good morning it is 11:00 a.m. at morgan stanley headquarters in new york, 11:00 a.m. on wall street and "squawk alley" is live ♪ >> good thursday morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt at post 9 of the new york stock exchange we're going to start today with morgan stanley's $13 billion

akwy sessiak ak akwywy situation of e-trade. will has the highlights. >> hey, carl as you said, just last hour we were talking with james gorman, the ceo, and said he first got attracted to e-trade back in 2002 when he was still at merrill. he said the conversations this time got real in december. here's what he had to say about that $13 billion price tag >> i never worry about strategy. i'm never trying to copy what somebody else is doing we have to do what's right for morgan stanley you have to be opportunistic, move and move quickly. we put in a very full, i think appropriately, a bid for a great company with an iconic brand if we tried to to do it on the cheap, that would have created turmoil. you get the job done that's what we did >> this is what he said about the rationale for the deal

>> we bring in a group of technologists that i think will drive technology platforms even further than that we've been able to do they have online banking we can roll that to premium clients. we have a lot of young clients, a lot of clients who don't have a lot of money, but most of our business the is in the $1 millit $10 million. the demographic is different it's an option play. it gives us access to a different demographic. finally, you know, this can be a platform to take internationally. i've been very interested in having a digital platform outside the u.s. rather than trying to rebuild massive financial adviser networks >> share price is trading down but only by about a couple of -- 1.5% now this is diluted to the tune of

about 12% or 13%, so could have been down a lot more interesting, carl, also to see goldman sachs trading down, albeit again it's recovered from some of its losses, less than 1 purse down, perhaps from the opportunity cost of not having done this deal >> great interview and repo reporting. was this type of potential deal making whether today's deal with morgan stanley and e-trade, was this inevitable or perpetuated by some of these disruptors, these start-ups like robin hood coming in and giving everybody a run for their money? >> listen, i think as we've discussed at length over the last six months, the likes of robin hood certainly were a catalyst, a spark to lead to the original price cutting amongst the brokers and then the consolidation that saw schwab by tv am td ameritrade.

since then, ebay was thrown around as a potential takeover target for the likes of morgan stanley and goldman sachs. their share price is up 40% or so since october clearly, that gave them much more currency to act than they had previously goldman sachs's share price also up in that period of time, perhaps not quite so much. some people are wondering as to whether or not they could have done this deal also. it fits in what they're trying to do in terms of buildout and online bank and trading platform i spoke with the ceo at goldman sachs who suggested they looked at it does v but decided not to go for it because it wasn't right for them you see the market relative to the dilution, i think a goldman sachs banker would point out they've achieved $60 billion of deposits themselves organically through marcus without having to pay the $13 billion that morgan

stanley has to pay to for goldman sachs, maybe a big mess in terms of expanding what they do in scale and market share. on the other hand, you could argue this validates a little >> i'm assuming that framing it as a miss is probably why there's pressure on goldman sachs' stock today >> yeah, definitely. but listen, morgan stanley has been the clear winner share price performance year to date of all the banks goldman sachs would be second in that list. both have done well. morgan stanley, the clear winner here today when they announced their strategic plans after their earnings, the stock jumped it's essentially where that still was despite a diluted deal the market warming to this deal, no doubt about it. >> will, good stuff as always.

for more on the deal, let's bring in former wells fargo ceo. where do you think the magic is in the deal in this case >> well, this is really james gorman's vision. he wanted to emphasize the brokerage and growth management business reminded me of the dean witter deal it was a main street brokerage house basically. and i think he believes that emerging wealth is -- the emerging wealth customer base, many of those or some of those will become full-free brokerage customers as they increase their wealth over time i really think e-trade had to

make some sort of a deal given the no-fee trading situation in the discount brokerage business. and i think they got a really good deal. this is a full-priced deal it makes a lot of sense for them we'll see how it works for morgan stanley >> it is a good deal you would argue from e-trade's perspective and i think some of morgan stanley's competitors are making the same argument. what's the worst-case scenario here so that investors understand largely they seem to like it because morgan stanley is hardly down at all. how does this go wrong if it does >> it could. the dilution may not get to zero or positive over a period of time and probably get close to that, so i don't think it's going to be a disaster by any stretch of the imagination

where it becomes a single, there's probably a question mark i don't see how it becomes a home run given the price but it could i mean, you know, who knows how this is all going to -- the disruption that is occurring in financial surveillances from all kinds of areas, it's very hard to predict how it's all going to settle down. i think it's a risk, but i thought quite frankly that his decision to go as far as he was going with wealth management and brokerage and eliminate, you know, a lot of the investment banking, i thought that was a bigger risk than this risk he's taking now he was successful in doing that. >> yeah. in politics, and i say this coming off that democratic debate last night where there was a lot of focus on the middle class or the trump administration's blue-collar boom, there is so much more focus on the middle class, you can make the argument that that's actually happening in

banking right now too, whether it's the morgan stanley deal today or the fact that ubs announced a new ceo, outside ceo that has a retail banking background what do you make of that what is it about this i guess as you put it emerging wealth customer that becomes so attractive so recently >> i'm surprised they didn't do it before. i've always believed in it the essence is at 70% of the financial services revenue is in the consumer side, and a huge percentage of that is from middle market upward so if you want to be a diversified financial institution, which i think you should be, you have to be in the middle market of the middle income consumer. it took a long time for some of

the financial institutions to believe it >> how do you think about m&a in the space overall? b bsh bb&t suntrust, franklin, legg mason earlier this week. where should we look for m&a to happen with the fastest pace >> well, there's going to be more consolidation the large institutions really aren't able to do m&a, at least in the areas of which they are already operating. so it will be the smaller companies that continue to combi combine. technology is -- the cost of technology and the value of technology is that you can reduce costs by having greater volume and so that's driving it and the competition is hard. margins are decreasing so you have to consolidate >> so just to take a step back

or i guess look at this deal specifically, dick, it's the biggest takeover by a big u.s. bank since the 2018 crisis any reason to think this is going to have any kind of issue going through regulators and lawmakers in d.c.? >> i don't think so. i think that if this was a mainstream bank, put it that way, as opposed to an investment bank, i don't think this deal could get done i think there's still a lot of concern amongst the regulators to see, you know, jpmorgan or bank of america or wells fargo get bigger morgan stanley is not that large compared to those. this is in a business they are already in and i think they could do a deal like this, certain goldman could do a deal like this, but i'm not sure that a large financial institution, that the regulars would allow it >> one last thing. yesterday in a filing, bank of

america cited the possibility of negative interest rates in the united states as a business risk for the first time is that something that's being talked about more openly, do you think, than say last year? >> the only talk about it is it doesn't make any sense i don't believe in negative rates. how long have we had negative interest rates in japan? how has the their economy done in the last 15, 20 years i don't think it helps i think it hurts you have to have a strong financial institution and of course it reduces the income of financial institutions so i don't think there's any possibility in the near term that we have negative interest rates in the united states >> your point on japan is a good one on the heels of that last gdp print. thank you as always for the guidance dick kovacevich. one of the big earnings movers is viacom cbs. julia boorstin has more on the

results. >> jon, that's right vie come cbs shares plummeting down about 15% after missing wall street expectations for top and bottom line results and giving lower than expected guidance the ceo on the call this morning tried to shift focus away from what we called a transitional quarter to a new strategy. in contrast to rivals netflix and disney, ramping up spending, he says his company is focused on making more from their current investment >> our strategy isn't about spending more. it's about better aligning the combined company spending with growth potential and maximizing the value of our content franchises across our larger asset base that means putting the full power of the company behind our biggest priorities >> he laid out his plan to accelerate viacomcbs' momentum

in streaming and digital video announcing they have 22 million users of free pluto tv and 11 million skrooubers between showtime, cbs all access all access will become the base of one of their content platforms and expand it with content from the company's cable ch channels >> it will have free, broad pay, and premium pay segment, and just like in a linear world, we'll have streaming product for each >> he's increased the company's guidance on cost savings from the merger by 50% to $750 million, though that has not helped the stock today analysts are starting to weigh in citi warns that if the ad market performs worse than expected viacomcbs could face greater pressure than the rest of the overall market, but ever corps saying it could serve as a good

entry point for long-term investors. >> julia, my head is spinning looking at these results as we talk about a golden age in television across revenues and operating income it's like everything's down. tv entertainment, cable networks, publishing, film, entertainment year over year all down is there something looming on the horizon for viacomcbs that would be positive? you look at disney or comcast, you win some, lose some, something's down but something else is up i don't see anything up. >> it's a golden age of television for consumers but a very tough time for the media businesses everyone tries to sort out the future of streaming. what viacom and bakish were saying on the call, this a moment of transition they had 11% lower content licensing revenue. that's because we've seen so many different streaming

services launch. a lot of them are spending more on their own content look at disney as an example netflix, they're still buying some content, also producing a lot internally what he's saying is this was a transition the future is going to be about us making more from the amount we're spending on content. it was notable he did not say they'd be spending billions and billions more but they want their content to be more effective and they'll be pulling all these assets together, creating a multitiered streaming service more similar to what we saw from peacock, which is that comcast service that's going to be launching over the next couple months. so he really wants to make it one-stop shopping, bring together all of their assets a lot of analysts on the call pointed out some of their cable channels like nickelodeon, their ratings have been in the decline so they need to transition that content to be more valuable for streaming consumption. >> yeah.

big question we'll see if they can do it. julia boorstin, thank you. speaking of streamers, a report in "the washington post" this morning details the flood of political ads to streaming services like roku and hulu. loopholes that traditional tv broadcasters are not subject to, not to mention social media. henry blodget of business insider and joanna stern of "wall street journal" join us now. welcome. >> good to be here >> so many conversations for the past, i don't know, year now, henry, about things like political advertising in the social media sites we've seen streaming coming into play with spotify saying it was going to not take any political advertising back in december, but this has not been a topic of conversation yet why not? >> well, it is starting to be. what we are learning is political campaigns will do absolutely everything they are not explicitly prevented from doing. the thing that's different is you look at the different rules

for the social folks, the streaming companies versus broadcast. there needs to be one set of rules here otherwise we'll see what we're seeing >> i think the worst thing we can do is conflate streaming with linear, regular broadcast tv they are completely different beasts when it comes to ad targeting, and i think what a lot of consumers don't understand is how much of what they watch is being targeted or being tracked. so this is a completely different beast when looking at what can political campaigns gather about their viewers or the viewers and then target ads against that >> joanna, maybe targeted ads ought to be regulated, period, not even just talking political ads. i think about junk food or housing and employment, even if it's not a direct solicitation for employment or for housing. there are discrimination issues there potentially. how is anybody going to know if targeted ads are creating issues unless somebody is looking at who's placing the ads, who i

they're targeting, and tracking what the results are >> i could not agree more. how about that the biggest thing is transparency is key and i believe facebook will be a leader in this, as much flak we've given facebook over the last two, three years, they've made big inroads in giving us transparency about why we're seeing those ads what info is gathered, why we're seeing that particular thing in our news feed, instagram feed, i don't know, plastered to our head >> it's important because the experience is the same for the consumer, right? you don't understand why you're seeing it. you're just seeing it the way you would watch something on tv. >> arguably, the experience can be much better for the consumer if it's well targeted. ads have always been targeted. there are demographic assumptions. advertisers are always trying to figure out which ads are working, which aren't. watching television, 80% of the ads are about something you wouldn't buy in the next ten

years. to joanna's point, it's how far you go with it facebook got to the point where you could target five pool with certain carc tryst, on a particular block maybe that's too much. we have to figure out what makes sense. >> big questions that i have a feeling are not going to be answered anytime seen, but we'll see. all right. >> carl is doing a million things >> i'll get it in a second >> another story we've been watching closely, forget tesla, wall street's new favorite stock is apparently virgin galactic rising again this morning. actually, it's turned negative in the last hour, down about 5% today, still up -- >> up 10% a few moments ago. >> it was. just to put this in perspective, when it went public back in october, the stock was priced around $12 a share it's currently trading around $35 and change a tech company saying that

largely millennial investments is what it's focused on, just passed tesla has the most traded stock on the platform. henry, you were around you saw the dotcom bubble. comparisons with the tesla chart to that period of time, b this chart has been stratospheric as well they haven't started service yes, there's long-term targets in place, but the move we've seen in this name, does it feel like that to you >> it's a speculative play toy that's fine. speculation can be fun and lucrative. at some point, virgin galactic, will trade at 20 to 25 timeser that doesn't mean if there are no earnings today it will go to zero it means at some point in the future, they have to merge if you were speculating in virgin galactic, and want to be

investing, saying this is a good price, you want to draw on your spreadsheet how many people are they going to send people into space every day, every year? what's the profit on each one of those people you run some numbers if they charge $250,000 per person, how much income do they have to have to support the current market cap you're getting into thousands of people a year going into space paying full price. there's lot of room for subjectivity is the point. >> i started saving this morning. >> this makes me queasy even about tesla, because it makes me wonder if investors are investing on hope versus analysis you just believe something about the future because in the future we'll all be partying in space obviously, i have to be buying that there's no analysis about their ability to put people into space safely, et cetera. makes me wonder. >> if you love space, what are you investing in right now astronaut soup

i love space but i also -- i watch some tv and that's enough for me other people they want to invest in it so they might invest in the stock. what else do you have right now? >> the people are buying it because it's going up, which thing if you're speculating and looking for a quick trade. that's why it's going up we saw the same thing with the pod stocks a year ago, something you have to make assumptions, this one company in canada is going to get 80% of the market forever. you have new entrants coming in. space travel is bigger harder than growing pot in a field. >> i think that's what worries me here. obviously, i'm the resident space geek and this is an area i cover and it's very exciting because we are on this cusp of this new space age, this new era, if you will, but when you see a big move like this in a stock, you hear about the investors getting involved and their fundamentals seem to have

switched, i worry about what it means for up-and-coming investors that are moving into the market right now >> it's something new and we can't discount spacex in this conversation, the momentum in the last couple days they've had is pushing this as well. this is a competitor and one that seems to be a little more accessible so i don't know. i'm saving >> it's up 300% in 90 days morgan stanley today says it deserves a breather. doug cass says a half of the flow as traded today a third of outstanding shares has traded today >> investors is the wrong word here i would suggest lots of people trace evidencing the stock are in and out many times a day. this is speculation. that's okay. we don't need anything moralistic about it. people need to be grown-ups

about what they're doing >> we'll leave it on that note henry and joanna, thank you. >> thank you >> we've taken a bit of a spill, dow down 150 or so, back to 29-2 goldman did dip a bit but that wouldn't explain all of this s&p down 13. we're back in a moment e a littl. but now quickbooks helps me get paid, manage cash flow, and run payroll. and now i'm back on top... with koala kai. (vo) save over 40 hours a month with intuit quickbooks.

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deirdra has a preview from one market in san francisco. deird deirdra? >> good morning, jon dropbox has yet to convince investors that its reinvention is working and it can compete with microsoft and google in the enterprise space despite launching a new desktop app and partnering with slack and zoom, dropbox shares have lagged the broader markets this year and have gone nowhere since the 2018 ipo additionally, the shorts are circling short sellers spruce point capital suggesting that dropbox has lost its direction they see drew houston's addition to facebook's board of directors a distraction. they call the company's new headquarters a poorly timed an expensive vanity project that comes at time dropbox is struggling to retain key executives it slams the hellosign acquisition as an expensive deal that doesn't make dropbox competitive. dropbox had no comment on the

report but if enterprise's position or lack thereof is at the core of what dropbox has van gundy -- struggled with the last few years. it wants to be seen as a collaboration and productivity tool for companies but in doing so it's running up against stiff competition from the like of google and microsoft which already have a significant foothold in enterprise when dropbox reports tonight and we hear from houston on the analyst call, investors will be'inger for user conversion numbers, big partnerships and where dropbox believes its edge is >> you'll bring us all those headlines and numbers. deirdra bosa, thank you. the dow is down more than 180 points down about 0.6%. similar move for the s&p as well "squawk alley" returns in three. phew! it's back, with lobster mac & cheese. it's gone again! it's back, with shrimp now! steak & lobster starting at only $16.99.

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brooim i'm brian sullivan. jurors in the harvey weinstein trial delivering a third day of deliberations. they're focusing on allegations of rape. if convicted, the former film mogul could spend the rest of his life in prison benjamin netanyahu announcing he is moving forward with construction of thousands of new jewish homes in key parts of east jerusalem. critics say the buildings could cut off palestinian residents from the rest of the west bank a children's bottle has been recalled the spout can detach and get logged in a child's throat and a new study concluding that smoking cessation drug chantix is safe. concern about psychiatric side effects led the fda to impose a black box warning in 2009 which was removed in 2016. the latest research included

over 600,000 adults without a history of depression. that is your cnbc news upkatedaa this hour. morgan, back to you. taking a look at the markets right now, taking another leg lower. the dow and s&p are down more than 1%. the nasdaq falling more, down about 1.7% in just the last couple moments the dow is down 323 as i speak we'll get more on that in just a moment meantime, european markets closing just a few minutes ago dom chu has the breakdown. >> towards the lows of the day ireland one of the lone standouts. on the data front, british retail sales saw their largest increase in sales since march of 2019 this past month after of falling in december. so maybe a little bit of slight positivity there there's also more turnover at some of the top of europe's

largest banks and this time it's ubs appointing ing's ceo as its new chief executive officer. he's set to replace sergio, who has led the company through the financial crisis but has come under scrutiny in recent years over performance hammers has been credited with helping them recover from the crisis by firming up some of the digital and mobile offerings for banking. the chairman specifically cited his track record in digital transformation when he announced the change at the helm of ubs. the schalk-up comes just a couple weeks after credit suisse named a new ceo after a resignation following the bank's spying scandal to morgan's point before, european markets accelerating the reports of downside in the latter moments of their trade and now that u.s. markets are

following suit it will be interesting for this afternoon's trade. >> both of those things seem to happen at the same time. as we mention, the dow and s&p both down just over 1% the nasdaq faring quite a bit worse, down more than 1.5% tesla is down more than 5%, shopify down more than 5%, nvidia too more when we come back after thisre bak robinhood believes now is the time to do money.

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the dow quickly tumbles 388 points, slightly above that now. you have the ten-year below 1.51, the 30-year below 2 at 1.95 the vix did spike to 16.50 chipmakers like micron and that vid nvidia leading the s&p lower. 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. woi felt completely helpless.hed online. my entire career and business were in jeopardy.

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let's check in with rick santelli for "the santelli exchange." >> good morning, carl. i like to keep this real time and i want to talk about king dollar, but we're having some pretty big moves as the dow jones industrial average is down basically 300 and kind of a quick spurt. looking at interest rates, look at the chart of the week the last several sessions of ten-year note yields they started trending lower, now closing at the lowest levels since early february, but the reason this is going on is the cross-fertilization that as stocks move lower, interest rates move lower and sometimes moves lower at interest rates have that back channel into stocks we're seeing a bit of that as you look at the longer-term chart, realize that, you know, we're not far from the cycle of the low yield close of 1.46 as you see on that one-year chart

and also realize that the double bottom all-time low double bottom in ten-year note yields is 1.36 from the summer of 2012 and 2016 so as we get close to 1.50, many trades are starting to go guns hot with regard to the magnetic draw of lower rates. and even though it is good for multiples and how you look at stocks in the bigger picture and how their values can be enhanced by a lower interest rate landscape, there's another side to that when it happens in big helpings it's usually a sign of smoke or trouble. that seems to be what's going on here back to king dollar, all right, you know, emerging markets in the first seven weeks of 2020 have sold a record amount of dollar denominated debt, okay. why should that matter when you have dollar denominated debt, your interest rates will be in dollars. there are a variety of structures whether it's in

interest payments or dividend payments or just the notion of financial trustructures that ar wrapped around dollar liabilities and assets and the way they are put together. this demand is also creating a short position you know, what is being short the dollar mean? it means you need to buy dollars to make yourself whole if you're paying out lots of dollars especially as a foreign entity and you add in that we have weak economies in japan and europe and their central banks are trying to deal with it, you end up with greater demand this was the big thing with dr. judy shelton when she was talking in front of the panel with regard to her presumptive nomination the notion that she thinks that this better thy neighbor die v dynamic puts us at a footing where we have our hands tied behind our back doing the right thing from a central banking

perspective. sound complicat complicated it is. but the dollar is close to breaking 100 and will that will create more moment up 12 out of 14 sessions carl, back to you. >> rick, don't go toofar away. rick santelli. bob pisani is here on set and can help talk about why we hit this air pocket midmorning >> this sort of smells like some qantas woke up and said this market doesn't make a lot of sense. we're hitting new highs when there are concerns about coronavirus, but at the same time, all the safe havens are up, and somebody said these crazy stocks that have been going up, the momentum names, maybe we should take money off the table. look at virgin galactic intraday put that up here all of a sudden somebody said i've had enough, i'm going to

take some profits so that's been down throughout the morning. same with tesla. same -- these big momentum names have all of a sudden just sort of had some profit taking in the middle of them if you put up mtun, there's virgin galactic, you see the drop tesla, same situation. it sold off very quickly if you look at mtum, covers microsofts and all of the semiconductors, that thing has been on fire it's hit a new high. every day i point out the stocks that are in this, but the big tech names and the semiconductor names, mtum. and that's down again today, same with the semiconductor, smh. been on fire recently, everybody acting like there are no problems, just collapsing there. at the same time, you have the rates going down, jon. we're at 1.50 on the ten-year, like somebody has said i don't know if that makes a lot of

sense. >> hard to figure because microsoft is down 2.5% but apple, which was warning about its china expoeb sure, is down just a little over 1%. both have had a lot of momentum lately >> apple is the stock nobody ever wants to sell that's the key point my point about the contradiction is very real we're at new highs broad market participation in the rally, yet at the same time there's an awful lot of people buying defensive plays the dollar is at a three-year high, gold at a seven-year high, utilities at a historic high it doesn't make a lot of sense you can't have all of the growth or momentum names hitting new highs at the same time as the defensive stuff is hitting new highs. somebody just took profits here and said i think we've had enough of what we're dealing with here in the short term. my sense is maybe this is somewhat tied to the coronavirus. south korea had debt, japan two, even as china reported a

slowdown in the number of two case, very contradictory information. but a number of companies have been talking about this. >> goldman saying yesterday the corrections near term seem more probable, but that was yesterday. >> if you look at some of the names, semiconductors, there were some downgrades today, wells fargo down traded on semiconductors, had the same opinions prices have gone too far too fast i don't think you should overthink it too much. it makes perfect sense for suddenly to hit an air pocket and all it takes is a few people with significant positions to say i need a little profit-taking here right now i think it makes sense >> still more volatility to come down more than we are right now. inming up, mohamed el aryan jos us on the midday sell-off.

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here is what is coming up. obviously all over this sudden selloff in the market. asking the question today, are investors too easy to brush these coronavirus concerns off as even more companies now are warninging about tinabout the it and we'll trade home depot and lowes. and miracle on ice and al 'lchaels who called that game. wel see you at noon.

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treasury yields are slipping and what do you make of this sudden selloff, what do you think the cause is >> so i think that rather than look for a single cause, which will be hard to find, we have to understand the context and the context is a very technical driven market that has been increasingly decoupled from fundamentals and even in some cases valuations so the way up, it brushes off one traditional implement after the other, the most recent being the coronavirus. there is a massive momentum that is underpinned by a narrative, but every once in a while these markets hit sudden air pockets the real test is do we see a recurr recurrence of the buy the dip mentality. and so --

>> and that is a key point just given everything that we've seen playing out on a macro level, all the uncertainties around coronavirus in recent weeks as well, if you have been surprised at how resilient the markets have been. >> surprised, no, because we have been deeply conditioned to believe two things one is that every shock is containable, temporary and reswrersabr reversibl reversible so we bounce back straight so don't worry and secondly, we've been deeply conditioned to believe in a central banks have our back pup so i'm not really surprised as much as worried that at some point you can't decouple markets on fundamentals. and you've heard me say this

over and over, the coronavirus is big it will affect a lot of companies, not just those with direct exposure to china and i think that the markets have tended to underestimate what a big demand that supply short is >> anybody who has been in the market for the past 5, 10 years feels like a genius right now. so given everything that you have said about the market mentality, what do you think individual invest to toors shou? >> if you are heathey havheavild in market, you may want to take some off the table if you feel confident in your tactical call and think that we will repeatedly buy the dip, then you will have an opportunity to continue. i tell people the key thing to understand is what mistake can you afford to make because in the technically driven market,

the possibility of a mistake is quite high increasingly that mistake is turning icy met friday cal because valuations have run so far ahead of both fundamentals and realities,met friday cal because valuations have run so far ahead of both fundamentals and realities, every investor has to decide whether they are willing to underwrite that risk. >> and i walked into the office this morning reading about the moves that the chinese have made from a stimulus stand point. but then reading about m-1, i just wonder how much of that granular chinese stimulus policy is relevant right now? >> so first and foremost, expect the chinese to throw everything they have at this. and not only the chinese other asian economies as well. singapore will have a massive fiscal expansion they will do all they can to counter the impact of the coronavirus.

the trouble with economic sudden stops, not a financial sudden stop, an economic one, is that it is hard to restore simultaneously economic activities in different parts of the country and the world. so the effectiveness of these policies will be quite low and we have to understand this now, if you happen to be the direct precrecipient of the stimulus, if you happen to be a company whose debt is being for given or taken over by the chinese government, that is great. but if you are further down, if you are a cruise company, an airline, it will take a long time for that impact to reach you. >> all right thank you for joining us today >> so we'll watch it closely obviously the session low is dow down 388 about 120 points above that. dollar continues on its pace toward record highs, especially

dollar-yen points to the fear that remains all around the world regarding just the uncertainty of where the coronavirus trajectory will take us and then watch yields 30 year was an issue earlier in the week and we're back there again at 195. so let's get to the judge and the half back at hq. >> carl, thank you so much the current state of stocks and why in-swre tovestors are too ct about the coronavirus. it is 12 noon and this is the "halftime report." >> is a correction coming to the record rally why investors may be underestimating the impact of the virus. and what you can do to protect yourself another blockbuster deal in the brokerage industry what it means for the investing landscape. and home depot and lowes getting their price targets raised to new street highs it is our call of the day. and the smart money has