the analyst community will come around and upgrade it. shannon is in disbelief. >> it's a good belname >> a new president for the knicks he'll be there for five year, they'll still lose every game. >> that does it for us thanks for watching. "the exchange" starts now. thank you. hi, everybody. welcome to "the exchange." the world health organization warns they see a spark that could become an even bigger fire with the coronavirus we'll have the details and what doctors are saying could be done. and travel in tech retail, restaurants, autos and airlines how all of these industries are trying to minimize the virus in the short-term and in the longer run. and is a deal for victoria's secret around the corner should tesla and google get together we begin with the markets which are surprisingly resilient with all of this going on seema mody has the numbers >> that's the question that the

market was able to overlook worries last week. will that continue this week we're up fractionally across the board. the nasdaq up 0.6% technology is the second best performing sector. look at the defense etf. a new record high for this etf thanks to better-than-expected earnings from lockheed martin and northrup grumman this etf is up about 7% so far this year. a lot of movement in the real estate investment sector simon property shelling out 3$36 billion to take control of t taubman centers. the deal would pay taubman shouldhow old is shareholders a 51% premium. we begin with the coronavirus and the massive impact its having on companies around the world

meg tirrell is with me on what we know about the virus. contessa brewer it live in chinatown with the travel impact, josh lipton is looking at how the supply chain is hitting tech companies, and joining us from quarantine is dr. charles lipman what do we know, meg >> the numbers have topped 40,000 confirmed cases the death count is up to 910 over the weekend that passed the number of deaths from the sars outbreak the world health organization holding a daily press briefing noting that 99% of the cases are still in china and for the most part, most of the cases are mild about 20%, they say, are severe. they did point out something, they said in recent days they've seen concerning numbers in terms of pockets of human to human transmission in france and in the uk they said there wasn't travel

history to china the director general of the world health organization says the detection of these small number of cases could be the spark that becomes the bigger fire for now he said it's only a spark. he said efforts need to be directed at containment. >> the w.h.o. had come under criticism for how they handled and labeled past epidemics or pandemics. how are they handling this one differently to be more careful about what they're saying? reading a quote like me sounds a bit like scaremongering. i know that's not their intent if they're trying to catch everyone's attention in a good way, that's one thing. but how do they determine that this does not turn into a panic. >> athey are saying things that could be concerning and people need to act quickly to contain this they want to make sure health systems are on alert trying to contain potential spread

tomorrow and wednesday they're convening a meeting of scientific experts from industry, research, across the spectrum to try to establish a blueprint for research into diagnostics, therapeutics and vaccines they say this meeting is oversubscribed we confirmed a number of companies attending this in person or on the phone from that crop of companies we've been reporting who are working on this >> fascinating we'll see if they can come together for some solutions. the impact on the travel industry has been huge, felt from land to air to sea. contessa brewer is live in chinatown, in new york city with this piece of the story. >> last year chinese tourists spent $12 billion in the united states according to the china outbound tourism research institute. 2 billion of that was spent here in new york. so as you might imagine, those travel restrictions barring chinese tourists from entering have had an immediate impact we talked to ed ted to a busy t operator here in china town.

they say 60% of their business comes from chinese tourism and that has evaporated. it's not just chinese tourists and their absence making a difference, sino-american tours relies on the greater new york city area for its customer base, they say business is down 10% year over year because their tours to hong kong or macau have been canceled because of a general fear about coronavirus that is concerning travelers in chinatown itself, the fear is palatable. we talked to one restaurateur who says business is down 70% year over year >> we see less tourists, less locals coming to the restaurants. just looking at the street itself, it's very empty. it hurts us, you know? >> it came like a curveball out of the blue. just before the beginning of the year it has socked us

>> and we saw a lunar new year celebration here in new york city's chinatown that was well-attended but nothing like it normally is still they're thankful it went on because in miami, for instance, there was a celebration canceled because so many vendors expressed concerns over coronavirus the real question now is how long does this linger? however does the impact go for instance, e-world tours says they're no longer sending tours to vegas or niagara falls because the chinese tourists are not here to support it >> and there's criticism about the way the cruise industry handled passengers on its quarantined ships. >> i have to point out the cdc said the four passengers taken off the ship in bayonne do not have coronavirus, they had the flu, but the heightened concern is palatable and they're taking every precaution to make sure

passengers stay safe >> contessa, thank you. now to tech, which the market is watching closely and where the coronavirus is disrupting the heart of electronic manufacturing josh, these headlines have been pushing us around in terms of the dow, the nasdaq and the s&p today. >> yeah. apple investors are focused on foxconn and for good reason. that's the largest manufacturer of apple devices, reports suggesting that its factory is back open for business but that only 10% of workers returned still that's important because this plant is described as the most critical iphone production site it's located a couple hundred miles from the center of the outbreak in wuhan, and another important foxconn plant in shenzhen is coming online, too china is a key consumer market for the company. beyond apple what does this virus mean for semis that's another question for

investors, it depends on the length and breadth of the outbreak, but analysts expect china is responsible for 35% of chip sales and 30% of semicon sum shun kel kelly, back to you >> thanks, josh. josh lipton. i'm joined now by dr. ian lipkin it's great to see you. i know you worked with the chinese government and the w.h.o. during the 2003 sars outbreak and you're under self quarantine now because you got back from china last week. what did you see on the ground you couldn't even get to the epicenter of this, could you >> no, if i had gone to wuhan, it would have been much more difficult to get out i was in guangzhou and beijing but in meetings with people from the national cdc, the guangzhou cdc, scientists from all over the country who i met in guangzhou and beijing. the cities are deserted. all the stores are closed.

it's daunting just to go through activities of daily living as you said in the earlier two segments, this has had enormous impact on manufacturing. >> we look most importantly at just how deadly this virus is. so correct me if i'm wrong, it's more transmissible, spreads more quickly than sars did, but it's less deadly. is that right? >> so, it's a -- there are many different ways of looking at it. i'll try to break it down. we have a mortality rate for sars and for mers. for mers it was much higher than for sars this one appears to be less deadly than mers or sars we don't actually have official mortality rates because we have not fully defined the denominator to do that we need to use antibody tests so we can figure out who might have been infected but not manifested signs of disease or been characterized with a preliminary

chain reaction test, a nucleic acid test for discerning who is infected my estimate, which is obviously speculative at this point is the actual mortality rate will be substantially lower, probably less than 1% to put this in perspective, we have 650,000 to 300,000 people who die annually of influenza. this epidemic thus far has cost 900 lives. so it's not nearly as challenging for us as influenza. on the other hand, it's a new virus, we don't know much about it >> right >> there fore aforeall are conco make sure it doesn't turn into something worse. >> the difficulty here is understanding how much the chinese know about it and how much they're telling us and if they're fully transparent. if this has less than a 1% mortality rate, less deadly than even the flu as you said, why

are we seeing video of these quarantine squads in china dragging people from their homes, throwing them into these ambulance-type vehicles, taking them away to hospitals which have rows and rows of bodies the images and the reaction there don't jibe with what you're saying. >> i think you're referring to in somewhat pejorative terms i would ask to step back from that for a moment. there's a new virus, we don't know much about its transmissibility, we don't have accurate diagnostic tests and we don't know where the outbreak is going to go. the only thing we have at present absent vaccines or drugs is containment so people are being aggressive about containment. now, with respect to transparency, there's two aspects to that. are they sharing everything they know, and athe other question, how much do they know. i'm working on the scientific

and public health aspects of this there's a lot we don't know. so ma may be tawhat may be lack transparency may be ignorance on what's going on. over the next coming weeks we'll have a better handle on that we're working quickly with them to try to improve diagnostic tests and find ways to better define who is infected, who is not. those pictures are horrific, i agree with you i just don't knows there an alternative other than containment. and if people refuse to participate voluntarily in containment, then, you know, i guess there's some measures that we would like not to see but i don't have any solution for that other than containment at present >> finally, doctor, are you going back to china once yourself-quarantine ends or are you going to stay here and assist >> i am sending staff back over there again next week. i anticipate i'll be going over again within the next month. there's an enormous amount to

do, and the suffering is -- you know, it's impossible to explain. >> all right dr. ian lipkin, thank you for your time today. greatly appreciate it. >> i appreciate your support. for more on the coronavirus, tune in to cnbc's special report, "outbreak: coronavirus" tonight at 7:00 p.m. and here's what's ahead. coming up, the stock market seems to be waving off any fears of a coronavirus impact. but it continues to be a big subject during earnings calls. are investors underestimating the fallout? plus the name that some are saying is the market's indispensable all-purpose stock. and could tesla be a good acquisition for google ♪ limu emu & doug

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welcome back to "the exchange." since the initial shock of the coronavirus outbreak, the major averages have all recovered from their worst losses and then some in one tumultuous month the dow is up 1% the s&p up 2%, the nasdaq up over 4%. the view from the bond market is different. over the past month the yield on the ten-year treasury note plummeted 15% to 1.55% so are stocks underestimating

the coronavirus impact to the global impact? let me bring in jim augustine and quincy crosby. is there a divide in what these two major markets are telling us >> there is technically, but you have to look for the reasoning why is -- money has been pouring into the treasury market obviously along with gold, as a safe haven move. so that obviously pushes the yields down. before that, as long as you have negative interest rates in the eurozone, as japan is trying to push the ten-year up to zero, money will be coming into the u.s. regardless of this extra fear trade >> that's an interesting point so, john, if money is coming into the u.s. it can push our bond yields lower and stock prices higher at the same time this is just a recent example of this trend which is a decade plus in the making >> you're right, kelly the dollar is caught in the middle there to echo what que y

quincy was talking about we don't think the stock market is getting ahead of itself, we think there's extra buyers in the bond market. that's what we're seeing now >> where would you be positioned, john what would your advice be to investors? >> well, first off, will you have to be patient, just as we did through sars, 2002 to 2003 and there will be a pause. we don't know how who handicap the pause in economic earnings, mick activity or earnings for companies, but that will be coming out over the weeks what we did do was earlier this year pre-coronavirus, we actually moved up our waiting weightingsg cap growth and international those are two spaces where returns were coming from, and we want our clients to participate. we're still there. >> those are not secret parts of the market

stalwarts leading us higher and higher quincy, would you be in those strategies how would you play the markets here >> i like domestic right now, mainly because we don't know how this -- how long this is going to last. we call it the duration. so you want to be safe you may want to have some money in treasuries, money in gold if treasuries are going down, utilities which were overbought are still getting a bid. the other thing is the dollar. the dollar was trading at the lower band of its trading range, that helped emerging markets it helped international. the dixie hit 99 the question is does it continue to rise? defying expectations >> sure. >> that's a negative for emerging markets it's a negative for international. also for emerging markets, they need china to turn the corner. they get 20 to 30% of their

supplies, those who sell to china, you have a stronger dollar, even though china needs the beef and it needs the pork and the soybeans overall it will be attractive. i think the dollar will weaken if jerome powell suggests we may see a rate cut, and that would reinforce what the fed funds future market is saying. >> so in other words, you're saying to people watch the dollar here, don't do anything until or unless it weakens a little bit then maybe look for opportunities. john, we had a couple guests talking about buying chinese stocks buying lukin coffee and items like that. you mentioned developed international stocks where would you be placing your money outside of the u.s.? >> primarily in europe asia, as quincy talked about we don't know the hit there yet. we know 35% of the emerging market index is based in china actually we've been impressed by

the resilience of that index recently we would not be locating directly in china. we would be going more with active managers and emerging markets, but for now we would favor really not staying out of but being more or less benchmarked slightly less than benchmark in emerging markets, baby step in as quincy talked about as we see how other things develop. because 2003 was a good year for emerging markets after sars cleared. we hope the same comes true here >> all right thank you both appreciate it. coming up, why this stock is critical to the market the name and what makes it so important is ahead and l brands wings may get clipped. we'll have the latest on the victoria secrets brand nearing a sale

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focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved. ♪ welcome back to "the exchange." look at shares of casper sliding after closing higher by 12% on the ipo day. the stock was down 18% on friday it is below the ipo price of $12, hovering around $10.36 a share. shares of lyft are jumping after an upgrade to buy from north coast research lyft is up 23% lately and is scheduled to report earnings

after the bell tomorrow adding nearly 7% today. roku higher after positive comments the firm saying students staying home due to the coronavirus could be a boost roku climbing more than 6% shares of restaurant brands higher after reporting better than expected results. popeye's sales jumped 42% due to that famous chicken sandwich and slackup i jumping more than% today. ibm will be moving 350,000 employees to use the messaging service, that's a 16% gain now to sue herera for a cnb news update. attorney general william barr expressing his outrage at the attempted assassination of two new york city police officers over the weekend. >> i'd recently been up there to visit with the nypd, that's a force that does exceptional work

for the people of new york i want them to know that they have the full support of this administration and this department of justice. >> a judge dealing a blow to michael avenatti's attempts to limit his testimony if he testifies at his new york city executtortion trial. he ruled that allegations of lies and deceit involving past clients are relevant avenatti's attorney says whether his client testifies depends in part on the judge's decision. a storm battering northern europe with hurricane-force winds and heavy rains killing six people and calling travel disruptions across the continent. in poland, a mother and her daughter died after the roof of a ski equipment rental building was ripped off back to you. >> sue herera, thank you. don't go anywhere, here's ahead of us on "the

". the secret may be out. is l brands getting ready to sell it's victoria secret brand? a controversial op-ed, should google buy tesla? and how bad could it get for hilton as the coronavirus continues to weigh on travel and the indispensable stk.oc it's all coming up on "the exchange there are untold hours of careful construction... infinite "what ifs?" and contingency plans. creating funds that help target gaps in client portfolios. tap untapped potential. and strengthen confidence in you. flexshares. powered by over a century of investment expertise before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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welcome back let's catch you up on a couple stories that should be on your radar. here to break down the headlines are courtney reagan, robert frank and seema mody l brands is apparently nearing a deal to sell victoria's secret to sycamore partners for more let's bring in lauren hirsch you broke this story >> i did >> it sounds like the sale is eminen eminent. is this the end of victoria's secret >> sycamore is an interesting firm, i don't know how familiar you are with it, but they bought staples. a lot of private equity firms passed on that deal because it seemed out of date sycamore had this vision, they still had a wonderful b-to-b

business, we'll buy it for this business and deal with the retail business. >> is that working >> it appears to be. they're really known for being creative and strategic i don't think they're buying victoria's secret for its business-to-business but i suspect they have a non-obvious angle. the interesting history is they bought the sourcing business that used to be part of limited brands, which was l brands predecessor. they used that sourcing brand to build up the retail business i suspect they have a non-obvious entry way. >> it is fascinating to reflect, l brands stock four years ago was around $100 a share it's down to 25. victoria's secret four years ago felt main strestream and now th canceled the last fashion show, there's been outcry at who is

this aimed at and what is the product for and you had this analyst's call last week that said nike is redefining conscious because they are body conscious, the show was more inclusive. the fashion moment has changed i wonder what victoria's secret will have to do to become relevant again >> i brought this up before, and this may be an unpopular thing to say it's very hard to rebrand a company. so i'm not saying that victoria's secret message is the right one for what today's women want, but i think it's hard to take victoria's secret and turn it into an unsexy brand and be successful i don't know that you can do that well. lauren's point is great that sycamore is creative and its founders found interesting ways to do things i'm looking forward to what that means, but how do you change that brand that's the brand's dna, sexy if that's not pop lash with consumers -- >> i would like robert to reflect on why the unsexy is the new sexy >> you get what i'm saying

>> i agree with courtney it's difficult when you have gone so far that direction and thin change totally. but how much of the whole epstein "new york times" expose where there's all this cloud around the company for a moral perspective, as a woman, even if they change the image, there's so much stuff around it. as a woman do you ever want to patronize this company again >> i can tell you a couple of things pressure for victoria's secret and bath and body works, there's been pressure for them to split before they were -- they had different trajectories well before the epstein stuff came out as part of the deal negotiations, wexner may or may not step down. >> may or may not? >> he's in talks, he's considering it >> you have to figure he's out >> it's a safe bet, but you wonder if that solves the problem. >> are you hearing anything else about whether they view

mall-based retail footprint as an asset or -- they can't be reinventing the wheel altogether if they're going to make money on this. >> there's real estate, i don't know how much this company owns. but there's -- >> over 1,000 stores they have to bring that down >> i would -- i don't know for sure it's likely, you know, having covered retail, it's safe to assume it would make sense to do that >> to keep the stores or whittle them down. >> to whittle them down. it would make sense to further whittle. >> lauren, thank you >> thank you i'm kicking you off. >> all right hilton is set to report q4 earnings before the bell tomorrow they're the first major hotel operator to report since the deadly coronavirus outbreak in china china, seema, was hilton's fastest growing margin, just when they made a decision to double down here, a big setback it could seem. >> industry data shows a 75% decline in hotel occupancy in january, so to what extent has

that hurt hilton's operations on the ground that will be a topic of concern on the earnings call most expect hilton to bring down the 2020 guidance that will likely be the same for enter continental and marriott because china has been the fastest growing market for all of these hotel operators. they're trying to capitalize on this growing millennium audience and also china also becoming a bigger destination for tourists in general >> instead of leave going elsewhere. >> it's europeans going to china to visit, and all of these u.s. operate verse been building their footprint there. >> none of these stocks seem to be acknowledging any of this if you look at these stocks, since the coronavirus first became public, they're basically flat >> you're right, but the hardest hit -- >> especially hotels it makes no sense. >> here's the thing, even though china is the fastest growing market for these hotel operators, they still make half

of the revenue in north america. that will be a big question for hilton >> north america before this -- >> but also u.s. and european sales. >> but before this north american market was fairly weak. it had a weak 2019 you look at the chinese tourism coming here, asian tourists coming here, it's all a big flow it's not like we can isolate this it strikes me as these stocks should be reacting more, especially if we could see some surprise in the earnings guidance >> the options market is predicting a 6% move in hilton's stock. let's see, to your point, maybe the price action will come out after earnings tomorrow. >> we talk about this being a tem prir disrpporary disruptione a hotel operator, you lose that stay, does that get made up? do people reschedule vacations or is it lost altogether manufacturing, it seems like it's delayed >> you might say i'm not going

to china for a few more years now, maybe it's not a good idea to take my family there. >> sentiment is a hard thing to assess there's no metric to gauge how the american consumer is feeling. >> twitter >> i could talk to my mom and see what she says, but she's scared >> so the mom indicator, no-go to china >> no way. but that's not the gauge for everything >> i think it is for a lot of things >> midwest moms are good for a lot of things. >> when she's comfortable again, we want the exclusive. a controversial new op-ed in forbes on tesla. the magazine laying out a scenario for going toogle to ac the company. tesla is arguing if google could acquire the shares for 1,500 per share, they say that would be a $2 trillion stock. it would be a win-win for both and it could improve tesla's scale. tesla up 2% today. >> it's a fun stock fantasy to talk about, but the only thing

crazier than buying this company for what would be 2$270 billion is the idea that elon musk would work for anybody, number one number two, he would work for a ceo that doesn't control the parent company, that's contr controlled by sergei and larry so you have elon working for somebody, which is impossible. he can barely work for himself >> just put him in charge of alphabet what could go wrong. >> that would guarantee volatility in alphabet stock >> and google looked at buying tesla when the offer would have been about at 5 billion. tesla comes up a lot in speculative takeover discussions like twitter used to >> i could see the benefits to software, but agree with what robert is saying there's no way elon musk will work for anybody else. the story doesn't make sense

>> you could see how it makes sense for google >> yeah. makes sense for google, not for tesla and elon >> i didn't realize forbes took search hot stances on issues like that. the other thing for google, i could see it making sense in terms of a new business line way mo waymo did a lot, but could you see a compelling case? >> if we look at tesla further out as a data collection company, as a company right now gathering all this data on all of its cars, more than any other car company, eventually that translates into autonomous, google's ability to both co-collect data at the same time and to use that data, that would be a two plus two equals five, i think. but the personalities won't let that happen. >> equals 2.5 trillion finally, before we go, "parasite" made history at the academy awards by becoming the

first foreign language film to win best picture, they also took home for best awards for screen play and director. the studio behind the film is publicly traded and shares jumped 19% on this win they trade on the south korean stock exchange had they run up into the oscars? >> i don't believe so. this is all captivated today in this one-day stock performance in general, it's great to see the international foreign films get that level of recognition at the oscars versus the smaller festivals like sundance >> i'm not treating seema like she's the expert on south korean finances, is there a big industry there or is this a one-off? >> i believe it's growing, but in asia, i can speak to bollywood and india, you are seeing more content come out of the asian markets and demand increase in north america. >> did anyone here watch "parasite" >> i did. >> was it good

>> "parasite" was very good. don't want to ruin it for anyone who has not seen it. it has a bit of everything it's kind of a comedy, sort of drama. kind of a thriller the end just really catches you by surprise. >> do you think it deserved best picture? >> i do. my husband and i both thought it was really good. we thought it could definitely be a contender at the last minute i picked "1917" because i think probably more people have seen it if you're an academy voter, maybe you are more likely to go to an english language >> is this an unofficial bet thing you had going? >> no, the cnbc oscar pooll >> i didn't know anything about it >> did anyone watch the oscars >> all of it >> i watched when martin scorsese was falling asleep for eminem and that was worth the entire night for me. >> i love eminem thank you all today. >> thanks. coming up, the nation's doctor shortage is expected to climb to 122,000 by 2032

and the department of veterans affairs is certainly not immune from this. we'll look at a new program designed to help them caring for the country's millions of veterans look at shares of alphabet and amazon, both hitting all-time highs toes as the trillion dollar club continues to grow.

the tight labor market is affecting industries all over the country. the veterans of affairs is no exception, the agency has more than 3,000 job openings on usajobs.com. they range from custodians to hr and to primary care physicians kate rogers has a look at a new program that could stem this bleeding >> reporter: that's right. we went to harvard to meet med student seamus carra hshg ercarr

>> i think you feel that extra little bit of desire to make sure that you're there for them. before arriving at harvard, he and his two undergraduate classmates envisioned a shadowing program for aspiring doctors at va medical centers. they took their idea to capitol hill where it became a bill. the va is offering to working expanded care to veterans beyond that bill with the mission act which offers vets the ability to seek care outside of the va system the va said it helped 1.7 million vets obtain care since 2018 but more doctors are needed nationwide >> our biggest challenge is to find those doctors and nurses out there who would be happy coming to work with us >> now the va has reported as many as 49,000 vacancies, but

it's just 3,000 workers short of full staffing per congressional appropriations >> come on over. it strikes me, this is the second doctor shortage story you've done this year. if it's hardest in the top paying opts to get doctors, that it makes it that much more difficult for the va >> certainly and in rural wears in particular. we went out to arizona earlier this year in the fall and we talked about the shortage they're facing, but more than 120,000 projected doctors short by the year 2032 a few different things at play the nation is living longer. the age of doctors, they're also aging out of doing those roles they're also retiring. so the doctor shortage impacting all of us is also impacting the va that's where the mission act comes in lets them seek care outside of the va hospital system if there are not enough doctors in rural areas, some places you hear thousands of residents and one pcp available. this is a big issue. it's a creative program from

this young med student at harvard. it awaits a vote in the senate that's one way to solve this >> you don't want them to scrimp on training. this is one area where you have to go the conventional route to bring more to market thank you. >> thank you. coming up, being a ceo is a different ball game today as the world gets smaller and threats like coronavirus get bigger and faster as a result we'll look at what it takes to lead a global company when your supply chain gets wr s upended.

it's that the school integrated world is one of the big e challenges ceos face today in fact, that's the cover story of this week's, the economist, which explores what it takes to be a ceo in this decade. joining me now is the economist u.s. business editor great to have you. and your point about ceos is much larger than this. it's how much more difficult the role has gotten. >> every generation of ceos thinks it's never been as hard as it is for us now, but there

are some distigt challenges and one of them certainly is grappling with a new manner of globalization. for 30 years, it was taken for granted. supply chains just grew longer and products got cheaper it was 2% cheaper each year but what's happened and even before the coronavirus, we began to deglobalize. even before president trump with his tariff war, we began to see the chains were beginning to rearrange themselves for business and economic reasons. ceos and boards had to deal with hey, it's not just cheap china anymore. do we think about mexico, regionalization, in part because of innovation. >> in a way, you're saying it would have been easier to make a cost driven position if it's cheaper, we'll sign off on that. and now, it's much more subject to discretion or risk driven h >> one of those risks we see is a disruptive event like a

coronavirus but it could be natural zasers we've seen icelandic volcanos, floods in thailand this is now a board level ceo challenge. >> you have deep experience in china. you lived there for how long >> about six years >> what do you think about the outbreak the way the chinese government has handled it at the beginning of the hour, we spoke with the doctor who admitted as it appears, these quarantine squads are going house to house and pulling people out of their homes in some cases is that an example of china's ruthlessness worki ing to produt public health or that this is some of the weakness of the communist party. >> when you think about it from the business mind set, typically economists look at the, they studied sars we know by and large, these tend to have a short-term effect. so most economic forecasts are pretty relax ed when they lock t

global economy i think this time is different in a couple of ways. one, the nature of this virus is still unknown. we don't know the numerator or denominator. a will the of people who have not been tested or asymptommatic. they could be more widespread and sebldly, when they go back to work, i visited that megafactory. it's very impressive a lot of iphones are made there. workers sleep eight to a room. so when they come back and some proportion are going to have coronavirus, it's likely to spike again. this is one of the concerns we may see a spike when these draconian measures are eased the second reason for worry is that these measures are unprecedented. sometimes they can be almost unhumane but they're doing it with a good intent on behalf of containing the virus. >> i'm glad they are taking effective measures they should have done it six or

eight weeks earlier rather than suppress the truth, punish the doctors. those measures, you can defend them at this point, but unfortunately the measures themselves are having a strong economic impact that hasn't been factored in and the third thing, the panic. fear of the virus. in part because of scenes like people being seen dragged out of their house. for example, you might say what is a mobile world congress in europe have anything to do with china. many companies are pulling out we're going to see economic effects. >> so longer lasting than in sars thanks so much we'll be reading more to get your perspective coming up, take a look at this chart. the stock up more than 70% has become indispensable to the market stick around imagine traveling hassle-free with your golf clubs.

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microsoft hitting a high today and that's helping lift the nasdaq to new highs as well. it's had a lot to do with the shift in strategy that many others have followed mike joins me from the new york stock exchange seems like it can't lose approach here. working for adobe, microsoft, sales force. you name it. can the story simply be this good >> it can be this good i think as the fundamental driver and premise for why people are so enthusiast ic about microsoft although i think there's an element of crowding and hiding into areas of the market and areas of tech that seem less at risk to some of the big scary macro stuff. whether it's china exposure or the semiconductor cycle or anything else macro. so i think you can have a great fundamental story, but also at least at some point become overextended, nobody knows where that point is. >> i'm working on a hot take

where an apple and microsoft reverse. any way, that might be a bit ahead of itself, but here's what i want to know from your brain what stops this? these companies are worth a trillion dollars already are we quoing to two t is it business cycle risk? what could possibly stop these juggernauts? >> i don't know if it's really a one quarter stumble, but it could be as simple as investor preferences shifting once again. all these dynamics it's getting people to love microsoft for its cash flow yield and buybacks and dividends and all this kind of bond, it's sort of a stand in for a bond out there benefits from a low yield, low growth environment if that shift, it could be a brighter, shinier object comes along and microsoft backs off so very difficult to say though what exactly is out ahead of microsoft that could change this story.

aingd that explains why it trades at more than 30 times earnings because other people can't figure it out either >> so we've just got to wait for higher rates the wait continues great stuff. thanks very much that does it for the exchange today. i'll go join tyler for "power lunch" which starts now. kelly, thank you very much we'll see you in a moment. welcome, everybody i'm tyler mathisen here's what's new at 2:00 on "power lunch" on a monday. stocks are holding steady even as the coronavirus death climb counts, but there's something happening in the market which could be a major warning sign and we've got those details. plus as the virus spreads beyond china, the global impact on travel could have a major impact here in the united states and softbank is set to report a steep drop in profits. this as elliot management takes a nearly $3 billion stake and the chairman of we wor