taking notes furiously appreciate it. good to see you. thank you for your time. i'll see you on "power lunch." >> over to you >> we'll see you in a moment i'm brian sullivan welcome, everybody and we begin with the market sell off stocks, they are getting slammed across the board one of the biggest point drops of all time. for the dow. as the coronavirus virus spreads to south korea and italy the dow down 975 points. s&p, down 3% nasdaq down near 4%. market on track for its worst two day stretch since december of 2018 when the market fell 15% in the month stocks sell, buyers rushing into bond yielding falls into 100 year lows

on this busy day, we've got full team kovrnl like you could not get anywhere else. bertha coombs at the new york stock exchange steve liesman digging into the economic impact and meg here with the larapid response from companies. >>. >> dow down more than 1000 points b bertha coombs is there for us. hi >> hi, kell lichlt the dow taking out its january lows today and dropping below 28,000 for the first time since december chip makers among the biggest losers today the surge in cases now in south korea, we've also seen the consumer names, tap tri leading the sell off while carnival

crashes. health insurers, it's about medicare for all about bernie sanders put in a decisive win following a big win in the new hampshire primary. that sector down 9% from last week finally, bucking the trend at the opposite end, gilead hitting a new high with health officials siting process on the ability to treat the drug and clorox, but guys, keeping things clean is the first line of defense against infection. >> thank you very much see you in a bit the trigger for the selling today. number of cases worldwide is now near 80,000. the big concern now is over the rate of the spread of the disease outside of china 219 cases in italy include iing five deaths. the chinese government admitting it does not have this spread of the disease under control.

e eunice joining us live from beijing. >> thanks so much. well, president xi has said that china's efforts had its shortcomings, but health officials here said that the situation is under control or improving. they determined the drop in new infections is real china's aggressive approach has been effective in curtailing the virus' spread. the only drug that seems to work is one by gilead and the virus will likely be around for months now the w.h.o. is urging other countries to take on a rigorous approach and they've raised their alert to the highest level

and urged them to take unprecedented measures travel restrictions. they postponed the start of the year to march 9th. there's been a will the of anger in south korea directed towards one particular megachurch and that's because more than half of the cases are linked to that church where a member was urging other members not to come forward to authorities so that city has been gripped in a will the of chaos. and that church which is quite secretive, does have a branch in wuhan so in south korea, there's been a lot of speculation that could be the link. brian. >> again, i know listen, we've

been talking and you've been not only reporting through this, but obviously living through this. you have to deal with this every d day. >> what about the people you enkenter on a daily basis. what if anything has changed >> there are more people on the stree streets, there have been more people who feel they need to come back to get business going again. on saturday, i had to get

another pass in order to authorities have been restricting the number of family members that can leave an apartment to three at least in my compound and for many others. that's bb been more challenging to go out. it gets quite tiring >> thank you today's sell off wiping out all the gains. is this the beginning of a larger coron a induced correction what do you think? listen, this is the second or

third biggest point drop of all time, but it does not make the top 50 percentage drop simply as the numbers get larger it is serious though is it the beginning or the end >> it's impossible to tell, but one of the things that's probably weighingon the market is the data is start iing to co through. we first encountered this issue in january 22nd. obviously, there's not going to be much even the high frequency data isn't going to respond to it we now see data like you know, small business in china activity plunging other activity really pulling back so i think just the personification of this concern is starting to come through. >> you know u, as you look at the markets, we've talked a lot about where the damage is centered and what it might look

like move fing from china to ot parts of the world do you think anything is out of whack or does it make sense? that the stocks are only off, from the highs about 5% is it going to be deeper >> we came into this with a barbell approach with technology on one hand, large cap tech really outperform. given the advent of coronavirus, we saw this defensive play come into action. so yields, u.s. dollar gold even the reet, and utility sectors all outperforming. where we have concern now is that tech sector, which had been the leading performer in the s&p. it's directly in the line of fire when it comes to supply chain disruption, when it comes to the spread and reduced demand from the global markets. very much multinational, dollar exposed. so we could see volatility coming out of these leading sectors here but that being said, the defensive play probably in the near term okay

so i think that's an interesting di cot my we'll see in the markets. >> surging cases in korea, that's impacting things and you see the stocks down, we were saying it's almost down 10%. what i think is the craziest thing about this is that china's down less than the u.s. and europe are from its highs. the color we were getting earlier that things aren't back to normal, but at least it's not getting worse, last friday, we were talking about how our biggest most important chart to watch was cases outside of china and then saturday, it just exploded higher so the fact that the market is down a lot today i don't think is surprising given that people are rightly be concerned that it may be spreading. we don't know where it's going to go. that's the problem and as jack was saying, as davis starts to come in, only time is going to tell. >> we're down more than 1,000 points right now the low we were down 1,073 down about 1,110 right now

we hear this a lot the chinese, it's not getting worse. how do you know? not just you are we to take basically at face value, the information we're given or is there the sense that going back to the report about the thermometers, they might be using the wrong kinds. is there a sense we can trust the information they're giving us >> you saw the w.h.o. saying there was some quote unquote real progress o. so i think other independent agencies saying there's maybe some improvement ewan is said things are getting maybe back to normal but i think the key here, china is we can't be 100% trusting of the data what happens outside of china. so italy over the weekend, that really freaked a lot of people out and rightfully so. if we go tonight and there's not another big escalation of cases, i think you could just as easily see the market up strongly tomorrow on some relief. >> that's the irony, jack.

we just talkeded about how we're not that far off all time highs but maybe that's part of the problem. is it's not simply fears of the coronavirus and a slowdown in china, which is responsible for the one-third of the entire world's economic growth over the last couple of years, but rather than this is a market at 25, 27 times trailing earnings on tech was priced to perfection and we are suddenly a long way from perfect. >> that's true we had a growth last year, so clearly it was an evaluation expansion. i think there are some pressure points related to valuation.

what i'm writing about this week is really the bigger issue and that is will many of these tech companies, will many governments start to rethink their relationship with china. the fact is that you know as a source of unreliable source of global supply chain, as perhaps as transparent, will we see countries shift away from china and that will have broader impact for not only economic growth, but investment prosperity over the next decade. >> jeff, if you look at the dow performers is united health today. is there a ber aspect to that as well >> i think so. i do think there's some sort of a bernie overhang. one of the things i did look at was hemt care stocks they tend to be u.s. focused centered here.

and do they deserve the pounding i think this could be the bernie effect and you know, we'll see we isnhaven't seen the investors react yet to the democratic primary. we may start to see that now >> today was a surprise. we didn't expect this over the weekend. let's hope it gets better, but it could get worse >> talking about bernie? >> coronavirus what do we do? should we be selling stocks? if those dug does, if we're down 1,000 points because of couple hundred cases in italy and south korea, what if we have 5,000 cases? >> it's interesting. when you look back at sars, not a perfect example, but during that period, ipindices were dow 15%. china's down 8%. s&p's only down about 3% since

january 17th there is downside to this market but in any given year, one to three corrections are the norm so 5 to 10% corrections, we have not experienced one. the iranian situation didn't that's a good time ultimate tloi pick up some stocks you've been looking at could be a buying opportunity. to be determined, still. but something to keep in the back of your mind. >> thank you very much paul, you're sticking around for the entire hour. thank you for that >> now if the impact of the coronavirus is as bad as the markets seem to be fearing now, will the fed and other central banks around the world cut rates and if they do, can they cut enough to rescue the rally steve liesman has thoughts on that >> the first one's not a question mark. it's pricing a very aggressive federal reserve response to the coronavirus as economists downgrade their outlook for u.s. growth here are the percentage probably

probableties april at a 50% it was july last week. july now at 85 then you start to price in a second cut, a 60% probability for september and a third cut where there's a 44% probability for december ran into gregory here who says the fed will react more quickly to tightening and financial conditions because of the coronavirus than they will to data, which will only show up, but roger ferguson speaking here, now the head of tia craft, said it's not clear rate cuts are the right answer >> it may well have a spill off into macro economics, but it's not 100% clear having interest rates 25 basis points lower is likely to have an impact on the ability to manufacture goods that's one of the questions the fed has to think about.

fed said they would wait before committing to rate cuts. >> stay with us. could the coronavirus trigger a global slowdown? we want to ask jay bryson about this he's a global economist with wells fargo. we're keeping mona and paul around as well so, jay, do you still anticipate a nice rebound in second quarter? >> it's really difficult to say right now. obviously a very, very fluid situation. but if this coronavirus doesn't completely spiral out of control, we were saying before, not sprirl out, now it's completely spiralled out of control, you could look for a rebound this year, but it's really going to muddy the

picture up in terms of the data over the next few months it will be hard to get a real read of where the u.s. economy is at this point >> this brings up the question of politics. there's more at stake than in a typical year are you in the camp where it might -- is this a kind of demand that could slow things down for the rest of 2020? >> i don't think you want to which for a big slowdown here because things can kind of start to spiral out ofcontrol. some of your guests were talkinging about the financial health of the corporate sector if things slow here, the businesses start to lay people off and if they start to lay people off, the economy weakens furth further, so again, i don't think you want to wish for a slowdown

here because this could turn into something nmore drastic >> the major question is whether a fed response is the right one. steve, you talked to roger ferguson about this. he sounded skeptical i'm curious, mona, if you think the same thing this is what peter alluded to last hour. can people still believe that the fed is going to come to the rescue here? >> yeah, it's interesting. when you hear fed officials speak, all have been skeptical about stepping in at this point. now they don't know the updated coronavirus data they don't see what's happening in future economic results, but thus r far, they've been reluctant to use any more fire power. jay powell has articulated he wants to see a material change in outlook before making a change thus far, we have seen q1 data is softerexpected. look for the ism print on friday if it comes out much lower, that could be a trigger for the fed

they watch that. >> but the bond market has done the fed's job. >> rates are pretty low as it is >> pretty low? near 100-year lows on the ten year and europe. 240. >> not negative yet. >> however old this great nation is, we're near all time lows on the 30-year. >> but i think when you look at it, it's where does, we see an outbreak in the u.s. lore rates may not help that but if we look abroad, it may help the u.s. knowing that the fed is there at the ready. if things come here, people aren't going to go out because points are 25 basis points lower. >> and look to the central bank is not the right body to respond to a disease outbreak. >> i think investors have to differentiate with the fed can and can't do they can respond to what's happening today, which is lower stock prices that the federal reserve will see as a tighten ping of financial conditions

lower than it wants it to be what they can't do is restore supply chains that have been shut down because the virus. >> if the main problem is the market, the fed can and perhaps might address it at levels like this or moves like this, if they keep going, could certainly bring the federal reserve back in if the problem is supply changes, i think the fed's going to be skeptical that lower rates will solve that problem. >> it's a little weird we talk about falling yields needing to be met with cuts and rates why? so they can cut rates and send the yields back up >> i just wonder, steve, would a rate cut even move yields lower? don't know if this gets worse in europe, we could see trillions of dollars from asia and europe and the norwegian sovereign fund, maybe that comes in and buys

treasuries and sends us below 1% on the ten year. >> it wouldn't be for the bond market, brian, because it's going through its own adjustment if stocks were to go into a free fall, the federal reserve would see that as affecting the macro economy andthat's something that would bring it in before the data would show. so the idea that oxford, i had in my report would say tighter financial conditions would bring in the fed because the data is going to be messed up. it's going to lag by the way it may be until next month that we see the first inklings of what if impact is is >> and jay, we'll give you the last word. something warren buffett alluded to this morning. he said he and charlie munger talk about why would anybody take from the federal government at a 1.3% yield when they're saying they're going to have 2% inflation. it suggests they don't believe that inflation is going to happen or again, that they've just, they don't care, right so it must be that they don't believe we can get there

>> this is a big risk off move if they're going to b holook a g bigger losses, that's something. one thing you need to keep in mind here is not necessarily the level of yields per se it's what's happening to corporate bond spreads steve talked about liquidity in corporate bond markets and those things locking up. so if you can't get borrowing into the system, i don't care where the treasury yields are, it really has an effect on the overall macro economy if corporates can't raise cash. >> great point where this all supposed to come out in the wash. appreciate it. thanks for joining us. mona and paul will stick around and steve liesman. check out the dow right now, back near the lows of session. down more than 1,000 points. about 1,073 and there are yields as well. just an ugly picture 1.362% a spike in coronavirus cases outside china over the weekend

in both south korea and italy is partly sparking today's sell off. there are about 80,000 cases worldwide. the outbreak in northern italy is drawing attention with authorities unable to identify patient zero our next guest is dr. win. she's from george washington university she said health officials are shifting from containment mode to dealing with a pandemic what do you mean when you use the word pandemic? >> it's nice to join you and i think we're heading towards a pandemic which means it's a sustained, community transmission that's not just with people who had been to the epicenter, to wuhan, china, but it's person to person in the community. this is what we're seeing now, now we have over 30 countries where there's this novel coronavirus and many of these cases are not related to travel. we are also seeing countries that don't have well developed health care systems and i am very worried about what happens when this outbreak hits those

countries. it's likely, too, that the numbers being reported are an underestimate. that there are a lot more people that have mild or no symptoms who are not being counted or tested who may have coronavirus and be spreading it to others >> yeah and you get that because there's a couple hundred people in italy that ostensibly have the disease. it has a population of 60 million. so china's more than what, 20, 25 times larger than italy do you think that china is purposefully underreporting its numbers or you think they genuinely do not know? >> there are many reports of hospitals running out of testing kits and it seems that there just isn't information about how many people who could be out there who could be infecting other people and just don't know it i think italy certainly gives the concern, too that these are the cases that we know of. but how many people are not yet being tested who have the

disease? >> you know, one thing, if it's true that the number of cases underreported but the rate stays the same, in a way, you could say that's encouraging do you expect both of those to increase both the number of people who had it and the fatality rate and is it possible that the western countries could give us r more transparent information? >> right now, the fatal ta rate for this novel coronavirus looks like it's 2% e which is lower than sars and higher than influenza. so it's possible that over time, we might find out there are more mild cases thand denominator going to be increased. to your point, i think transparency is still critical public health depends on public trust and the u.s. government has been very good about being transparent about their responses. a changing response actually is a good thing as long as someone explains why that is happening

it just means you're being nimble and aa agile i'm very concerned about china and some of the other countries where krohn is now spreading to. if they have unstable government institutions, if they are ready, the public doesn't already have trust in the governor, that could make the outbreak much more difficult to contain and diseases know no boundaries. we're only as strong as the weakst country in the world. >> what's our status here in the united states? i flew this weekend. the plane was packed you live in baltimore. would you get on a flight at bwi right now? >> well, i am eight months pregnant so myself might not be getting on >> how about for those who may not be pregnant? >> the most important thing is that this is a very quickly evolving situation the risk to the every day american right now is very low but that may change at any given

moment so watch the centers for disease control prevention website if you're planning any travel, heed the guidance from public health officials don't go to areas that currently are undertravel restrictions and remember, too, influenza and colds and other diseases are spread the same way as coronaviruses and so wash your hands carefully. don't go around other people who are sick stay at home if you are ill yourself and these are all good things that you can do to prevent yourself and your loved ones from getting sick. >> we've had you know, flu and colds and this and that go through our house and my efforts to bleach and quarantine did nothing to stop it so what would your best advice be is it just immuno compromised people that should self-quarantine? it's really hard to stop these things from affecting you once they're out there. >> that's why the best thing we

can do is to wash our hands a lot. i know it sounds simple and basic, but at the same time, while we're waiting for treatments and vaccines to be dweveloped which could take months or a year, the best thing to do is watch our personal hydrog hygiene and travel advice because this will be moving very quickly. >> my hands are getting chapped from so much washing thank you. really appreciate it >> back to the markets you know this, technology stocks, they rule the market but today, even the big e of esf the big can prove they can get hit. apple down about 4%. am d, nvidia, qualcomm, broad com, they're hit hard. let's talk more about this important group. josh >> so, brian, investors have more questions than answers now when it comes to apple and that's causing real nervousness.

twhen will factories many china return to full capacity? investors don't know, but that has a big impact on iphone production as well as when new products will be available that investors care a lot about so like that new low coast iphone reportedly set to launch in march and the 5g iphone expected in september, of course it's not just apple. investors as you mentioned selling apple suppliers in today's trade, too like sky works and micron. the sell off coming as apple has enjoyed a remarkable run it still has a lot of fans include warren buffett who told cnbc today that apple is probably the best business he knows in the world back to you. >> all right josh, thank you very much. now let's talk r more about the markets and the moves with seema and trading nation >> thank you, brian. let's get a check on those chipmakers josh was pointing out with our trading nation team.

>> they're getting hit and it's very, very hard to do, but if you've been cautious and have had some cash on the sidelines, this is too toim to step and and put money to work and we're buying those >> if we can take a back and look at the broader index, what do you make of the sector? certainly high exposure to china. >> our take is that a lot of the magnitude has been endured here. maybe just needs more time to stabilize. after such a terrific run, but we are buyers of the pullback for longer term investors. semiconductor stocks, still above its rising 200 day moving average. coming to an important level at 17.60. that's still just a minimum retracement of the prior events in that index and as far as what stocks within we'd be buying,

we'd buying the relative lead ers. lam research coming off a new high unlike that index that's the stock we'd be buying first. >> thanks for your perspective for more, head to our website or follow us on twitter back to you u. >> thank you ahead on "power lunch", we'll continue to monitor this massive sell off the dow down u more than 900 points one group getting hit the hard is energy. down nearly 5% those stocks trading in a bear market as oil prices plumet on coronavirus fears. we'll discuss it right after this we set out to make the best bike on the market,

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welcome back here's your cnbc news update at this hour. former hollywood film mogul, harvey weinstein, has been found guilty on two counts in his sexual assault trial a first degree criminal sexual act and third degree rape. he was found not guilty on first degree rape and predatory sexual assault. he faces up to 25 years in prison he'll be held in custody until his sentencing on march 11th police say 30 people were injured, some serious ly, after man intentionally drove his car into a carnival parade in germany. police say the man has been arrested, but they're not commenting on the moting vegas for that attack. here at home, jussie smol et back in on new charges of lying to police. the former empire actor pleading not guilty to six felony counts

of disorderly conduct and thousand of mourners are packing the staples center in los angeles to say good-bye to basketball legend kobe brintd his daughter it was chosen in recognition of his jersey, number 24, and gianna's number, 2 you are up to date that's the news update this hour back to you. thank you. a major market sell off is here. the dow down herely 1,000 points that wipes out the gains thr this year. we are down 1,073 at the lows. it's a better than 3% drop take a look at energy. the worst sector in the s&p today. falling b about 4% it's in a bear market. >> the oil market is set to close trt day and crude heading back towards 50 bucks a barrel

fears of coronavirus spreading around the world dampening expectations >> hi, brian so both benchmarks are off around $2 a barrel brent is off about $2.17 wti closer to $2 or down 3.7%. so as you said, this is on concerns about slowing demand for crude as coronavirus cases accelerate outside of china. john kill doff saying that this $50 a barrel level is an important one to watch, say iin that anything below this in some of these oil companies, they begin having trouble paying their debt energy, the worst sector the s&p, oil and gas, that's also down about 6.5% also on pace for its worst day since march 8th of 2016. brian, back to you >> oil driving nrng energy stocks even deeper the worst performing sector this

year the worst over a year. the worst over a decade. in fact, if you invested in oil and gas for ten year, you made zero dollars how much worse can things get? joining us now -- paul is here with interesting stats as you always will bring, paul. thank you very much. what's amazing is that we're not at 40. we're at 50. how much worse would it be if and when libya and iran start to come back more >> i think the question is how long will the virus overwhelm the fears about libya and iran i think this is a strategy of war at this point so you can say that million barrels is parked on the sideline for a couple more months. at the end of last week, i think there was a sense that maybe the virus could be contained end of the second quarter that maybe opec didn't make

correct action now we have the fears about this spreading. once again, everyone's concerned will we be back in the low 40s if you take 14% of the world's demand, they make it easy. take 50% off 20% off. that's what we don't know. is it 2 million barrels a day? 5 million? because if you get to 5 or 6 million, they start to not matter >> i think this puts all the pressure back on to opec we're going into this meeting on march 5th. >> are we? are we going to have a meeting >> that is a scheduled meeting the saudis wanted an early meet meeting on valentine's day they said let's wait and see and the question is now.

>> they said they expect a short-term virus on oil demand it will improve in the second half of the year, particularly in china are we looking for something stronger in that regard? >> this is what's really interesting is that you have had signal frs the saudi oil minister, from the algerian minister, saying look, we want to get ahead of this but again, you have a set of producers saying this could be transient then saying what if your house is on fire. why would you use a hose i think these are tensions within the organization. if they don't get their act together, this could get away from them. >> these are the names we talk about all the time how much more could we talk about these equity losses.

you have these great stats so that ail is not as cheap as financials >> constantly get the question energy's down so much. it's cheap >> too cheap to ignore >> two-thirds of the time, it's graded at a higher valuation so it's not particularly cheap the financials are a lot cheaper than the energy sector it hurts profitability it's just not an attractive sector to us u before this coronavirus came out, iran issued oil couldn't hold on to anything and i think that's the signal you saw in the beginning of the year in all these geo political crisis, it was six hours then it was over >> we flirted with 50 today, but it kind of goes to brian's opening point, which is there is

some oompf there keeping us above this level which is make or break for this whole oil producing region >> our technicians say is $48. if we break that in wti, you're looking at the december 18 lows, but the one thing that's holding this market up still is the supply adages. again, you have a million barrels of libya offline what if we start to have flight cancellations? what happens to india? we are going to be watching what happens with the rest of asia? >> it could get much worse but when you look at sars, those scare, they were more temperatutemporary in nature so to use, you have to probably say it's more likely than it's a short er term phenomenon >> you can always buy oil and

store it as long as you've got room and i hear that the chinese are buying u you've got a u super tank e eoin the ocean he's like i need to put this oil somewhere. >> and also short-term, if opec does not get its act together next week, i think a will tlot f people expect a cut. >> we'll see if they meet. >> zoom video. >> stock of the day. zoom video that's how you're going to opec in the future. from your computer in your sp p slippers thanks, we appreciate it it's not just zoom another stock trading higher on this bad day is gilead the company has a drug that's been mentioned as a treatment for coronavirus. meg is here with more. >> the drug is experimental and the world health organization scientist said it's the only drug right now they think may

have real efficacy against the novel coronavirus. that sent shares up as much 7% at one point today the drug is in clinical trials in china but they had trouble recruiting patients because multiple studies are being run on medicines the w.h.o. says are less promising it's not yet approved for any condition, but it has shown promise in other coronaviruses that cause sars and mers last month, it was used to treat the first u.s. patient with novel krohn kroeb in the u.s., but one patient isn't enough to conclude how well the drug works. robin saying in a note this afternoon that data from the two trials is expegted in april, but doesn't expect the drug to be a meaningful revenue driver for gilead. >> well, the stock is still excited there might be some promise for this what does it tell us about coronavirus and hiv might be successful in treating it? >> well, this isn't an hiv drugs

and it sounds like a hiv drugs they're testing may not show real promise so all these drugs, the hiv drug, this drug, they interfere in the virus' ability to replicate, but in different ways it looks like this drug may do it more effectively than the hiv drugs. p. >> looks like they're fast tracking it in china >> they should a big drop in interest rates. diana oleic is looking at the impact on mortgage rates and the housing market >> as the yield tanks, so do march rates which loosely follow that it hit 3.42% and just hit 3.34% today. that according to mortgage news daily. that's matching an eight-year low. it was over 4.5% a year ago and the expectation was that rates would move higher this year. let me do simple path with a 20%

down payment for a $300,000 loan, a year ago at 4.4%. payment was -- savings of $200 a month. no surprise the refinance market is suddenly booming. applications to refi up around 165% compared a year ago, but mortgage applications to purchase a home and home sales so far are not reacting as well. that's more due to the severe shortage of homes for sale back to you. >> gim to put you u on the spot. i remember when there was a refi boom about ten years ago, people were taking out cash and buying things like solid gold boats do we know if people are refiing because they want to lower than monthly payment? or taking a cash out >> no, we are not seeing the same amount. nothing like what we saw a de decade ago this is mostly refinances just to lower that rate on the 30-year fixed into a much lower

payment. we have record amounts of home equity, but we have so much money in your homes right now, people are still keeping it in there. >> one thing i want to ask you is will the drop in rates make the housing shortage and the situation worse? so can't really help if people don't have a down payment to get in, but it will push up prices further. >> the lower rate, it's helping making housing more affordable that coupled -- >> but let's -- >> just diana was talking about it >> i don't know if you remember this, i've got the ears and memory of an elephant, when i first joined cnbc, we did a segment when rates went down, the it was will the refi boom kill the housing market five and ten years out because nobody's going to move.

they're going to be locked into these homes with these low rates and they're never going to leave. you know what they're going to do have another kid build a room but they're not going to move and no one's moving >> and that's why we're seeing the remodeling market movinging. we are seeing mobility at record lows people aren't moving t they don't want to give up that record low mortgage rates and home price gains have reaccelerated. so why would anybody who's got a great rate in their home want to have to step up to a much higher cost maybe because rates are lower now, but again, it's a much higher cost for that payment on that move up home. so we're see iing a lot of peop stay in their homes and that's hurting the shortage of homes for sale >> just kind of from where you sit, how do you see this playing out? yes, the lower price should make the monthly payments better on a mortgage, but if you don't have the 20% down, there's no get tig around it. is there a way through the nonbanks, u there nontraditional

channels, for those who feel they're shut out of home ownership to take advantage of these rates or is this hurdle going to remain? >> you have fha, 3.5 down for the mortgage so there are much, there are a lot of ways to get t into the mortgage market right now. it's a question of do you have the credit do you have the ability to repay, which is a big part of the market today and they're looking for having debt to income ratios, but if you don't show that amount you have per month coming in to go out, they're very strict. we had the ceo of amherst holdings saying the mortgage market is very tight with people who are freelancing or multiple jobs are having trouble qualifying because they can't show that income coming in in a way that somebody who has just one job does so it's hard to get a mortgage now, but with rates coming down, it should get easier, the question is is, do the rates pop up when the market recovers and that's likely going to happen.

>> the dow down more than 1,000 points at the lows nasdaq down more than 3% rhtig now. we'll get a trader's stake on this action next on "power lunch.

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welcome back coronavirus fears are gripping the market the dow is on pace to have its second largest point drop ever mr. steve grasso, steve, we spoke last hour that we could be close to a bottoming process, given how severe the moves have been what do you see? >> well, if you look at the s&p chart, the 3275 level, that's around your 52-day moving average. we haven't been below that since october 2019 we flirted with it just a bit in jan, but closed above it if i told you this morning this is where we would be right now, what would you have said you would have said it was a home run, no >> that what was the home run? >> being here only down 2.8% would have been a home run coming in, with the panicky

selling that we saw this morning. >> what does that tell you >> it tells me rates are going lower. if you think rates are going lower, you get forced into risk assets and people think maybe we're not factoring in how much ammo the fed has or what the fed is capable of doing. >> was it disorderly this morning? >> yeah, this morning got a little ugly, brine i felt like there was a rush for the exits, which is natural coming off the weekend, but when you get through the first hour, people sort of -- if you look at the intra-day chart, people sort of want to buy the dip, then they want to sell the rip, of course, and then you saw where the market faded below -- or i should say down 1,000 points or so, and then people got nervous all over again why don't you hit up a galactic

stock, a branson stock it was down 12% today, now it's up 3%. >> they're going to go to space, right? >> yes, that's right, to hide from this. paul, i heard you before i agree with you i think sars, when you look at the mortality rate with sars and mers, they were way off the chart. what we're dealing with right now is at best 3.5%. so i think the panic will get ahead of itself and it's still a buying opportunity >> where is the buying opportunity? >> i've been waiting for value to outperform tech, brian, and i've been blue in the face waiting for that i think you can still buy cyclicals just based on yield. if you don't want to turn blue in the face, i think you would just have to stay with momentum temperature names and understand if the fed cuts, which no one expects them to cut, then you're going to see this market rip

again and it would be all momentum that gets us there, the handful of names, six to eight games. it would be the semiconductors that are getting demolished today. we'll see tonight at 5:00 on "fast money. get uptown all right. see you then. paul hickey has an interesting stat based on history. and don't forget you can watch us anywhere on the cnbc app. download it, and we're back right after this ♪

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the dow is down 835 points that's actually a couple hundred points off the lows of the session. we're down 1,073 midday. nasdaq a bit harder hurt today >> it's hard to believe, but down 827 doesn't appear that bad, considering what we had paul, on days when we have these kinds of market drops, we tend to have a snap-back. >> we say thank god it's monday. when you have this type of sell-off on a friday, and then a follow-through the following monday, forward returns for the market have been pretty strong, about 2.5% over the next week and consistently positive returns. from a bigger picture three worst times to buy -- the bay before the crash, the dot-com peak and 2007 peak

since then stocks have either performed in line or better than bonds on an annualized basis even if this is the big drop that some people are calling for. tgim, paul, thank you. thanks for watching "power lunch", everyone. "closing bell" starts right now, everyone. here we go welcome to "closing bell." i'm sara icing here at the new york stock exchange. today at the delta post. alliance in general getting slammed as the coronavirus crisis deepens we will take you through this sell-off 59 minutes left to the close. >> good afternoon, i'm wilfred frost. a rapid expanding of coronavirus cases as the pandemic spreads through italy, iran and south korea, tea