to live in a communist country. >> really? >> yes all right, you know what i want to talk about? i bet youcommunism >> no, the new york mets do you know why? >> you want to put mr. met on?

>> i'm not putting mr. met on. >> noted hedge fund manager. >> a spent a lot of time reporting on a story involving the expected deal between receivie cohen and the mets, dom ma dominated by the wilpon family they were negotiating an agreement cohen would take control of the team over a period of five years, in which the wilpons would still be essentially running things, fred wilpon and his son, jeff as the company's c.o.o. yesterday i was spending a lot of time trying to confirm something that i had been hearing for some time, which is that mr. cohen was going to be walking away from those negotiations in part because the wilpon family had tried to retrade the deal essentially, come back and said no, this is not what we want, we originally greed to terms, none of which have been made public. mr. cohen would not say anything

other than i'm an nda and can't talk to you. the wion family spokesman similarly saying the same thing. limited partners hiding behind the confidentiality agreements, very difficult to get anybody to confirm what many people have told me, which is again that the wilpon family came back to him, with different potential terms, and mr. cohen looked at it and said you know, you're not dealing honestly with me, and we're going to have at least a five-year relationship ahead of us it would be one thing if i knew that okay, this is the new deal. i'll pay the price and have the deal with them five years and not trusting them any longer seems to have stopped the deal in its tracks. unclear whether there's another potential buyer for the new york mets, whether they have received indications of interest of a higher price that emboldened the wilp wilpons. this mets fan will follow the news bad news for mets fans

>> you picked tesla, the pitcher of yours >> what about him? >> he picked tesla it was a winner. winner of the contest. >> as is jacob degrom, spoken as a mets fan >> we have to move on from your pathetic team, david >> dow is back and s&p let's get to bob >> guys, we are rallying on efforts to contain the coronavirus, 600, 700-point move in the dow the last couple of days, back to where we started, martin luther king weekend, we were 3325. guess what we're back where we were totally round trip here, we're down about 3% in our worst and all the way back as if nothing actually happened. the sectors today it's all the cyclical groups doing well, industrials, energy, banks, semis and utilities flat now, finally taking a back seat to what's been going on why are we getting the rally today? the three elements of the four

reasons, the market's done so well recently are still very much intact. the u.s. consumer is strong, yes, fed's neutral, adding liquidity. trade truce, yes what we don't have and this is emphatic, on the global bottoming stouffery here, because coronavirus is playing havoc with that last part of the whole game, remember there are still companies talking about very significant hits to their earnings profile nike and adidas are closing stores capri, michael kors talked about an earnings hit cathay pacific, three weeks of unpaid lead estimates are coming for the first quarter. the market is focusing on microchip companies, great numbers, and their earnings guide aance was better than expected global brands are mixed. i want to mention microchip great numbers and guidance was terrific they said coronavirus may be a problem. they think the bottom was in

december that's what the market is focusing on. chips moving very well ipos starting to heat up interesting little kind of smack in the face from the people wanting to buy casper the mattress makers, 12 to 13, going to price tonight prior price talk 17 to 19. what's going on there? these direct to consumer stories have been tough sells, peloton has been stuff, mile direct has been tough the companies have to spend a lot of money to go out and get customers and there's concern they're not going to be profitable for a while, there's concern they have to spend a lot of money, if that goes away, the customers might go away. we'll see how this trades. another interesting one tonight here, ppd, this is big biotech research firm here, a hot space to work in, keep an eye on this one, a lot of positive comments i'm hearing in the background on that guys, back to you. >> bob, thank you. as we said, dow up 312 here. s&p within about ten points of an all-time high don't go anywhere.

watching snap today down 9% a three-week low as they miss on the top of the bottom lines. s&p has essentially recovered all of the losses since the coronavirus became a story back within a range of 3330. stock trading with jim after a short break. (vo) in every trip, there's room for more

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time for jim and stock trading. >> humana reported a very good number but sometimes i wonder whether this isn't the so-called disarray in iowa i say so-called because who the heck knows what is going on there? but when you see candidates who have went single payor kind of not doing that well, you want to buy these, united health is up, too. but this is important to watch because this group is really a play on whether the republicans win or democrats win some of the democrats want to get rid of the company humana and the president is clearly in favor of health care the way

that it is >> yeah. jim, what is on "mad" tonight >> all right we have to mention clorox. teladoc is something i've been focused on the millennials tend not to have positions so they like to talk on their phone, which i always think is funny you know, these guys are now doing, i had doctors in demand the other day. they now have psychiatrists. can you imagine? hey, man psychiatrist >> why not >> google ran a commercial about sharing memories of your dead wife with google assist. >> that was the one most people cried. that was a crying commercial >> we'll see you tonight dow is up 318. market pmi was good. we're about to get ism services so don't go anywhere

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york stock exchange. s&p 500 -- dow needs 270 points amid broad economic optimism we have market pmi that came in strong and now we'll get ism services to see if it can ratify what we've seen on the manufacturing front. hey, crick >> reporter: indeed, this is a january read we're always excited to see what the service sector the largest swath of the u.s. economy is doing and it is better than anticipated. 55 to 55.1 expected. 55.5 this sequentially follows a 55-point -- oh, that was down graded by 0.1 at 54.9. this is a very nice number all things considered and 55.5 is the best level since august when we were at 56.0, so not a bad number and of course the market has responded. equities especially. rates have followed it up. i do caution on the very solid

best in 4 1/2-year adp number we basically add an extra basis point to the upside to barely close to 166 now two basis points lower about the same place as before that number was released sara, back to you. >> certainly a nice pop in stocks though. rick, thank you. a road map for the hour starts with rally on nasdaq hitting a new intraday high the dow sitting back above 29 k as investors seemingly shrug off fears of the coronavirus. >> juul and other e-cigarette makers to testify before the house on their public health impact we'll take you there live. tesla shares are down. imagine that after of course a massive rally that started the year. how should investors be playing this amid the recent volatility? first an update on the koechbs. the number of confirmed cases of the coronavirus hitting more than 24,000 and the death toll nearing 500 amid new reports saying there is progress on a vaccine. eunice yoon is live in beijing

with the latest. >> reporter: thanks so much, sara the world health organization as well as china's top health authorities have both played down the rising hopes about a vaccine as well as a treatment the national health commission had said there is no confirmed effective treatment for the coronavirus. this is after state media flagged that researchers have said there are two drugs they were experimenting on which they found inhibited the coronavirus in the lab the lead scientist has been recommending these two drugs be used in the official protocol for the national health commission separately, uk scientists have also told sky news they have made a breakthrough on a vaccine reducing the amount of development time from two to three years to 14 days the commission has been much more focused on another drug, an

antiviral drug buy gilead. that experimental drug is currently in clinical trials in wuhan. the epicenter of the outbreak is wuhan. in fact, there is a wuhan research institute that has applied for a patent to use the drug to treat the coronavirus. chinese suppliers for these drugs have seen their stock prices over here, a skyrocket, move into double digits over the past couple days because of all these hopes, but for the most part, there are several chinese companies that are now working on treatments, looking into vaccines, but they all have said to us as well as to others that the likelihood of any type of vaccine before several months from now is quite low. >> eunice, you clearly are in beijing. what is the level of activity? we're starting to get more and more updates from american and other companies that do business there.

i just got one from adidas operating less than 500 stores in china, 5% of the total stores are people out and about in beijing? >> reporter: people are out and about more than they were last week, but it is still very, very quiet. for the most part it's difficult to go out to eat, for example, not only are a lot of places closed but you don't necessarily want to be around other people that's true for businesses as well right now probably the busiest people are the ones who are delivering products to other people's homes as well as delivering food. >> eunice yoon, thanks for the update we'll turn back to this morning's rally now, up more than 300 points on the dow citi's global economist dana peterson and charles schwab chief investment strategist both join us now. good morning to both of you. dana, what is the feeling as far as the coronavirus impact on the global economy at this point

>> well, certainly our thoughts are with the people being negatively affected by this but it will also affect the global economy. we've seen downgrades in growth and inflation across a number of our very large economies in particular in china we've down graded our 2020 growth estimate from 5.8% to 5.5% that certainly poses down side risk to our overall global gdp forecast right now >> as far as the market reaction, now we're building on a more than 3% rally in a matter of days heading toward record highs, already there on the nasdaq what does that tell you about where the market is at this point? >> well, i'm not sure it has everything to do with the coronavirus obviously with the number of infected going up by thousands every day. i don't think the market is rallying purely on some sense that this has been contained frankly, i think it probably has a lot to do with what had been driving the market for the past several months, which is

liquidity from central banks you've got some expectations that the fed may have to step in if we see a bigger hit to global growth that starts to infect u.s. growth and possibly consider rate cuts this year plus the stimulus that we've already seen announced by china and then more recently out of japan, so i think it is back to that liquidity driven momentum trade that, frankly, was a real part of the story before coronavirus. >> nothing diana said about the global economy and the outlook would reflect the nasdaq at an all-time high and other indices at a near all-time high. what are stocks saying right now? >> stocks are certainly rallying on the other aspects, certainly the u.s. economy is doing well >> we just talked about a rate cut this year. >> certainly if you think of the fed as kind of a global central bank you do have that risk certainly last week we heard from powell and he said the fed is watching things and the fed will be concerned if it feeds

back through trade channels or financial markets in terms of the coronavirus on effects on the u.s. >> does a rate cut make sense now, liz ann we just got the services number. it was very strong at 55 a lot of the -- adp, private sector jobs, an incredible number there factory orders yesterday do we really feel like we need a rate cut >> well, i'm not saying i think a rate cut makes sense here. i'm just saying that market expectations bumped up a bit when we started to get further details on coronavirus and just the potential hope that we get a little more liquidity from the fed i think has been enough to drive the market now, in terms of ism or market, services would generally be not exempt from concerns with regard to coronavirus but less affected by that. in terms of what we saw on the manufacturing side, which was a bump up, a lot of that predated concerns about coronavirus we have been expecting a stabilization in manufacturing,

not least because global manufacturing had started to stabilize. unique in this cycle has been the fact that at least in the last couple years global manufacturing, global pmis have led the u.s. both on the down side and on the upside combination of the phase one trade deal and then stabilization in global manufacturing data i think was enough to lift the u.s we were not really seeing a lot of the survey data on the manufacturing side yet reflect the concerns about the global supply chain, capx plans as it relates to the virus >> that's still a wild card. i guess what i was wondering, dana, is the market getting ahead of itself too much, pricing in rate cuts from the fed at this point? >> most likely, yes. certainly we're seeing that most of the effects have been contained to china in particular, asia, again, we've seen downgrades across our asian economies. a little bit of an effect certainly in europe in germany of even germany saying some of the stimulus on their side can offset the negative effects from the coronavirus seen through

trade, through travel, and also through supply chains. so unless we see a big outbreak here in the u.s. and unless we see the global economy really tank here, the fed is probably going to remain on the sidelines in our view. >> diane, in terms of earnings, the thinking coming into earnings season was that january, the qualitative language would be better you might take some numbers up as we got the halo effect around phase one. clearly, the virus has postponed that to a degree do you think numbers go up or down from here for the year? >> liz ann >> oh, sorry >> liz ann sorry. >> estimates for 2020 are still, you know, mid single digits for the first half of the year, back up into double digits for the second half of the year. i think there are still a lot of wild cards not least being what we've been talking about the last few minutes, which is coronavirus. and remember, china's impact on the global economy and the u.s. economy is certainly much elevated relative to where we were back in 2003 and part of

china's efforts to sort of morph their economy has meant that their consumer is much more dominant, which does have a greater impact on many u.s. companies, some of the biggies already announced suspension of business there i also think the profit margin story is not being reported significantly. and that's largely a function of tariffs. even though some of them were pulled back, the september tariffs, we didn't get the december tariffs most are still in place and i think companies are still digesting how to absorb those tariffs, whether to do it in profit margins or attempt to pass it on to the consumer i think it is more the profit margin story that should be a focus in 2020 than just the bottom line numbers. >> which sectors are you in? >> we have only two overweights right now which are health care, which has been a longer standing overweight and then more recently, financials most of the rest are in the neutral to slight underweight.

so within those neutral categories we do like tech keeping it at neutral or market weight is just reflecting some of the valuation excess and some of the pockets of tech >> liz ann sonders, thanks very much nice to see you as well. two evacuation flights carrying u.s. citizens from wuhan, china landing in california kate rooney has the story for us >> reporter: good morning. we are about an hour north of san francisco at the travis airforce base. two evacuation flights carrying 350 people landed here overnight directly from the epicenter of the coronavirus outbreak in wuhan, china one of the flights is refueling and heading to the marine corps air station in san diego approximately 250 of those passengers are expected to stay here at an inn within the grounds of the airforce base and will undergo a two-week quarantine ordered by the centers for disease control and will be monitored on a regular

basis. the u.s. department of health and human services is responsible for that care, transportation, and security as well this comes a week after the first chartered u.s. flight carrying american diplomats and families was evacuated from wuhan. we are expecting the state department says travelers were screened for symptoms at the wuhan airport before boarding those flights and, guys, there is a press briefing from the cdc here in fairfield, california at 3:00 p.m. eastern. we'll have an update on the evacuees later today back to you guys >> all right kate, thank you very much for that still to come, disney shares are under some pressure despite beating earnings estimates we'll go through the quarter next quick programming note do not miss a special report on the coronavirus outbreak right here on cnbc tonight at 7:00 p.m. eastern time. dow is up 284. tesla officially in a bear market "squawk on the street" is back in a minute. unexpected.

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disney shares are lower as you can see right there. despite what was a beat above the top and bottom line expectations for the company also announcing some new numbers, big numbers for the streaming service. julia boorstin is out west with the story. she also spoke of course to the coo. julia? >> david, that's right disney announcing its flag ship streaming service disney plus is growing faster than expected with 28.6 million paying subscribers as of monday the company did not update its

guidance for 2024. the coo pointing to the strength in disney plus's average monthly revenue per user, $5.56, close to its $7 undiscounted price >> it's in our release and is pretty significant that's a blend obviously of people who have signed up for a discount that is a 12-month discount. people who have gotten it through third parties like verizon direct by the way, about 50% of our subscribers came direct from our own website. a lot of it had to do with the fact that they signed up early before it was available through other services verizon about 20% came through that agreement, that distribution agreement >> iger also noting customers did not drop disney plus after december instead they've gained over 2 million subscribers since the start of the year. >> we were actually heartened by the fact that after the original

episodes of mandelorian were all made available we really didn't see significant churn from that. as i said earlier we continue to see subscriber growth from the end of the year, december 28th, through yesterday. >> and disney plus is driving adoption of espn plus, its subscribers nearly doubling since november and iger announcing houlo aims to launch internationally next year after the roll out of disney plus worldwide. guys, back over to you >> julia, all of which does beg the question and i don't want to make too much of it, it is not down a lot but after a quarter like this you might expect the stock to be responding positively is there anything there is particular concern about amongst investors? does it even extend to the likes of the closure of the shanghai and hong kong parks? >> i think obviously coronavirus is an issue. iger told me they expect to see

an impact and they don't know how long this will last. they said on the call there will be an estimated $175 million impact to operating income should the parks be closed for two months though iger was very clear there is no sense how big an impact this could have. as to why the stock is down, i think that certainly is a factor perhaps there could be some concern that disney did not raise its guidance for its goal of having between 60 and 90 million disney plus subscribers by 2024. i asked iger about that, why they weren't raising that guidance and he said that is a really big range 60 to 90 million and it is still early days he did point out they have not launched internationally yet most of the global rollout is yet to come. they're launching in western europe in march so there is a huge runway for potential of growth of this service so those would be the two main factors i would point to >> anything, julia, about the competitive landscape? we'll get comcast, peacock network, of course our parent

company. and at&t's hbo max it is going to get crowded out there in streaming world >> absolutely. it is already crowded, sara. you have the other services launching plus another one this spring i asked if he was threatened by any of the new players and he said they're not a threat. he thinks all of the companies are really participating in the same trend of the rise of director consumer, the demand for streaming content but he thinks what disney has is unique in terms of the quality of their content, the distinctive brands that are really unique to disney he said he doesn't see them as a threat and that they are not going to be trying to do a volume play. they'll really be focusing on quality over quantity, maybe throwing shade there at netflix which is really about volume in so many ways they're not going to be trying to play when it comes to competing for the volume of content. but he said they were certainly not threatened by those new players. we'll see how it all plays out >> all right fascinating work with that interview last night, julia

boorstin on disney in the meantime juul and four other leading e-cig makers are heading to the hill today to testify on the impact on public health >> reporter: good morning, carl. as you mentioned the five leading e-cigarette makers will be sworn in and questioned about vaping safety, underage use, and marketing when this hearing starts minutes from now in this room behind me just not too long ago we saw the juul ceo he was the first to arrive here. we also had a chance to talk to the ceo of the blue e-cigarette. he said he had this message for the subcommittee and also the public to hear about vaping. when i did speak to him he said he was very concerned and wanted to share those concerns about possible underage use and said his company takes every step they can to prevent underage use. so just in general today the stakes are very high this subcommittee oversees the

fda, the agency that will either approve or deny applications for these e-cigarette makers to stay on the market that must be submitted by may the applications called a premarket tobacco application, again, due by middle of may and juul and three others represent 90% of the u.s. vaping market and vaping concerns. they have dramatically shifted market share juul, the industry leader is seeing both its sales and its market share decline by 15%. just to put today in context, back in the 90s big tobacco executives appeared before a similar subcommittee and falsely testified that cigarettes are not addictive. four years later the tobacco giants paid billions of dollars to settle claims and agreed to change their marketing practices. the outcome of today remains to be seen. we'll watch very closely for their testimony and of course the questions from the committee. back over to you

>> frank, back then of course it was -- the issue was whether or not it was addictive now that's a given the argument from these companies will be that it's a matter of harm reduction, trying to deliver nicotine in a safer way. i assume that argument -- they'll try to make that the best they can. >> you know, that is expected to be the center of their arguments and it's also been a big part of their prepared statements that were released ahead of time. another thing for a lot of these companies is where is the proof that their products are actually harmful? a lot of them have actually pushed back on the sense that their products are linked to the vaping crisis. they say vitamin e acetate has been linked by health agencies like cdc a lot of them are pushing back on the sense that vaping may or may not bad for you basically saying the science isn't there today we saw imperial brands stock falling sharply today after they reduced their first half guidance on eps largely due to the vaping concerns

most likely another issue they'll push back on, whether or not their products are in fact safe >> frank holland, thank you very much as we head to break take a look at top stocks on the dow up about 287 off session highs broad strength ibm. exxon is having a good day oil is actually up for the first time in six days turn on my tv and boom, it's got all my favorite shows right there. i wish my trading platform worked like that. well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions. hm. didn't peg you for a crumpet guy. focus on what matters to you with thinkorswim. ♪

time for our etf spotlight taking a look at the spdr ticker xrt up more than 3% so far this week after friday's sell-off currently trading up 1.4%. some names that aren't participating, adidas not in the global rally down about 0.5% the company says it is closing a considerable number of its shops in china due to the coronavirus. meantime nike out late last night saying it expects the coronavirus situation to have a material impact on its operations in greater china in the short term and that approximately half of

nike's own stores have been temporarily closed in china. stock down 1.4%. we'll talk about that and a lot more later nike's brand new ceo john donahoe joining us on "closing bell" this afternoon 4:00 p.m. eastern. coronavirus, an innovation event nike is holding around the olympics, and i would throw in macy's to the mix because some significant announcement there in terms of store closures and leaving cincinnati as the headquarters also having to layoff about 2,000 in corporate staff >> continue to open smaller store formats though not a lot of them but some >> that's kind of away from the mall and the department store. interesting share price reaction there on macy's. i was going back and forth with jan nippon who follows retail and he said this is great news they are preserving the cash flow, preserving the dividend which is very high and cutting a significant amount of costs. on the flip side doesn't look like department stores are coming back any time soon and the pain continues and they'll

try to right size their business accordingly. >> talking to the journal yesterday, said that there remains a place to go shop where there are multiple brands. >> they have to convince people of that. customers and investors. i think that's going to be the key. >> you don't believe it? >> i mean, if you look at the traffic and the numbers, they haven't been good. if you look -- you pull the wholesale numbers out of a company like nike or ralph lauren yesterday, it's in decline. it's all about direct to consumer right now and online. these guys just have not wholly figured it out yet >> do you have any expectations for donahoe at nike in terms of how he moves the company in a different direction in some way or pivots a little bit off of the leadership from mark parker? >> so the key difference is his background he of course was ceo of ebay as you know ceo of service now he comes from a digital background mark parker was a designer at

nike and there for a very long time the key question is how is he going to accelerate the already very fast growth nike has seen digitally on the sneakers and what sort of changes is he going to make there? the other thing there is parker is staying on as executive chairman so it is really a one-two team there >> is he on for -- >> he is on for a while. >> not an end of the year thing. >> not retiring, no. so maybe not so much change especially for a company that is really on top of its game right now when it comes to sales but i'll ask >> good. look forward to listening. >> thank you in the meantime let's get a news update with sue back at hq. >> here's what's happening at this hour. a second avalanche slammed into a mountain road in eastern turkey, killing at least 23 rescue workers sent in to find two people missing from an earlier avalanche. the overall death toll now rising to 33 more people are still buried under the snow the bill and melinda gates foundation increasing funding

for a coronavirus response the foundation says it will immediately commit up to $100 million to help strengthen detection, isolation, and treatment efforts. the new funding is inclusive of the 10 million it committed to the outbreak last month. prince charles has named american pop star katy perry as a new ambassador for one of his charities. the british-asian trust. perry will help promote the children's protection fund for india. >> fascinated to learn the work of the british asian trust supporting millions in the areas of education, livelihoods, mental health, and antitrafficking. i was equally fascinated and motivated by his royal highness the prince of wales and his care and concern for this work. >> and you are up to date. that's the news update this hour david, i'll send it back downtown to you. >> thank you, sue. as we go to breakright here, let's give you a look at shares of tesla they are down sharply. this of course after the incredible surge that started

the week legendary tech investor going to join us next, he'll weigh in on that, stocks volatility and a number of other things (janine) i used to be a little cranky.

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welcome back to "squawk on the street." a strong market rally continues today. dow is up 231. tesla shares, though, down sharply from record highs. officially in a so-called bear market down 20% from the highs of yesterday our next guest was one of apple's early investors and is witness to its meteoric growth he says tesla may be a cult story.

andrew patricof is here fresh from corporate retreats. nice to have you back. >> thank you nice to be here in one piece >> is the tesla, i'll call it a mania, filtering into things you watch? >> things i watch? i don't know we have one company that is a company called palmetto in the solar installation business and they use a tesla battery and it is doing very, very well i can tell you that. tesla is -- everybody knows the name tesla when i said cult, which you are referring to a previous conversation we had, what i meant is it is a consumer favorite it's talked about. you see it on the street and we're in a -- the last year has been all about consumer known companies that they're consuming and you go back over the list and now we have casper coming out and everyone is talking about possibly airbnb later in the year. so companies that are familiar to the consumer seem to have a

big, a lot of attention. >> doesn't sound like you have a problem with the change in valuation. >> i think it's mind boggling. i don't know how you relate it we're talking -- i met a lot of the reports about tesla and they are talking about what the potential revenues will be in 2030 i mean, they're not talking about 2021 the electric car is still a very small fraction of the total consumption of the country hybrids are much more popular. definitely tesla has a major share of those that are purely electric and it is a very nice car. i think at least one of my sons has a tesla and maybe two for all i know i haven't gotten to that yet >> but after being essentially dead money for several years, right, it's clear that there is some, maybe their russell 1,000 growth managers, whatever, have decided they have to own this. >> yeah. i think it is now a popular consumer name. don't forget elon musk tried to

do a private buy-in at 420 just what, three months ago, four months ago, and everyone thought he was crazy at that time. he's got this compensation set up for these additional options. when they issued i think the stock had a, i can't remember exactly, but all i know that is that for every 50 billion in increase he got so much and everything, he's already gotten two of the additional options of the 10 scheduled for each one of these options i gather is worth almost $2 billion. >> you mentioned casper set to price tonight, ipo tomorrow. sharply cutting its range between 12 and 13 which values it around $500 million that's less than half of what it got in the private market. what does that tell you about what investors want? >> it tells you the preipo buyers, which are a lot of the

well known hedge funds and later stage buyers, ought to be very careful about watching what the economics of the different businesses are they're buying into and not just assume they'll get taken out in a public offering at a premium to what they pay i honestly can't say whether casper is worth $500 million or a billion but it suggests that the underwriters are saying, this is where they can place it. it doesn't guarantee it is going to open at a premium, either and perhaps the people who bought in the most recent private offerings, what, 7 or $800 million one round and another at a billion didn't carefully analyze what the actual basic economics were. >> it seems like an intolerance for the no profit thing that public investors do right now and that is kind of a shift. >> i live in a world of no profits. everybody asks me how many of my companies make a profit. probably 1 out of 100 literally.

but that is the venture capital business that's not the later stage private investment world you're referring to those buyers. >> right when you sat down sara asked what you're thinking about and working on and you said podcasts spotify reported earnings this morning. they're very focused on podcasts they announced an acquisition. we don't know the price tag of the wringer but they continue to spend a lot there. why do you think they have a real growth opportunity this return to sort of old fashioned radio? >> yeah. old fashioned radio. that was around for a long time. in my opinion we're going through the period of audio. audio, audio i mean, with the great growth in the air pods, which is, you know, i think close to a hundred million now out there, you see all the people walking on the streets, you look in offices i don't know about here at the exchange but people are walking around

with something in their ears they're listening. listening to music obviously that's first and foremost. but people are getting hooked. our most prominent company which isprobably the leading company in the podcast business, has had four, five, six number one appearances on the podcast best seller, the apple list actually of best sellers. so i try to surround it with every aspect of it from ad attribution to social media attribution to subscription concepts, which is really hopefully the answer in the end that not to be totally an ad based company. and of course wondery which has got content and is primarily nonfiction, serialized content that is -- has taken off so i think we'll see a return to soap operas. people are listening audio is affecting a lot of the things that you see today.

people are finding out that even the cars of the future are going to be very heavily into audio. >> we don't know the terms of the ringer deal but are we seeing the prices paid for acquisitions as extreme as we have in video streaming? >> well, spotify has been the major acquirer and they bought anchor, which i thought they paid a lot of money for, but they seem to know what they're -- they bought gymlet which was the main competitor of wondery. these were all publicly announced prices were very fancy. they bought a couple other small things now they're buying ringer. you know, bob pittman bought, whatever it was, i forget, how stuff works. >> and audible at amazon right >> audible was the originator. that goes back a long time ago amazon bought it probably, i don't know, must be at least seven, eight, nine years ago that's not recent. audible obviously is the pillar,

the king of the audio business i mean, they've done phenomenally well. in books and now spreading out to other areas so i think it's an interesting area to keep an eye on >> you've been working hard for biden. are you discouraged this week? >> i assumed you'd get to that sooner or later. >> why not tough week or not? >> yeah, i was out in des moines knocking on doors two weeks ago and if you'd asked me who the winner was going to be the other night i would have said undecided. because that's what i -- the responses i got from knocking on 50 to a hundred doors. i think that joe never expected to really win iowa i didn't speak to him in the last two days but i'm sure he expected to do better. he's in there. his game is to play nevada and south carolina i think look at it, you know, i won't invite myself down, but

after south carolina then this discussion i think will change if he doesn't show a dramatic change but i think he is still very much in the race and don't discount him >> i was going to ask if you have a number two. that's what everyone gets asked in those auditoriums in iowa if their candidates aren't viable >> i, you know, you can probably guess who my number two would be if joe -- >> starts with a "b" i bet >> mike bloomberg? >> i like the letter "b" although there are a lot of "b"s around we got to be careful >> that's true >> two >> that's true >> bl -- >> right now i'm sticking with joe. came with him and i'll stick with him and i still think he has a good chance of pulling this out >> good to see you, alan thank you for coming in. >> thank you after the break, now one company is using its tech to fight off the potential koech

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coronavirus concerns continuing to impact business. the world health organization reporting moments ago that in the last 24 hours it has seen the most cases being reported since the virus started. outside of china there are now 191 confirmed cases in 24 countries. this comes as medical professionals try and treat the disease. san antonio based disinfection services has developed a robot that uses uv light to disinfect hospital rooms and says the devices are being used to clean facilities with suspected cases of coronavirus joining us now is the ceo of the company, morris miller nice to have you >> thank you >> how many of your robots are currently in service at various

hospitals or other facilities that might need them >> so we have thousands of robots in use in over 500 facilities around the world. we've been contacted by about 200 of them that are using them to disinfect emergency rooms and other spaces where they have suspected coronavirus cases while they're doing the tests to determine whether they are actually coronavirus or not. >> and how quickly can one of your robots actually dispatch with cleaning a room >> so, a typical hospital room will get disinfected in a five-minute cycle and since we started the company we've done about 21 million of those cycles during the ebola crisis we were asked to test against ebola. it takes one minute to kill ebola. we've tested against other coronaviruses. obviously the wuhan coronavirus is an original nobody has seen it before. nobody has it. but if you remember the middle eastern respiratory syndrome that was out a few years ago, we

tested against that and it is very fast to kill that this is a very similar enveloped virus. go ahead >> we're watching company produced video i assume where a nurse seems to have inputted certain things and then what is the machine actually doing there? what is going on that we're watching right now >> right so up until now really the only way to disinfect a room was with chemistry or with old mercury light bulb based devices this was the first nonmercury light bulb based device. it is a xenon lamp the nurse would input the data and allow it to pulse. it pulses at very high intensity across the entire germ spectrum. the pathogens, c-difficult, mrsa, these are antibiotic resistant pathogens and it deactivates the active part so

it can't make patients sick and kill them anymore. >> that is amazing can you do more with those robots can they actually serve patients, dispense medicine and other things that may be more dangerous for human-to-human contact? >> believe it or not there are plenty of other robots that will move around the hospital and deliver medications and other things like that we're very focused on disinfecting hospitals these are used around the world in pharmaceutical manufacturing facilities the biggest pharma companies in the world use this in those situations, as opposed to having it manually moved around a room, it will automatically move through a pharmaceutical manufacturing facility and disinfect the clean room so this is what you use to keep a clean room clean that's how you disinfect it. >> who are your anufacturers is itoutsourced? where does it happen how much could you ramp up capacity if we ran into these sorts of situations again? >> right so the, first of all, they're made here in the united states,

actually made in san antonio, texas where we're headquartered and we have a dedicated group of people right now we were on one shift as demand ramps up and down. i mean, we'll periodically see this from our top hospitals like mayo clinic or md anderson. i think the coronavirus has served as a great wake-up call to remind people, 6,000 people a day in the united states get infections when they go to the hospitals and about 374 die. the last number i saw this morning was approximately 500 people died from coronavirus that's basically a day and a half, almost two days, of what standard happens in the united states when you look at our customers, like honor health, that deployed them across their hospital

system, they're disinfecting 90%-plus of the rooms and reduced infection rates as they report to us more than 80%. >> curious from a business standpoint, obviously it's great to have growth in your product you have a installed base. what do you see in your product if you finally meet the demand in the hospital system, for example? >> good question every business -- not every business but basically every business i'm involved in have a recurring revenue stream, and there is that for the robot. we talk about it like a robot but it's really a kplet service. we go to the hospitals and deploy them. help them work out the kinks in the system our goal is see that hospital report in infection rate reductions and we're not happy until they do that it's a complete service. there's an associated recurring revenue charge for that. that keeps us with account managers who are deeply involved with our infection preventionist, ceos of the

hospital, heads of quality to make sure they're getting the benefit of their robot utilization. osher in, new orleans, good example. we worked with them and 90 days later, they published -- not we -- they published a 40% reduction in infection rate, which astonished everybody. >> i imagine they're pretty expensive machines can hospitals around the world afford this to make it a standard of care >> so far the answer is yes. the machines cost about $100,000 they're in ecuador and europe and uk and japan the real way to think about it is how many rooms can you do per day with a robot our top hospitals do 65 per day. their cost per rum is probably $2.50, $3. if you use the robot it might be $67. when you compare that to an hour and a half of labor you still have amazing housekeepers going into dangerous situations.

they're doing all of the cleaning but then they rely on us to do the disinfection in a very fast manner and the typical disinfection cycle is about five minutes. we can get the disinfection done, leave the cleaning to them and patients get a much safer environment. >> right it, got it. thank you so much. appreciate you taking some time. >> my pleasure, thank you very much. >> i want one of those for my apartment. let's go over to jon fortt with what's coming up on "squawk alley" -- >> we're talking to the ceo about semis but about connections to china that's coming up rx. crafted by lexus. lease the 2020 rx 350 for $419 a month for 36 months. experience amazing at your lexus dealer.

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morning with the nasdaq hitting a new record high, but the averages are off their earlier highs of the morning in the middle of another business yirnings week. we have to decliners to point out, ford down more than 10% looking at its worst day since january 2011 and tesla is down for a change, after its tremendous run-up. maybe we should hit four, guys, because we have more fundamentals talking about the

price move operating loss, disappointing weakness, a number of price cuts all over wall street. >> sometimes i wonder if they regret having not gone bankrupt like their competitors ford, remember, did not, only u.s. company. >> which was a big source of pride, they did not. >> yes. >> see you this afternoon on "closing bell. dow is up 273. after the break, we will take you live to the house briefing hearing on capitol hl.il confide. yeah, they help us with achievable steps along the way... ...so we can spend a bit now, knowing we're prepared for the future. surprise! we renovated the guest room, so you can live with us. oooh, well... i'm good at my condo. oh. i love her condo. nana throws the best parties. well planned, well invested, well protected. voya. be confident to and through retirement.

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good morning it is 8:00 a.m. at disney headquarters in burbank, california it's 11:00 on wall street, and "squawk alley" is live ♪ ♪ darling you got to let me know ♪ ♪ should i stay or should i go if you stay that you are mine ♪ ♪ i'll be here until the end of time ♪ ♪ so you got to let m