we're pretty much avoiding any commodity related sector because most of that really feeds into china demand which we think will be very badly hurt as well as demand from emerging markets so we like other sectors like health care and industrials and even the utility sector we think will be much better to be in than the commodity sector like energy >> what about you? sector wise what do you like >> yes, i think what you saw last year toward the end of the year when the political uncertainty kind of started ebbing and you had the stimulus filtering into the economy you saw more cyclical asset classes out performing because people started pricing in the fact we weren't likely to have a recession. that worked until about january 20th and then people became more defensive again. we do think as the storm clouds subside, as that stimulus begins to weave into the u.s. and global economy you'll actually see cyclical asset classes perhaps like the one previously mentioned out perform because their valuations are cheap and people are right now crowded into defensive sectors based

upon first their trade war fears which have kind of gone down and now the coronavirus fears which we do think will eventually pass also >> do you buy the chip stocks? they've been buffeted around on supply chain disruptions >> yes we like the chip stocks. we think they've been great investments and have had a turning point in their cycle we expect them to continue to do well and we have an exposure that we like >> thank you both for joining us obviously pharma is a big piece of the story let's check in for the latest on the virus with nearly half of the cases outside of china coming in just the past four days >> carl, concerning increases in case numbers coming from several countries over the weekend south korea, italy, and iran total numbers now topping 79,000 around the globe with more than 2600 deaths. the world health organization just now in a briefing detailing some of the findings from its team's visit to china. one is that the epidemic appears to have peaked and plateaued in

china between january 23rd and february 2nd and has steadily declined there since then. there has been no significant change they say in the dna of the virus. in terms of its fatality rate worse in the epicenter of wuhan, between 2% and 4% and 0.7% outside wuhan. as the case numbers have risen in other countries the cdc increasing its travel alerts japan and south korea are now level two. an alert to practice enhanced precautions. while new level one alerts which are more of just a notification have been added for iran and italy. finally in the race for treatments the w.h.o. scientist saying today gilead appears to have the only drug right now that may show real efficacy. it is in clinical trials in china and gilead's stock is up almost 5% on that news david? >> one of the few of course. thank you. virus concerns are disrupting the airlines, under pressure this morning as well as you might imagine. phil lebeau has a look >> check out the european airlines because the concern is

that that cluster of coronavirus cases in italy could manifest itself in other parts of italy as well and fewer people traveling. ryan air down more than 12% today. also look at aiag the parent of british airways also taking a hit down more than 8%. in terms of the u.s. carriers with the most exposure to europe they are feeling the impact as well out of concerns that we'll see fewer people potentially booking trips to go over to europe talking about delta, american, united all down anywhere between 4.5% and more than 8% in the case of american airlines. by the way, this is also with domestic only carriers they're feeling it or generally speaking almost completely domestic southwest airlines now, southwest does have some exposure in terms of international routes going to latin america, to the caribbean. but generally speaking this is a carrier that is domestic only and, yet, this is a stock under pressure today down almost 5% guys, not a surprise given the

fact what we heard from the international air transport association last week that this year internationally, globally will b will be the first year of negative flying demand in fact, a drop in demand in terms of number of people flying since 2008-2009. buffett weighed in on the airlines this morning as well. this is what he said about why he's not worried about the virus. >> if you own airlines for 10 or 20 years you'll have some ups and downs in current business and some will be weather related, all kinds of things the real question is, is how many passengers they can be carrying 10, 15 years from now and what will margins be and what will the competitive position be. >> join ing us this morning, elaine becker from cowen good to see you. >> thanks very much for having me on. >> i was struck by a comment comment you made, i think it was

last week or maybe the week before, when mobile world congress was canceled and your point was, hey, this is still largely a china story, but you have conferences on the other side of theplanet getting canceled and that did lead to what i presume was a sense of caution for you. right? >> exactly so you had 100,000 people who were supposed to be descending on barcelona today and this week, and, you know, with the chinese counseling basically the world's isolated china by not flying there for the next few months, that's exactly what happened and it was concerning to us because all of a sudden you had this concern about a market that was far away, and the idea that you may not have travel, as much travel internationally as people were thinking, you know, a month or two ago is very worrisome >> so then what is the thesis right now for these airlines from a pricing standpoint, for

capacity let's take q2, how do you think it shapes up >> yeah. so here's what we're thinking about that i actually flew over the weekend and i flew in and out of newark airport. i went to west palm. both airports were packed. in fact, west palm tends to be a relatively small airport, and it was packed i was surprised, in fact my flights were crowded. i flew a 757 from newark to west palm the other day so definitely people are traveling. the airports domestically still seem to be packed. the airlines are still seeing good demand, so i think as you think about the second quarter, we should have pretty good demand as people start to think about their summer vacations i think what you're going to see is more travel domestically, hawaii should benefit. i think you'll see some traffic on the north atlantic, although with italy being closed this week, as your reporter pointed out earlier, is concerning

because most of the airlines thought, okay, you won't go to asia this year but you'll go to europe, and perhaps that won't happen, but i think that the industry in general will lose a year of growth, but i don't think people will stay home. i think they'll stay close to home by traveling in the u.s. market >> all right wish we had more time on a day like this. we appreciate your time. >> it's okay thanks thanks for your time >> with the dow down 800 points we're getting some white house reaction to today's sell-off on wall street. strait to eamon javers with that >> the president is traveling in india today but the white house staff is monitoring the coronavirus itself and also this market sell-off that we're all watching unfold this morning reaction from a white house official on both fronts saying that the president is receiving regular updates on the coronavirus even as he's traveling around the world he's being told exactly what's going on from the u.s.

perspective. there is some optimism from this white house official that i just spoke with that the u.s. has been successful at least so far in tamping down any potential exposure of the virus here from those cases we had seen inside the united states. as for the stock market sell-off, this white house official saying to me our initial reaction is the dow is still above 28,000 and nobody thought it would get that high the official saying we understand the market is reacting to the news of the day as it should, but the actual economy itself is very strong. this official suggesting this is a momentary wobble as far as the white house is concerned although they are paying close attention. back to you. >> the president is still very much in touch with his own task force, i would assume. are we getting regular updates from them? >> well, the president is getting regular updates. the question is what if any action is the u.s. going to have to take here i'm told these meetings at the white house are very high level

and that the president is getting a lot of information from them. the question is at what point does the united states have to roll into action in the way we've seen, you know, italy and iran and some other countries that have been affected by the infections you know, that is some serious stuff when you start talking about locking down entire villages or towns. we have not seen anything on that scale in the united states. the question is will we have to, and that's what they're monitoring at the white house. >> one says the u.s. needs funding from congress to protect americans, declined to give an amount of what they might request. "washington post" has a piece out. how much of that is going to be a story today or this week >> i talked to a couple officials at the white house this morning they say they are going to make the request likely this week from funding from congress they're cagey about how much money they'll ask from congress but expect a large ask from the white house sometime later this week

>> all right eamon, thank you >> you bet >> eamon javers. sara, you'll be following the markets on "the closing bell" today. what else do you have coming up? >> today's closer, blackstone president and c.o.o. jonathan gray, someone you know well, obviously, about the investigation environment right now, how if anything has changed as a result of coronavirus and some of the global growth fears. he has a good global perspective. italian stocks are down 5.7% right now, so you're starting to see some big losses pile up around the world >> sara, see you this afternoon. as we go to break, check out fang you can guess, but some of the numbers not as bad as the opening. more on the sell-off when we come back. "squawk alley" is next

it's 10:00 a.m. in omaha,

nebraska, 11:00 a.m. on wall street, and "squawk alley" is live ♪ oh, baby burning down the house ♪ ♪ hold tight wait till the party's over ♪ shoulder tight ♪ >> i'm carl quintanilla with morgan brennan and jon fortt at post 9 of the new york stock exchange a big selloff in places, within thre