lsht, thank you. >> i don't know if they're going to like it but thank you >> make sure you join us tomorrow "squawk on the street" is next ♪ ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. future is green after three days of losses for the dow. investors looking over some of the coronavirus headlines this morning including the smallest number of new confirmed cases since january although the death toll exceeds 2 . europe a surprise up 0.5,

looking for 0.1 and fed minutes at 2:00 p.m. eastern time. our road map begins with the virus risk for stocks. investors closely monitoring the potential economic fallout of the coronavirus outbreak as the death toll crosses 2,000 plus tesla stock is spiking again, why one analyst thinks energy generation and storage are the next big thing to fuel the company's growth shares of dish network rallying the satellite tv provider beating estimates as pay tv stubs decline but at a slower pace stocks are poised for a positive open after the number of new virus cases falls in mainland china and chinese officials announced fresh measures to support businesses struggling due to the outbreak globally the number offen could firmed cases exceeds 75,000 with confirmed deaths surpassing 2 . lowest number of new numbers for the month so far >> right with we dr. fauci on yesterday, at "closing bell" and he was the most optimistic i think of the times he was on. he did point out, he was asked a

question what do you feel about the americans coming off the japanese ship? he said pretty good. it was my decision so he's more or less in charge and he's basically saying, look, it's not the end of the world. there's going to be some things that go wrong but when i say that he was the most bullish, what i say is that i watched the nightly show we do, which is so good and i got a sense that he's seeing that there could be a path for this to end not as horribly, how about that, and so but he does not say hey, listen, the numbers are better, because i think's learned his lesson unless he's in there, he can't tell about the real numbers but the numbers, i mean if you just, if they're not totally lying, what you do is think there's two sets of numbers. there is the numbers in the cordon and you can't get out of the cordon and a number away from the cordon and also a 9-year-old below don't get it, 30 and under, very little lethality. 50 to 30, not that bad

60 not so hot. not so hot being if you have 14% death that is a very high rate so when you get the 70, 80, just beware that what it seems like to me there is an age bias that we should be talking about that no one is talking about. it's really dangerous. >> the classic influenza as well the casinos opening this week, stories out of reuters opening roads, trying to get back to work now we get adidas and puma, adidas sales are down 85% year on year. is this a free pass for companies who want to guide lower? >> kimberly greenberg talking about how nike is going to have numbers down 1% to 6%. i don't know how it is possible that adidas is just getting clubbed and nike and donahoe is good -- >> he took the job

>> this is by nike nike's barely down this is by nike. this is also something we have to talk about. there are stocks on the ticker underneath and fuel cell, virgin galactic >> power again, right? >> yes, so i mean there's a level of bubbling of belief that you know what? if we don't want to buy chinese stocks, we can go to the moon with virgin galactic those are usually bad signs but we're in a market where if you say that, you're a killjoy killjoy trading down >> these guys filed on friday quiet little for a long weekend for 31 million shares in s1. >> david, why wean bring that up >> i don't know. thought maybe people would want to know. >> why are you letting the facts get in the way of an incredible story. there is a level of optimism here, carl, that is out of sync with what you might have felt

monday with apple, and also a degree of -- what's really ailing apple it's hard to get a hall pass to go outside your house. when i see the streets of beijing empty and story in the financial times how hard it is to get workers there i find it hard to believe everything is going up but i find i'm out of date i'm not going to say the market's wrong i'm out of date. people buying virgin galactic. will you tell them we're not going to mars someday? i listen to jenson at nvidia, which is upgraded today by someone who missed about 150 points and they're going to the moon they're going to the moon, david. >> sounds good to me >> you thinking of adding space to your charitible trust >> no, i just feel like i've seen this movie very many times and then it turns out it's a

netflix. it's a series. it's narcos 2 mexico which i'm not crazy about. >> cooperman on "the half" said we're in the early stages of knocking done the door of euphoria >> right >> not quite in euphoria the conditions for a big decline are not yet present. >> right that was encouraging that was a really interesting talk with lee cooperman and i think that one of the undercurrents he's trying to articulate what i see, which is that, a, it's crazy out there but not crazy enough not crazy enough to do some selling, and then you mentioned a lot of stocks that we all know, like i thought that alphabet was a classic example of what he's saying. we can buy some alphabet he also had the value stocks the oils and those are dinosaur. >> you said they're uninvestable >> they are uninvestable >> lee is running his own money these days but you want to listen to him. >> they're uninvestable.

>> you say they're uninvestable. he says they're cheap. >> i say potato. >> you say they're going to stay that way >> bp raises its dividend, a mighty stock with tremendous cash flow. it is doing incredibly well. how much does bp go up when it raises dividend quarter over quarter? goes down two! so wait, someone was saying buy concha, the dividend is going up are you kidding me unless they get a bid from occidental, i mentioned that because they're funny, you find the situation where bachen from brazil are selling, producing so much oil everyone is producing oil and doing it with far fewer rigs i mean i don't know. we got a lot of oil. >> we have a lot of oil. china obviously is not using the energy that it had >> no, that's important first quart per >> not consuming as much coal the air is cleaner than some time >> it'sa console

>> your point about there not being the incremental buyer for companies that are not doing well on their esg scores and fossil fuels regardless of the efforts they're making >> bp put out its 50-year plan the plan was a good one. doesn't matter >> in terms of at least getting through investor psychology and/or appealing to the growing number of assets we discuss all the time that are moving in to strategies that at least incorporate some sort of screening for the environmental social and governance social aspects of companies >> these money managers in youth they don't like it they like virgin galactic, fuel cell and end fix >> it's interesting, when you talk to chief executives these days it's not just about their company being favored by investors who are looking at esg. it's also their employees who are pushing them >> yes >> and it's their customers as well that are demanding it from

them it's coming at them from all sides. their shareholder base or potential shareholder base >> right >> their employees want values they can ascribe to that they can believe in and therefore push it and customers who rfps when they get them actually say hey you've got to hit this, this, this and this in terms of packaging, in terms of all the different. >> when i was out with satya nadella he's telling his suppliers this is the way it has to be. >> you got to listen >> you want to stay on the right side of microsoft. there is without a doubt a move by kids so to speak that is driving this a lot of people are saying will you give me a break? the kids can't be doing it they are >> i would argue this is what is good about capitalism. if it gets debated tonight on the stage by some of the

candidates >> my point is that things are changing >> since the election of 2016, the etf is down 21 for coal. the clean energy atf pbw up 139% it's just money making decisions >> what is incredible is that germany increased coal india's increased coal china's increased coal >> i know. >> we should be making a lot of money on coal. coal is not working. they're just not making a lot of money. >> if we go coget natural gas more cheaply >> germans rejected it in order to get it from the russians. go figure that what is that about i'm with the president on that, i'm just going to say it >> yeah, i don't know. >> as far as coronavirus goes, tonight our special 7:00 p.m. eastern time, get a sense of where all the headlines are leading us as the story changes from day to day.

meantime the tesla rally is regaining some steam piper ups the target to 928, they were at 729 that was street high analyst alexander potter and winnie dong expect tesla to achieve the same success in energy generation and storage that it has in vehicles. premarket it was 920, which would be a record close if it could hold >> look, tesla the new -- if you look at end phase enph which has these beautiful tiles that make your roof look better than it does, you realize that tesla has something going with solar, and if you read the report, they're talking about the next leg being not even tied into what is so-called our coal based system. not true, only 28% of our energy is from coal but there seems to be a move by musk to get off the grid how is he able to do all this? i'm jealous of the guy no

i mean, what was it like to be working with edison? it's like hey, man, that guy -- i'm an idiot you know where edison isfrom let me quiz him. you know where edison is from? >> new jersey? >> a town. >> edison? >> edison. every time i think i have him he keeps getting me every time i pull him he gets back in. >> we're seeing a lot of capitulation >> recent rooftop solar considered to be a bad move, remember when? you know what? this is now energy generation storage tesla's other segment is starting to really roll. i come back, anybody who goes in the last conference call, it was the work of genius and it talked about april being battery month. battery month. he has not given us the day of battery day but that day, i am going to bring in all the batteries that are going to be taken out because of him including traditional car

batteries and you'll have to live with it we'll set them on fire i don't know, national battery day, i mean people are starting to understand what he's talking about. he's talking about how the battery could be the thing of the past or the new battery can take you far further people say that's not the point on twitter, and jimmy chill blocks every single person who starts with "that's not the point. >> what's your point that's the classic >> what's your point >> now we'll move on to recycling capacity and some of the longer term structural issues that batteries bring which has not been part of the conversation >> my buddy michael hayley is a junk guy, won't take 'em he'll take anything. i've seen hayley take cryptonite but he will not take these batteries. he won't too dangerous. >> hmm the old batteries. >> good point. no one is talking about that but you know he'll solve that, too, and then you'll feel bad. >> let's hope he does. >> he will is he going to solve world peace? how has he on that >> i don't think he's that good

on that. no >> remember when he used to spoke dubies and make fun of the sec? >> now he has to deal with bill gates buying the competitor's product. >> he's become, he's an elder statesman. a little gandhi in him i didn't count. >> it's been a very good year. >> it's been an -- where are the sellers, carl? where are the people who have made so much money in tesla that they want to ring the register how about all these kids who bought one stock and it's tesla, and now they think they're buffett. david, it's a voting machine versus a way machine these people show up, every child who bought a share of tesla, how did you do that discounted cash flow analysis. this is the most amazing, sensational thing i have seen in my career. people just continue to make money, on a company that actually, look, you think this piper, this guy didn't go to college and get stupid what is this fella's name,

alexander potter there's a bunch of them. they're geniuses they're geniuses the guy is a genius, david >> mr. potter. >> yes, yes. yes. >> wonderful life. >> i've been on potter's field it's not so hot. >> no. >> when we come back, cramer's mad dash and count down to the opening bell lots of names to get to today, adobe street high target, bernstein as jim saysdoing a little guilt trip on nvidia. "squawk on the street" continues in just a moment

we got 12 minutes before we get started with the opening bell we like to call it hump day, of course came early this week. >> it did. >> first work day, nvidia we spent a lot of time talking about it late last weekend earnings surged. you want to talk about it again on "the mad dash." >> it's recommended now, now what do you do if you stay negative you say obviously this was not growing more constructive on the shares was an error.

so they admit it and i think that's terrific. but they just talk about data center, machine learning, artificial intelligence, the new rate trace game. there's so many things that are going. right here they are calling this a false peak this was built on bitcoin, and it turned out when bitcoin fizzled out, nvidia was in the wilderness, and then, an unbeli team, and this and amd, amd the bad quarte 50, went down to 47 these are levered to the data center, which is so back and remember what i told but nvidia, what's going to happen one day you're bored you create five people to talk to you about shakespeare, maybe first the histories, then the comedies and over the course of six hours, rather than watch netflix you get a gathering of holograms powered by nvidia. that's what they're able to do david, they think they have

conversational inference >> going to create your own book club >> yes, they know. they know. like let's just say -- >> you have no friends you can create friends >> pfaltstaff is an idiot. i happen to like pfaltstaff. on page 492 of the annotated row, pfaltstaff has tremendous legitimacy this is the new nvidia chips it's going to happen i can show you an nvidia game and show you "star wars" and you can't tell which is real and which is not jenson wong is putting a calcul. >> when does the world end up there, when they create the terminator >> david, if the world ends, we'll go to mars, have a dynamite time and do "the mad dash" request mars virgin galactic to take us there. >> we have more to cover the dish numbers of course we want to get to as well, cord

cutting slowed a little bit and check out our podcast, listen to the opening bell hour of "squawk on the street" wherever you listen to podcasts we'll be right back. at fidelity, online u.s. stocks and etfs are commission-free. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk while our competition continues to talk. we sunleashing the promisegas of clean energy.

at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. ♪you got to ac-cent-tchu-ate the positive♪ ♪ e-lim-i-nate the negative "slow it down a little" ♪ and latch on to the affirmative ♪ "it's okay" ♪ but don't mess with mister inbetween ♪ ( ♪ ) supporting innovative companies that will shape tomorrow and building workforce development and tuition-free college programs to generate the talent companies need. with a $150 billion investment in state of the art, modern infrastructure, and a nation-leading commitment

to low-cost clean energy, new york is doing more than any other state to build for the future of your business. new york state, the state of the future. learn more at esd.ny.gov. futures look good after three days of losses of downs. gold gets to a six-year high, a lot to get to when the opening bell rings in over seven minutes.

we see breakthrough medicines getting to patients in record time. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. there's room for more than just the business you came for. ♪ whether that's taking in every moment... or capturing a moment worth bringing back. that's room for possibility. ♪ how far we can go, oh oh ♪ sales tax, real estate credits, solar incentives... and we have no way to integrate all that?

no...but bdo does. (announcer) people who know, know bdo. the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. you're watching cnbc's "squawk on the street," live from the financial capital of the world, the opening bell in just about three and a half

minutes. busy morning, watching the krn headlines, jim you said we're in a lull here. >> right >> why is that >> what dr. fauci was saying yesterday is there is some degree of containment. there are a bunch -- when you point out anything that is from china, people don't believe it but the chinese center for disease control and prevention i am very conscious that yes, you can go say it's a completely fraudulent you the outfit but talks about some positives about how they might come to an end to this and saying the public health measures they took are meaningful and the patient death is not as bad and i know people say will you give me a break it seems that things are a little better. this is the over 80 group and

then 14.8% that's who is at risk. i want to find out what is the rate in america that so many people are dying is it that cohort? there seems to be mitigating factors with the exception of a couple young doctors this report the epidemiological characteristics of an outbreak of 2019 novel coronavirus china 2020 under vital services is worth reading. >> i haven't gotten a hold of it i rely on you to transmit. >> it makes me feel better, okay immediately people will tell me it is a fraud. on page six of this fraudulent document you see there is a convincing decline in all cases, confirmed, suspended, clinically diagnosed. >> that would be a good thing. for world health and the chinese economy where we continue to be

focused, getting manufacturing capacity back to significant numbers. >> i wish we could show this >> opening up some of the provinces closed >> the confirmed case decline. >> it's coming down. >> again, this is a completely fraudulent lying horrible ridiculous document from china >> being sarcastic >> i am because wuhan unrelated exposure is going down this is remarkable fauci said something when he was interviewed by sara and wilf that shocked me. when you have martial law you can shoot people who leave the cordon, we would not get a court order to shut down california. they don't have as much democracy we're discovering as us they just don't. that's absolutely, we never have seen someone, authoritative

government try to quorn tee something since the soviets decided to starve ukraine in the '30s >> the opening bell here the s&p 500 at the cnbc real time exchange and the big board it's deutsche, black leadership forum in honor of black history month at the nasdaq, and the eastern company at the nasdaq. waiting for the board to fill in on this wednesday morning. david you've been watching dish and some of the metrics. >> david corrected me that edison is from milan, ohio >> you're welcome. >> go ahead, dish the dish >> we're going to talk dish? >> that was the segue >> sorry i was looking at cord cutting numbers because the latest numbers are out. let's get to dish numbers as well we talked about it at the top of the show

people look at the traditional number of people signing up still subscribers to the direct broadcast satellite business the future is not about that business it is about providing 5g nationwide and that is certainly where one would expect the company's ceo will get a lot of questions when the conference call takes place later this morning. numbers in terms of how many people were signing up and falling off better than anticipated. from the top 14.3 million in the first quarter of 2010 that was their top subscriber number, down about 5 million subscribers, roughly 35% or so where they are right now however, churn was better at 1.56 and overall numbers were better in terms of the losses of subscribers that they had at dish which came in i'm trying to, sorry, i got a lot of different numbers here, i'm

talking it through, came in less than had been or fewer than had been anticipated slipping is one of the survivors in the top world in aggregatie ing programming. cord cutting continues the pace and those that say direct broadcast satellite if you want to view it as its own category is still losing at a rapid rate when you consider what's happened at directv as well. 13% continued decline acceleration, even at this point. 90% of all households in 2010 is down about 65% in terms of taking it. being able to roll out a nationwide network the questions can they do it for the numbers they're talking about in terms of the capital that's needed for the company to

equip the country to offer that. they got the mbno at t-mobile, that will stand them in business early and for a number of years to come. they have a lot of work to do in terms of getting to 100% build-out, a lot of public works to be done as well given the requirements it's pointed out verizon and at&t spent something like $200 billion over the last ten years on building their networks we'll see. mr. ergen in his public testimony and privatery with judge marro seemed to do a good job convincing him they would be a real player, one of the key reasons he cited in approving of the deal saying no to the unions more on the call we always hear from ergen. hopefully one of the days we'll

have a chance to sit down in person and talk to him >> that would be great >> hope so >> get to go out there >> i hope so >> analog devices an analog company that makes chips, a lot of them fall into quiss and reported a number that looks good, up seven the semis are alive and well analog devices is internet of things, their devices are in everything it's a remarkable market bears are telling me they're feeling endangered >> you mentioned bernstein on nvidia to 360, they were at 300. quoting here with the stock almost exactly back to prior peak levels, it is obvious that not growing more constructive sooner with as an error. >> people say that's the top

that has not been a case think about the people who threw the towel in at tesla, 300, 400. we don't talk about them enough. turned out to be not a call. >> tesla is aapproaching 170 billion, not far from the highs it saw during that a couple weeks ago. >> i won't be worried until gm and ford if you add them up and double them that tesla is worth more than them and there you go. >> not included debt >> so 80 doubles 160 >> 170 >> david i'm bumping my price target stock is 917 what is your target? >> 1017. this is what's going on. one of the things that's amazing, someone tweeted his cab driver bought tesla. so my contention here is that he's a bozo and the cab driver

is smart >> reminiscette of the late '90s this reminds me of a lot >> qualcomm was supposed to go to 1,000 >> i do. qualcomm is still with us and still a successful company there are companies that not just survive but thrive. plenty just to put it mildly overvalued >> witch of we have an oil company going up, seeing an oil company go higher. >> what else is going up apple after yesterday's brief slide we'll see on concerns about china on their inability or evolving situation is what tim cook said. >> how could it not be counsel ten the company is saying there sish us with supply and demand

>> 10% you mean. >> yes the answer is that people think let's talk about what's really -- no one wants to say this people think this thing is going to be solved >> of course >> that's driving things when it's solved, china pumped so stimulus in the economy it could be to the moon, alice, situation. the chinese don't allow selling unless you call the government hey, i'd like to sell some ten cent it won't kill you if you do that capital crime. what do you think? capital crime to sell, who the hell knows over there. one thing is absolutely true is that there is an undercurrent which says the great minds are going to solve this. now it's interesting because the top scientists don't feel that way but there is a great minds theory and i think that is in charge you disagree with that >> not necessarily no there seems to be optimism this will be solved. not become a worldwide pandemic

at the very least. what the impact will be on the chinese economy this for this quarter and quarters to come is unclear >> don't you think there was another major shift, the president wants to increase commerce with china. directly the opposite of what we were hearing >> that was yes. >> hard liners >> a number of tweets and eamon encapsulated late in the show. that was curious, jim. >> the navarro camp is not in favor. what did you think of that mnuchin camp one, secretary of the treasury one doing business with china. china is pumping money into the economy. if we solve this thing what -- >> kicking our journalists out of the country >> yes >> great "wall street journal" report >> first time since '98 they evicted a credentialed foreign journalist response to the journal op-ed. >> first amendment is very weak

over there >> not a lot of clarity parts of the administration moving against or mitigating your ability to sell to china and then the president saying what he said. >> president made an about-face said look, anything -- huawei obviously. >> that was in a tweet is that all it means >> david n a tweet, that's like a presidential proclamation for heaven's sake. >> got it. >> in a tweet? you act like it doesn't matter >> three plus years in >> there's no press conference he stands outside with a nice coat and he picks who he wants to and boom. you ever cover the white house >> never >> i covered it once >> not -- >> raise my hand, they would never call me because i had this dirty corduroy jacket. >> you've been living in the car probably not long before that. >> i couldn't get a shower that ease pill >> which president >> the big race to elect jerry brown he called on me once and

wow, i said why don't you break up the interstate highway system and stop the rural electrification grid and he said you have no idea what you're talking about. i said candidly i probably don't and that was the extent of it. >> for the market's purposes if we could put a lid on the coronavirus spread and get the max back, today american airlines says it expects resumption of max flights to happen august 18th >> boy, is that aggressive >> surprisingly specific and gradually phase in service in august and september, at the same time boeing is going to court today to fight this request from lawyers representing victims of the crash. >> i hear the same things are accelerated. cooperman an impaxed call by united i hear things are going along. i keep hearing the question is

what are they going to call it i got to stick with that 737 max. what are they going to call it do you know? >> they'll stick with that you don't think they're doing good work how to approach it and how to work with the airlines? >> i think it's the safest place on earth on earth, safest plane. i volunteered to do "mad money" on the inaugural trip. >> when you fly commercial after august will you ask what model, what the equipment is? >> i don't fly commercial. i fly first -- i ask i will not because i think it's the safest plane on earth. anyway you can't hear me through my mask. >> a number of secondary stories today as well. nike, john donahoe elevates heidi o'neill to the consumer business, running ecomm. highly placed female >> that was huge a lot of people felt he was

running a boys club there. nike huge business in china, they make them in china, and this stock is just hanging in there. none of us are used to this. nike should be down big. somebody short this thing huge because it made too much sense to short i read that note and made me want to buy it and dominos is doing a good job, placing with very good people nike buy, buy, buy. how is that possible speaking of buy, buy, buy, anyone on the bed, bath & beyond conference call? >> investing $400 million on remodeling and supply chain, buy-backs. >> possibility of buying back almost half. a disjointed conference call >> macy's is a junk yesterday talking about khc. >> even though they've done everything they can to clean up the balance sheet, not enough. everyone's trying to get ahead of some of what we've seen in department stores.

i can't blame them i thought bed path laid out a case which said look i'm getting rid of the bad stuff and i'll be fine i was shocked at that macy's downgrade, shocked >> we talk about bed bath buying back stock >> they bought back much more. >> then they decided to stop, now they're going to start again. >> management there was jimmy chill will not say what he thought of previous management >> honorable decisions in terms of allocation and capital. >> agreed. agreed >> costco half a buck from an all-time high opening a second chinese mainland store >> they're ready >> in shanghai that was announced >> wow i mean, i know that they told me when i was out there, they wouldn't do it until they're absolutely ready, sea cucumbers the most popular thing they have there. a lot of people costco special

dividend the one shanghai store had to be closed after a couple hours, too much demand and needed to figure out what to do they could put as many stories inchina as they have in the u.s., they could double the share, the store count this is remarkable they open it right now, a sign of how well they are doing, and of course that's doing a fantastic job. remember they make the conver r converters, make your solar panels work. what the hell is happening >> okay, i think that's a good place to end, carl >> nasdaq record high. bob pisani >> nice update for the dow, also essentially new highs on the s&p. apple is helping the dow, jpmorgan, some of the other names, disney also moving here it's another risk on day semis doing great here we have new highs at analog devices at nvidia, at amd, home builders are doing fantastic new high on the home building index. consumer discretionary a new high not just the home builders but of course you've got amazon

doing really well. you have home depot doing really well banks have been all over the place depending on the yields but up today utilities on fire, new high yesterday, taking a little bit of a breather today. in terms of where the markets have been, this is the remarkable pattern with coronavirus. the response has really been very modest. i use january 20, this is roughly the time when everybody kind of woke up to this issue here china, the big mchi, the broad etf for china down 4% since this became well-known. shanghai is down 3 nikkei is down 3 the stock 600 in europe, that's up 2%. that's knnot down 1.500 up 1%. this is remarkable response given the potential knock-on effects of this in the first and second quarters and always prompted the huge debate on the street whether the markets are resilient. i've heard that word and some people said the markets are delusional we have this modest drop in global equities, essentially none in the u.s. and europe.

modest in asia safe haven plays are notably higher about the same time utilities, bonds, gold, a dollar playing it the markets in terms of moving on the upside, the global economy all right and then they're playing more defensive way, essentially trying to get it both ways here and nobody is quite winning right now. in terms of what's going on with the sec, i want to note they put out a statement this morning saying they had been in touch with u.s. audit firms about coronavirus. this is a little way of saying we're paying attention here. they discussed the exposure of u.s. companies to the virus, and they reminded everyone, they have certain powers out there, that they may have the power, they do have the power to grant appropriate relief from filing deadlines. this tells me there's been inquiries to the sec about this, saying we don't know what's going on explain to us the rules here and the sec is reminding everyone that they can. so i anticipate you are going to see some firms that may ask for and be granted filing deadlines from their reporting requirements because of coronavirus. hasn't happened yet but this is a clear indication the sec is on

top of this and watching developments finally a lot of discussion about an article in the ft about the options business it's expanding, it's booming and there is a number of reasons why the options business is expanding. we have a whole sort of new options available in the last few years. we have weekly options, monthly options, quarterly options we never had this ten years ago. business is expanding. they're more affordable. would you rather buy tesla at this price or rather buy a call option on tesla? virgin galactic or any of the faang names? who can afford that stuff? that may be a more affordable way to play the business retailers are more comfortable, more educated than they used to be and the momentum followers, commodity trading advisers, ctas out there, they use options and since tren overall and finally if that doesn't impress you look at the biggest options player in all of the biggest play on options what, we use to called the cboe, the chicago board of options and

you can see last ten years there is where the options business is going, that's cboe and this is the s&p 500. the options business game is outperforming the equities business game right now and that's a sign that options business growth is very, very real carl, back to you. >> thanks, bob pisani. to the bond pits we haven't mentioned the ppi number from earlier today. let's get to rick santelli hey, rick. >> good morning, carl. certain methodology in ppi was changed in 2010. those up half 1% on headline and core, they don't get any higher than that literally. it's really an extreme measure now, whether that is an anomaly, because we're much more concerned, as it moves down the pipe line into the consumer arena, and obviously cpi last week wasn't nearly as hot. and even the housing data, just unbelievable basically we're looking at 13-year highs on the metrics with starts and permits, but having said all that, we're up one basis point across the

curve, parallel shift, tens are at 157, they close at 156 which was over a two-week low yield close and look at the intraday we got what, a basis point out of those hot data points pay attention, on many investors say oh my goodness, the treasury complex and low rate saying about the u.s. economy when you get very big extreme data and the market doesn't move you have to think that hypothesis through look at a month to date of tens as we bounce along here, we can't seem to get much above 165, and finally if we switch to the foreign exchange markets, which are a bit more aggressive in the other direction, look at the one week of the collar dollr intext treading water and lofty levels and boom, rocketed again, now at 33-month highs if you look at one of the euro versus dollar it's opposite. as a matter of fact much more aggressive exact opposite. it's down ten out of the last 12 sessions and at a 34-month low

if you open the chart up to april of 2017. carl, david, jim, back to you. >> rick, see you in a bit, rick santelli we are going to continue to keep an eye on tesla after piper goes to 928 street high. stock opens around 9:25, sett settling bit back here in the early minutes at 9:06 the dow is up 84 points. back in a moment

we see homes staying cooler without the planet getting warmer. at emerson, when issues become inspiration, creating a better world isn't just a result,

it's a responsibility. emerson. consider it solved. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition.

that's the power of edge-to-edge intelligence. all but one of the faang capone nents the green today netflix barely down as apple tries to reclaim friday's close of 32495 ♪ ♪ ♪

♪ don't get mad. get e*trade, dawg. wenot the exception.sh food being the global norm, at emerson, when issues become inspiration, creating a better world isn't just a result,

it's a responsibility. emerson. consider it solved.

jim, let's get to stock trading. >> i know these casinos are opening up a very good piece out by jpmorgan a primer about betting not focused on bar stool but this stock has been up and up and up and i think if you need a casino why go to china when you can go here with very good gambling >> all right how about tonight? >> i have everbridge one of those where you get that like warning, warning on your phone like the verizon blasts. there is going to be a flash

flood? then charlie morrison wingstop stocks hit a low i think wingstop is a good business model >> comps up 12 >> we'll tell the good story >> digital 39% of revenue. >> oh, no they have the day of tremendous door dashes it's a terrific story. i asked if you could ever get a franchise. you have to have so many different mcdonald's, successful franchises even to get a wingstop and wing stop is fantastic. >> lrlt. we'll see you at 6:00. >> yes i'll go active >> see you on the moon >> sure. i'm going to the sun boy, must be hot up there. >> s&p and nasdaq record highs back in a moment happens out the today, remember, you have the hilton app. will the hilton app help us pick the starters? great question, no. but it can help you pick your room from the floor plan. can the hilton app help us score? you know, it's not that kind of thing, but you can score free wi-fi. can it help us win?

hey, hey! we're all winners with the hilton price match guarantee, alright? man, you guys are adorable! alright, let's go lose this soccer game, come on! book with the hilton app. if you find a lower rate, we match it and give you 25% off that stay. expect better. expect hilton. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you. apps except work.rywhere... why is that? is it because people love filling out forms? maybe they like checking with their supervisor to see how much vacation time they have. or sending corporate their expense reports. i'll let you in on a little secret.

they don't. by empowering employees to manage their own tasks, paycom frees you to focus on the business of business. to learn more, visit paycom.com

and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk good wednesday morning welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at post 9 of the new york stock exchange record highs for the s&p as some of the coronavirus fears fade at least for today. dow is up 65 trying to reverse

three days of losses >> our road map for the hour begins with the resuming rally nasdaq, s&p both hitting the new record despite global head winds. >> coronavirus fears hit retailers, adidas and puma issuing new warnings >> michael bloomberg set to make his democratic debate debut in las vegas. we'll begin with the latest in the coronavirus outbreak. the number of two cases falling in mainland china but globally the total amount of confirmed cases exceeding 75,000 with confirmed cases surpassing the 2,000 mark eunice yoon is live in beijing with the latest. >> reporter: health officials here have pointed out china has posted the lowest daily rise of new infections since january 29th at about 1700 cases or so the authorities in the epicenter of hubei province have also been

taking even more, tougher measures to sweep for unidentified cases and are now checking this out through purchases of fever and cough medicines, so officials are going to the drug stores and also checking with online purchases and telling the sellers they have to give up the identities of thebuyers. the government is looking for ways to try to stablize the businesses because of the disruptions. there have been reports recently the authorities are looking for ways to potentially bail out some of the problems with the airline industry, also considering direct cash infusions and mergers to help airlines now, local authorities have been looking at ways to try to help out other companies as well, particularly in the medical field as well as companies that are offering up daily

necessities, for example, the city of shanghai is offering subsidized loans to affected companies and that includes the international ones like unilevers as well as 3m's china unit this week they're going provinces very far from the epicenter. i spoke, though, to the w.h.o. and they said as of right now, there is no trip planned to hubei province on the agenda though they haven't ruled it out. guys >> eunice, we were talking with dr. fauci from the nih yesterday and he reiterated how unprecedented and unusual the quarantines that are happening in china are -- millions and millions of people basically locked down in certain places. i'm wondering what the attitude is toward the chinese authorities that you're gleaning

there. >> reporter: well, the way people are looking at it is they just are actually quite used to having a government that is very heavy handed, so, yes, it's inconvenient, but it's not particularly surprising, because people have been living with the government for quite sometime. >> eunice yoon, thank you very much a reminder do not miss our special report on the coronavirus outbreak again tonight, 7:00 p.m. eastern right here on cnbc in the meantime for more on how the virus is impacting the markets we're joined this morning by our guests. good to see you both thanks for the time today. so, the market believes this is going to be essentially a q1 phenomenon are you onboard? >> absolutely. i think this is going to be pretty detrimental to q1 growth particularly for china and the global economy as you've seen supply line disruption, travel disruption as well but with any of these events as you move further away from it over q2, q3, q4 -- we've down

graded chinese growth from 5.8 to 5.3 for 2020 and global growth goes from 2.5 down. >> q1 close to 1 >> if not zero some of us are saying the disruption is much longer than planned. factory closures are going on for another couple weeks therefore maybe we'll just get flat gdp growth for the first quarter of 2020 chinese growth >> all right jim, so the real danger then is that this becomes more a matter of duration than magnitude, right? >> that is absolutely right. we hope it remains that way. the market clearly is pricing containment not pandemic but we don't know yet whether pandemic has a probability of manifesting itself that said, we completely agree we think q1 is going to look fairly depressed given the scope, scale, and duration and spread of the coronavirus, but we do think that's likely to be a buying opportunity for long term investors, given that the underlying fundamentals

especially here, whether looking at earnings, look k ing at intes rates or the key economic driver, the u.s. consumer, those are all signaling for us at least currently a slow growth, no growth path that we think is going to be beneficial for investors to stay the course >> where are we on this reflation story? gold up 1600 people now calling it a floor. bpi comes out and surprises a few folks with 0.5 is that back >> no. i think it is still too early to be calling the return of thef investors who are very nervous about overseas negative yielding debt we've got $14 trillion worth of debt trading with a negative yield. that is weighing on bond yields here in the united states. it's forcing equity markets higher as multiples expand as frankly the u.s. equity market becomes the only game in town for many investors when you're faced with a sluggish global backdrop and limited options within a fixed income market >> here's what i don't get about

the global stock market reaction just brushing off the china concerns over the last few years there were many china scares every time china's currency weakened past a certain point, global stocks shook everywhere every time there was talk of a hard landing o arer credit crunn china global stocks shook and now global stocks don't seem worried about that economy grinding to a halt why? >> i think this is something where investors are focused on the chinese longer term growth picture. changes like movements to currency markets, yes, it is quite detrimental not just for where we are today but where we might be a few years from now. i think investors are taking a longer term view on the coronavirus and seeing the actions the chinese authorities have put into place to try and contain the spread and view it as very much a q1 phenomena. as financial markets are long term balancing machines and trying to assess growth over say a one to two-year time horizon this doesn't change the long-term growth picture that is how i would assess it. >> jim, does that make sense to you? >> it does though it is ironic

we have sort of a barbell trade, large cap growth clearly enjoying the benefit of money flowing in as well as the long inside of the u.s. treasury. so we're seeing both a growth trade as well as a fear trade playing itself out in this market i think one of the reasons why we have relative confidence in at least the u.s. market's ability to sustain growth is again coming back to that driver the u.s. consumer. we also think it would be a mistake not to begin to look at the rubble of the established foreign and emerging markets for some of the rubies that have been compressed over the last decade, relative to our own market we think in the hands of a good, active manager being super selective, there is going to be some great long term bargains that are going to be unearthed >> like what >> well, in particular we like the small to mid cap value space, both here in the u.s. but also the established foreign and

emerging markets we think anything that relates to the consumer whether the u.s. consumer exporting goods and services here or whether it's catering to their own home grown consumer base, we think that's one way in which companies will be able to continue to be -- to find ways to profit, no matter what the event driven news of the day is, whether it's phase one trade deal, coronavirus, or of course a fairly contested election year here in the u.s. this week macy's goes to junk kraft heinz the day before warnings this morning on low corporate quality debt how does it register on anyone's radar right now? >> i think at the moment this is starting to transform into a risk a lot of investors were focused on late 2018-2019 when the triple b story started to come around. what we are starting to see is big companies moving across that threshold.

a lot of large investors say actually i can't hold those bonds anymore. they sit outside of my rates an to change the position right now all we're seeing is one or two isolated companies. our concern is that that starts to build into something more meaningful and that that's where we start to see large scale credit downgrades. compound that with some of the liquidity challenges within the fixed income markets and we could have a bit of a problem within corporate credit. we are encouraging investors, focus on quality and move away from some of the triple b names into u.s. treasuries and triple-a corporates. >> we'll watch the fallen angel phenomenon all year long i imagine. jim, alex, thanks, guys. good stuff >> thank you >> appreciate it two german sports wear giants issuing a warning about their chinese business this morning. adidas saying that the coronavirus is taking its toll on them due to store closures and fewer tourists the company issuing a new statement this morning saying, quote, our business activity in greater china has been around 85% below the prior year level since chinese new year on

january 25th and while we have also seen some traffic declines in other markets predominantly japan and south korea we have not yet observed any major business impact outside of greater china. shares of adidas are up this morning about 1.5% adidas says they'll provide more guidance on the magnitude of the overall impact on their business when they release results march 11th but they still have to reach targets they say for 2020 after reporting better than expected results for the 4th quarter. they are forecasting a 10% gain in revenue this year the ceo saying in a conference the company should be able to fulfill march orders with a three-week delay and that outbound shipments have improved in the last four to five days as ports reopen the company says that more than half of both owned and operated partner stores are also temporarily closed due to restrictions by local authorities. guys, adidas has about 22% according to analysts, sales directly in china, nike, for instance, for comparison has about 16% in greater china both of them make a lot more

profit in that market. the last thing nike said was that they expect a material impact on sales. interestingly, supply chain here doesn't seem to be the major concern. it's really demand and i think it shows you just how much of a growth market china was for companies like puma and adidas and nike also, the parent company of vans warning as well. >> so is the takeaway the chinese consumer is going to buy twice as many shoes in the last three quarters >> seems to be what the market is saying by overlooking this. >> though we have nothing from the companies obviously on that and no predicting the behavior of whether that will snap back i think it's easier to buy tn ss the revenue lost from restaurants, for instance. so maybe they're discounting that fact, there and the idea that with all the chinese liquidity and maybe fiscal stimulus in the form of tax cuts or any other things could actually help consumers open their wallets more. i think analysts ingeneral are looking at the strength of these brands in china and sports wear in general as a category growing

so fast that they are looking at the long term and writing it off. >> so they don't lose the competitive stance because everybody is facing the same thing. >> right it's also a big year for sports. we have to watch things like the tokyo olympics because these were all -- this was all supposed to be a huge catalystt for sales for some of these companies especially nike and adidas with that impacting the region that is going to be key for when it comes to the numbers for 2020 >> puma had a good quarter >> yes >> in and of itself. quite strong >> that's why the stock, you know, was up >> right what is interesting of course is the performance of adidas. it is off its recent highs but up over 2.5% on this >> nike, too it's barely been a blip even though these businesses are clearly being affected >> we should point out apple is up 1.1% this morning as well after falling yesterday a bit on its own warning about the china business >> no change in pattern there. they're not getting punished for having coronavirus hit to sales even if the sales continue to climb here in terms of the impact hit >> okay.

still to come right here presidential candidate mike bloomberg taking the debate stage tonight in las vegas we'll break down his new plan to take on wall street. that is ahead of that debate this evening and a reminder you can always watch us live. if you're leaving the house, got to go somewhere, get the cnbc app. down load it today "squawk on the street" is right back at snhu we value your time. and your experience that's why we'll accept up to ninety credits toward your bachelor's degree and offer discounts to active duty service members and their spouses

finish your degree. s. h. u. dot edu. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value ♪ talk, talk

time now for our etf spotlight looking at the spdr consumer discretionary ticker xly hitting a fresh record high currently trading up about 0.4 one of the catalysts garmin up sharply on better than expected quarterly results and a dividend boost that stock having an 8% day. home depot and mcdonald's moving a little lower today >> when the stock market gets volatile investors search for safety, treasuries, municipal bonds, stable assets such as those that pay dividends, but the ten-year, well, it is still trading around 1.5% right now and the 30 year closer to 2% not a lot of yield for your safety we're looking at the pros and cons of higher yielding preferred stock as we kick off a

new series called "the hunt for yields." >> the biggest investors saw their assets under management jump by 27% in the past year preferreds are issued by companies to raise money and trade under a different symbol than common shares they've been a favorite vehicle for warren buffet who bought occidental petroleum's preferred stock last year and famously scored big on preferred shares after getting a special deal that wouldn't be possible for smaller investors with goldman sachs, general electric buying them up during the financial crisis preferred stocks spits out dividends much higher than ordinary shares. for example let's run through the numbers on bank of america the common shares are paying a dividend of 2.1% the latest preferred stock was issued last month paying 4.3%. a september, 2019 preferred issuance was offered to the market at 5% most of that was gobbled up by institutional investors but individuals can get in on the action as well buying the preferred over the common shares would give, have

given greater yield but common shares have surged up 25% since september. common shares of broad com pay 4.25%. preferred shares issued in september of last year were offered at 8%. again, better yield but in that time frame the common shares are up about 10% there are also etf's dedicated to the space like the i-shares pff paying 5.24% annually. if a company goes belly upholders of preferred stock are second only to bond holders in a fight to get their money back. critics argue the yield on preferreds don't give you enough advantage over even more secure high yield corporate bonds they say preferr down market, which we don't have right now. they also limis soar unlike common shares preferreds can also call back by the issuer and if you give up your right to vote like an ordinary share

holder if these are a problem for you, you may need to continue your hunt for yield somewhere else for more ideas in the preferred space, go to cnbc.com. carl, back to you. >> all right seema, thanks very much. as we go to break take a look at the top stocks on the s&p today which did hit a new record high. ( ♪ )

gimme two minutes. eligible for medicare. and i'll tell you some important things to know about medicare. first, it doesn't pay for everything. say this pizza... [mmm pizza...] is your part b medical expenses. this much - about 80 percent... medicare will pay for. what's left... this slice here... well... that's on you. and that's where an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company comes in. this type of plan helps pay some of what medicare doesn't. and these are the only plans to carry the aarp endorsement. that's because they meet their high standards of quality and service. wanna learn more? it's easy. call unitedhealthcare insurance company now and ask... for this free decision guide. inside you'll find the range of aarp medicare supplement plans and their rates. apply any time, too. oh. speaking of time... about a little over half way

and there's more to tell. like, how... with this type of plan, you'll have the freedom to choose any doctor who accepts medicare patients. great for staying with the one you know... or finding... somebody new, like a specialist. there are no networks and no referrals needed. none. and when you travel, your plan will go with you anywhere in the country. so, if you're in another state visiting the grandkids, stay awhile... enjoy... and know that you'll still be able to see any doctor who accepts medicare patients. so call unitedhealthcare today. they are committed to being there for you. tick, tick, tick, time for a wrap up. a medicare supplement plan helps pay some of what medicare doesn't. you know, the pizza slice. it allows you to choose any doctor, who accepts medicare patients... and these are the only plans of their kind endorsed by aarp. whew! call unitedhealthcare today and ask for this free decision guide.

mike bloomberg taking the stage tonight, his first democratic presidential debate a day after unveiling an ambitious plan to rein in wall street. robert frank joins us at post 9 with more on that plan unveiled yesterday. >> yeah, yesterday, basically his whole economic plan because less than two years ago mike bloomberg took the stage at an imf meeting and warned of the dangers of taxing the rich >> you can take money from the rich and move it over to the poor if you do it too much then the rich stop producing and everybody loses. >> okay. that was then.

now that he is running for the democratic nomination bloomberg has called for higher taxes on the wealthy and more help for those at the bottom. his latest is the financial transactions tax he announced that yesterday. it will be a 0.1% tax on any sale of a stock, bond, or derivative and is expected to raise between $700 billion and $800 billion over ten years on top of the more than $5 trillion in new taxes he has proposed to pay for infrastructure, health care, and education programs he would raise the top rate from 37% to 44.6% and raise the corporate rate from 21% to 28% he would tax capital gains the same as ordinary income for those making more than $1 million a year bloomberg saying, quote, fixing inequality is my priority and the rewards of the economy are far too concentrated at the top. the tax foundation saying bloomberg's plan would in fact increase the burden on saving, investing, and working in the u.s. while also reducing the global competitiveness of the u.s. economy lots of questions about who the

real bloomberg will be tonight is it the wall street bloomberg or the bloomberg of the past two months >> right compared to bernie sanders, for example, where is he on the financial transactions tax some crazy number. >> five times greater. plus if you look at bernie's overall plan it is probably between five and ten times larger on an overall dollar basis. >> does buttigieg have a financial transaction tax? >> he does buttigieg, warren. biden is the only one i think that doesn't at this point >> some discussion about bloomberg's business where he'd actually become president what would happen there >> he has been consistent in saying if he became president he would sell it. now he is saying it would be put in a blind trust first and then sell it but as the m & a king i wonder who would buy it. they dominate that business so much there is no logical industry buyer >> there isn't necessarily i've been at least talking to some people about it i think he is informally has

some bafrmgs thnks looking at vs things, looking at the asset who could buy it, how could you monetize part of it if you needed to in some fashion. no formal process i'm aware of they would actually try and sell it but your point is interesting, who are the natural buyers it is very difficult to figure that out you have the terminal business which is the cash king you have a big news operation. do they really belong together would a buyer want them both and so it is hard to come up with one name not to mention the size it's at least $50 billion is the expectation, maybe more than that and so your number of buyers who could actually even afford to buy something if they wanted to is very small. you come back to names, well, would microsoft have any interest probably not but you never know. or another big name, private equity the ticket is really high. it is a very difficult deal for them to pull off at that size. then you get to names like buffet who you could imagine buying the whole thing if he wanted to and thought the

returns were worth while >> yeah. it's weird their dominance becomes a detriment because, you know, for buffet it's great because you got that moat of data which is really hard to replicate on the other hand it's a huge number and the other players whether reuters or even some of the other exchanges, $50 billion to $60 billion even for private equity is a big number >> you mentioned the monopoly concerns if he does actually become president, then that shouldn't be a barrier >> right >> he can direct doj theoretically to approve it. any deal >> you're seeing a president -- >> wait. direct the doj >> i'm just saying we're a few steps -- >> that seems to be -- well, our guest this morning would have an issue with that. you are so cynical >> did we not have a president tweeting about a deal in the recent -- didn't president trump tweet about at&t, time warner? >> yes, he did >> what happened >> it was blocked. but there was no correlation between the two. don't you know that?

or that rupert murdoch got approval for his fox deal in six months >> i feel like you're being sarcastic. >> you know bloomberg would have a tough time in the current administration should he try to do this with antitrust we do know that. >> got to wait >> true. >> oh, man this is bad. even having conversations like that shows you what is going on. quite negative >> sounds like you have some calls to make. >> no, we're good right now. >> see how he does on the debate tonight. robert, thank you. >> thank you guys. >> after the break will the coronavirus cause a recession? that is the question our next guest is asking in his latest op-ed. we'll explore it next when "squawk on the street" comes right back imagine traveling hassle-free with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination.

with just a few clicks or a phone call, we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk

while our competition continues to talk. try to win by attacking, now, we know the trump strategy- distorting, dividing. mr. president: it. won't. work. newspapers report bloomberg is the democrat trump fears most. as president, universal healthcare that lets people keep their coverage if they like it. a record on job creation. a doable plan to combat climate change. i led a complex, diverse city through 9-11 and i have common sense plans to move america away from chaos to progress! i'm mike bloomberg and i approve this message. here's your cnbc news update at this hour secretary of state mike pompeo addressing ethiopian business leaders and amplified criticism from president trump that china

pushes poor countries into debt through lending for ambitious infrastructure projects. >> not every nation doing business in africa from outside the continent adopts the american model of partnership. countries should be wary of authoritarian regimes with empty promises that breed corruption, dependency >> the turkish president erdogan warning of an emnent turkish intervention unless syrian government forces retreat from the country's northwestern province erdogan was speaking to his ruling party's legislators the libyan coast guard rescuing about 230 migrants from a rubber boat that was off the coast. it's also appealing for international assistance, saying the center where the migrants were taken does not even have a dock that's our cnbc news update for this hour. back over to you guys at "squawk on the street. >> okay. thank you, courtney. the worst case scenario for the coronavirus putting the economic impact at a potential trillion dollars for the global

economy. senior economics reporter steve liesman has been following these estimates and the attempts by economists to measure the effects in china and of course what is a constantly changing situation or evolving as was said the other day, steve. >> yeah, david they have real time indicators oxford economics in a new report is estimating three scenarios for the coronavirus. in its base case the virus remains contained to china and the effects are modest but if the virus spreads throughout asia oxford sees the potential $400 billion hit to global growth relative to the baseline scenario, about another half point of global gdp if the virus goes global oxford's model forecast $1 trillion, 1.3%, off of global gdp. if there is a global pandemic oxford says the u.s. and eurozone enter technical recessions in the first half of 2020 however, the recovery is rapid the pandemic puts a short bu very sharp shock on the world economy. economists have turned to a variety of high frequency

indicators from pollution to energy consumption to traffic data this helps them gauge the economic impact of the virus in china. data check closely monitoring traffic congestion in beijing. you can see it remains sharply below normal levels. at peak rush hour times congestion now is 40% to 50% below the 2019 average and that is in beijing. so we'll look for more details about what the federal reserve thinks about the coronavirus in the minutes that come out at 2:00 today and i'll be asking the fed vice chairman richard clarida about the outlook in an exclusive cnbc interview tomorrow at 8:30, guys >> that will be really good, steve. i wonder where the market is right now in terms of expectations of a fed rate cut as the economic toll here grows from coronavirus >> that is going to be a key part of the discussion and what the market takes from the interview because right now it is about a 60% probability of a rate cut as soon as july and then that moves up to 80% as the year goes by when you get to

december so it is getting close, sara, to being pretty baked in without so far any particular commentary from the fed kind of urging that along except they've said, hey we'll address it when it comes i think all of that is relative to those scenarios that i talked about. how much of what happens with the coronavirus in asia comes over and affects the u.s >> steve liesman, thank you. >> a pleasure. >> let's talk more about the economic impact. our next guest's latest op-ed says the world's second largest economy is coming to a near stand still because of the coronavirus. senior fellow at the brookings institute and former china head at the imf joins us now. your headline certainly catches a lot of people's attention. will coronavirus cause a recession? what are you looking at here, a chinese recession? a global recession >> well, as an academic i don't take a position in terms of forecasting but certainly the indicators are very worrying 2020 was supposed to be the year

when there would at least be a modest upswing in global growth. that now looks very difficult to achieve even for the fourth quarter we have very weak data from europe and japan so there is very weak momentum coming into 2020. and the first quarter certainly there is going to be a great deal of disruption in china, asia, and perhaps beyond china in particular has been a key driver of global growth and almost certainly the coronaviru services sector, to the industrial sector, both in terms of supply and demand the big question is whether it is going to be a temporary shock to demand or a longer term shock to supply. my big concern about china is not that they don't have policy measures they can bring onboard but there are many small firms especially in the private sector in the services sector that are going to get hit and for those to come back up it is going to be difficult so it could be a short term shock but one that ends up having a somewhat longer term impact >> so you're saying that the wall street view of the v-shaped

recovery is wrong? >> wall street may have a different perspective on this because financial markets have taken it very well both in china and around the world and i think this suggests confidence among financial market participants and policy makers especially central banks are going to step in if things get a little dicey so we've seen many times in the past where growth and financial market performance has gotten a bit disconnected and i think we're seeing the central bank here, the notion the central bank is going to step in to prevent any financial market problems even if the economy is not doing that well. >> you mentioned things getting a little dicey i mean, adidas comes out and says sales are down 85%. it is almost like a science experiment to have a company say that and the stock is up 2% so, i mean, your point about the markets counting on assistance and stimulus, that point has already been proven today, right? >> exactly i think across the board, and china is the perfect example of

this, i mean, given the very difficult state of the economy you would expect the stock market to be taking a pretty big hit. it did go down somewhat in the first few days or couple of weeks after the coronavirus hit but right now it is not doing too badly given where the economy is and what the prospects are for the rest of the year now, one of the issues here of course is that financial markets may be interpreting this as a short term shock certainly if it turns out to be a containable epidemic and the effects can be contained within the first quarter in terms of economic activity then maybe financial markets will be proven right. but i fear that it's going to be a very tough year in terms of economic activity in china, in asia, and that's going to have effects on the rest of the world economy. >> since you use the "r" word recession in the title, how close is the global economy to a recession? >> i think it will pull through. my answer in the op-ed is that

maybe we shouldn't quite worry about recession yet but it's going to be much slower growth this year. now, my concern is not just about the slow growth but what the policy responses could do in terms of medium term risks china certainly has a lot of room to be able to pull the economy back up toward a 6% growth for 2020. but that could come with a lot of medium term risks if they go back to the old playbook of creative financing, that is not going to be good for the economy especially because the chinese financial system is still not that much credit to the smaller service sector enterprises in particular that are much better at generating employment growth, productivity growth. you could have a lot of medium term financial and physical risks as well. >> you also bring up this point which i sort of got at with eunice yoon our reporter there you write in your op-ed another long lasting impact is likely to

be on chinese citizens' confidence in their own government as someone who has dealt with a lot of the leaders there, what do you mean? do you really think this is something to worry about >> what i find remarkable is as i speak to some of my friends and acquaintances in china there is a real sense that even now they may not be getting the full picture of that information. now, whether the chinese government right now is trying to clamp down on information or is just doing the best it can under difficult circumstances, is a little hard to tell but there is a pattern here. last year we had the swine flu epidemic which the government tried to tamp down but it ended up being a very large epidemic, ended up with pork prices doubling against that background there is a sense i think that the government may not be fully transparent and at a very difficult time like this if the government's information cannot be trusted, it makes it much harder to ensure a recovery or to reduce the amount of panic that might be setting in among the population >> you're clearly very worried about china eswar and the

region what about the u.s.? how resilient and insulated do you think we are here? >> the u.s. i think has enough momentum in the tank to be able to get through 2020 without a huge negats particular shock but one of the problems is that the u.s., like many other major economies, has not had very good investment growth. private business investment has been declining in the last few quarters the phase one trade deal with china was thought to have taken away some of the uncertainty that was holding back business confidence and therefore was tamping down investment. unfortunately, any deduction and uncertainty that could have been from that phase one deal is certainly going to be offset by the concerns right now that many businesses are going to be looking to regenerating supply chains and dealing with supply disruptions. you could in fact have an investment boom later in the year if you have in fact supply

chain restructuring. for the moment it certainly means companies are going to be holding on to the investment plans until this episode of uncertainty resolves itself. >> eswar prasad, thank you for joining us >> thank you >> as we go to break look at shares of tesla. 929, close to session highs. close to the all-time high on february 4th of 968.99 this time piper goes to a street high 928 expects tesla to achieve the same success in energy generation and storage it has in vehicles dow is up 84 back in a moment es facing our w, what do you see? we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world

isn't just a result, it's a responsibility. emerson. consider it solved. and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk 100% online car buying. carvana's had a lot of firsts. car vending machines. and now, putting you in control of your financing. at carvana, get personalized terms, browse for cars that fit your budget, then customize your down payment and monthly payment. and these aren't made-up numbers. it's what you'll really pay, right down to the penny. whether you're shopping or just looking. it only takes a few seconds, and it won't affect your credit score.

finally! a totally different way to finance your ride. only from carvana. the new way to buy a car. a major comeback in the cards for the casino operators our traders reveal their best bets on "tdirang nation.cnbc.com. more "squawk on the street" coming up. [ indistinct talking ]

a new kind of investor is changing things up. with an app that's changing the way we do money. download robinhood now. welcome back to "squawk on

the street." markets are positive today so far with stocks right around the highs of the day so far. we have six of the 11 s&p 500 sectors behind me hitting new 52-week highs this morning some of them actually hitting record highs as well like consumer discretionary and technology but one sector that is sitting up the recent run is financials even though it is near the top of the list today on a year to date basis that group just about flat but you take a look at some of the worst performers so far and we see names like comerica, zion's bancorp, wells fargo at least in today's trade positive the low interest rate environment has added pressure to some of those banking names and if rates continue to fall or remain at the low levels we could see continued pressure on some of those longer term names in the sector. now, sara, back downtown to you folks over at the new york stock exchange >> thank you wanted to hit nike shares higher this morning the new ceo john donahoe announcing changes to the company's leadership structure including a new coo.

number two there and a new cfo. currency cfo will take the role effective in april another change, heidi o'neill will lead the consumer business, a 21-year veteran of nike. matthew friend, the current cfo of operating segments and vp of investor relations will become cfo. a few takeaways here number one john donahoe is clearly establishing a new structure but he is taking from within which shows the depth of the management bench at nike and also the continuity of strategy. sort of seamless transition there. number two, i think the fact that heidi o'neill is taking on one of the most important roles of the company is important as a woman for a company that in the past few years has dealt with some cultural issues and has faced some criticism and many lay-offs including the presumed successor to mark parker leaving as a result of the having a bro-like culture and some of the complaints around that clearly a nod to that i think in her tenure

she is also considered a rock star in the industry used to be on the national retail federation board and now takes on the consumer business at nike. >> even as that company faces all kind of macro head winds as we've been talking about all day long, all month long in the meantime burger king is rethinking the image of its signature whopper burger restaurant brands international which owns burger king is betting that customers are craving healthier, organic ingredients with a new ad campaign that promotes the company's efforts to eliminate artificial preservatives and other additives. watch this ♪ ♪ what a difference a day makes ♪ >> basically mold growing on a whopper trying to -- remember super size me? the documentary about mcdonald's and the food that lasted for a month without actually changing at least visually?

they're trying to fight back against that argument that this food is never going to decay at all. >> the whole thing with the fast food commercials is it is supposed to look so juicy and tasty you just want to go out and get it i'm not sure a moldy burger does that but i get the concept nobody wants preservatives anymore. >> wow yeah didn't do anything for my desire to eat that. >> usually you throw away moldy stuff. >> yes not encouraging you to eat the mold i assume. >> no. they're just trying to show you what happens when you don't use i guess a lot of preservatives >> i was wondering who was in the meeting. yeah let's show a moldy burger just in its full mold that's going to sell >> yeah. the space is so competitive that they're doing a lot of moon shots on marketing, on menu. wendy's is starting breakfast. just disruptive marketing for sure >> are they impossible or beyond at burger king >> impossible. >> right >> yeah.

it was a huge plus for impossible in that war but i don't know how the -- i wonder how moldy the alt meat burgers get. they are also supposed to be, you know, not have a ton of preservatives but they have a lot of chemicals in them next taste test. how moldy can your burger get? yeah >> all right and with that we will now send it over to john for a look at what is coming up on "squawk alley. >> that is the beauty of live news it has no time to get moldy and is always fresh. coming up fresh, no mold, a security startup leaning heavily into a.i., just raised $200 lln aou now a unicorn in just a few minutes.

let's get to the group in chicago at the santelli exchange. >> good morning. and thank you. i would like to welcome my guest the chief economist and managing

director thank you for joining me this morning. let's get right into it. i think we had a hot ppi certain metrics we have not seen forever. granted this ppi calculation only goesback to 2010 and housing, whether you look at starts or permits, basically both at 13-year highs. my question is specific, interest rates haven't moved they're exactly the same place now as before the data was released what do you think about that >> yeah, the numbers are very strong we saw a big jump in ppi and housing start being so strong and still the market doesn't really want to reprice it tells you the market has a very, very strong view that is difficult to see the fed raising rates soon the fed chair did talk about some of the reasons to move to the down side but it's very difficult to get the market out of this idea that the next move from the fed will ultimately be a cut.

>> now, torsten, let's dig down on something you said. you said rates didn't move because it will take a lotto get the fed to raise rates the long end isn't supposed to be about the fed it's the short end and complexion of the curve affected by the fed long end is supposed to be the barometer on economic activity and it's failing miserably. >> absolutely. the issue here is long rates should be moving whether the inflation is surprisingly to the upside, particularly what we saw today. but the mindset of investors and almost all clients at the moment is about the rebuke, it's about the idea we're on a little pause here while we wait on what the fed will do once they come out with a review in june. and a general idea and general message powell said repeatedly and from several forums again and again, when the review comes out, we will sit around the table and we will say, well, we concluded we don't really understand why inflation's so

low. so the expectation it will result in cutting rates and lower rates because the inflation process has been so disconnected with what's going on in the economy. wasn't really able to shake the tree much and get the bears out. it really has been a very significant development that doesn't matter because the narrative is so strong. >> here's the irony here though, so many investors now use the long end, low rates as a reason they think that the company is destined not to continue to expansion at the same horsepower which leads to another question -- central banks. monetary policy is very easy right now. central banks have been easing, lots much stimulus as their balance sheets go up, voila, stock markets correlate with that. is that the reason the fed never wants to seem to assign blame because basically they're at the epicenter of the distortion? >> as you know too well -- and as you have debated repeatedly, the question is when the

expansion ends this summer, what will be the outcome? is this not q4 the big issue at the end of the day will be all about did we get more details, what will the end game look like the fed is buying t-mills when they mature four, six, eight weeks. will we see more buying out of the ten-year rate? >> what will happen tore steyn, the market will have a fit and other central banks will follow and currency gets restarted. we've seen this move before. torsten, thank you for joining me back to you. >> rick, thank you time to check what's coming up on "closing bell" a few hours from now. >> our closer is sheila bair, former chair of the fdic we will talk politics a little

ahead of the big debate tonight, and tax and wealth taxes and where she comes down she's been in administrations of republicans and democrats. >> yes. >> cfpb as well. that will be interesting, thank you. and after the break, former twitter chair chief is here. "squawk alley" starts in about three minutes. (soft music) - did you know that americans that bought gold in 2005 and even now many experts predict the next gold rush is just beginning.

so don't wait another day. physical coins are easy to buy and sell, and one of the best ways to protect your life savings from the next financial meltdown. today, the us money reserve is releasing official gold american eagle coins at cost. for the incredible price of only $154.00 each. these gold american eagles are official gold 1500 each. pick up the phone and call america's gold authority us money reserve, with nearly two decades in business, over $1 billion in transactions, and more than 500,000 clients worldwide, us money reserve is one of the most dependable gold distributors in america. today, the us money reserve is releasing official gold american eagle coins at cost for the incredible price of only $154.00 each. these government issued gold coins are official us legal tender, made from solid gold,

mined here in america, and fully back by the united states government, for their gold weight, purity, and content. do not delay. call now to purchase your gold american eagles, for the amazing price of only $154.00 each. gold is now on sale at prices unseen in years, and this year could be one of the greatest gold buying opportunities of all time. call now while vault inventory remains, and as one of the largest us gold coin distributors in the country, us money reserve has proudly served 100s of 1,000s of clients worldwide. don't wait another minute. call now to purchase 1/10th ounce gold american eagles for the amazing price of only $154.00 each.

good morning, it is 8:00 a.m. at twitter headquarters in san francisco, 11:00 in new york and "squawk alley" is live ♪ good wednesday morning welcome to "squawk alley." at the new york stock exchange, we hav