"squawk box" begins right now. good morning welcome back we'll start with the markets this morning after yesterday's mid-day selloff. the dow fell nearly 200 points in two minutes it was down before rebounding to try to close lower to 228 points with a decline of just over 0.4% you'll see now the s&p, nasdaq and dow are all indicated lower. dow indicated down about 132 points nasdaq was the big loser yesterday, down over 0.6%. today, it is down another 53 points you'll be looking at a negative

week for the nasdaq. that is the first time you'll see stocks down for the major averages in three weeks. this morning, we are still near all-time highs for both the s&p 500 and the nasdaq looking at the treasury market, right now, 10-year at 1.486% some additional pressure concerns about global growth and what it will mean for the economy. s&p was out saying for the year, you could see chinese growth at 4.4% for the full year that concern if they see a peak to the virus in march. >> all these new highs and goldman talking potential correction i can see how the case could be made right now is there anything more than a

possible global pandemic i think about it it is hard to buy any stock that wouldn't be impacted by a bad outcome in this. >> right people assume it will be a v-shaped recovery and that it will happen sooner rather than later. >> with coronavirus. after it going away. but we don't know if it goes away and we still don't know what kind of numbers we are getting. it appears it is slowing and then we hear they are changing the way it is counting >> then you see, in south korea, it is spreading rapidly. >> it is hard, if you rank uncertainties. for me, 1918 global pandemic, millions of deaths that is really scarey. >> you were scared back then >> yeah. i didn't get the flu shot then

either i just think if you rank. >> they areworried about being able to ramp up. they rely so heavily on impact from china if you start thinking out months and months from now, what the impact would be. >> we have dr. gottlieb on who said, there will be pockets here if this becomes, if there are more cases that come to the united states, then it will really affect stock trading. >> apple and other companies said they are not sending people to a conference in san francisco

and also not sending people to a conference in boston so there are concerns about traveling here in the united states >> if there are pockets here in the united states, what do you think the stock market would do? >> is that 5%, 10% >> i don't know. i don't know i'm saying if you rank my fears that a global pandemic is up there. until we get a handle on it, i don't see how you'd want to belong on anything >> this goes back to you know who said this on the air in davos. >> he has a good record. global air travel is set to decline for the first time since

2009 the impact will cost airlines globally mostly in the asia pacific region estimating that chinese airlines will lose $12.8 billion in revenue. talking about how jet fuel demand has pushed down prices for jet fuel south korea's currency suffered the biggest loss in years. becoming the worst affected place outside of china bringing the country's total above 200. car sales in china have plummeted due to the ongoing virus outbreak just under 5,000 cars have been sold down from nearly 60,000 cars the market is expected to see sales slide from the full market in the coming year >> we need not only the number

but to tell us exactly what it means. overnight, china reported over 500 new cases now stemming from four prisons, two of which are located in hubei eunice joins us more with impact so 500, eunice and it is a new method we are counting is that more or less >> i have bad news for you, joe. we don't know. the latest on the count is that the local authorities in wuhan decided more i want to tell you more about the impact speaking to a restaurant that is

one of small to medium enterprises suffering here a recent poll found that 85% of smes were worried that they'll run out of cash in the next three months china has recognized fnb as one of the hardest hit sectors >> usually you can't get a seat here not these days >> we are not having customers >> moko group runs 14 restaurants like this one in china. he had hoped to open even more now the columbian is wondering if his business can survive. >> most of our locations are closed time keeps passing we are thinking of what to do with salaries, staff, rents we have it is getting complicated day by day. >> locationed in beijing known

night life he is lowering open hours and negotiating rent cuts and pay cuts china is allowing them to delay pension payments and offering loans. the loans may work but the biggest concern is how long the outbreak will last >> we are pretty worried we need to declare the company bankrupt. we are trying to avoid that but it is in the back of our heads >> the chinese government has been trying to stabilize business for a lot of small and medium companies mainly because the industry here employees millions and millions and they don't want to see those people losing their jobs or pay

it sounds like it is getting more and more complicated. i saw some of your tweets about what you have to do to get in and out of your apartment building now how difficult is it? >> it has gotten much more difficult. part of that is because we had some disturbing news here in beijing in the morning where there were clusters at two hospitals, many outbreaks in the chinese capitals that heightened fears here that things could get worse the chinese state press referenced it and said the district that saw the uptick of cases had an infection density that was just lower than the epicenter of wuhan that was a stronger response out of authorities to try to make sure that they really contained

the spread you are referencing that to get in to my residential compound. i was told yesterday i now need to bring my rental lease and passport to authorities -- to community authorities in order to get a pass. each apartment is allocated three passes if you have a family of four, one of those people will have to stay home the entire time. we are seeing more tightening here in beijing. >> eunice, you've done a phen phenomenal job there how concerned are you at this point? >> um, that's a good question. there are days i think it is fine that it is going to be okay

because you do see that the authorities are really trying their best to keep things clean. i now smell bleach all the time. at the same time, you do hear about these mini outbreaks and you just don't know when you can catch the disease. it is disconcerting. i'm hoping it gets better. i'm more of an optimistic person i'm hoping >> we are hoping too we are grateful for the work you are doing. we think about you a lot thank you, eunice. on monday, we'll be sitting down with warren buffett you can tweet questions to us with the hashtag #askwarren. in 2019, he shared with us who he's thinking about when he

starts off writing that letter each year. >> i've always had the image that i am talking to my sisters. i have two sisters, they are both berkshire is pretty much their whole investment they are smart they are not active in business so they are not reading about it every day. i pretend they've been away for a year sign up for the weekly news letter go to buffett.cnbc.com we'll tell you more about that a little later coming up, we'll talk more about yesterday's mystery mid-day selloff. and take a look at shares of virgin galactic and tesla. some of the hottest stock under

pressure this morning. we'll be right back. >> announcer: today's big number, $29.3 billion. that's what the coronavirus outbreak will cost airlines in prenngevenue this year reesti a drop in global demand according to the air transport association. it's either the assurance of a 165-point certification process. or it isn't. it's either testing an array of advanced safety systems. or it isn't. it's either the peace of mind of a standard unlimited mileage warranty. or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned. or it isn't. the mercedes-benz certified pre-owned sales event. now through march 2nd. only at your authorized mercedes-benz dealer.

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. let's talk about where investors can find opportunity in the market. joining us now, chief strategist at btig and the head of investment strategy at pro shares does either of you have any idea what happened yesterday? its with a weird selloff it did leave people scratching their heads. >> we are going to keep having it as long as we are in an uncertain period >> you think this will keep happening? >> i do. south korea popped up as having more bad stuff >> you agree with that >> we saw a little program selling coming out of europe the dax has been on a strong run

in an economy where there are political issues that grew by 0.0% last quarter. things coming off there. we have to put this into perspective. the vix has been trading 14, 15, 16 lower than the long-term average. we've had a lot -- a month and a half, six months to a year of strong gains it is normal in this i agree. we've held in to this level. is there a point where they say, okay, this is scarier than we've thought. it is lasting longer than we thought. >> six to 12 months after pandemic, the market has always been up. in the near term, we don't know what will happen if you want a reliable hedge in

this environment but it is going to flip the other way quickly when it clears up >> are you advising that >> as a hedge. if you look at the franc and th yen not doing aswell if you want to put 4% or 5% as protection but they will flip quickly in the back half of 2016, you lost it all. it will go back the other way. >> joe brings up a good point. if there are pockets that show up here as many experts have said is likely, it would be difficult to try and find safe havens outside of a zero coupon bond there wouldn't be too many places that would be immune. >> no. when you get to a situation like there that would be a lot of known and unknowns

if you are an investor and going back to the run we had last year that had been very, very large, you want to think about it this has happened several times, you need to envision yourself being a buyer of stocks down 10% to 15% these things happen every nine months or 12 months or so. >> would you wait or if you see a pull back of 5%, would you say this looks better priced to me >> it depends on the timing. if it is very sudden, as in the next several weeks, we might be a little more patient. particular in regard to the coronavirus, the closer you get to spring, the medical evidence, the higher the probability that problem starts to dissipate but we are still in february here. >> we are worried about reporting a slow down frdown he.

>> if it were here, would you change your activity >> i would i wouldn't be going out to eat or getting coffee. >> the gym >> then it wouldn't be imported. it would be home grown we have a strong economy we are depending on freely moving around >> coca-cola is just out with a statement now estimating that impact of the coronavirus on its earnings it sees the virus cutting earnings 1 to 2 cents per share. nevertheless, this isn't like what apple came out with but nonetheless it is hitting stuff. this goes back to how are people changing their behavior.

>> earnings growth is a challenge. we had the first three quarters of 2019 with zero to slightly negative growth. a surprise in q4 was actually midcaps. trading at a 40% discount to large. stuff is already a little on sale in the markets if you can look through the virus, look 6 to 12 months down the road thank you, gentlemen coming up, a rapid fire roundup. and more about deere my dogs would go nuts. the know h they know how to spell it. if i say get me a beer, they

start barking. i wouldn't order someone to get me one i would say i'm going to get one myself >> liar. >> i've seen that where a dog would bring you that seeing signs of stabilization in the u.s. farm sector we'll be right back. goodbye fred. [ toilet flushing ]

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welcome back to "squawk box. going to big earnings movers talking dropbox. fourth quarter earnings beating estimates by three cents also beat on two key metrics, paying users and revenue per paying user. topping $21, the price from the 2019 ipo hasn't closed above that since september. take a look at fitbit. shares falling reporting a loss of 12 cents a share versus expectations of earnings of three cents per share. lowest fourth quarter total. google agreed to acquire fit fit back in november it expects to get approval this year they sold more fitbits but just

at lower margins >> reportedly unexpected loss in the further quarter. revenue came in well under expectations working with advisors to review options to focus on the co-business. stock down by about 16.5%. check out shares of texas roadhouse. they are climbing. comp store sales grew by 4.4%. ceo said sales grew by 6.4%. the company is hiking dividend by 20% that is good for a 7% gain per stock. coming up, a new proposal from the nfl means fans could get an extra game per season details coming up next first looking at yesterday's winners and losers

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♪ we are live from the marketsite u.s. equity fur futures. nasdaq looking off about 55 points, s&p 500 looking about 16 points >> yesterday, we wrote a story where the market was down about 150. >> it was over 300 >> it dropped so rapidly

>> it looked like it was headed south. bringing you up to date on a media deal i'm going to call this a tech or telecom deal sprint and t-mobile have agreed to amend the agreement to give deutsche tell come a higher ownership. sprint's parent softbank will hold 20% deutsche will hold 43% they plan to close that merger the goal by april 1. that's not supposed to be about april fool's day the sprint business over the past close to two years has been decimated. one of the reasons they argue they need to do the deal is because they were in such disarray effectively, deutsche bank was fighting for a bigger share or

effectively, equivalent of a higher price softbank is giving it up >> you can have more of it >> and softbank is giving it there are also these provisions that softbank gets more if there is performance >> they'll get some shares back? >> maybe new shares issued they get a little bit more later. there is a whole performance set to this. >> it depends on how they improve the business >> marcelo is no longer at sprint he's at wework now we'll see. it is a big question >> when david was telling us about the renegotiation taking place, it was hard to imagine. >> they were going to

renegotiate this anyway. >> but this makes sense. you are not changing the deal. it is changing the risk/reward structure. >> this probably would have happened earlier part of this was just waiting on the judge. >> media deal. i don't get it i get at&t >> describing this >> yes what world -- anyway the nfl has released some new terms for the proposed collective bargaining agreement. including pay increases, larger roster for practice quad as well as adding a regular hadden season game and reducing the preseason. they are expected to have a phone discuss today to discuss the union is expected to vote

next month this is the nfl. major league baseball has some unbelievably weird proposals we shou delve into >> like what >> like that winning team gets to choose their opponent >> let's talk about signaling and what happens if you are cheating do you get to keep the world series title >> they said it is just a metal trophy >> what are the repercussions for that >> what will happen this season when pitchers appear to be throwing at these guys and maybe they are not there is going to be the perception everybody will be totally worried about whether they are getting thrown.

>> this is a worse than the black stocks if you look at espn and others, they are talking about this constantly >> this is a big deal. they haven't addressed it. the guys work 162 games to win this crummy piece of metal >> it is baseball, american pie and hot dogs >> we should talk about media rights and business. a lot going on >> there you go. taking it back to business in the media. >> that's what we do that is the business coming up, the nasdaq sitting near all-time highs. we'll talk about the names sending that index soaring you don't want to miss our guest

host for 7:00 hour st. louis fed president james bullard. not wanting to hold back tcusomise he will make news. wah live on the cnbc app. more after this. 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

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welcome back the nas still near all-time high stocks like facebook, apple, amazon and more. going to our guests. the partner at clockwise capital. good morning to both of you. there is a lot of people on the skeptical side who say, you know what, it is so overweighted in terms of the s&p 500 that it is so dependent on tech if something goes wrong or the mood changes, it more broadly will change. what do you think of that? >> i think you are absolutely right. if you peel back the onion for

someone like me, you take a look at tech specific stock indices such as the spider tech sector, etf. 40% is in just two of those names, microsoft and apple the concentration is worrying. i worry about apple. microsoft will be okay, i think. apple, there is way too much based on the 5g super sample >> the implication of the overweight relationship of these tech companies, there isn't much you can do about it, right >> we can have these fears unless you have some other idea

i don't know about >> i'm a tech sector and i tell people to be very careful investing in me or some other tech sector product. what you mentioned is true now there are11 sectors that make up the s&p. we have communication services you have to include. you have to include the major names like amazon. so the black and white technology sector is less than you think. you have to take a look at portfolios and make sure if i was to give you a baseline, it should not be more than 20% of tech is that the way you think about it >> we have increasing amount of the market explained by a set of

these companies. we think it is a handoff taking place. it is long cycles. about 50 years the last 25 years were about building out the infrastructure. the next will be about how do we utilize it the analog we derive is back to 1910 with the railroads where you saw 70% turnover in two decades moving from industrial to consumer companies. when you look at the tech sector now, we look to established companies. new emerging companies that would leverage what the establishment will build >> like who? >> from the big tech, i think amazon and apple continue to leverage their infrastructure. on the smaller side, companies

like slack, shopify, zoom. >> you are of the view, a decade from now, those companies you are talking about will be bigger than amazon? >> amazon and apple, we carve those. when we look at the trillion dollar club, there will be laggers. which companies will outperform over the next decade from that lens, i think that's highly probable. >> part of that is a regular torla tory -- regul tory r -- regulatory issues. right now it is not happening.

there is a lot of talk about it. >> yeah. i think there is some help to pay. starting in europe and coming to our shores for tighter regulations around privacy and regulations. i have to disagree as we build out this world, a world of internet of things, there will be very big roles for suppliers and those coming on to the scene. i don't know if the faangs are going to still be preeminent some of those suppliers that exist today will be even bigger if this thing works out. >> thank you, guys have a good weekend. coming up, we are talking one of the top venture capital specialists in the space area.

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>> virgin galactic may have snapped its eight-day winning streak, but the gain so far this year had defied gravity, gaining

more than 220% lisa rich is managing partner at hemisphere and invests in robotics and space companies, including spacex, and you have a different, i guess, objective than like a hedge fund or even private equity you want to own stories. you may never see a profitable company or maybe it's five or ten years down the road in your portfolio. so you don't immediately say this is unfounded with virgin galactic this is something you really like because you were there early. >> exactly you have to come in and see what the future holds and what is in that crystal ball. and i do live in the future, certainly, with the early-stage companies i work with. they have this long-term vision, just like virgin galactic does

while they're doing flights and early opportunities for tourism are there, they have a long-term view of hypersonic travel and that's exciting. so we would love to see the early opportunity for flight making them some money so they can achieve that goal of hypersonic travel for the rest of us. >> lisa, the volume in virgin galactic, suddenly you see what's happening and there's 135 million shares trade hands, so you know what's happening. it reaches sort of a story stock, almost a frenzy, and you know that it may or may not be based on anything fundamental. do you sell at that point or do you just ride it that's what you were hoping for when you invested in it, and you were early, but when do you exit these investments? not when we have a commercial space station up in space, right? i don't know when that's going to be. would you exit any virgin

galactic after this run-up >> i think that the run-up is just getting started because you've got people that want to be a part of the space industry and they can't buy spacex and they can't buy blue. so this is an opportunity to be a part of something. and so there's that sense of ownership and i think pride that people have in their investments and they want to be a part of the space industry and virgin galactic is giving them that opportunity. >> it's exciting for you, and you have a great job because you can invest in things that we have no idea if they ever make money or they're ever going to play out and you spread it across a lot of different companies. how much are you working with at the vc firm that you're part of? >> we're a small firm in a very early stage and i think you found us because we have companies that are getting a lot

of traction, like axiom space. when you're working with a company that's building the world's first commercial space station, people take notice. >> how much money did you put into axiom what you would start with, i guess, is an attachment to the space station that's already up there, right, but it would be commercial in nature >> exactly so it's a module that's going to be built on the port that nasa has given axiom spacex cluesive rights to the port and they would build that onto the existing iss so when the iss decommissioned, it will disappear and we will have the axiom station take over as a commercial destination and the only destination in space. so it's primo real estate. >> right but you make an investment and

are -- i mean, you're comfortable with it. what would an intermediate term investment be for you, ten years? >> right so most of our early-stage investments are looking at the seven to ten-year time horizon and when you make an early stage investment you're looking at a company that you believe will be able to reach this magic $100 million in revenue per year number, right? how long will it take for them to achieve $100 million a year in revenue so that it could potentially be acquired or ipo so what's interesting about the space industry is that you can have early-stage companies that could achieve that earlier than sten yea ten years, because the scale and the revenues come in very quickly, very fast for companies once they achieve their early milestones so for a company like axiom space that's selling tickets to

the space station for $55 million for a ten-day trip and a four-month experience of training, you know, you can achieve revenues early and that's what we look for is companies that have early revenue opportunities, because they need to survive long enough to achieve those revenues and be acquired or go public. >> you're in the very early rounds and you may get something for a dollar and then later rounds still of vr are at $100 can you tell us what are you in virgin at? it's at $37 today. can you tell us, do you have something -- >> the stock market, i didn't invest in virgin galactic. i'm familiar with the company and i think george whiteside has done a fantastic job, by the way, of building the community of virgin galactic tick ticket holders and there are many other companies that have

come to me recently looking to do space tourism they're very early we're talking, you know, the non-billionaire class of entrepreneurs, starting companies and saying space tourism is going to be a thing let's look at that opportunity. >> how much do you have in spacex right now >> we don't disclose our numbers. i would just say we're early investors. i mean, we're not in the billionaire class, so we're investors and we help other investors like the bigger vcs understand the venture environment. >> okay. >> for space because they have billion-dollar funds or $500 million funds and they have very specific models they have to follow to make investments. >> thank you, lisa i appreciate it. we're playing the earth moving under our feet here. when we return, we have two

sitting fed presidents joining us, james bullard will be with us for the 7:00 a.m. hour. we have a lot to talk about, including the fed's next move, coronavirus impact, negative interest rates and much more and later this morning, ian bremer will join us to discuss the global impact of the coronavirus. stay tuned ane it all together with a world-class software experience. we ended up creating, as you all know, so much more. peloton is truly a category of one and we're just getting started. now, let's do this. together, we are going further than we ever thought possible. apps except work.rywhere... why is that? is it because people love filling out forms?

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good morning, and welcome to "squawk box. i'm joe kernen, along with becky quick. futures at this hour have come back a little. down about 125 points on the dow. nasdaq down 53 s&p down 15. it was a rough session yesterday, so we're adding to some of the losses we were down almost 400 points to down 150 or so and now down 130, so we're back down about 280 or so. >> we've got a big hour ahead

and a lot of fed speak with us today. just let steve liesman spoke to the fed chair to questioned whether the markets really expect a rate cut later this year. >> what i refer to do is also look at surveys that many folks do of market participants about what they think we're going to do there's obviously a probability of outcomes, but i don't think when you ask folks they're pricing in the rate cut. market pricing might suggest that. >> we are joined this morning by saint louis fed president jim bullard to talk about the economy, emerging risks and the outlook. great to have you here and steve liesman is here as well welcome back jim, let's talk a little bit about what we heard yesterday. what are you doing now to try to engage the economy >> on the clip there, rich was talking about market pricing for

rate cuts. i would describe that as a peso problem. so there's a high probability that the coronavirus will blow over, as other viruses have, be a temporary shock and everything will come back but there's a low probability that this could get much worse markets have to price that in and that drags the center of gravity down a little bit. but if this all goes away, then i expect that pricing will come back out of the market and we'll be back on the on hold fed scenario. >> is that a description of your own kind of expectations >> i think the base case is that, as other viruses have dissipated, this one will also dissipate. but you never know this could be a little bit different and turn into a pandemic. >> it would be good to know how long sars lasts and not the severity of it because it wasn't as severe. and mers as well

we talked about sars for a long time and we've only been talking about coronavirus for six weeks. >> yeah, we looked at some charts i would say something like 45 days you could actually see affects in u.s. markets without doing any special analysis or anything from these other virus episodes and i think it was the same thing, the market is worried that it's going to turn into something more serious, but then it all goes away and then everything returns to normal. >> hopefully it happens that way. >> jim, what the market believes down the road is not a problem for you until you kind of get up to it, right which is when you look at the probabilities right now, it's kind of interesting, after clarida spoke today, the probabilities actually rose. so the stock market seemed to say maybe they're not going to give us the rate cut, the bond market seemed to double down on it we're looking at a 51% or 52 probability of a june rate cut, at least in the futures market is the market offsides on that

in terms of what you think about where rates are headed >> well, under what scenario you've got to put the scenarios out there. if you think the virus is going to disappesipate and we're goin have a temporary shock and everything is going to go back to normal, yeah, i think the fed is in great shape and we don't have to lower rates in that scenario you know, a lot of the news on the u.s. economy has been good in the last couple of months and i've been arguing that we're in good shape for a soft landing in the u.s. economy, tracking estimates of gdp in the first quarter, hanging right around 2%, 2 1/4%, so as far as the assessment we can make today we're not going to see a major impact on the u.s. of course you never know it could get a lot worse. >> if we've got a soft landing, how long could that expand the

positive -- the shots are so bad when someone sits here let me go here how long could that extend the current business cycle we're in, then we could be like australia size some day. >> exactly, australia went 30 years. >> and still going. >> and still going, yeah. >> does it make sense to you when you see the ten-year treasury trading below 1.5% this morning? >> i have been concerned about yield curve issues i would say the ten-year, two-year is not inverted so this is kind of a level shift for both >> but it's way down, right? it's half of what it was. >> it is way down. again, i think some of the pricing will come out if the coronavirus fades in the future. i want to see how that plays out before i get worried about yield curve issues. >> how do politics -- how does an election year play into the way the fed thinks as things may move or not in terms of what

people's expectations are? >> well, we have to react to the economy and i think if you look at past committees we have made moves up and down during election cycles, so i think this is kind of -- this always comes up in the election cycle, but i don't actually think it affects the committee's deliberations that much. also, i do not think that you can win an election based on whether the central bank zigged or zagged. >> but you can lose one. >> i don't believe that. >> when you read the political science, they never talk about what the central bank did. >> read my lips. >> i think there's a view. i don't know if it's right or not, but that if bernie sanders becomes the democratic nominee and there is an expectation or greater expectation that he would have a chance of actually beating the president, that that would have an effect on the real

economy and in the immediate term on the stock market >> i would like to get your sense of this. my sense is wall street is pricing in divided government and wall street likes divided government and i think for now they're pretty confident it's going to remain divided so they're not too worried. and i think that's where the pricing is right now. >> jim, can we come back to the coronavirus? how would a quarter point rate cut cure the flu >> huh >> i'm sorry, i'm being a little bit -- i'm having a little bit of fun with it taking what you said at face value, coronavirus hits and hurts the economy, the fed reacts with some form of a rate cut. would a rate cut do any good for the u.s. economy in that context? >> well, i mean, you know, you get a cold, you maybe drink more orange juice than you would

otherwise. does that cure the cold? probably not but it treats some of the symptoms and there would be clear symptoms coming from a slow china that took a long time to recover from this. that would slow global growth and that would come back to affect u.s. companies and so i think it might help a little bit. >> i'll push you a little bit more if the problem is a supply problem, chinese supply declines because they've shut down, does lowering interest rates in the united states solve that supply problem? and i should have been up front with that question >> clearly not directly, but you might mitigate some of the implications to that for the u.s. economy >> jim, what do you hear in your district specifically just in terms of what's happening on the economy? we had kind of been waiting to see what happened after the trade war. it looks like we've got a truce. does that change, has it changed any of the economic reports? >> i would say to the extent we have a lot of logistics and

transportation, that's somewhere where you see a lot of numbers that don't look that good. >> right, trucking >> trucking is down. now, some of that was occurring before you got the coronavirus, some of that is year over year comparison because they had a blowout year the year before but still, that's a place where things are very tangible not enough boxes to put on the railroad cars. >> but overall, the read you're getting is that it's a pretty decent economy >> yeah, i would say the labor market has come in very strong, consumption seems to be holding up well, trade issues have now maybe moved to the back burner a little bit so i think those kinds of issues are going to help us ag is an area that has been hurt by the trade issue that should rebound in 2020. they've had a couple of bad

years, so hopefully they'll do better this year. >> i have to ask you about the fed's liquidity and the effect on stocks. some people believe it was the turn to increasing the balance sheet, the injection of liquidity by the federal reserve into stocks that has created this recent run-up in stocks, along with the idea that if it's withdrawn the market could be in danger what is your take on that? >> you mean not qe >> exactly >> i mean, we've tried to push back against this. it's not the intention of the committee that this is quantitative easing. we're buying treasury bills, not the longer end of the yield curve. here's what i would say about this the fed cut rates three times last year, if you think it was easier monetary policy that drove equities, you've got it right there, that must have been it so why do we have to go to this story about the implementation of monetary policy at the very

short end of the curve so i think for those that want to tell a monetary policy store, there's a clear one to tell for the fourth quarter and up until now for equities and i don't see why you have to say it had everything to do with this relatively minor operation on the short end of the yield curve. >> jim is going to be with us for the rest of the hour we have lots more to talk about and steve, we'll see you back here in just a little bit. >> wells fargo reportedly now very close to a settlement with the justice department and sec over previously disclosed probes into its sales practices "the new york times" is saying the agreements could be announced as soon as today wells fargo has declined comment thus far they've paid out over $400 billion in fines and penalties since it was revealed in 2016 that employees opened millions of bank accounts without customers's knowledge. we take a look at shares of chewy trading higher this

morning. the onlyist has an outperform rating on the stock. he cited four key points in his note, including highly favorable risk/reward and strong fundamentals still to come, huawei's warning to america before we head to the break. take a look at the markets as we speak, you're looking at the dow. it looks like it will open off 133 points squawk returns right after this. >> announcer: got a question for warren buffet? now is your chance to ask. tweet them to us with the hashtag ask warren and the legendary investor will answer them on monday starting at 6:00 a.m. eastern warren buffet live right here on "squawk box. they're changing by the nanosecond. that's why cognizant created a unique engineering approach

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♪ at least it is friday. i heard it on saturday let's get to domm chu. >> you're not in love, joe >> i am, but it's tough to -- it's tough to be in a bad mood on a friday, and especially with

bullard here. >> it is kind of tough a lot of good stuff going on. >> let's take a look, first of all, at what's happening overall with shares in some food and beverage companies we're going to start off with shares of shake shack. overall you see shake shack shares moving lower after it got cut by analysts, citing some concerns of what's happening in the overall scheme of their particular shares. also what's happening with shares of domino's pizza they're off a percent right now. we have an analyst says the valuation calls are more tempered and then we're going to wash it down with shares of coca-cola, which are off fractionally after it warned that we could see a one to two cent impact on profits given the coronavirus

and its concerns over there. so another company tempering some expectations with regard to sales and earnings growth given what's happening with the coronavirus. still, shake shack, domino's, coca-cola, they're all in the red. i'll send things back over to you. >> thank you, domm in the meantime, huawei's chief technology officer saying that plans by the united states to create a 5g rival to huawei could be a challenge to find alternatives for the next generation networks. washington has maintained that huawei is a national security risk, alleging that beijing could use the company's equipment for spying huawei has denied those claims scanlon says the technical standards and actual implementation of 5g have taken about ten years to create. jim, i know this is not your field of expertise, but do you have any thoughts on this security versus competitive risk that huawei may pose to the

united states? is that something you guys talk about at all at the fed? >> this is out of our bailiwick. it's long been a concern that you're giving away state secrets when you trade i think that kissenger's comments that we're in a cold war is resurfacing issues for people that didn't live through the cold war and is not used to this kind of thing but during that era you would have worried about this incessantly and i think we're creeping back into that in the current environment. >> on huawei -- >> you know what, we'll do it later. just one second. i didn't realize this. did you see who died cy sperling, is he not tied to this show forever? i'm not the president, but also a client and i just read about

his system that i was always accused of wearing, what his system entailed. and it's not just a toupee, your own hair grows through and then they put more. i'm just preempting, just in case anyway, cy sperling dead at 78. >> we'll miss him. >> this was a shocker. i just opened this up. coming up, linking wall street to main street, morgan stanley's deal with e-trade sparking buzz among investors that more bank deals could be made we're going to talk about the financial sector in just a bit and in just a few minutes james bullard's thoughts on the houston -- no, not on the astros, but i'm going to ask you that off camera. the democratic debates and keeping america's economy growing. sidewalk boks will be right back. >> announcer: time now for the avenue lack trivia question.

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expensive wrist watch ever sold at auction the answer, a one of a kind patek philippe, which sold for over $31 million at a charity auction in geneva. >> welcome back to "squawk box." senator elizabeth warren has reversed her position on rejecting super pac support. she told reporters she changed her mind after filing to get her rivals to join her in rejecting the outside spending groups. she previously posted that only she and senator klobuchar lacked super pac backers, but yesterday they said the fact that the two women did not have super pac support was just not right she was also the first candidate in the field to turn to borrowing money. her campaign took out a $3 million loan in january. campaign spokesman says her fundraising in february has been stronger by contrast, senator bernie

sanders raised $25 million in january and finished the month with $17 million in cash some people say she changed her mind, other people call it a flip flop. >> thy actually wear those. >> you can wear flip-flops, too, or crocs. >> or thongs that's what they're called, flip-flops or thongs depending on where you live. >> she did that on purpose. >> you immediately have some sick mental picture of -- >> a sick mental picture of the ones you've mentioned, two on each side. >> i do wear thongs, four of them two and two. now my brain has been injured. >> with the addition of mike bloomberg to the democratic debate stage, almost 20 million viewers tuned in it was the most watched of all the debates since june

the debate was hosted by nbc and ms nbc they're both units of comcast, which of course is the parent company of cnbc. still to come on sidewalk boks, we'll get jim bullard's take on the debates. and later coronavirus fears hitting stocks once again. reports of the outbreak spreading beyond mainland china at a faster pace we'll get you up to speed on what to watch. plus turbulence for the airline sector, thanks to the coronavirus. new numbers show cloudy skies ahead. we'll give you the numbers in just a few minutes "squawk box" will be right back.

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we have a grotesque and immoral distribution of wealth and welcome. >> we're not going to throw out capitalism we tried that, other countries tried that it was called communism and it just didn't work. >> you probably have all seen that before. senator bernie sanders and former mayor mike bloomberg at wednesday night's debate we're going to hear a lot more

about the economy. i re-tweeted one of mike bloomberg's memes -- i don't know if it was a meme but it was the one where he says he created the job else here. >> i saw that one and there were crickets. >> i thought it was genius and i didn't like it at the same time. i'll tell you why, i didn't like the editing. >> it was fantastic. >> no, i know, but i wanted it to be -- >> i think people didn't know it wasn't real? >> this is a huge issue on social media. >> i'm really sorry i brought it up it was so obvious that it wasn't real and they took other shots of them responding to any questions that were given. it had nothing to do with whether he created a job or not and it was a joke, andrew. lighten up. >> i know. i'm just suggesting to you that you can't criticize when -- >> hopefully facebook will ban so that people know what day the the election is and the voter suppression. let's get back to jim bullard, president of the saint louis

fed. get a sense of humor take some nice pills it's difficult and it's even friday so what we have going now with the economy, you said it's a pretty good economy, you've seen some of the proposals of mayor mike about a wealth tax, about raising money here, raising money there. would those be detrimental to the economy or do we need some ways to raise revenue given that we're running trillion dollar deficits >> so this is just about deficit reduction or about expansion of -- >> when you saw bloomberg's proposals. they're obviously different than elizabeth warren's and different than bernie sanders and different than biden as a fed guy, if he became president, what do you think -- would it make your job harder or easier >> as a fed guy trying to predict what actually will happen, i think very little actually will happen because of

the divided government problem i do think that the two biggest pieces of legislation, dodd frank and obamacare are here to stay i think to the extent you had a backlash against that and a chance to change that, that has passed so i think those are going to be law of the land going forward. >> how about -- >> but i don't see anything of that magnitude happening. >> do you think a couple of pennies on every stock trade or fractions of cents is a problem? >> i don't want to impede the efficient movement of capital, so you do want the right investment, the right place at the right time. >> how about if we confiscate 20% of every publicly-traded company and give the stock to employees? that's bernie's plan >> i mean, this idea that is out there that -- who owns the stock market, you know, and it's like, okay, it's just the billionaires, don't we have this

big institutional investor cadre? >> 401(k)s and people pointed that out. >> i thought it was two-thirds sometimes you see different numbers on that. and what is that it's union members and teachers and all kinds of people. >> let me ask you a different question you look at, for example, mayor bloomberg's plan or some of the other plans around income taxes on the very wealthy. take the wealth tax out of it. what do you think the implications of that are genuinely on the economy >> what's the proposal >> i'm saying any of the plans, the plan to raise the top rates at the very high end that try to close some of the loopholes around capital gains, that try to step up basis of depth, all of those things, will those have real-life genuine economic implications >> i've actually been doing a lot of work on income and

equality in kind of the macro world. i don't think this thing would change the inequality picture. i think a big chunk of income inequality is coming from the life cycle, so what that means is that you've got peak earning years, you've got low earning years early and late in the life cycle. if you put that together in the right way, you'll get a genie coefficient that is close to what it is in the u.s. data. >> do you think it's just demographics >> a huge chunk of it is actually just life cycle. >> that there are more baby boomers who are getting toward the end of their earning cycles. >> you've got peak earning years, so this means that in the middle of the life cycle that's when we all earn the most income and we don't earn very much when we're in our 20s or late in the life cycle so because of that, if you just do that in a model and calculate the genie coefficient of that, you get something close to the actual data. >> i've never heard of that.

>> and you don't need any billionaires. >> you're talking about because there are so many baby boomers and millennials, that that screws all of the numbers? >> it doesn't screw them it means that of the coefficient that's maybe this big, maybe this part of it is just life cycle effects and then the rest is kind of -- >> meaning it will wear off as the millennials get older and become a larnlger part of the pk earnings >> i don't think so. >> you just said you don't think so >> this is not a story about more young people or less young people this would occur regardless of that issue >> back to the tax issue, if you were to raise revenue this way, would it slow the economy? if you were just focused on this top group, if you raised the rate on top earners in america, you close the step up --

>> here's what worries me as an economist. you're going to take that piece of capital that would otherwis n be allocated to some company and then what are you going to do with it? if you're going to take it and do something really smart and really great public capital, that might be good but if you say i'm going to take that and i'm going to have a party because i'm going to hand it out to my friends and we're going to have a party, that's going to hurt growth. >> it will hurt growth because some people believe that if you gave it out to people it would actually help growth, right? and by the way, that's the argument that you hear from most democrats. >> i think if you want to tax, you want to use it for public capital that's going to increase the productive capacities of the economy, there are plenty of things you can do that are like that but if you say i'm going to pass it out to people so they can consume today, that's not improving the productive

capacity. >> what happens if you use it to pay down debt? useful or not useful right now that's a big question. >> yeah, it is and we're doing a lot more work on that. i'm trying to rethink government debt some of you might know blanchard gave an address a year ago and raised questions about what is our conventional wisdom about government debt. the idea that 60% of gdp is the limit, and that seems to be out the window, doomsday scenarios about carrying too much debt don't seem to be working so i think as a macro economists it's incumbent upon us to get more granular and serious about what we're going to say about government debt. to say the sky is falling all the time hasn't been working. >> jim, let me ask you a couple of questions that steve liesman sent in. the minutes earlier this week were full of concern that fed

officials think market valuations are high. are you concerned about market valuations being too high? >> we always watch this and we watch financial stability issues and bubble type issues very carefully. i think the conventional wisdom is that valuations look high, but not at this level of interest rates and so to the extent you think this level of interest rates is probably the future, which i've been arguing, i think we're okay for now. but we do watch this. >> another question that he asks is, what does a supply shock in china mean for the u.s. economy? could it be like the oil shock of the 1970s with higher prices and less growth, kind of like stagflation. have you worried about that? >> i haven't worked out that scenario, but you could make an argument if you had further amplification of the virus in china that it would have major disruption, both on prices and

output globally and maybe some of that would feedback to the u.s. but i don't have a sharp prediction on that. >> you still think that sometimes money is better left in the private sector where entrepreneurs and others can use it to make investments rather than in the public sector? do you still think that -- there's not a single person under 30 that believes that. we are being told now that profit tiering and using money in the private secret is only to grease their own pockets. >> it's a powerful economy with lots of great market outcomes. there is a role for government and it is important, but you really want all that innovation that we got over the last 25 years, new products, you don't see that elsewhere in the world and that's why the u.s. is the world leader. >> and i'm not going to bring up reagan, although i just did. every generation, we need to

educate, because we're only one generation away from not understanding how -- and now we're revisiting venezuela and cuba and democratic socialism and it's not really socialism and denmark has a better standard of living than us we're revisiting all of this stuff and someone needs to be there to -- >> that's fine make the case. and i think that's what we macro economists should be doing. >> if sanders is ahead by -- what did you say, how many points this could not justin be an i l intellectual conversation we're having right here. you think this whole american experiment for the last 250 years, do you think it's -- it's halted in its steps, although you think it would be a divided government even if bernie got elected you wouldn't worry that much >> i think it's very tough in washington to get anything done and so i think that's --

>> a saving grace? >> i think that's what wall street is pricing. that's my sense. >> we saw what obama was able to do in terms of increasing regulation and we've seen what trump was able to do in terms of decreasing regulation. >> i think the deregulatory agenda i think has been important and i think the pendulum tends to swing too far in one direction you've got to pull it back a little and get the right level and get the right type of rules. and above all, get understanding of here's what the rules are, please go ahead and conquer. >> that would be my question it seems to me with such a divided populus at this point where you have such extremes kind of getting put in place, i don't know, you talk to doctors and they'll pull their hair out. they've tried to go along and come up with all the things they've been told to do for the affordable care act and then tried to undo that and get ready

for whatever comes next. if it's oofrable care for ul, i think all of these places want to know what the rules of the road are and don't want to change them every four years. >> and that's a refrain you often hear i also think that, you know, sort of conceptually we want to think about helping the poor segments of our society and doing right by them. but those that can afford things, let them run with it and have their own insurance and do it the way they want to do it. >> you will be with us -- you've got 18 minutes to continue to try to help the good guys here. >> yeah, i mean, i think the issue on economic education is a serious one and we just have not done a good enough job. >> we're going to come back to you in just a minute we've got a lot more coming up this morning the impact of the virus outbreak on the airline sector. we're going to talk a lot about that right after this break.

take a quick look at the futures right now. you're looking at red arrows, dow, looks like it opened down about 104 points we return right after this >> announcer: got a question for warren buffet? now is your chance to ask. tweet them to us with the hashtag ask warren and the legendary investor will answer them on monday starting at 6:00 a.m. eastern warren buffet live, right here on "squawk box." and we have no way to integrate all that? no...but bdo does. (announcer) people who know, know bdo.

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global air travel demand is set to decline for the first time since 2009 because of the coronavirus outbreak according to the international air transport association, the virus's impact on demand will cost airlines globally more than $29 billion, mostly in the asia pacific region the group estimates chinese airlines will lose some $12.8 billion in revenue because of the outbreak. the price of jet fuel is under pressure because of the outbreak >> when we return, morgan stanley igniting banking takeover buzz with its deal for e-trade. jim bullard is here today and he's going to talk about the state of the banks check out coca-cola, the company

out with a statement today estimating that the impact of the coronavirus on its earnings, it says it's going to look at the virus cutting current quarter earnings by one to two cents a share. however, they add they still expect to achieve full year targets. right now the stock is down 7 cents. "squawk box" will be right back. , boxed in, or held back. especially by something like your cloud. it's a problem. but the ibm cloud is different. it's the most open and secure public cloud for business. it can manage all your apps and data from anywhere. so it can help take on anything, from rebooking flights, on the fly to restocking shelves on demand. without getting in your way. ♪ ♪ 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.

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we have $60 billion in deposits, $40 billion on balance sheet, we're able to do things with that, with the funding they have tremendous number of clients who leave the organization over time as they want a financial adviser and now we can be the financial adviser. >> that was morgan stanley's ceo james goreman yesterday discussing the benefits of the e-trade acquisition. we want to go to jim on this what do you think this says about the changing landscape and how the wall street banks are shifting and how you see them? >> more consolidation is not surprising at all. i think the whole concept of a company like e-trade, that they were going to, i don't know, be the trading company of the future or something like that, you know -- i don't know i would leave it to others. >> let me just ask you a consolidation question, though there has not been a lot of consolidation in the banking space most financial crisis and

we're ten years plus. >> i don't know if i agree with that. >> in some of the smaller banks. the question is you look at a morgan stanley, a big transaction like this. >> it's 3% to 4% a year and it could accelerate. >> do you think some of the big banks should or could be able to get bigger would you want them to >> i have not wanted that. i want plenty of competition in the space so i like them where they are, or even smaller. >> and what about -- and one of the things you're seeing bloomberg just proposing this week, again, this idea of what a bank is supposed to be, how much trading they can actually do, what kind of proprietary acquisitions they can make to add onto their business. >> yeah, i think the cows are out of the barn on that, so i don't think we're going to be able to go back to anything that splits investment banking or commercial banking it was getting tired, even 20 years ago. and i just don't think we can go in that direction. but what we can do is be

vigilant, keep an eye on these companies, and if you have plenty of them, then you can let one fail and it would be okay. >> where do you see the risk right now? if you were to say there's risk in the market, people think we're in some kind of bubble, people look at different corporate debt levels. >> a good outcome of the crisis is that we put in much better intelligence and radar and we focus on these issues a lot more there's a regular quarterly report on the state of affairs we track all different types of things in markets. i would say financial stability risks are moderate at this point. but we do think about this and worry about this a lot more than we would have 15 years ago. >> so you don't see a leverage based risk -- >> i don't see anything in the magnitude of the housing bubble or anything in the magnitude of the dot-com bubble

i don't see anything of that magnitude right now. >> if you are looking at lower interest rates being at these levels for a longer period of time, what does that mean for the banking industry >> it means it's hard to make money. they have to change their business models. i think they're very savvy and i think they have done that. more fee-based income, other types of products. so i think business models will evolve to handle the lower interest rate situation. >> the other question i was going to ask you is just the rise of esg. because we haven't had this conversation i'm just sort of curious how the fed even thinks about this you have companies that are now talking about purpose over profits, over the past couple of months you have all these companies, microsoft and others, planning to spend real money on climate change, combatting climate change they're delta announced they're

going to spend $100 a year to buy offsets. what do you think about the productive use of capital in this environment >> is it just me or has this not been going on all the time i feel like this was going on in the '80s corporations wanted to position themselves to be friendly in the current environment they operate. they want to do nice things for the community. >> so do you put the delta money in -- by the way, you could say delta is going to spend $100 million on the offsets and you could say that's their marketing budget for the next year that would be the skeptical, cynical take on that. >> i think they're trying to appeal to customers and the customer is changing taste they care about these issues so they say, okay, we're going to do something somebody else might say i'm not going to take that airline because they're doing that and that's driving up my cost and i'm going to go to the low-cost airline that doesn't do that this is just markets at work

>> there's a piece in the journal pointing out that when ceos start trying to influence or go along with the prevailing social wisdom that, once again, you're actually lessening democracy and where money is centered is again starting to influence socially and that the ceo should have one thought in mind you're cynical, though >> what do you think about the catholic supply store? they're appealing to catholics and that's their market and they want to be nice to their customers and they want to provide a good product. >> shareholders can do what they want, but i'm saying there are two sides to all the cultural issues and when a ceo that lives in new york decides that he has all the answers on one side of the issues, you're not necessarily going to -- >> i guess what i would say is that there are pitfalls in going

in this direction, so you can go too far or try to, you know, appeal to a certain segment and then you offend somebody else who is a key customer. >> that's 50/50. >> this is what they get paid the big bucks to do. >> i guess the reason i'm asking the question and you have companies like microsoft or put it on amazon which are going to spend an inordinate amount of money over the next 20 years trying to get to carbon neutral. maybe you're arguing that's strictly marketing i don't know does that change the outcome should they be thinking about climate change as a potential problem in the way that larry fink is sending letters? >> they have a biggest carbon footprint on the planet with all the deliveries. >> they don't have the biggest. >> well, they need to pr their way into not being so horrific to the environment. >> the question is -- that's the question, is it pr, is it actually good business this is what i'm trying to get

at. >> i'm saying it might be good business to the extent that they would otherwise lose customers who feel like it's bad for the environment. >> whether it's actually coming into financial play. >> if people say i'm not going to use amazon -- >> no, i'm saying if there are more climate issues, that would therefore affect their business. >> the crisis. >> jim, thank you. [ laughter ] >> we've got to go "squawk box" will be right back. g g it's going to be a week before they can get through on these roads shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪

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market searching for clarity. u.s. futures are down again after yesterday's mystery sell-off the bern economy. >> i believe in democratic socialism. >> as the vermont senator gains strength on the campaign trail, we'll take an in-depth look at what his economic policies could mean for wall street >> and the fed in focus. take two we've already heard from saint louis's jim bullard. >> wall street is pricing in divided government and wall street likes divided government. >> this hour, an interview with raphael bostic the final hour of "squawk box" begins right now

good morning, and welcome to "squawk box" here on cnbc, live from the nasdaq marketsite in time square, i'm joe kernen, here with becky quick. we're down 97 points on the dow. s&p indicated down at 12.5, nasdaq indicated down 34 and change tr treasuries were down and now 1.48 continuing some angst, global growth, what we're seeing increasingly in other parts of the world in terms of the coronavirus. >> it's certainly in south korea. the first case was just reported in italy >> in the meantime, hundreds of

infections found in two chinese jails, this adding to the number of new coronavirus causes in the country. more than 75,000 people have tested positive for the illness in china and the death toll has now topped 2200. south korea saw dozens of new cases, bringing the total to more than 200. authorities say a super spreading event ata church has led to infections with more than 400 church members showing symptoms of the virus. eunice joins us with more. >> thank you so much the policymakers here are walking a fine line trying to make sure that they stamp out the coronavirus, and at the same time support the economy so the commerce ministry today had said that the growth rate for imports and exports for january and february they expected would fall sharply, but they also said that it believed that the resumption of work is starting to normalize, especially for some of the major cities such as shanghai and

areas like hunan, which they describe as having key invested foreign enter surprises. they say that has topped 80% we're seeing a comeback for a lot of businesses. even so, the government has been trying to make it easier for companies to access money. we saw that the central barcnk yesterday had cut lending rates, and in addition to that the government is finding her ways to try to support companies as well for example, china has now -- chinese firms are now in a rush to try to raise more money, $10 billion in a share sale as funding rules were eased also, chinese companies are starting to look to sell what have been described as coronavirus bonds. so the authorities here are now encouraging chinese companies to sell these bonds by one estimate more than 25 businesses were,

from manufacturers to airlines, had raised more than $3 billion from these cut rate loans and 20 more companies are expected to follow suit. also, the government has been trying to help companies here to try to get through this tough time by allowing them to delay some of the payments on social insurance. so these are pensions for workers, as well as a safety insurance and health insurance so all of that, from when i talked to a lot of small and medium sized companies, they say that this is actually quite helpful, but at the moment a lot of this is still talk. and so they're waiting to see what actually happens once they apply for these types of grants. guys >> eunice, thank you very much for more on the growing economic impact of coronavirus, let's welcome ian bremmer, you'his ade was featured on the cover of

time magazine. thanks for joining us. a lot has changed since you wrote the cover piece. this is changing on a day by day basis right now. there's a lot we still don't know but what is your best understanding of how we think this might play out and what it means for the global economy >> two scenarios, sars 2.0 where you have a v-shapehit and it rebounds, the second is that we get outbreaks that goes beyond china and it has a significant impact globally. either way, you have this happening in the context of a chinese economy where a lot of american manufacturers, service providers, have been saying for a long time that their footprint on the ground in china is actually bigger than it needs to be labor costs have only gotten higher, u.s./china relations, the competitive environment in china is more challenging. you've got an american government that wants to have stories about how you're coming back to the u.s. they didn't really want to make big changes because they were making money and they didn't want to upset the chinese government in this context, you're giving

an awful lot of people an excuse to rationalize the supply chain and i think that's something we will see over the next couple months. >> the supply chain has already spread to places like vietnam. do you see more manufacturing actually coming back to the united states? >> i think there's going to be more to the united states. vietnam definitely has increased its economic capacity, but huge labor shortages there. the infrastructure isn't what it needs to be to tolerate a significant amount of cross-investment coming in from china. and also the capabilities on the ground aren't what they need to be so there was movement inside china going from big cities into the interior and less competitive cities were labor costs were low now i think you're talking more about in-sources, trying to be on the ground where most of your customers actually are you service china out of china and service the united states more out of the united states. and before coronavirus my presumption is that would have waited until the next major economic down cycle.

i think for china specifically, this now is going to be a reaction in the shorter term. >> let's talk about what's happening with the chinese economy. again, we're monitoring this on a day by day basis, but you've got already places like morgan stanley saying you're going to see much lower first quarter growth and s&p came out yesterday and now say they're looking for something i think like 4.4% for gdp for the full year. it's the second largest economy in the world how does that impact the rest of the global economy >> that's certainly a more significant hit than what people were saying a couple of weeks ago. the presumptions were in the low 5s at that point what's interesting is the response by xi jinping has been contain the virus no matter what, expand to large cities, take care of the media and have control of political stability and i think that if you do that, the economic implications clearly are going to be more negative so i don't think there's a worry that chinese political stability is going to be a problem, that

there's going to be a backlash against kpresident xi but the question there, i was just in munich last week, for example, and the americans, republicans and democrats, across the board were saying china is our principal national security concern and the one person who hasn't been saying that in the last few weeks has been trump because he's focused on the phase one trade deal and he's focused on xi jinping is strong, he can get it done. if this becomes a big enough deal the next couple of months that it's not just about chinese economy taking a big hit in the first quarter, but it's seen as affecting the american economy and having a difference inhow trump considers his re-election campaign, we'll switch on china. and if that happens, there's no support underneath them for it so the likelihood you move from just the tech cold war where we have a decoupling and into something that feels much broader and takes the world's

two largest economies, we're heading in that direction anyway but that becomes a much more likely possibility in the run-up to the elections. >> joe pointed out earlier we've had others that have come on and say they anticipate there will be pockets of outbreak here in the united states. that's not saying how big or how many people. if that's the case, though, it's a different scenario how would that potentially impact the u.s. economy and stock market >> i'm not an economist so i'm not going to comment on that. >> are you an epidemiologist >> no, i'm a political scientist and i'm looking at how the plit fall i was talking to the head of the w.h.o. last week in munich and his perspective at that point still was we don't believe that there's likely to be that kind of a significant breakout in other countries. what i do remember is after 9/11 in the united states -- >> shut down travel. >> shut down travel, and by the way, treatments of saudi citizens coming into the u.s. was different than it had been

pre-9/11 imagine how chinese citizens might be treated if suddenly there was an actual fear of such a breakout >> you've already seen facebook and sony say they're not sending any employees to a conference being held in san francisco, similarly in boston. those are u.s. cities that we're saying forget it, we're not sending any of our employees to. >> global companies that were planning on having global meetings in the united states and saying we can't bring our asian employees. i was involved in one next month and they already canceled it so i think the fear factor and the uncertainty around what this is likely to look like in the upcoming weeks is going to have an economic impact. >> it's enough right now and my only point is with our economy, we're humming along pretty good here but in other ways, wages and things happening and if there were pockets to break out here it wouldn't take much to see a little bit of an effect, which if people aren't going to movies, aren't going to

restaurants, if there were pockets here i think we would -- i just know human behavior and we might stay home and there would be some effect on our domestic economy which we're not seeing now except for the uncertainty of the whole situation. >> i think that's right. and my response to that is, that level of uncertainty and fear in an election period where a big piece of trump's popularity is precisely that the average american feels really good, the likely response in my view is who am i blaming for this? i'm blaming china. and let's take the macro point, too, china is a huge piece of global growth. it doesn't have anywhere near the institutional resilience or the leadership that the americans or the japanese or the french or the germans. so you're going to see more pandemic and you're going to see a lot more coal and a much bigger carbon footprint.

you're going to see less control on data, sovereignty and concerns of people losing their identities so the kinds of risks that we consider black swans in a world where china is going to be the largest company. >> also a reminder, don't miss a cnbc special report tonight called "outbreak, coronavirus", make sure to tune in at 7:00 p.m. for the latest on the virus. >> coming up, more about the coronavirus and the impact on stocks we're going to go from macro to micro and talk about how fears of the illness are influencing some specific names. and then later raphael bostic will join us right here on set for a conversation about u.s. growth, rates and much more as we head to break look at the shares of deere, the heavy equipment maker beat analyst estimates. the company says it's seeing signs of stabilization and the relaxation of trade tensions is

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welcome back to "squawk box. we were just talking about the macro impact of the coronavirus, covid-19 let's drill down on individual names and one commodity for your radar. joining us is stephanie link we're going to start with what we heard from coca-cola. i think they said one to two cents of impact from coronavirus at this point. >> i was actually surprised it's only one to two cents because 80% of their revenues are outside of the u.s so this is a stock you want to buy if it has any pullback, especially under 55. they had a great quarter, 6% organic growth they're guiding 5% growth. and this year you're going to get the trifecta of good top line and bottom line earnings and free cash flow growth of 40%. the only problem it's expensive at 26 times forward. but i think it's one to watch and definitely to buy on the

bu pullbacks. >> it is a real number. >> it is a real number, for sure but this company is doing a fabulous job in terms of product innovation i would have thought it would have been more like five or seven cents impact, so one to two i think is very manageable. >> you did not know that i was going to be wearing lululemon pants, did you you know why there's a zipper right here so the wallet stays in the zipper -- the wallet right here. i can't be pick-pocketed that's one of the reasons. and they feel like jeans >> yeah, and they look good. >> they look okay. i don't care if i look much better than okay that's all i'm hoping for nowadays look at that chart. >> i know. there's a little less room for error. >> it's because of these pants. >> this is the whole reason i'm going to tell you you don't want to sell this stock because men's, e-commerce is still in early earnings and china, even

though they're going to see an impact short-term, they've got like fivefold growth potential the only problem is it's trading at 45 times earnings but you're looking at upper single digit comps who is doing that? and 85% full price who has that >> they aren't cheap, these things. >> they're not cheap do you have a few pairs? >> i have two gray, two blue, a khaki and a weird sort of a grayish textured thing. >> that's a nice assortment. >> that right there, we're talking about half the year i can get through if i do it -- if i change a pair every three or four weeks then i can go right through the season all right, let's -- i have underwear on, relax. let's talk gold. i knew you were going to talk gold gold is moving and that does move on the coronavirus.

>> it moves on coronavirus and it moves on kind of the safety trade. but i wonder if there's a little bit of inflation fear given all the -- >> really? >> a little bit. we're not seeing inflation i get it. >> maybe if you're a central banker printing money fear. >> china is doing everything that they can and i think that's worrying people. the supply chain might lead to a little bit of inflation. i don't think that we have it but i think that's also driving the price of gold for sure. >> it's been a long time coming. the forecast, how long ago was that when it got close it got $1900 and change, did it not? >> yes so i think you can own a little bit of gold but you don't want this to be a major part of your portfolio. >> it's obviously down in the 1200 >> this is a great company, the stock is up a ton, great management, they've done a great job. >> the yellow metal, that's why

you wore that. are you going to be with the judge today? >> i am not going to be with the judge today. next week. >> always testing us to see if we're listening, joe when we come back, a surging bernie sanders and the bernie economy. what would a presidential win by the vermont senator mean for wall street and for government coffers? that debate is next. and a reminder that monday we have warren buffet live. he'll spend three hours answering our questions and yours. you can tweet them to us with a hashtag ask warren this is the 13th year that we'll be sitting down with buffet following the release of his annual letter to berkshire hathaway sheareholders he shared with us who he's thinking about when he starts the letter each year. >> i've always had the image that i am talking to my sisters. i have two sisters, both berkshire is pretty much their whole investment they're smart, they're not

active in the business, so they're not reading about it every day. but i pretend they've been away for a year and i'm reporting to them on their investments. >> and be sure to check out the squawk pod later on monday we'll have special ask warren content on the podcast download, subscribe. we'll be right back. >> announcer: what's working is sponsored by comcast business. take your business beyond. ther of careful construction... s infinite "what ifs?" and contingency plans. creating funds that help target gaps in client portfolios. tap untapped potential. and strengthen confidence in you. flexshares. powered by over a century of investment expertise before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. i'm part of a community of problem solvers.

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box. investors are taking a closer look at bernie sanders economic proposals as he holds strong at the polls these days at this week's debate sanders continued to hit the themes that have brought him a lot of support, but also alot of controversy. >> i believe in democratic socialism for working people, not billionaires health care for all, educational opportunities for all. >> joining us right now for more on what the bernie economy could look like, washington post analyst raymond james and head of u.s. public policy and political strategy research at

ever core isi. i'm going to start with you, ed. what do you think happens? i'm just going to pretend for a second that bernie sanders is not just the nominee, but wins the presidency what happens the day after, not just to the markets, but to the real economy >> yeah, i think the market is shocked. i would go back to the day after the trump election in 2016 and i walked into the morning meeting and i said absolutely everything is in play in almost everything that was going to get done was potentially positive for the stock market so what i'm looking at right now is that the stock market might be paying more attention to bernie sanders' economic policies, but they don't believe he's going to win and they don't believe he's going to be enacted. so the day after the election, should he be president, it would be the opposite. there would be a concern that absolutely everything is in play obviously not everything is going to be implemented or

nothing kind of in terms of the extreme are likely, but that uncertainty would absolutely be a wake-up call for the market and potentially have real impact on the economy >> sarah what's your day-after view >> well, the day after is certainly going to be surprising, but i think that the markets will quickly understand that really not everything is in play i don't think it's very likely that a sanders administration would enjoy the majorities in congress that the trump administration did, and there's going to have to be compromise and we've already seen the debate in the democratic primary about medicare for all there really isn't the support for that so i think that the market will have to quickly look through some of the campaign proposals and figure out what is actually going to happen. i think really what sanders would start with is what all the democrats would start with, which is a big kind of green infrastructure like package to really address climate change.

>> would that be helpful or hurtful to the overall economy >> well, i think in general it would be -- it would serve as a stimulus there would certainly be proposals like the proposal to ban all fracking that would cause a lot of angst in the market but in terms of what actually passed at the end of day in a closely divided senate and the house, i think that it would on balance be positive. i think where you need to worry about sanders is in the same place we've seen some of the volatility around president trump and that is around trade deals and other areas where the president has a lot of authority without the congress there, i think bernie's remarks about usmca and the need to pull out of it would cause a lot of jitters. >> here's the question assuming there's divided government, what can bernie sanders do as president through executive order, through the appointments of people in their roles at the head of sec, ftc, various agencies, and how

meaningful do you think that can be is that just on the edges? >> i think that is a big deal. we focused a lot on that when warren was leading in this race and she would be more focused on executive orders but there's a lot you can do through appointments, whether it is your chair of the sec and the kinds of corporate accountability that they bring forward, whether it's your justice department in their efforts to break up big tech, to climate change and other things. so for sure, investors are going to have to learn a lot about executive authority and i do think while warren would be a bit more effective, given her sort of legal background and details, the senators would also do a lot in this regard with appointments. >> do you think that bernie sanders would be better for the economy or elizabeth warren would be better for the economy? >> well, i think what you look at here is that they both represent somewhat similar kind of views, being from the liberal

lane here. i do think that kind of a senator elizabeth warren being president would be much more aggressive in implementing some of the bank regulatory reforms but as it relates to bernie sanders, i think he would be very effective as it relates to trade and more volatile as it relates to trade in some of those executive orders, those regulatory positions so when i said everything is going to be in play, it is all of those authorities that trump has repeatedly shown us is that the presidency actually is pretty positive. in terms of kind of what gets through congress, i do think if there is a kind of strong win by democrats this fall, we could easily have an all democratic government and one of the big questions would be if there is a democratic majority in the senate, is whether or not the filibuster holds or if it's going to change. that's going to add to some of the uncertainty. you ultimately do see some things that would be fiscal stimulus, changing student loan

debt, medical debt, unlocking consumer spending. so it's not all bad. there are plenty of sectors that you would say these are buying opportunities. but the immediate uncertainty, especially where the market is pricing in a trump re-election at this point, that is my biggest concern. we're going to thank you have a great weekend, you guys. >> coming up, a special live interview with the atlanta fed president. a reminder, you can always watch us or listen to us live on the go on the cnbc app stay tuned "squawk box" is coming right back whether your beauty routine is 3 steps... or 57, make nature's bounty hair skin and nails step one. it's the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. nature's bounty, because you're better off healthy. we have like 40 years of data! that's incredibly valuable!

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try to win by attacking, it is already working 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. welcome back to "squawk box," live from the nasdaq marketsite in times square a few stocks we're going to watch or that you may want to know about as we count down to the opening bell computer printer ink maker has

adopted a poison pill. the move was meant to set off a takeover bit from xerox. and sprouts farmers market reported quarterly profit of 20 cents a share. that was nearly double the estimate and poultry producer pilgrim's pride. >> peter piper. >> fell 10 cents short of estimates. pilgrim's pride pointed to difficult conditions in some key markets. they have no idea. >> she sellsseashells by the sea shore. that was clever. last hour we were joined by jim bullard to spoke about the strength of the u.s. economy. >> i've been arguing that we're in good shape for a soft landing in the u.s. economy, tracking estimates of gdp in the first

quarter, hanging right around 2%, 2 1/4%, something like that. so at least as far as the assessment we can make as of today we're not going to see a major impact on the u.s. >> so continue the conversation, we are welcomed by steve liesman and a guest. >> president bostic, thanks for joining us. >> it's great to be here. >> let's start with the issue of the day, which is can you tell us how you're thinking about the potential effects of the coronavirus on the u.s. economy? >> well, the coronavirus, one of the issues we have is that new information comes in all the time and so we know it's going to be disruptive to china, to production, to a lot of the supply chain when i talk to businesses here, what they tell me is that it's going to be a short-run disruption if you have that kind of exposure, but they're not expecting they're going to lay off folks and they're not

expecting an extended negative impact so i think this is going to be a short-time hit, we'll get the economy back to its usual level that jim was talking about sometime in the future. >> so does that mean you're looking at some points coming off of gdp in the first quarter, but getting most of that back in the second quarter >> that's what my models are saying right now but of course we get new information about coronavirus pretty much every day. so while we have that as our baseline, we're always open and monitoring to make sure that there aren't new things that are coming up that have some deeper implications for the economy >> i'm not quite sure how to ask this, but when you think -- what is your general outlook for the u.s. economy >> that's sort of an unclear question so let me say my general outlook for the economy is pretty good we're going to be at 2%, 2 1/4%,

employment is going to continue to be strong, inflation is not going to be a significant problem. and when i look around and talk to business leaders and folks and consumers, the one thing i hear is, you know, we're not taking extra risks, we're not seeing anything that would lead to significant changes in course, and as long as that's going on, i think the economy can just roll along as it has been. >> and is policy then right, or to use the term of art, appropriate for that scenario where it is right now? >> yeah, i have no impulses really to think that we need to do anything with our policy stance different than what we are today. >> how do you fold into that the idea that the market has priced in the rate cut? >> there are many different scenarios about what's going to happen between now and june or july my baseline expectations is the economy are not going to see risks and we're going to stay

stable, so we won't have to do anything my focus is really on today. and what we know today, what we know next week as the data comes in, if we see more weakness than expected, then i would be open to moving. but that's not my expectation. >> what's not in the future, president bostic, is where bond markets are right now. you are toying with all-time lows on things like the 30-year and 10-year. what signal is that sending you? >> it's sending me a couple of signals. so one, we know that there's a global impact -- the global rates are low, so our neutral rate of interest is much lower than it has been historically and that's pulling everything down i think there's also issues around safety, so the united states is a place where capital is flowing and that's actually pulling down yields as well. the other thing that i see when i look for -- when i look at these yield curve shapes, is really trying to find risk i talk to our finance guys at the bank and they say the yield

curve has got the shape that it has. and i say so where is the risk, where is the switch that's going to happen such that the economy is going to turn in a different way. and when i ask that question i'm not getting a lot of clarity so we're going to continue to ask and continue to look, because ultimately we're going to have a change in the economic performance from decisions that happen by people in the c suites. >> the atlanta fed is not a small tooim regularity there's a lot of banks that are located there. are you guys on the front lines of supervisory >> we have a lot of banks. our district, we have a couple of large banks, so like regents. we used to have sun trust, which moved into the richmond district but we have a ton of community banks and a lot of the towns across the southeast, there will be the baseline family-owned

long-standing financial institution that plays a critical role. so we talk to a lot of bankers and they're also not taking on excessive risk and so things are pretty solid and i'm pretty comfortable about where we are. >> what about the liquidity that's been injected by the federal reserve into the banking system has it had an effect, do you think, in pumping up the stock market >> i don't think so. now, we've had a fair number of conversations about this on our team, and one thing that we see is that there has been this correlation. the correlation doesn't always equal causation and there are a lot of other things that are happening as well. so when we think about trying to identify this explicitly, the real question is can you tease out all of the other stuff to make it clear that it's exclusively on our policy? there may be a little, but i don't think it's the main driver. >> if it's not the liquidity

that was injected, jim bullard made the point that if you're really looking to blame the fed, look at the rate cuts last year driving rates down across the board. is that something that pushed a lot of money towards equities because there's no alternative or yield anywhere? >> that's possible again, there's a lot of things that are going on to drive this. if you look at what's happening in the equity market, there's a lot of index investing that's happening. there's a lot of movement in terms of the technology companies. so there is some justification for it but it is -- i acknowledge that -- >> maybe you're doing what you're supposed to be doing, that is managing the economy in an effective way for growth, so you averted some type of -- maybe it was too tight, maybe there was going to be a bump in the road, you averted that business stayed strong, companies continued hiring so it's not just the liquidity, but you're managing the economy in an effective way. >> there may be some of that one thing i would say is given where policy stands right now, we're very close to what we call

the effect of lower boundary zero so when you have that kind of limited space, i think there is some advantage to being a lit more stim lafb than you might be otherwise. but i think t really is around -- >> i'm trying to tell you that you guys are helping and controlling -- i'm giving you more credit than i like to give the fed. because i wish it was the underlying economy but at least you're out of the way. >> so i don't think it's the underlying economy, but i think it's because we're out of the way. so one of the things that i've always thought kind of where we stand right now is that the economy is strong. it can stand on its own feet and it can grow pretty consistently. and so we should let it do that. >> you raise the point about how there is a lot more indexing that's taking place, investors putting their money into the broad indexes. does that raise a concern for you? you've noted that it's happening. does it matter >> i'm not concerned about these things right now one of the things that is really

important is just to understand the patterns, so we're doing that and then once you understand the patterns, the next thing is to really have our team think what are the implications for this, does this really affect how we should think about what's going to happen. >> have you found any answers to that it's an interesting point. we're going to be sitting down with warren buffet on monday and he's been a huge advocate of investors putting their money into the indexes, but are there unexpected consequences with that >> i've read articles that talk about the concentration of a small number of companies that run the index funds and that could lead to some more coordinated strategies into the marketplace. right now we don't see that. it's something you've got to keep an eye on, but right now i'm not seeing anything that would suggest that. >> i think that's all the time we have and we should thank president bostic for joining us and make it not the last time. >> i look forward to coming

back thank you for having me. >> thank you coming up, a big move in gold this morning. we've got the details on that next plus, was yesterday's mini market sell-off a sign that the rally is at risk or is there still far more upside than downside we're going to talk to strategist who join us next to give us the answer you're watching squawk right here on cnbc

welcome back to "squawk box. under an hour now until the opening bell on wall street. we're seeing moves in gold,

treasury yields and futures. domm >> it indicates risk aversion i guess is the theme we want to go with let's take a look at just the movement in stock futures for one. if you take a look at the s&p futures, you can see just in the last maybe 15, 20 minutes or so a slight, again, move to the downside here. we are nowhere near where we were at the inter-day lows yesterday, but if we continue on this trend we could see and take out some of those levels so we're watching what's happening with stock futures in the early-morning trade. also let's take a look at what's happening on the macro side of things you mentioned interest rate and gold futures interest rates, 1 hunt 378%, the last trade for ten-year note yields remember, this is a move to the downside the low that we saw, the record low that we saw was just around the 1.37, 1.38 level that happened in the wake of the brexit vote.

so as we watch the moves, a move to the downside in the last few moments. and then we'll end on gold prices, as you mentioned again moving to the upside near seven-year highs right now. it's been a steady move higher for the past few months. currently $16.47, almost 2% to the upside joe, it just exacerbates this idea that there is perhaps no real losing trade that's happened over the past few months you could havebought gold, treasuries, stocks, and you're still pretty much whole at this point. we'll see if the trend continues. back over to you >> yeah, betting you can lose, draft kings. let's talk more about what investors are liking in this market joining us is chief investment officer for citi group private bank you're still pretty friendly >> yeah, on the markets. but some of the things that they're talking about today about gold, treasuries, these

safe havens are going to turn out to be dangerous places in the market to be because when we get over the hump of the coronavirus and people have charged into utility stocks and growth stocks, they've put a lot of money into these places that are, quote, safe, and we think those are going to turn out to be places where the market is overvalued and actually we'll see reversals. if you take a look at the strength of the economy today versus 2016 when ten-year rates were as low as like 137, the fact is the market is way better today in terms of the overall safe so this rush to safety actually is a bit of a danger for investors. >> you say it makes sense investors are worried about the impact of the virus on earnings, manufacturing, delivery of goods in the second quarter. but there's downside but it's not major. how do you know? you're making an assumption about that this is like sars >> exactly correct and if you go back to 2003, you see this massive drop in production and a huge hit to earnings it probably was, you know, 75%

of gdp for a quarter in china. it went down very sharply and then it came back. and when you look at that as the event, you see that the market then performed very well for the next 12 months so right now there are two things that are really unusual when we look at what the private banks asian doing is they've been taking positions in the asian markets in equities and actually putting money to work and you've seen the snap back to normal levels in china when we look a year from now you'll see that as an attractive market from this point forward because this, because of the fact the earnings will continue to rocket. >> in general, you don't think markets are overextended there's got to be some pockets tesla, virgin, galactica, virgin galactic >> stocks have not left orbit in terms of relative evaluations and that's true a lot of stocks deemed safe. what we're looking at if you want to look at what people should own there's a rotation from growth to value after this is over, benefits to owning

dividends that are not utilities. there are places where people should go. >> dividends are, someone else said that earlier this week. absolutely >> how worried would you be, we talked about this in the last hour how overweight or how much the faang stocks are weighting the s&p on any given day >> we're worried about the relative value of the s&p given the earnings growth that's going to come. the s&p is fully priced right now. the discount of emerging markets and developed markets to the u.s. is at an all-time high. the u.s. is viewed as a safe market, place to go when things are in distress. you want to own a lot more of the other things, where earnings growth is going to continue in europe, in japan >> wait a second, when you're saying that there's a rush to safe havens and that the u.s. stock market is one of those havens >> that's right. >> it's going to be unwound? >> the faang stocks and the value wagss of those relative to

others is a risk to investors. they have a a lot of momentum built into them and you're discounting earnings that are three and four years away. so that's really what's taking place psychologically. i think there's value in the market but you have to seek it and rotate your portfolios to it, one of those being dividends. how a global investor thinks, asian investor they're buying their local markets because of the relative value of the markets inspite of the coronavirus. that's something a u.s. investor can do as well same for dividend stocks in the united states and europe these are places where there's relative value and assuming we continue to have eps growth which we will, things you should own in portfolios. >> when you have a meeting with all your people, you talk china, coronavirus, you talk the election >> when we do talk about the election impact and the difference between the psychological impact, what

people anticipate and you've done that on the show already this morning, what's likely to happen, in other words, the relative ability to change policy, depends obviously on the congress, senate as well as who wins the election. there's a tend to presume radical changes in policy and i this i that is unlikely but the react will react much more violently depending how that goes >> i was looking around, we have saturday is nevada and bernie hasn't done a lot in nevada. buttigieg is still ahead >> in terms of delegates >> super tuesday is a week from tuesday. >> it will be a big teal >> only a week from tuesday. >> i know. >> looks like bernie is going to win texas and california, which are both the two prizes. >> we'll see >> but because buttigieg, bloomberg and klobuchar and the other moderates if none of them lead, that's why bloomberg circulated that dire scenario f there's that many moderates splitting the vote, gives bernie

almost an insurmountable lead. >> also a story bloomberg's campaign is reaching out to all of the super delegates to try to light up ail second vote they can't vote on the first vote but if there's not a clear majority after the first vote they can vote on the second vote >> could be ugly trump says if they take it away again it will be ugly. if he is the nominee and there's a chance he gets elected you should look at some of your positions. >> why don't we look at what the probabilities of these are we looked at 1 shun yea00 years given the economy and how strong it is, the probability of an election, re-election of the president is well above 75% today regardless of who the democratic candidate is. if the democratic candidate is a moderate, there's a whole variety of other scenarios you can look at. the question whether will market will react rationally. that's the baseline where things are given the growth rate of the country and things like that >> all right, i almost played the thumb for you on my phone.

>> we'll have to move on next year >> that was a real loss. i'm worried we'll lose a lot of the wrinkly rockers that i grew up with and i don't look forward to that. already lost bowie and others but there's some big ones that are getting up there. >> that's right. a pleasure to be here and we'll see this rotation take place >> thank you let's get down to the new york stock exchange, and to jim cramer jim, we heard from coca-cola earlier this morning update on the coronavirus, one to two cents they expect to shave off but they'll stand by their full year numbers and they also say this is an evolving situation. there's a lot we don't know. >> yeah but it's so nutty, becky. yesterday proctor put a figure on it and stock went up $1 and so i mean i think there's a sense that don't worry about us. we'll do well and there's kind of an unreal feeling, this thing

is going to end rather soon and then it ends you're going to make it, you're going to say why didn't i buy proctor or why didn't i buy coca-cola it's confusing because it's not going to end soon, and i think that those stocks are fine, but don't pay up on bad news i don't pay up on bad news >> right, and too many unknowns. >> right >> what do you think happened yesterday with that weird sell-off that happened within a couple minutes >> well i think that some of the high flyers are now the leaders in the market, teslas. tesla is down, tesla was down badly. tesla is the leader in this market right now i know sounds kind of strange, but it was, it got ugly and tesla got ugly it took stocks to down with it becky, the morgan stanley thing with e*trade, i think trading, they trade stocks, don't trade s&p and they love tesla.

they love battleship galactica >> got to get used to that, too. >> could you ask warren about battleship galactica, no, ask charlie. 2030 revenues. >> yesterday i gave you a quick answer on that >> well you know, joe, that the backlash is that bernie's going to win not the primary, but everything. >> yikes >> whole thing >> you're not going to see that on "fox & frndies. >> we'll see you in a couple of minutes. "squawk box" will be right back. now, we know the trump strategy-

try to win by attacking, 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. ♪ ♪ tonight you're gonna get your time to shine ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. coming off thursday's drop, futures suggest the dow and s&p may see their first weekly decline in three weeks, maybe the nasdaq, too. pmis in europe were good we'll see the u.s. number in about 45 minutes ten-year below 1.48, even as gold now approaches 1650 road map begins with the coronavirus risk for stocks. futures lower,