says i don't agree with many of the things she said. this comes after all of these in july she wanted to go 50 basis points i so disagree. averages closed at new highs if you're looking at the 10-year but when she says that she isn't going to be bullied by the note they're right about 1.605%. president, i believe her okay look at some of the witnesses that does it for us today. before congress. we'll see you tomorrow on all of you believed. okay all of you viewers valentine's day. maybe i believed right now it's time for "squawk on the street. i think she's a person of her word but here is the point. virtuous cycle what she is really saying is, that maybe five or six years ago the games played through central good thursday morning. banking and interest rates to welcome to "squawk on the street." i'm carl quintanilla with david control one's currency really grew into a problem we could all wrap our arms around faber and jim cramer let me think what could it have been? china switches its methodology maybe the trade negotiations on the coronavirus resulting in with china that is kind of when her view 15,000 additional cases and the changed, which i still don't agree with testing -- the thesis of a however, central banking, like rebound. europe has been watching that all the problems we see with supply chains, has gone global same macro dynamic all day today. the 10-year briefly dips below the problem with that is, and i'll read another thing she said 1.57 and oil is hanging on to in an interview we don't have on tape it's been a comfortable position 51 for fed officials just to say, coronavirus cases surging as the we're pursuing our domestic chinese province at the heart of the outbreak begins to use a economic objectives.

but can you put on blinders with faster method to diagnose the regard to what other major illness. >> tesla shares are falling central banks around the world because the company announced a are doing? sound like something i would $2 billion offering of common stock. say? see, here's the problem. >> speaking of tesla, why one steve's right. legendary investor says he that maybe she morphed a little would, quote, never buy it and i bit. but she gave a reason why. would never sell it short. we'll begin with coronavirus okay and whether you agree or fears weighing on the global disagree with the reason, the markets. obviously this move is not just big elephant, the big the methodology change, jim, but hippopotamus, the big animal in the room is the fact that while firing some top officials. there's a couple stories on the rome is burning, our central wires comparing it to a board room reset. bank is fiddling with the same >> it does seem whatever decisions we've made based on policies, the same group think, the numbers that were coming out bringing back the same policies were decisions that won't hold that haven't helped japan, up what i want to caution people is haven't helped europe, and it's yesterday the mood of wall so inefficient in the u.s. street was, hey, this thing is you know, when we were the beaten today the mood is, is that we're center of the world just eight or nine or ten years ago, all going to die everyone knew that countries >> you did say yesterday don't like china were manipulating their currency be complacent. but in the grand global scheme >> what happens is if you're of economic activity, it was them, if you're the chinese, there's tremendous pressure on just overlooked. after the credit crisis all these local officials to not frighten people. those issues we ignored and they want people to go back to work, they didn't handle it overlooked because we were so right. look, japan is not handling the

big and strong are coming back cruise ship right. to haunt us. they're doing just as badly as she sounds like somebody that the chinese. could maybe come up with a all i'm trying solution of how we could don't swing every one of these insulate ourselves from all the there are countries that are a mario draghis of the world and better gauge singapor dthan they should relao actually do something right. >> christine lagarde now and the hippopotamus in the room is other countries like indonesia bigger than the elephant in the or philippines where there room i agree with you and i think her should be more where i'm going ishithing is no focus on currency might come under scrutiny but just to put it in perspective it's one vote. spread like wildfire what i think you have to come a fed governor gets one vote at every meeting. down to say this is a really clearly influential when it comes to setting policy. horrible flu season. >> so why is everybody so it's worse in china with this nervous about judy shelton new strain but stop investing on it >> right so doesn't change necessarily the center of the fed and might stop making decisions based on be good for some ideas i think it'll be interesting how how you think it's going to be, because it's going to change she tackles the independence question radically every day and you're >> and this gold standard stuff? shame on everybody out there going to end up buying something that is not at all what she high and selling it low. means. so just think, if it's got some she isn't saying we need to get all the gold bricks and do what sort of a problem, mgm, okay, we did prior to roosevelt or nixon in changing the gold standard what she is saying is that your las vegas sands, a firm raised money is literally pieces of las vegas sands. paper that all of these

well, that was wrong because mgm countries with crappy policies just told you it's much worse. are printing more of and we need to keep up because our currency goldman today upgrades gets caught in the cross fire. caterpillar. that's going to be wrong because china is going to be slow. >> what about when "the times" shave in something of value that we call it embedded options. does a piece or cruise operators you traders know what i mean an embedded option is something saying bookings are down 15. you can touch. lumber, commodities, silver, gold >> travel is bad she is not talking about a i think travel is having a very standard she's talking about bringing big reset. i have said that the hotels reality back into financial should all be sold i think the cruise ships -- i banking. >> all right, rick i mean, her quote in "the don't understand yesterday -- i said how carnival could say, listen, this could cost us 55 to journal" in 2009 was, quote, let's go back to the gold 65 cents and the stock up a standard, end quote. we'll take your word for it on dollar i said at the top of the show that one don't say we're all clear. rick santelli in chicago as we go to break, a look at the all i'm saying is understand we're not all clear. worst performing stocks on the dow this morning, down 157 some things are less -- back in a minute marriott marriott was almost at an all-time high. i remember when they bought starwood when you look at the critical issues facing our world, remember, starwood -- the ceo of starwood lived in china for a what do you see? month because they had so much business in china. we see a billion more people breathing free. so all i'm saying is try to -- try to not jump up and down on we see access to fresh food being the global norm, every number because there's not the exception. going to be other numbers. i was reading the harvard we see homes staying cooler,

without the planet getting warmer. gazette this morning at emerson, when issues become inspiration, a professor says it's a focusing core strengths to create a better world gathering storm. it's going to come here and hit isn't just a result, it's a responsibility. us hard. emerson. consider it solved. no, don't invest on that >> the concerns obviously about health, which are paramount, and then there's the impact it's having on the chinese economy. when i talk to ceos of companies who have manufacturing capacity in the country, whether it's in the province that is under total quarantine or not, they sort of shake their heads. this has happened a number of times and say i don't quite understand why the stock market keeps going up that said, they are watching closely to see who's reported back to work in areas that don't include wuhan and that area. >> what are they saying? >> people are showing up they are showing up. they're not back to full capacity whatsoever. and again, not in hubei province i'm probably not pronouncing it properly but they are coming back to work but when you get a spike in cases like they did yesterday, that does put in question how

many are going to show up, not show up, who goes, who gets back to full capacity at any point, but it's having an impact, no doubt about it, in terms of the ability of that economy which we all rely on to produce things, period >> and sum theconsume them, by y as well. >> apple stores are going to open on valentine's day, some locations, for limited hours but that's directionally encouraging. >> i just know that 48 hours ago things were starting to look better yesterday we heard containment today we're starting to think of now it's going to start popping the unparalleled landscape of park city, up everywhere. i'm calling for a middle ground. or the famed peaks of whistler, if you own stocks that are you've faced the hassle of lugging your gear really related to travel and through the airport. leisure involving china, you're with ship skis, going to get hit decide whether you can own it you're just a few clicks away from having your skis, through that a lot of people i've talked to snowboard and luggage shipped from your doorstep to your destination. about cruise ships have said, you know what, i'm never going with unrivaled pricing, to take another cruise again real time tracking ship skis delivers, hassle free. i heard that when there was an accident off the coast of italy ship ahead and go catch those first tracks on fresh snow. with carnival. what happened? they came right back i heard it -- i heard it with ship skis. your skis. delivered. ebola and they came back

decide what kind of risk on a flexible wealth plan. tolerance you have and with new brokerage accounts, otherwise just stay away from your cash is automatically invested at a rate anything related to china because it's going to be very that's at least 20 times more than other advisory firms. rocky every day. and i think that we're going to personalized advice. see more things like what's happening in japan right now unmatched value. where they really don't know at fidelity, you can have both. what to do they act like they're in control with this diamond princess, but are they >> yeah, the accuracy of the clinical data is one thing to watch. by the way, we've been doing this special report every evening at 7:00 p.m. and do it again tonight. it's a nice 30-minute basket of all the coronavirus news throughout the course of the day. it's not very market centric, it's more about the policy and corporate effect, but it's definitely worth checking out. hi how are you? begins at 7:00 p.m. right here on cnbc. >> time now for our etf >> i find that it's -- it's our spotlight. today we're taking a look at the own program, but you just want measured stuff krane shairs csi china internet. that's all i want. i don't want people to swing one china large cap ticker fxi both day gather sophisticated 3m mass and the next day offer them on under pressure on coronavirus fears after we learned that the ebay let's have some measure here. number of cases in china >> no doubt. significantly shot up overnight.

finally a final thought on the consumer in china because we did alibaba also trading in the red get alibaba earnings at well today despite what was better than expected quarterly results. even on the call they talk about that stock down 2% the fact that the consumption in it's been so vulnerable to the china contributed 58% of china's headline risk around china the kweb and the fxi heading in economic growth in 2019. opposite directions so far this 3.5 percentage points of china's year the china internet etf is up gdp growth online retail up 19.5% more than 7% and the fxi is down 3% they say it's clear consumption has become the major driver of economic growth in china >> after the break coronavirus fears are sinking travel and online retail of course leadis gaming stocks. a closer look at those sectors next when "squawk on the street" exports from that economy being returns. put on hold, it's also the chinese consumer sitting home and not doing anything except maybe ordering on ( ♪ ) alibaba. >> those stocks have been red hot. the chinese stocks, it's very clear that it must be difficult to sell over there i don't know if you're allowed to honestly. it's like the hottest market in the world. that's a little counterintuitive. >> tess las sells potentially a lot of automobiles there.

>> remember i said tesla can sell $2 billion the moment it wanted to. >> yes, they did and they are. >> they're going to sell up to $2 billion in stock to strengthen the balance sheet musk will buy up to $10 million worth. 15 days ago they said they would not raise capital, but things changed. the stock was 580 then. >> the stock is up huge. it had a couple of years of growth in the stock. he does have great expansion plans. also, it is a little more prudent. ten days ago we weren't as worried about china. i mentioned during the tease that ralph lauren told you ten days ago things looked pretty good now they put out things look dana-farber cancer institute pretty bad discovered the pd-l1 pathway. i think musk like everybody else pd-l1. is trying to keep his workers they changed how the world fights cancer. healthy but wants to expand there and he's got a chance. blocking the pd-l1 protein, why not take advantage of it lets the immune system attack, i think there's some people who attack, don't understand that there is attack cancer. no law against a stock going -- pd-l1 transformed, revolutionized, immunotherapy. appreciating a hundred points pd-l1 saved my life. and you now selling where you saved my life. wouldn't have down below 100 saved my life. what we do here at dana-faber, he didn't do anything wrong. changes lives

if anything, he did what you everywhere. want. everywhere. >> a couple of questions being everywhere. everywhere. asked this morning is should everywhere. they do more, will they do more, and who else follows suit. are they opening the door for others who have had similar price action >> not too many have the similar price action. >> shopify, why not take advantage. >> i had shopify on last night they're flush. >> they don't need the money. >> they don't need the money they don't want to dilute themselves listen, why should we do this, we don't want to dilute ourselves. that was something elon musk said but it's free money. >> $2 billion on a $140 billion market cap is not going to dilute you that much either. >> he has plants he wants to build. maybe his look at germany is he could build two more caps if he had a little more capital. >> he pointed out his comp which good morning, everybody. seems very much going to be, i'm sue herera with your cnbc given the average stock price news update at this hour where it needed to be above 100, the iraqi government lass given nato the green light to stay in he's going to take 360 million, the country for training something like that, just alone purposes that according to the organization's secretary general. in additional in his options the announcement comes just

weeks after iraq demanded the vesting, i guess is what it is. >> if you give him a net worth foreign forces leave over the u.s. killing of iran's top of $30 billion, $10 million of general at baghdad airport stock is 0.3 >> the government of iraq has by the way, they are recalling confirmed to us their desire for 15,000 models. >> right that was important. >> that's another piece of news. a continuation of the nato training advising and conducting china retail car sales came in for january down 21.6. so we know what's going on february is probably going to be activities for the iraqi armed worse. forces and we will only stay in >> i just think anybody who has a lot of business in china would iraq as long as we are welcome do best to try to figure out how southwest airlines has much money they need if it extended its cancellation of doesn't come back online until, flights involving boeing's say, the summer. grounded 373 max jet southwest took all 737 max not unlike what southwest is doing, by the way, with the max flights off its schedule through august 10th, pushing back the sort of saying, listen -- prior date of june 6th >> august 10th >> these are the two big issues e-cigarettes maker juul has in the world been sued by the massachusetts i don't want to conflate death attorney general's office. juul is accused of buying ads on from this illness different from the boeing plant but these are teen focused websites after two things a lot of companies are trying to judge how bad claiming it did not intentionally target teenagers things are going to be elon musk made a judgment he's you are up to date going to be fine no matter what sara, back downtown to you >> all right, sue.

after today. thank you. and welcome back, everyone, >> charlie munger was asked to "squawk on the street." i'm sara eisen here with carl about tesla stock at the annual quintanilla and david faber live as always from post 9 at the new meeting. take a listen. >> i would never buy it and i york stock exchange. one hour into the trading session let's check on where the would never sell short major averages stand down today taking a pause after we close at new record highs for the dow, s&p, and nasdaq yesterday. dow is down 189. s&p down less than 0.5%, 0.4%. i have a third comment so a mild sell-off and the trigger for that was news last night that the number there's a man in los angeles of cases in china, specifically in the hubei province of named howard almanson. coronavirus has spiked up after he once said something that i've taken to my heart. new methodology using ct scans never underestimate the man who to diagnose these cases. overestimates himself. utilities, real estate, and consumer staples are bright spots. that is on lower yields and a defensive play i think elon musk is -- he may >> yes, sara just said the total number of globally confirmed coronavirus cases reaches over 60,000 overestimate himself but he may the death toll approaches 1400 not be wrong all the time. people movement restrictions remain in place in china as those around the world are wary of traveling. >> charlie munger, 96 years old, join us now with a look at how went off on a bunch of topics, the coronavirus is impacting technological change, the way those companies that rely on

travel for the bulk of their chinese holds stocks, wretched excess around the world. earnings, our guests >> he's been a great investor. i don't necessarily want to -- i mean, trip and expedia you canthink of any number of empirically it was great to own other cases here tesla. you never wanted to buy it or how do you go about trying to sell it. figure out what the impact is it reminds me of when his going to be? are these earnings lost forever? partner, warren buffett, was >> you know, it is funny because some of the companies that talking about technology and never wanting to buy it and reported already, the cruise ships, you know, the hotels, and suddenly he buys apple as one of the greatest investment of all trip expedia reports after close time so these guys have a right to tonight, we're getting a change their mind. consistent theme here which is he has a right to change his that the overall impact while it mind, even at 96 is unquantifiable at this point, it was a good investment, tesla. but it is starting to have a i'm never not going to be proud of buying tesla. toll, you know, trip said this >> but at least you didn't short it morning they are seeing some negative impact and while when we come back, we've got they're trying to downplay the overall exposure to china, we an earnings beat for pepsi we're going to talk to cfo hugh know a lot of these companies either directly have fairly johnson in a moment. significant operations in china live shot of capitol hill as or in the case of trip a well as the federal reserve board nominees, including judy material joint venture with trip shelton and christopher waller will testify before senate in china so net-net i think that the banking. we will monitor that hearing and market at this point seems to be bring you up to speed in

under estimating the overall realtime we'll get to amat and cisco, impact of this and that is why we've decided to take a little this upgrade at goldman when we come back. bit more dire view don't go anywhere. i have to say, also, that overall something unique about this makes it a little bit different from ebola or even but in my mind i'm still 25. that's why i take osteo bi-flex, sars in terms of the speed and severity of the cases that we're to keep me moving the way i was made to. seeing and also the death toll it nourishes and strengthens you just alluded to. my joints for the long term. >> yeah, you know, dan, world osteo bi-flex - now in triple strength plus magnesium. mobile congress gets canceled for example in barcelona by the way, generates enormous amounts of revenues for the economy there, not to mention all the travel related to it a lot of business travel as i understand it perhaps being put on hold in certain cases not to mention travel for pleasure as well if it involves going to china or even asia what are you seeing? what do you expect from here >> i mean, it is tough to handicap how long and to what extent this virus crisis lasts but looking at trip adviser and expedia, we estimate trip adviser probably garners 10% of

its revenue from the asia pacific region expedia even less. a single high digit rate what we've heard from some of the hotel operators in quantifying this if it were to last six months to a year as far as it being contained and then a recovery period the way to maybe think about it is for every 10% exposure that a company might have to an area where demand is really dropping off for travel, it could impact the revenues for those companies maybe a percentage point and a half to two percentage points for each quarter that there is a major, meaningful impact. so trip adviser did have their call this morning. they were saying that, you know, thus far there is some slowing there is some cancellation, some delays but they feel it is not material, so, you know, we'll have to continue to monitor the situation. >>ism' looking at your coverage list, tuna, besides travel stocks you also have the casinos which are facing issues because of this as well and the cruise lines. is anybody in your universe worth buying right now >> well, actually, we downgraded

most of the, you know, casinos and the cruise names one thing about the casinos in particular is they said even while all of the casinos have been closed in macao in china when it comes to your business internet, for more than aweek now they which is more important? ♪ ♪ are still incurring a relatively high expense burn rate on a okay, i wish i didn't have to choose. like the more i think about it, daily basis. the more i want to jump to each room. in the case of wynn up what if i said you can have it all? ♪ ♪ 2.6 billion on a daily basis comcast business gives you connectivity that goes beyond. mgm just coming out and saying about 1.5 billion expense burn that's what we want! on a daily basis that's speed, reliability, and security, all from one provider. even while all the casinos are shut down. you know, cruise ships we've touchdown! get started with internet heard about the quarantine and voice for an amazing price. one thing that bothers us about call today. this is that investors tend to comcast business. think of this as localized in beyond fast. china. while china has a significant amount of out bound travel we think the market is overlooking the fact that it is also starting to have a potential fallout on key markets for cruise itineraries, the u.s., europe, starting to hear >> guilt by association. >> that's right. >> i don't want to go on a cruise to the bahamas?

>> it is starting to happen and i think will only accelerate from here. >> those burn numbers you just quoted for gaming and i guess pepsi with higher sales in the fourth quarter beating macao, those are the overall analysts' expectations as its wagers you said 1.5 billion a day name sake beverages and snacks >> million drove gains with sales in i apologize. international markets. 1.5 million. sara eisen is here along with thanks for that correction that adds up pretty fast if you the pepsico ceo. think about a business that generated margins in the high 20s low 30s. those are pretty sizable >> good morning, hugh. numbers. thanks for joining us again. >> dan, others we've talked to >> good morning. good to be with you all, sara. this week said at least for the >> so good quarter capping off a trip advisers of the world, i solid year mean, it is directionally a i wanted to zero in on the negative, but it doesn't compare beverage business in particular to the larger problem that in north america because it came they've already been dealing with, which is the evolution of in a lot better than analysts expected and has shown a lot of search >> yeah, i mean, google remains improvement, even with coca-cola a major threat to trip adviser upping its game and its performance. what are you doing there to turn it around and how sustainable is and their search platform. it >> yeah, we feel very, very good about north america beverages google continues to emphasize and the performance for the year their metta search platform, if you go back a year ago we talked about the notion of the which trip adviser gets around company pivoting to growth so a little less margin focus and a 70% of their traffic from. what is interesting is what

little more orientation towards we've seen in the last couple weeks google maybe perhaps growth we look to invest back in the through regulatory pressures is business under a framework of starting to now put some of these organic search links back faster, stronger and better. faster being more advertising, above the metasearch platform. more feet on the street selling. we organized the business to get we'll see how it evolves it is very early closer to the customer if that were to become more and frankly it's working really, prominent we think it could really well. alleviate the competitive the advertising is paying off. pressure for trip adviser and some of the other players in the if you saw the super bowl, it industry >> so david sort of hinted at was awfully hard to miss us and this question earlier, dan certainly hard to miss our how do you think about the lost beverage ads in addition to that, we've put a activity in travel and whether it eventually can come back? lot of selling capacity in and can you model that the innovation has been >> well, again, you know, it's absolutely terrific. gatorade zero is doing tough to necessarily say it is phenomenally well. that will likely be a billion apples to apples with sars but, you know, we can look back dollar business in the next year or two for us. at what happened with sars there were companies that were public today and public back b then bubly is performing well trip.com, what we saw in the mountain dew is one that's been second quarter of 2003 was c a bit more of a laggard. with mountain dew zero sugar, trip had a decline in room nights sequentially up 43% down the product tastes i think better than the original to about 280,000 room nights mountain dew so i think it's a booked and then in the following third combination of all those things. >> i wanted to bring up mountain quarter the room nights went back up to i believe 750,000 dew. i know it's an important brand and then also in macao sgm was

and it has been struggling the only operator at that time what's the plan there? >> the biggest thing is we operating during the sars really have sharp earned up the epidemic in 2003 advertising. if you saw our super bowl ad, i it saw a period of a couple months where visitation was down think it was terrific. in addition to that, there's a 30% but then when you look at big zero sugar market out there the gaming revenue growth for for mountain dew and mountain all of 2003, it was 68%. dew zero sugar is a brand we so there is some historic think has an enormous amount of evidence to show that there is pent up demand for travel once potential. that combined with the fact that these illnesses are contained. our organization is executing well in the marketplace. and when las vegas sands, they i don't think of this as spoke about this, they feel very quarters of good performance, i think of it as years of good confident if this is contained performance to come. in a short amount of time in the i feel like we're very much on the right track and think we'll near term there will be some pent up demand they expect to do terrifically well there this recapture some of this year. >> jim, good to see you, of >> all right a big question we don't know the answer course. guys, thanks for exploring it >> hey, jim. for us >> one of the things put in dan and tuna place is sodastream. >> thank you after the break why the i've always felt that this was silicon valley legend is at the heart of sustainability doubling down on his investment in crypto. i think we deal with a lot of (vo) in every trip, companies and they want to figure out how not to have plastic. is this not the longer term hope for those who think that you put

too much plastic out into our earth? there's room for more than just the business you came for. >> jim, obviously we're doing a lot of things to manage plastic whether that's keeping up with what you always do... and to reduce the impact of or training for something you've never done before. plastic. sodastream was a major strategic that's room for possibility. thrust in that regard and that ♪ business is also doing very, very well. it really is early days as well. if you look at the sodastream but we're also a company that controls hiv, business in totality, it grew over 20% last year it is now a billion dollar fights cancer, business for us, so we've added repairs shattered bones, another billion dollar brand to the portfolio with the growth relieves depression, we've experienced in the last restores heart rhythms, year frankly if you look at the helps you back from strokes, opportunities for growth, in northern europe the penetration and keeps you healthy your whole life. of that business is as high as 20%. in the united states it's down from the day you're born around 1%. we never stop taking care of you. so i think, again, we've got many, many, many years of growth in sodastream and it's going to be an important not just product - when i see obstacles, i create opportunities. (soft music) but an important platform for pepsico as we build out our - when i see adversity, i find a way. businesses more broadly to capture growth. >> we are starting to see some - when i hear never, i say now. advertising for it it was a quandary to me why you

didn't put some advertising in - [announcer] southern new hampshire university is education made to fit your goals this report. are we going to think of with over 200 degree programs, sodastream as a major platform flexible class schedules, where we'll see as much and some of the lowest online tuition rates in the nation. advertising for that as we would for, say, diet pepsi (cheering) >> you know, over the course of - so when i face barriers, i can break through. the next five or ten years i - [announcer] breakthrough at snhu.edu. wouldn't be shocked to see that. not at all i think sodastream has got our retirement plan with voya gives us confidence. potential for probably so we can spend a bit today, knowing we're prepared for tomorrow. exponential growth if we really wow, do you think you overdid it maybe? get the model right in the united states and as consumers start to focus in on it. overdid what? well planned, well invested, well protected. i think it's terrific, it's the leading brand that's out there voya. be confident to and through retirement. by far it will capture a disproportionate share of the growth out there even as the leading brand. yeah, it's a platform that we're super excited about. >> i want to talk about flaming hot everything i mean free thrfrito-lay innova. everyone wants to get into snack food how crowdes is that for you? >> we see it as an opportunity it's very healthy for the category because it creates a level of interest that's even

hi higher clearly snacking is on trend right now with busy lifestyles to your point about flaming hot, we're on something there that i think is going to continue to grow for a long time the flaming hot platform, because it touches just about every one of our brands grew double digits last year, we expect it will grow double digits this year i've often joked with our devise and said maybe we need to have flaming hot oatmeal next as a new platform. >> i don't know about that one hugh, you've got a good global perspective. i know china is not a huge portion of your sales, but you do have a plant in wuhan so give us some color as to what you're seeing there as a result of coronavirus >> yeah, obviously it's a very difficult situation in china i think the government is taking all the steps that they can to try to manage this from our perspective, it obviously happened during chinese new year so a number of our employees were not working during that time anyway. we basically had all of our plants closed for a short period

of time. all but one of our plants are back open. but our interest is first making sure our employees are okay. second, doing what the government directs us to do. you are looking at a chart given the plants are up and of bit coin handily outperforming the s&p 500 over running, we're back in business the past year of 187%. again. distribution is a little bit of a challenge. that gain catching the attention but we feel like we're getting of investor peter teal whose back that said, it will have company is doubling down on crypto with its series b something of an impact for china investment and crypto wealth business for pepsico, china is less than 2% of our overall company so it management company and the founder and ceo of that company shouldn't be material based on everything we know right now. joins us at post 9 >> one more quick comment since you have such a good handle on welcome. >> thanks for having me. the u.s. consumer. are you seeing that continued you're trying to do traditional banking for crypto growth in employment and wage gains play out >> exactly right >> we are. we see the u.s. consumer right now as very healthy and we're blocfi builds financial services for crypto investors certainly seeing lots of positives in all of our one is an interest account where you can earn 5% interest on your businesses i mean if you think about it, bit coin, 8.6% interest on your stable coins frito-lay had its fastest growth we also support coin in the top since 2013, pb & a since 2015, five by market cap but not as much marketshare as bitcoin. we were the first company in the qfma since 20 15 space to offer loans to

individuals that own so the growth environment in the cryptocurrency similar to you u.s. driven by a healthy what are able to do when you borrow against a portfolio of consumer couldn't be better. stocks except with bitcoin and >> hugh johnston, thanks for joining us other crypto assets as ceo and vice chairman at collateral the most recent product launched in december is the ability to pepsico. we'll get amcrer's mad dash buy and sell cryptocurrency for no fees whatsoever moving it and count down to the opening bell after a short break legendary terrain in telluride, closer to the traditional equities market where trading is largely free which we launched in december. >> so i think it sounds appealing to put my bitcoin with you and get a pretty high interest on that is it safe are you regulated? how do i know the money is safe? >> square, for example, sofi, for example, we have a money services business administration at the federal level and lending licenses and money transmission licenses at the state level. there is more risk here versus a savings account with fdic insurance or a traditional brokerage account with sipc insurance but you're compensated for it with the high yields. throughout our entire history as a company we've never lost a

penny across any of the lending activities we do >> what is the delinquency rate on something like that isn't it dangerous >> zero. if you look at securities back ending, margin lending in public equities which is most comparable to what we're doing, number one you're always getting liquid collateral when making a loan to someone else we might lend you 50 cents for your dollar of bitcoin that we the unparalleled landscape of park city, custody and hold throughout the or the famed peaks of whistler, durr afgs the loan then we have a proprietary risk you've faced the hassle of lugging your gear management system that automates through the airport. the notifications for margin with ship skis, calls and the liquidation of you're just a few clicks away from having your skis, assets in this scenario where snowboard and luggage there's volatility in a shipped from your doorstep to your destination. direction that requires us to take those actions with unrivaled pricing, >> why do i need loans in real time tracking ship skis delivers, hassle free. bitcoin if you can't buy really anything in bitcoin? ship ahead and go catch those first tracks on fresh snow. >> well, it is an investment asset. so i think there is this ship skis. your skis. delivered. misconception because of the term cryptocurrency that the use case for bitcoin is people spending it. actually it was the best ♪ performing asset of the last decade in terms of investment returns and most people in the u.s. aren't buying it because ♪ they want to spend it. they're buying it because the price goes up. and so one of the things that happens if you bought bitcoin at don't just plan to retire. a thousand and now it's 10,000

for example, is if you sell it plan to live. you have to pay taxes on the an annuity helps cover your $9,000 gain. essential monthly expenses, a loan from blockfi enables you so you're free to live the life you want. to get liquidity without selling find out how an annuity your bitcoin so you still hold can give you lifetime income the potential future upside in at protectedincome.org that position and have extra cash you can use to make other investments, pay down higher cost debts, start a business, etcetera >> well, it goes up but it also goes down and it can be quite volatile not that stocks aren't. what assurances do you give those who are getting the interest or entent with you that you're going to be there at the end if there is incredible volatility in the underlying currency? >> yeah, so we recommend that people look at our track record, our investors, and our team. coronavirus worries flare up again as china changes their so our team is comprised of methodology. plenty else to watch, though folks from traditional prime brokerage equities lending cisco, baba, tesla and some fed we have folks on the team from the federal reserve. hearings today at nasete we made our first loan in january of 2018. banking. opening bell in four and a half minutes. obama: he's been a leader bitcoin was 17,000 they went down to 3,000 by the end of 2018. today it's at 10,000 handily out perform pg the s&p as you all

noted. we've had days where it is up or down 30, 35, 40% in the interim and our system has perform throughout the entire history throughout the country for the past twelve years, and that is our expectation mr. michael bloomberg is here. going forward. >> there was a point at 3,000 vo: leadership in action. where you doubted its viability mayor bloomberg and president obama worked together long term? even for a moment? in the fight for gun safety laws, >> no the for me to improve education, and to develop innovative ways to help you know, if you look at -- there is an interesting stat teens gain the skills needed to find good jobs. that came out recently from sharls schwab. obama: at a time when washington is divided in bitcoin is the fifth most popular holding for men ill yals old ideological battles he shows us what can be achieved when on charles schwab's platform we bring people together to seek pragmatic solutions. i did a ton of research in this space when i was working at a bloomberg: i'm mike bloomberg and i approve this message. traditional company and i understood the technology and the use cases. and so even at 3,000, we were still very bullish and we were still building >> thanks for joining us >> thanks for having me. >> blockfi >> let's get a look at what is coming up on "squawk alley." >> we'll talk big tech regulation josh hawley is a senator from missouri and has some ideas about that and big overhaul of the ftc. woman: what does the word "partner" really mean?

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which of your devices leasare protected 350 for $419 a month for 36 months. by daily security updates? daily security updates... daily? i don't know. the only thing... i'm struggling with this. some providers you have to manually download updates welcome back we're going to take you right to to each device. the opening bell in a minute and comcast business securityedge updates every 10 minutes a half but let's squeeze in a mad dash to help keep your connected devices protected

amat. against new ransomware, malware and phishing threats. >> one of the more eloquent people out in silicon valley, every 10 minutes feels pretty good. gary dickerson comcast business security edge he's the president and ceo of automatically helps protect all the devices on your network. applied materials. in his excellent quarterly call today. comcast business. report at the beginning, he beyond fast. talks about why this semi conductor equipment company is seeing business like it's never seen what it says is it used to be a sink or swim business. there would be a lot of equipment ordered and then very little ordered because of the secular change of having devices, the need for semi conductors everywhere, it's no longer boom or bust the way it used to be. that's saying, you know what, even on a day they tell you china could hurt us, you'll see the stock go higher. he's saying china will bush out some of the growth but we're no longer boom/bust, we're much more secular i believe them because of all the devices that we see that are welcome back to "squawk on chips and you need their the street." i'm dominic chu. a mix of red and green for equipment in order to make it. sector performance we are at the highs of the session so far

maybe it deserves a higher price one group that is outperforming is the utility stocks, the and that's what they're going to second best performing group today. part of that story is investor get. if you need to learn this rushing towards those so-called industry, there's 400 words that safe havens, those stocks in will tell you everything sectors that are generally more so read their report, it's immune and stable to economic really good. [ bell ringing ] >> there's the opening bell at downturns, perhaps a testament the s&p 500. north american transportation to the vomit we'latility we've and the logistics company this a yore. among the names leading the celebrating its opening at the sector higher, duke energy, quarterly earnings beat nasdaq greenwood project, a nonprofit estimates but revenuings wees ar introducing students to careers in finance speaking of equipment makers, goldman ups caterpillar to buy slight miss. carl, back to you. getting a briefing from the 168 is their 12-month. they're talking about cap world health organization on this chinese change in methodology relating to the utilization rates and u.s. construction, dealer inventories coronavirus. most cases relate to a period troughing out. >> yeah, i think that that call going back to the beginning of the outbreak, and while we've on any other day would have been a better call. i think that what will happen is seen a spike in the number of people are looking for a way to reported cases not a significant be able to get out of china change in the trajectory of the outbreak exposure, so they're going to aside from the "diamond

hit that one and hit cummins it's a well reasoned piece princess" cruise, we're not see in the way the market works manager cases outside china. these days, people are saying, might be one reason we're you know what, i think china is rallying a bit here, dow down really bad where can i get an uptick, so 109. rick santelli has "the santelli don't chase those stocks don't buy them today exchange." >> thank you there will be too many hedge welcome the man himself, jim funds that want out of them grand, the founder and editor of saying they're china stocks and orders are going to be delayed, sell, sell, sell grant's interest rate observer so poorly timed upgrade. i want to get right into it. >> all right normally we would talk to chuck you know, dr. judy shelton is in front of the senate committee robbins, but this is going to be today, and they're questioning the third disappointing earnings her with regard to a possible nominee and nomination to be a fed governor gap in a row. >> let me give you the way i however, it raises many look at it discussions, and the discussion i want to have with you is this there are discreet events that new form of qe because we don't impact the so-called enterprise. have sufficient liquidity in the brexit really did hurt them. repo system and the reason why china is only 2%, but china is completely paused. the service provider business we don't have it is this $30 that they have spent a fortune trillion postsealy quid ti maintaining, still no orders yet. when you look at the way the calendar works, you're going to that's swamped, private equity,

begin to start getting easier corporations, all of that wants comparisons. they're buying backs stocks slightly they did boost the dividend. to be somewhere risk free like is chuck robbins on the hot t-bills but the system isn't big enough and we find ourselves seat i would argue that he did not with the plumbing starting to say anything in the previous leak your thoughts. quarter that would have made you buy it up to 49, but the market >> what's the question, rick? did. he's kind of stuck with the fact >> what do we do lid ly kwabout that he did what he said he was going to do. i did not see the degradation people say but i didn't see liquidity? >> relating this to dr. shelton, anything to get excited about. i think if you sell it now, six the author of "the coming soviet months from now you'll regret crash, 1989. it she pointed out that the problem i'll defend chuck. he said he was going to do x, he of the soviet economy kwuz the did x. people wanting more than x and they didn't get it. lack of price discovery and the >> our statistician points out command and control. this speaks to repo system because the fed has brute force. cisco will be the second worst it buys tens of billions of dollars worth of treasury bills every month it offers and performer other than exxon. >> i think the u.s. is in really imposes on the market, all manner of other billions of good shape we have packet core, sell site dollrick, instead and radio back haul, ipo routing

is our mutual friend jimo core, we've got security and obviously there's a couple of companies in europe, one in has proposed to offer fund bug south korea that provide the radio technology at a penalty rate. the fed has become, apar firing there's also software players that are out there right now that are building, you know, has become the lender of first resort it's supposed to be the lender disaggregated solutions to be of last resort >> now, real quickly, jim, one used in the future question i have for you that's we're spending a lot of time the biggie is do you believe in helping them understand that and sound money policies as an working to just make sure that offshoot of many who once there's a recognition that thought the gold standard was there's a lot of technology the way to go? i think that's the road that's been built and being everybody's getting lost on. built here in the united states. i don't think the u.s. she believes in sound money. government should make investments in these companies hey, why can't we put a little embedded option for silver and >> he's talking specifically gold and u.s. treasury bond? about this bill barr effort to wouldn't that maybe separate the channels between manipulation of potentially buy significant interest rates and central banks stakes in erickson and nokia and foreign exchange >> it might help indeed. not saying we shouldn't invest i think it's a little bit funny in 5g, but chuck's point was that people like elizabeth there's plenty of technology warren are accusing you judy shn here in this country that can be used, that can be continued to

be developed that will put us in of radicalism. a good position in terms of 5g she'd like fixed exchange rates and a convertible currency, which i do she harkens to a time of infrastructure, jim, but i don't know what replaces huawei. relative monetary stability. now we have end lest qe, the worldwide. >> he's been to the white house a couple of times trying to explain the way it works here again, this is the problem lowest interest rates in years, with cisco they are enterprise 5g and we have the -- >> jim, we're -- 2020 is the year where we're >> they're called conservative spending on consumer 5g, you, >> jim, we have to leave it there. we could talk a long time about me, you. this of course i'll have you back 2021 is enterprise 5g. >> okay. >> carl quintanilla, back to he will not d of any you. >> i'll take it too, rick, and significance for 5g this year. turn to sara judy shelton will be a feature so if you're buying it and saying i'm going to get good 5g on "the closing bell" today. >> we'll talk about what it numbers, you're not. you're going to be disappointed. could mean for fed and the policy stop buying it on that our closer today, the ceo of that does not happen until q1 of yeti, ticking lower today off 2021 he said over and over again earnings but this is nearly we're enterprise 5g. double from its 2019 ipo price enterprise 5g is not until next year i just don't want people to jump the gun. we'll talk about the he's not being conservative,

coronavirus. and i have david faber for "the he's being actual. >> right, right. closing bell." >> co-host is more like it worth hitting shares of alibaba, >> guest co-host which are not down that much in >> yes terms of the numbers themselves. >> it's going to be great. mey"tas ale srtin mont they did spend a good amount of time on the call talking about we're down 114 on the dow. what we talked about at the open before we talk about tax-smart investing, what's new? of the show, the impact of the coronavirus in china and particularly on alibaba's business as well revenue, by the way, was up 38% year over year annual active consumers on their retail marketplace reached 7-elev711 million. mobile maus also increasing 39 million. that's a lot of people access the platform in fact more than not on mobile. but here's what they had to say about the impact so far of the coronavirus. this is daniel chang, the man who runs the company, executive chairman/ceo for our e-commerce business the delay in employees returning to work following the spring

festival holiday is preventing merchants -- we've observed active impact from our commerce business as merchant operations have not returned to normal and a significant number of packages were not able to be delivered on time time in our retail business order -audrey's expecting... -twins! volume recovering. consumer services, restaurant ♪ businesses, food delivery orders we'd be closer to the twins. down noticeably year over year change in plans. at fidelity, a change in plans of course many restaurants is always part of the plan. haven't resumed. they're also seeing categories like grocery shopping increasing as people get stuff delivered to the home travel of course also down sharply. >> you see they said 17 years ago the e-commerce business experienced tremendous growth after sars we believe adversity will be followed by change in behavior among consumers and enter prices and agreeing ensuing opportunities. >> people staying home have become much more accustomed to

ordering the way they might not have previously. >> do you buy into that? >> i do. >> i do too. we're committed to making college more affordable., that's why we're keeping our tuition the same i thought that was very common through the year 2021. sense. >> you could argue that their - [woman] i knew snhu was the place for me business when things have when i saw how affordable it was. normalized has benefited. - [narrator] find your degree at snhu.edu. >> i'm banking on that i do think it's a great company. >> how about kraft heinz, do you find the best instructors in the world, think that's a great company >> no. and tie it all together with a world-class software experience. no, not at all wow. >> you know, they are, jim, we ended up creating, as you all know, so much more. going to be -- they're seeing the beginning of stabilization, they say, in the second half, peloton is truly a category of one and we're just the trends they saw in the getting started. now, let's do this. second half of last year their ceo saying they believe the essential ingredients for a together, we are going further than we ever thought possible. turn-around are now in place people with deep experience in key roles to drive functional excellence perspective on where consumers are going and how we can win productivity initiatives with detailed jobs to be done and a financial profile with strong free cash flow. i'm not quite sure i know exactly what that means.

>> no. i want to double click on that. >> overall sales down 2.2% when you adjust for everything. constant currency and everything else good morning it's midnight at alibaba 2.2% decline in sales. i don't know where the headquarters in china, 11:00 turn-around is. >> they're losing a lot of a.m. on wall street and "squawk share, david, in a lot of alley" is live different aisles they are the whipping boy. ♪ >> come on, they have developed a much better understanding of future consumers a long-term vision for the company and a strategic plan that they're excited about, jim. >> they're excited >> come on. >> jumping up and down terrific >> yeah. >> by the way, we're going to share a lot more of that in early may in new york. >> instead of march. we were looking for the plan to come in march, it's going to be late. >> look, they didn't -- i was looking for something to say and ♪ i realize they didn't cut the dividend david. they kept the dividend. >> they kept the dividend. >> so why don't you get onboard, man? >> i know. >> get on the bus, gus they didn't cut the dividend >> when is warren buffett just going to say see ya?

>> is he avoiding tesla? no, that's not warren buffett. >> that's charlie munger, his partner. >> they're even saying talent is one of their concerns. talent. >> yeah, talent. >> there's talent short. >> munger had some net kind words for musk saying don't count him out in a sense, but he did have some tough words for companies that try to post earnings through the lens of adjusted ebitda. take a listen to that. >> investment bankers talk about ebitda which i translate as [ bleep ] earn sglgz. >> he said why would you post that it's basically admitting you're a flake. >> i first heard about it from the man to my left i said is that like earnings no, that's what the cable companies use. how about eps.

but you are the one -- i took accounting yeah, the a, what are you doing. david said, jim, this is how people are going to start valuing companies. i said that's inconceivable to me now whenever something comes out from silicon valley, i have to see if it's adjusted. >> the adjustments are more important than anything because you don't know how companies are adjusting for different things, some of which are not necessarily one-time occurrences but they say they are. >> you were also -- >> watch out for those who adjust for compensation. >> david said, jim, you've got to watch how much they pay their employees in stock and then so munger is right. we are so far afield the adjusted before stock consideration? >> he called it basic intellectual dishonesty. we just had a big discussion about uber, though, setting an ebidta for profit at the end. >> there it's at least directional.

i like the direction they are going. i would match their legal counsel against anybody. when i go over the quarter, we're not just going to reach for revenues anybody, we're going to reach for profitable revenues what was casper reaching for >> i'm not sure. sleep castro convertibles? >> free cash flow is something we've always focused on. >> fcf. >> and by the way, sometimes reported earnings and cash don't match up at all. think ge in terms of earnings. but what was the cash number >> well, they use adjusted operational -- they had their own terms, ge. and i used to go -- i had a great accounting professor and their terms were not in any text that i've ever seen. remember the aoecf what was that? it was like the eye chart. it was like b, c, o -- now right eye, a, e.

>> all fair points mr. munger makes. >> you introduced these terms. >> i did. >> that's why we're stuck with them. >> it is my fault. >> david blessed them. if he had never reported on them nobody would have used them. >> i was mystified by the bankers. they took my mind and turned it inside out what could i tell you? >> they got you. they infected you early on you were patient number one in ebitda. >> jim, you got thoughts on judy shelton as she is on the tape now saying that the president has the right to criticize the fed but that nobody is going to tell her what to do as a fed official >> i don't know. it's his -- it's certainly his -- his choice. i think, by the way, that i will defend his right to do whatever he's wanted because a lot of presidents have done it, just not recently so we don't know. president obama was just not in the habit of talking about this stuff at all but there's a lot of presidents who have just --

president nixon, not that he was necessarily the paragon -- >> more broadly, she's asked why we need a central bank at all. she's talked about the gold standard. >> the gold standard, yeah boy, that would be awful >> yeah. >> fascinating guys, to just come back to some more earnings. we don't always talk about but nestle reported numbers in contrast to kraft heinz. they have been doing a lot of divestitures at nestle and the ceo, mark schneider actually says he regrets 2019 was light on acquisitions and heavy on disposals. and so a number of people who watch nestle and are forecasting what the company may do this year when is comes to m & a are encouraged by those comments and the belief they will be more aggressive buyers of assets. >> that's fascinating: by the way, can we just say he's done an unbelievable job? >> he's been terrific. >> look at that, he's been terrific. >> starbucks partnership they did push back their china sales goal, so add them to the

list of nikes and under armours and callaway golfs that are citing coronavirus as an impact for the first half airbus will lose a week of productivity airbus said they're not benefitting from the max because they too are sold out until 2025. >> i know. people just think that it's -- that it is win one, lost one the reason why everyone has ultimately wanted to go back to boeing is because you can't get planes it's a 20-year wait list, jim, so don't think we're ever going to be out of the running so it is that plane is going to fly again, it really is. >> the max >> yeah, it's going to fly again. i feel better about it now once mr. calhoun came in. >> there's a piece calhoun has fired the employee who was in charge of the other employees who sent those emails, even though he never sent or received any of those emails. >> but on wall street, remember, it's the failure to supervise. i think that was the right thing to do.

there was a tremendous failure of supervision in that company right from the top calhoun is really -- i like everything he's done so far, i really do. i do. >> he does not have a failure to communicate. >> no. you mean like we're shaking it, boss >> dow is down 121, off the initial lows let's get to bob pisani. good morning, bob. >> i was a little surprised. there were some big names down 2% preopen but the low print was right at the open and we have bounced ever since then. take a look at sectors, emerging markets had a tough time china, mchi, that's the main one you want to watch. that's been rallying here. here a pretty modest decline energy was negative, turned positive now semis were down almost % you can see fractional declines now. industrials, this is what you want to watch in terms of global market impact. this is a very, very modest response let's look at the coronavirus stories. alibaba talking about a significant impact on china's economy and potentially

affecting the global economy ralph lauren, two-thirds of their stores are closed over there. nestle, operations have resumed but at a reduced rate. and nu skin, a third of their business is mainland china possible 20% to 25% decline in their sales. alibaba, these are not that horrible considering direct stories related to coronavirus nu skin down 15%. the faang names here, considering how stupidly overbought some of these stocks have been in the last couple of weeks, again, very modest declines amazon has been a monster the last couple of weeks down fractionally netflix is positive here you can see here, rather surprising response here to what's been going on when i say overbought, i use simple two-week metrics. this is relative strength. when you're over 70, the last couple of weeks trading action, you're overbought. when you're over 80, you're stupidly overbought. you're generally asking for the market to correct or the stock

to correct but you can see here again, very modest response considering how overbought some of these big names are. finally, retirement commentary from fidelity. they're putting out a report about the state of their 401(k) plans and their ira plans. here's the good news there's a record number of 401(k) millionaires out there and that's certainly good news here 441,000 ira and 401 accounts have a million dollars or more in them. that's 1.6% of fidelity's ira and 401 accounts so it's small, but they have a big effect on averages we put out numbers that the average account has this amount. average act for baby boomers, $210,000 but then that's dragged up by that small group of millionaires out there. i always look at the median. look at that, $69,000 for 56 to 73 years old that's a baby boomer right now that's not a lot of money. 50% have more, 50% have less so yes, there's a lot of good news out there market is up helping retirement accounts more people are saving more,

that's helping the retirement accounts all this is good news, but people still don't have nearly enough and remember, they're going to live into their 90s, many baby boomers. they're going to have problems running out of money and that's what i'm concerned about long term carl, that's something the rest of the country really needs to work on. back to you. let's get to the bond pits as well. rick santelli at the cme in chicago. good morning, rick. >> good morning, carl. you know, right in the beginning of bob's piece he talked about how we've seen such a big reversal off the worse levels, especially if you look overseas. that dynamic changed interest rates as well. look at a 24-hour chart of 10-year note yields. before the sun rose over the empire state building, we were trading around 1.56. now we're at 1.62 only down one basis point. listen, of late there is some magnetic pull on stocks as they either improve on a down day or go record higher but that force is less and less obviously, as you look at the

year-to-date chart when was the high yield for 10-year note yields? basically the first trades of the year at 1.92 that's where it closed if you look at the low at 1.50 and change, you can see, yes, we're up a dozen basis points but basically down 30 basis points for the year. all bounces are minor. we have two days resistant to 1.60 going through, it becomes a big deal with no follow-through. here is the market that actually is trending and you can count on look at one week of the dollar index. it broke its streak but still continues to hover at the best levels we've seen on a closing basis, even intraday since early october. actually, let's zoom, zoom, zoom that chart back to the spring of 2017 because we are about 3/8 of a cent away, less than half a cent considering we're losing some ground from 33-month highs which the euro weakness is already comping to back to may of 2017. back to you. >> rick santelli still to come, the ftc says it

plans to examine these past acquisitions by four of the faang companies and microsoft. that's not enough for one lawmaker on the hill josh hawley wants to overhaul the ftc in an effort to rein in big tech open down when it comes to your customers' expectations, there's one thing you can be sure of. they're changing by the nanosecond. that's why cognizant created a unique engineering approach to design and build new digital products. learn how cognizant softvision designs experiences and engineers outcomes. ♪ cool. ♪

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-well, audrey's expecting... -twins! grandparents! we want to put money aside for them, so...change in plans. alright, let's see what we can adjust. ♪ we'd be closer to the twins. change in plans. okay. mom, are you painting again? you could sell these. lemme guess, change in plans? at fidelity, a change in plans is always part of the plan.

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comcast business gives you connectivity that goes beyond. that's what we want! that's speed, reliability, and security, all from one provider. touchdown! get started with internet and voice for an amazing price. call today. comcast business. beyond fast. let's get to kraimer and stock trading. >> i have been a huge supporter of square from the early days. it is a jack dorsey company. i continue to believe it is going to be good last night i had shopify, they will be using something that will rival square. not yet. but be careful shopify is very powerful and if they want to take a lot of share they will be able to do so be a little more moderate in your support of square >> what's tonight? >> ring central if you look at

this, this is vlad the stock is up 40% in like five minutes. like many companiesinvolved with software as a service and there is no beating these companies. you can't short them and you can't own them who said that? >> jim, we'll see you tonight. >> wild market crazy days "mad money" is at 6:00 p.m when we come back the president's fed nominees at their confirmation hearing on the hill we'll stay on top of developments dow is dn 2.ow10 usiness of trading goods and services. nasdaq operates among the largest markets in the world. and our technology powers markets from indonesia to chile. great markets are built on a foundation of trust and integrity, forged through leading edge technology and a smart regulatory framework. as technology advances, regulation must keep pace to allow the markets to evolve. today we see an opportunity to modernize regulation,

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good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. a little loss at the open. dow down 154 as china changes its methodology on the coronavirus and that results in nearly 15,000 new cases. >> all right road map for the hour is going to start right there coronavirus fears weighing down global markets >> president trump's fed choices nominee judy shelton facing an uphill battle as she testifies

before senate banking today. elon musk's about face tesla announces a $2 billion common stock offering just two weeks after mr. musk declared the company did not need to raise any more capital we will begin in china with the latest on the coronavirus where the total number of confirmed cases worldwide is now exceeding 60,000 eunice yoon is live in beijing for us with the latest >> reporter: thanks so much, sara the spike in cases is due to a change in methodology in hubei province, the epicenter of the outbreak they have changed the way that they confirm cases they now have two groups one is called confirmed and that is confirmed people -- people are confirmed if they have a test and a lab test. but the other group is called the clinically diagnosed group and those people are confirmed with a ct scan likely because there aren't enough tests or the testing ability is lacking now, the new method looks as though it is aiming to help patients get into quarantine or

get treated faster but there are plenty of people who are doubting the numbers and saying that this could be a way that the chinese government is trying to obscure what the numbers actually are because the latest methodology also means people who are asymptomatic or don't show symptoms are now not counted as confirmed now, outside of china, japan is now the third place to suffer a fatality a woman in her 80s who lived near tokyo and then back here in china, the chinese government wants to show that it has a handle on the situation. today they announced new replacements for two sacked local officials in the outbreak zone also on state tv it's been very heavily featured that the military is sending in 2600 more medical personnel to hubei province guys >> eunice, just trying to understand, the higher cases you

just reported, is it clear whether these were previous cases just not reported or whether it is a new spike? >> reporter: it is not -- the time frame isn't clear, but these are people who haven't previously been diagnosed. a lot of it is because, as i said before, there is a suspicion there isn't enough testing ability on the ground. it got to the point where the authorities wanted to be able to say we have more cases and started to use different methods in order to try to show that these are confirmed cases. >> eunice yoon, thank you very much and a reminder, don't miss our special report on the coronavirus outbreak it's tonight again 7:00 p.m. eastern right here on cnbc all right. for more on the coronavirus and the impact on the markets we're joined by our guests guys, good morning good to see you both let's talk about corona first. how much -- i mean, it has been

called a nonevent here in the u.s., but given now apparent cloudiness in the china model, how can we forecast any kind of production schedule for the first half >> yeah. it's going to be an issue for certain sectors in the economy we've seen some reports this morning and we have this tale of two economies, right the u.s. consumer, which is rolling along. this is unlikely to derail that. but the manufacturing economy was suffering from a trade war and is going to continue to suffer so we have that dichotomy. well, unfortunately, it is set to continue. >> implications for stocks here? >> certain sectors, certain stocks as we've seen reports this morning it is starting to come out who is going to be impacted certainly in the consumer sector, some manufacturing supply chain sector, but, again, u.s. consumer driven stocks, the stocks with the narrative, the digital disruption, and all that, those are going to -- those key durable themes are set to continue. >> omar, your thoughts on that >> well, you know, i think, you

know, there are a few things one is, you know, we should expect more volatility the more we go and hear information about the coronavirus and all the different statistics that come and go, even just recently the change in the number of cases, you just create more uncertainty and the market doesn't like uncertainty. obviously that is the short-term effect i think what this does, however, is that it provides the opportunity, looking at the bright side, that there may be fiscal stimulus going from europe, fiscal stimulus clearly coming from china to support that uncertainty i think that is probably the opportunity set for the markets as we go outside of just the headline you know, the headline itself, it will probably be -- >> i just wonder, do you ever feel uncomfortable calling stimulus as a reaction to a crisis a bright side >> well, i think it is in the sense that it's a way to support uncertainty. and if you actually even think about the actions by the fed, you know, is just by providing

that extra, you know, level of support of potentially reducing, you know, rates, a way to support or stability in financial conditions it is a positive to make sure investors still maintain confidence in investing. obviously, you know, the absolute bright side is that the economy is pretty resilient so far. >> yeah. i mean, it does raise a question fiscal stimulus, monetary stimulus will it be enough to offset some of the economic weakness that this virus and the continuation of the shutdown of chinese factories and chinese consumers will bring on places like japan or europe, which are much more exposed than the u.s.? >> yeah. i think the stimulus is going to be hard to overcome the impact in china right? and potentially in europe. and by the time they do we'll probably be under a recovery anyway so i think that's going to be tough for policy makers to get around that. we'll just have to let this play through in those economies >> you think markets betting on the rate cut this year >> in the u.s.

>> yeah. >> i don't think so. i think they know that an insurance cut is possible if needed so i think they have that put again, right, so i don't think they're baking in another cut as we sit here today >> does the economy deserve a cut, do you think, at this point? >> the u.s. economy is in good shape. and i don't think it needs a cut at all >> omar, how about you >> well, i agree i think the fed is certainly on hold and is definitely watching the different parts of the market that are critical for them if you actually just look at the data this morning, you know, inflation is clearly subdued and because of that, the fed, you know, we'll probably continue to watch, you know, the opportunities for the stability of financial conditions, the volatility of equity markets, the outcomes of global gdp as a result of the coronavirus as a way for them to act on another cut. i would probably say that the market seems to be pricing at least one extra cut.

>> the market is pricing it in for summer, omar how much of the rally to record highs after record that we've been seeing is built on the foundation that the fed is going to cut rates and be easy >> well, i think it's just the put, right in a way the market seems to be banking on the idea that if inflation doesn't pick up, with this incredibly strong, you know, labor market, then at some point the fed will not even have another option but, you know, to reduce rates and stimulate that inflation number i think you put together the fact there is some uncertainty in the coronavirus and the clear impact on chinese gdp and the implications on the different supply chains, that, for the fed, is just an opportunity to say if the data doesn't support a strong economy we're basically going to cut so there is definitely a higher probability that will happen and the market seems to be very comfortable, thinking that the fed will actually deliver.

>> finally, jolts this week showed some, what some are arguing is a canary in labor market potentially rolling over later in the year, but it's a limited data set and it's hard to draw broad conclusions. what do you make of that >> i wouldn't draw any conclusion from one data point looking at the whole constellation of data that we're getting it's pretty strong labor market and even if it levels off here that would actually be okay. so i wouldn't read too much into that but of course it's something to watch >> after you, omar thank you, guys. appreciate it very much. >> thank you >> thank you meantime we'll look at shares of tesla. given the volatility in this stock, it's interesting to note it's not doing much of anything. after it announced its plans to offer 2 billion in common stock. elon musk by the way says he'll buy up to $10 million worth of shares oracle's larry ellison also on the board of tesla will buy up to a million dollars worth of the stock. you can see down a bit but not much of course 10 million from mr.

musk given the likelihood he is going to be able to collect the first part of his compensation agreement he entered into in 2018, some $346 million, probably not too much. the question is, do they need it well, possibly why not take advantage i guess at this point. given the amazing run up year to date you can see of course what that stock has done we've talked so much about it. but it was only recently that they indicated they did not have a need to raise capital. when your stock is over $750 bucks and up 80% or so on the year it can make you think twice. why not? >> there's also been a revelation that the s.e.c. has issued subpoenas looking into information on financial data and contracts. it doesn't necessarily mean anything but that headline always might be a little bit spooky the smartest things i'm reading on tesla are actually from technical analysts just because the price action has been so crazy. one says, it is so, so, so over

bought at these levels that even with a drop back down to 734.70, which is near the recent closing lows, it still has an rsi reading of 92, which is just technical analyst speak for, it's very, very over bought. >> ah, ya. i mean, we were pointing out 15 days ago when musk said it doesn't make sense to raise capital because we're going to generate cash stock was $200 south of where it is right now where at tesla, guys, did that calculus change, i wonder, at what price did they say, you know what? let's go for it? >> after it kept running up and running up and running up. >> yeah. we don't know the exact number but somewhere along the way, no doubt. still to come president trump's federal reserve board nominees facing an uphill battle testifying right now before the senate banking committee we'll take a closer look at the president's picks next so what are you working on? >>i'm searching for info on options trading, and look, it feels like i'm just wasting time. wasted time is wasted opportunity.

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president trump's federal reserve board nominees are testifying before the senate banking committee. we have some of the highlights >> reporter: well, david, shelton is facing some tough questions during this hearing including from a republican senator pat toomey >> ms. shelton is not a conservative she is far outside the main stream she is off the ideological spectrum >> reporter: well, that was

actually senator brown, a democrat and democrats have been grilling her as well. they've been asking her questions about her views on central bank independence as well as the need for federal deposit insurance and also her views on the gold standard now, shelton does not have a lot of wiggle room on this committee. republicans hold a one seat majority, so senator pat toomey that republican who has been critical of her has emerged as a vote to watch. however, she has received the support, it appears, of the chairman of the committee that has said she is highly qualified to serve and her views could help diversify the fed's perspective. meanwhile, shelton has tried to dispel any notions that she might be vulnerable to political interference >> i pledge to be independent in my decision making and, frankly, no one tells me what to do >> reporter: i believe we do have that spot from senator pat toomey who, again, is very important and raised a lot of very critical questions before

shelton. >> you believe the fed should actively seek to devalue our currency if other countries are doing that and i think that is a very, very dangerous path to go down. >> reporter: guys, this is clearly a very fluid hearing with a lot of undecided votes. we'll keep watching and keep you posted >> it sounds like the questions are quite good this isn't the first trump pick that has faced uphill scrutiny or even rejection for fed governors. it seems like it's pretty unusual how many people the administration has tried to put in this role already >> that's right. we all remember, of course, steven moore and herman cain who didn't even make it to the hearing stage before their nominations were pulled. also remember trump had said months ago he intended to nominate judy shelton but it took him quite a while before that nomination was actually sent over to the senate, so i think there's a lot of scrutiny on these picks

i think that the banking committee is taking its job seriously. to me, the biggest question that is before the senators is the one of central bank independence there is bipartisan agreement on the committee that that is critical to the functioning of an orderly economy and, so, i think that's the reason why this particular nomination is potentially up for grabs >> thank you very much keep us posted let's bring in our senior economics reporter steve liesman with more color on the nominees, steve. that question around independence, judy shelton was long time during the obama administration calling for higher interest rates and then in 2016 she changed her tune but a lot of economists changed their tune how big of a deal is that? >> reporter: i think it is a big deal and i want to get, sara, to some controversy around comments made yesterday by fed chairman jay powell about whether he meant to suggest he would endorse or support the nomination of judy shelton people familiar with powell's

thinking say that would be a misinterpretation of his remarks. here is part of the exchange yesterday between powell and south dakota republican senator mike rounds. >> would it be fair to say you can have people from opposing points of view that can have very lively discussions but at the end of the day still be part of a very strong team? >> absolutely. i really just think it makes you stronger i do i feel that way and of course we've had plenty of dissent at the fed over the years >> reporter: here is how rounds on "squawk box" this morning interpreted powell's comments. >> she will bring a rather diverse background and way of looking at some things and i think that is healthy on the board. in fact, i asked the chairman yesterday about group think and he clearly wants a diverse group of people on the board with him. he is not afraid of that >> reporter: one person i spoke with who is familiar with powell's thinking said it would be hard to imagine powell supporting shelton given her economic and monetary policy views. this person also doubts powell

would criticize shelton. sara >> yeah, i mean, it is hard to think about just how far outside the main stream she is on one hand, yes the gold standard comments and she gets very technical when it comes to her thinking about whether interest rates should be higher >> right >> talks about excess reserves on banks on the other hand she has a ph.d in business administration she is at a lot of these meetings you and i have gone to with economists. she is very close friends with a nobel laureate in economics, so i'm not sure how far out of the box she is >> reporter: i think the concern is the political and i think the issue, sara, becomes the changes she has made in her attitudes about the exact same policies given the administration that's been in office if you look at what she thought about reducing rates, she said, that's only -- reducing rates during the obama administration. she said, well it's only for the wealthy few. just recently in an interview with rick santelli she said look at all the people who have money in the stock market.

half of americans. we should lower rates to help them she also said her support for lower rates is conditioned upon the fiscal policy. that is the concern. i also want to show you something we put together about those nominees the president has gotten in and those he hasn't. there's been four nominees that have been in but three who have kind of withdrawn or otherwise been rejected they, personally, withdrew the ones on the right didn't get in there was a change, sarah, in how the administration, i think, handled these nominations. some of these were at the, you know, were consulting with people at the fed, with the chair, normal, traditional practice to consult and some were kind of outside the box they appeared to change the process by which they chose these nominees somewhere in the middle of the trump administration >> steve, do you see her as a return to that prior batch, that prior tronch that were successful because they tended

to go through more political protocols? >> i don't think so. i think shelton is more in line with the kind of outliers. the fed believes you can have one o are two people, i think the concern is, and a lot of people have said what if the president turns around in 2022 if he is re-elected and makes shelton the chair? how much independence would there be >> i also wonder if there's more scrutiny just because this president has been so critical of the fed chairman, jay powell, and has people thinking, well, maybe whoever he puts on the fed will be next in line for that job if he wins re-election, steve. >> exactly you're right in the sense that, you know, she has some defined and definite and interesting economic views and that's not necessarily bad for the federal reserve. the question becomes, whether or not they are tenable ideas >> all right we have our eyes peeled on senate banking today steve, thanks. let's get to rick santelli as well who interviewed shelton over the past few years. good morning, rick >> good morning. you know, let's play a sound clip

because i think this is very enlightening and right to the heart of all the discussion. please run the clip, folks >> it would be nice to be virtuous