and the reason with jimmy here, did you see the same store sales? holy smokes! 6%, yeah this thing's going to rock n roll final trade is pfizer. i saw some car buying. i like it. >> >> "the exchange" begins now. thank you, scott hi, everybody. welcome to "the exchange." here's what's ahead. collapsein yields wiped out a big rally. coronavirus spreads to new places and the fda sounds the alarm about a possible pandemic. the cdc says worry and be ready. the white house says it's contained and under control. the administration is facing criticism on the mix messages on the coronavirus. we hear from a biggest port in the country, a bank ceo saying things are slowing and how hong kong is handing out money. we begin with the nice market rebound today

bob pisani has the numbers are we holding up? >> yes but barely. dow and the s&p 500 are on the upside the russell has been negative for the last half hour or so nasdaq also barely positive. so want to show you the dow jones industrial average 500 points moved in an hour. european news perhaps things spreading in europe. there's futures you see here and then after the market opened, up as much as 400 points. sold off gave it back on headlines of an fda official saying the coronavirus could be on the cusp of a pandemic. the point here, we are very volatile there's an awful lot of money moving around. these are the biggest e tfs out there. the russell mid cap, the qqqs. all of them huge volume today. more than 100% an only halfway through the trading day. here's one to watch. the efz.

short europe european stocks drop been up about 5% you see it's basically flat today. this would be down 2%, 3%, 4% but it's not bottom line here is we are getting a lot of action here and a lot of it is very indeterminate. back to you. >> feels like a tug of war more later thanks. first we begin with the latest in the coronavirus outbreak as more countries report outbreaks and the fda with a warning meg tirrell has the headlines and eamon javiers with the latest. >> reporter: brazil today confirming the first case. a resident traveling from italy. the u.s. state department suggesting increased caution because of the coronavirus outbreak and germany's health

ministry saying the country has chains of infection that cannot be tracked and numbers climb outside of china, declining in that country the world health organization saying first day that the new cases in the rest of the world surpassed china. mederna stock up 50% on the news of the first batch of vaccine to the nih for human testing and at least a year until it's ready for broad deployment. >> meg, come on over the shares up 40% this week and peter marxes just said in new york that the estimate of a three-po three-month kind of movement on that vaccine may be too aggressive saying we're hoping and then next quarter or two of a vaccine that will be ready to move how important is this timeline this was supposed to be quickest if it worked, right? >> way out ahead of the others we have been hearing like record speed getting to human clinical

trials potentially whether it matters, whether we get into human clinical trials that quickly depends on what happens with this outbreak does it persist throughout the summer go away? come back after the summer all matters in terms of testing it broadly because if it gets through phase one testing, there needs to be ongoing transmission to make sure it prevents the disease. >> we appreciate it. the president holding a press conference at 6:00 p.m. >> reporter: that's right. we don't know what the president will say or where. they were not giving us detail of that 6:00 p.m. presser. stand by for that. focus on the secretary of hhs and his role here. i have been talking to some senior administration officials here to get a sense of what is going on a senior administration official tells me the president is angry about that cdc briefing

yesterday that in part sparked that selloff in the markets late in the day and the president said to be angry about that and also wants alex azar to lead at hhs. the white house is denying they want to bring in a coronavirus czar on the money front, a second official telling me within the past hour or so that ultimately they're going to end up higher than the $2.5 billion the president requested for virus funding this week. you saw that request for $8.5 billion and seems inevitable north of what the president asked for. we saw the administration's top infectious disease expert out earlier today on tv on cnbc saying that ultimately that 2.5 billion might be a start here's what he said. >> when the secretary was talking about the 2.5 billion, that was really a start.

a down payment we need that now and hopefully we'll get it but i think in the future as we get into the next fiscal year, there certainly will be additional requirements. >> reporter: getting the details and what we expect the president to say tonight we'll bring them to you when we have them back over to ou. >> politico reported today that the white house might be considering a coronavirus czar and the white house denied saying we have confidence in alex azar head of hhs for this effort does there need to be more of a point person do you think this is something that has been under consideration? are you getting any signs of that >> reporter: we are getting signs that the president is frustrated with what happened yesterday with the cdc briefing an alex azar is safe in terms of keeping his job but officials not necessarily extending that to the names of other people you might pepper them with and whether they're safe or not and dealing with a frustrated of the

united states right now. they're working to clean that up we expect that we might get some more clarity but right now they call it a fluid situation, kelly. >> we appreciate it. the conflicting messages from washington not so different from the messages in the market today. this battle between the bulls and bears really playing out with massive volatility. for more aly mccartney, ryan dietrich and david reidel. before we get into this, though, we have the results of the 5-year auction from the top of the hour and let's get to rick santelli >> you know, kelly, the auction did not go particularly bad. but i gave it a c-minus. below average. 41 billion, 5-year notes the yield at the auction 1.15. close to where the issue was trading. bid to cover slightly above

average. you know, basically average. we had a weak direct bid at 9.8, weakest since dec of '18 average, less than average, the point is you said a lot of volatility in the markets. a lot to do with rebalancing and see a little ongoing selling of treasuries and stocks but is that really going to change the coronavirus trends that's the question on the trading floor. back to you. >> thank you, rick. let's turn to the markets where, ryan, you had a nice stat to remind people of of that three times a year we see a 5% correction do you think this one proves to be garden variety? >> we think that very well could be the case. go back to 1950. remember last year how great it was? two separate 5% corrections. we weren't shocked we said a month ago, you know, multiples are high people are complacent. there could be a 5% to 10%

correction coronavirus kicked it off but at this time we think maybe around 3,000 is where we see some significant support about a 10% correction but you know we still see positives and think this is a bull market. >> okay. >> this is just normal volatility is normal so expect it. >> david, would you be sort of putting money to work in a market like this knowing what is going on with coronavirus or do you think it's more serious and requires a change in stance? >> i think it's more serious we have evidence of infection in the u.s. and a concern of a pandemic in china and across the eu that's the three largest economies in the world i don't think the market properly priced in brexit, as well and rebalancing and be ready for risk in some downturn. we have seen this before with sars it can turn around quickly this one seems to be taking hold and once the cdc said they're ready for a pandemic i think we

need to listen. >> just on a follow on that, david, what would you do here investing-wise move to cash get defensive? look at the bond market. the yields are already at record lows. >> yeah. i would still stay defensive look for high yielding companies. i think i would selectively choose the specialty pharmaceutical companies to benefit from spending on health. i think there are some opportunities there. also i'd look at precious metals something like paas provides some protection in the silver space. i think we need to get pretty defensive. the tipping point this week is not what we were looking for where things are getting better for more cases outside than inside of china and should be worrisome and to consumers and should be to businesses and investors, as well. >> sitting here, the country of georgia just reported the first case joining pakistan, brazil and others today and then a

major company like nestle reportedly told staff to halt international travel and curb domestic trips what do you think the impact of this will be >> there's no answer to this it's not possible to quantify. this is an exogenous shock to us and it is exogenous and can be managed. the market over three days basically trying to digest what it meant that the containment beyond the china border and probably going from a supply side issue maybe a quarter long to a supply and demand issue that maybe is longer than a quarter. totally separately, though, we also are at a fragile point in the markets because we haven't had the federal fragility and a

small or large is creating further vol. >> do you think there's still further downside >> there may be further downside however, going back to the numbers and the data part of it, when the fear index, when the volatility index, the vix above 25 happening about 15% of the time it was about 28 yesterday, about in the 90th percentile and a u.s. economy that's on as solid footing as ours is right now the numbers tell you you have a 15% appreciation in the next 6 months so if we're looking backward and we never do then, yes, we should what i would say is we are selectively putting more money into certain markets based on the theory that we had around 2020 performance prior to the coronavirus which is there will be volatility, we will have a let's say 5% to 7% year, a sort of average year in the stock markets and even more so that

we'll return to not only dispersion among sectors in the s&p but amongst stocks so everything that was said previously around looking for those industries and stocks that are less vulnerable, travel, hotels, gaming et cetera, makes sense to me. >> you would want the ones that are vulnerable or no >> yeah, no. >> yeah. >> i would stick to consumer staples. >> got it. >> communication services. i would be concerned about tech both from a valuation perspective and from a location and sourcing perspective. >> ryan you pointed out we get a correction a year. are you buying as we sell off then what would tell you that, hey, this might be more of a 10% or 15% event? >> sure. if the bond market is truly freaking out we would see spreads blowing out in high yield and investment grade corporate. we are not seeing that that is run of the mill correction and different than

the other guest sticking with the cyclicals. we think this is an opportunity and tech is overvalued but we are still even weight tech here and we like the industrials and when all is said and done they provide alpha and outperformance when 2020 is said and done. >> this is emblematic of the action today negative and then positive and all over the map here. thank you all very much and appreciate it today. ryan, david and alli. coming up here on "the exchange," one prominent economist says this is about to be an economic pandemic. that's next. how are plunging rates affecting banks and corporate borrowers? look at smiletrekt tanking the company with a worst than expected loss. that's a 27% drop for smile direct and now just about $8.27 a share. we're back after this.

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plus, get $300 off when you buy a new samsung galaxy s20 ultra. that's simple. easy. awesome. call, click or visit a store today. this is a human tragedy. there's no question. particularly in china. the business side and the economic side i don't think it's going to be an economic tragedy at all >> that was the director of the

national economic council larry kudlow doing his best to calm markets yesterday saying he doesn't think the virus is an economic tragedy but a next guest said it's an economic pandemic quickly i'm joined by diane swank. what do you mean by economic pan demonstrate snik. >> we know that a health pan demonstrate ek pandemic is global in scope and we are seeing a global in scope reaction function to the virus as countries move to contain the virus. those actions in and of themselves disturbing global economic activity and it is an economic pandemic suppressing global growth and could push global growth outside of the u.s. negative in the first quarter. >> i want to get into that but first you raise the vexing problem here for the economy which is if you want to respond quickly to concern about a new outbreak before you have a ton of information, then you will do economic damage no matter what and at best you'll help if it's

a bad, serious outbreak and at worst shut everything down for no reason as a mild garden variety one. what in this modern day and age when we can shut things down in the blink of an eye, what should authorities do and think about this >> this is a political paradox you have to preserve human life first and foremost and of course you will react and one thing the imf warned about is the overreaction is causing an economic pandemic and suppressing economies. it prevents people from going to public places when they might otherwise do that. from making a sale or going out to eat when they might otherwise and those things are lost for good >> so when you say that global growth could go negative, we say a global recession as if we're under 2% growth and it is

unusual to go negative how negative for how long an importantly what do you think it means for the u.s. for gdp seems like this effect will linger on past the first quarter. >> i said global growth outside of the u.s. and if youen collude the u.s. you get buoyancy in that i think we see growth around 1% in the u.s. in the first quarter. snap back a little bit aen not as much as others hope but we have xhin. it won't print how negative the growth is but china is negative right now. we know that italy is going to be negative. europe will be flirting with negative numbers canada is looking like flat lining mek mexico is struggling the top ten economies could be negative in the first quarter or close to it. that kind of momentum, head wind to face is undoing the tail wind created by over 40 central banks

cutting more than 70 times last year to set up better growth this year. >> what do you think then the federal reserve should do if anything in response to all of this >> policy is well designed fiscal design can't do much until we have an event here in the u.s. and in terms of the federal reserve they have to wait and see i was with them yesterday at the conference and they're talking about monitoring things closely and it is because if things weaken enough you have to lower interest rates, one, to make sure the yield curve isn't inverted and make it easier for companies with the 50% of the bonds issued on the cusp of investment grade and be hit by the losses are fragile in their credit conditions, debt conditions so lowering the interest rate helps them a bit and of course gives a lift to mortgage refinancings. i'm not clear we can keep the

housing market booming there might be a pause with the pullback in the market but the ways that you could have a little offset but the problem is there's no silver bullet to this kind of a shock. >> yeah, no. that's for sure. amazing how quickly the growth numbers axed by this thank you. we appreciate it. >> thank you. coming up, take a look here at ground zero for what could be coming to the u.s. lack of shipments to mean for the economy. plus, from handing out cash literally to hoping central banks step in like we were just discussing, the response around the world to stop this economic contagion. look at toll brothers. down about 13% today after missing on the top and bottom line luxury home builder said some closings in california had been delayed because of coronavirus and a reminder, watch or listen to us on the go on the cnbc app. "the exchange" is back right

after this when you look at the critical issues facing our world, what do you see? we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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♪ ♪ ♪ ♪ welcome back interest rates are collapsing on coronavirus fears. banks are taking a big hit is that selling justified by what's happening on the ground here we me from the view of banks across the country is ben beardall great to see you welcome. >> thank you, kelly.

great to be here. >> tell us where your exposure is in terms of thest and are you starting to see a slowdown >> yeah. first of all, it's important to step back and consider just a historical magnitude to see the 10-year i think 1.32%, all-time low in terms of yield. who is willing to lock up the money for ten years for 1.32%? the answer is, of course, people are fearful. there's all kinds of concerns, uncertainty. whether it be the coronavirus or election people are willing to take gains off the table and lock in that money over the long term at 1.32%. >> right so you are saying basically you get freaked out looking at the 10-year and the rest of us you are the bank ceo why don't you give us a sense if you can about what the real change in activity is if any

this is the central question. >> yeah. that's the central question. right now it is premature. we are not experiencing a change in activity. to the contrary this can be positive for our consumers in terms of being able to refinance at lower rates if you think about the impact of banks over the long term you will have a lower -- if these low rates persist, you will have lower earnings on long-term assets like 30-year fixed rate mortgages. but that willtake time to play out over the short term banks have an opportunity to lock in low long term interest rates which can be a good thing. as you talk about the selloff in bank stocks and all stocks it is premature in my mind we we have not seen that. >> okay. reassuring and like you said might be upside from the refinancings you know, there's also in some ways the impact and the way that low interest rates juice the bad kind of borrowing and what i think about a lot lately

yields on muni bonds at 38-year lows and some states over indebted and more borrowing to hurt more than it helps in the long run so turning to corporate customers are you going to increase underwriting standards as a result here >> if this persists over the lo long term it's something to look at we see our corporate customers doing what everyone is doing stepping back and asking questions why and what impact will this have it is easy now to say we may overreacting only in hindsight we'll know and we have endured a whole lot in the past, in the past five years and been able to rebound and if you think about stocks and if we thought they were fairly valued last week, it is a buying opportunity. >> all right brent, taking the long view and staying positive

we thank you for joaniining us. >> happy to be here. now to sue herera. the white house denying reports it is going to appoint a coronavirus czar saying it has confidence in health and human services secretary alex azar, outlining the administration's plans at a congressional hearing earlier this morning. >> we are working closely with state, local and private sector partners to prepare for mitigating the virus' potential spread in the united states as we expect to see more cases here on monday a request to make $2.5 billion in funding available for preparedness and response. pope francis holding audience in st. peters square in vatican city and sending his prayers to coronavirus victims, some of the faithful wore masks. francis made a point of shaking hands with the faithful. he usually only waves. and kate, the duchess of cambridge, showing off the boxing skills at a charity event

in london. the wife of prince william took part at a sprint race. you're up to date. that's the news update this hour >> sue, thank you very much. the call is getting louder to step in and stem any global slowdown from coronavirus. but is that really the right answer we'll explain that when "the exchange" comes back in two. ♪ ♪ ♪ ♪ and when you open a new brokerage account,

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welcome back let's market flash. >> look at royal caribbean revised the guidance for third time this year saying cancelations modified itineraries will have a modest impact canceling 30 sailings in southeast asia other cruise line operators under pressure, as well. look at carnival, down 16% just this week and if you look at a year to date performance of all three cruise lines, royal, carnival and norwegian, down 30% feeling the pain looking for details on the confirmed cases and the impact on their

sailings, kelly. >> yikes 30% drop is huge thank you. the slowdown in china from coronavirus is felt here in the u.s. looking at the shipping con and thors coming from and going to china, imports from china to here have slowed over past several weeks and exports from here to china stopped completely for more on the impact to shipping and the broader economy, i'm joined by the deputy executive director at the port of long beach how big a drop in activity overall have you seen? >> it is a pleasure to be here the impact so far is significant. typically around this year we project for the first quarter about 30 blank sailings. but so far a total of 53 blank sailings from china so that impact will continue to be felt. in january, down 6%. in february we project to be down another 6% year over year. >> you said blank sailings you have had twice as many as

normal bank sailings are basically canceled cargos, is that right >> that's correct. essentially a vessel that was destined to long beach that has basically been canceled so all the cargo that would have been aboard that vessel is not coming to long beach. >> people point out that if you're ordering easter merchandise and doesn't get here in time, not like that's delayed in terms of coming the economy it is gone altogether. i have a question for you, though where do those goods go? do we return them to china come to the u.s. and disposed of somehow? do you know what happens >> a lot of those goods end up in the surplus, secondary market some of those are shipped overseas but the important fact here is the fact that depending on how long this coronavirus situation is prolonged, there could be shipments that will be canceled altogether missing the

season and that's what we are concerned about. right now we are looking at the immediate impacts to our cargo and the economy. we're also now thinking about the secondary impacts and the national economy. >> sure. you said down about 6% jeer over year in january and february essentially. do you expect it to continue next week getting into march >> we do and so far, with the number of bank sailings to anticipate through the first quarter we think that we're going to end the first quarter here in long beach about 12 percentage points behind last year. >> there's a ripple effect of the trucks, for example, the railroads that might be positioned to take it into the u.s. economy and now left empty happeneded, right? what about the affect there and workers at your port, as well? >> well, goods move in general is the economy in motion when goods stop moving, it has a significant and immediate impact to the economy as it relates to the supply chain, just the last couple of

weeks, we have seen a decline in truck oerperations to the tune f 20% and rail activity decline in and around the port to 25% and with the blank sailings that have been announced we expect that impact to continue to grow in the weeks ahead. >> one quick final question. why is it that exports, the stuff leaving the country, why is that going to zero? because the chinese economy shut down or because the u.s. exporters changing the behavior in a different manner? >> i think it's a combination of both but i think the driving factor is china's ability to handle those containers as they arrive the fact that the chinese economy is -- and their ports essentially at gridlock makes no sense for exporters to ship their shipments overseas and that's what we're seeing so far. >> please keep us posted. >> we will my pleasure. >> with the port of long beach.

coming up, look at stocks. they're now at session lows that the dow all over the map today we went negative about 90 minutes ago and then back positive and now down 70 points. reports of new cases of the coronavirus that crop up around the world. we'll get a trader's view of how to play the volatility next. take a look at the most searched tickers on cnbc today. the dow followed by the 10-year yield at 1.317%. apple, tesla, sndiey round things out we're back on the other side of this

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welcome back to "the exchange," everybody we are at session lows right now. the dow dropped 150 points, more than a 600-swing today yields are also at the low points bring in steve grasso to talk

about this, director of institutional sales. we were trying, fighting for a comeback todayer a. >> whenever you see a headline come across, you have tape reading algorithms to push the market around. positive one it rallies. we have had nothing but negative headlines. i didn't like the way the market rallied too early today so we were a little bit susceptible to any negative headline that's coming out to the market selling off here and we have had nothing short of negative stuff pushing the market lower. >> sure, no. that's what it's all about, isn't it geared to the spread of coronavirus and the way officials are handling it and the big question is economically you guys probably have thought about it down at the new york stock exchange what will happen if you have to work from home like the cdc was talking about yesterday? >> right people in new york stock exchange would never stay home but i hear you

the rest of the population could have that as you look at schools, what gdp is but, kelly, the way i look at it doesn't that really foster a hockey stick-like recovery if you think about it, wouldn't there be pent-up demand sitting home and almost get a forced technical recession -- >> right but here -- >> not as if people don't have the money and jobs they spend it on certain other things whether it's netflix or amazon. >> sure, sure. >> once they get back out they spend it. >> the only thing, steve, not like a hurricane that happens all at once. as it spreads, each community will have a few people down and then a few -- one rebounding and another in quarantine. i wonder if that rolling effect to mitigate the downside and the rebound. >> sure. that could affect it, too. what i keep relying on is just investing through this they talk about the people that have died but they don't talk about the people that have

recovered and still 97% or 98% of people that recur -- that just recover from this as if it's a cold or a normal flu. so that's what i'm concentrating on and investing through we will have the speed bumps throughout the process. >> happy ash wednesday, sir. thank you. we appreciate it steve grasso on the floor of the new york stock exchange. the cdc saying the americans should prepare and the white house taking a different tact saying the virus is contained and the necessary precautioning taken. the political impact is next. here's the dow walt disney down 4% on the ceo change and exxon and chevron down as crude on the screens below $49 a barrel we'll be right back. the middle with you, ♪ no one likes to feel stuck, boxed in, or held back. especially by something like your cloud. it's a problem.

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that's simple. easy. awesome. call, click or visit a store today. welcome back to "the exchange." the handling of coronavirus here in the u.s. is starting to come under scrutiny the cdc warning to americans to prepare. white house chief economic adviser larry kudlow yesterday had a different take.

>> we have contained this. we have contained this i won't say airtight but pretty close to airtight. we have done a good job in the united states. >> president trump also contradicting the cdc saying the u.s. is, quote, in great shape could the mixed messaging hurt the president's credibility with voters for more we turn to stephanie miller and brian schwartz. not much commentary about the debates last night coronavirus came up a little bit. is this an issue, brian, where you think it becomes a campaign issue? something the democrats use as a weapon >> i think it did last night brought up by michael bloomberg running for president. the first one to bring it up in the debate and out with a new tv ad highlighting what he believes from the trump administration handling the coronavirus so i think, you know, kind of of in a way bloomberg is leading this

eart effort, at least trying to bringing this up. >> the manager, right, exactly. >> so i think that it is going to be an issue going forward and an issue for donald trump. >> stephanie, how kind of given the way d.c. works to expect the response from here politico report of today a coronavirus czar and the white house denied but there's mixed messaging from the different agencies. >> number one thing the white house needs to do is make sure the economy keeps humming. if trump wants to be there in 2021 he cannot have a down economy leading into the election so having a czar or a task force as they replied is what they would rather have, putting more money into the economy to fight this, the things to help the economy humming and demonstrate they're doing something. the real issue here and the bloomberg angle, trump has downside with this issue as far as the democratic challenges have upside and criticize the president and not do anything.

>> maybe president trump should make the coronavirus czar michael bloomberg. >> a wonderful twist. >> say, hey, you know, you're right. you would be very good to manage this maybe neutralize the threat. but to your point about the economy we know the first quarter, stephanie, probably about 1%, 1.5% at best maybe now to linger into the second quarter and be a hit. even rebounding in q3, is that enough >> as long as it's not down. right? it's probably okay what we don't want is to see a contraction. >> if democrats keep hitting him on making cuts to the cdc, that's brought up. at least proposed cuts to the cdc. is the market going do get skittish with that is that a sign that president trump will have more of a problem with the re-election going forward and will the markets respond in kind? we have seen with the market the last few days but if democrats keep bringing up what he proposed to make cuts to the cdc, millions of dollars in

proposals, certain pieces of it, that could be a problem for him with this re-elect and the timing of this for donald trump is not good. in terms of re-election. not because -- the candidates go on the stump or create ads like bloomberg is doing and hit him for this over and over again bringing up those points i just made. >> quick question since you're here, brian. we know elizabeth warren after the las vegas debate did a lot of fundraising, maybe helped her position where are we other than mike bloomberg to have the money to throw into the campaign ads or attacks against the president? >> that's the question, right? are they going to have the resources to really do this? bloomberg and joe biden i think will also have enough money as we get into super tuesday in the coming week, he will have enough money to do this but somebody like elizabeth warren, she had to take a $3 million line of credit coming into february in order to keep her campaign going she's used only $400,000 worth of that credit, but still, the action of taking it is still symbolic

>> wow. >> she is going to have a little bit of a problem with fundraising. the writing is on the wall here for elizabeth warren and the other candidates, senator klobuchar, pete buttigieg, will they have enough money to put up this attack against donald trump with coronavirus issues. >> where are we joe biden and south carolina, it's make or break? >> he did very well in the debate last night. jim clyburn came out with his big endorsement for biden. that's a good thing for him. >> the latest polling shows he's neck in neck with sanders. the interesting thing we have seen at sand hill is the first three primary elections the undecided tip forwards sanders some of the polls out of south carolina had 18% undecided. >> wow. >> so if sanders trounces biden unexpectedly it's probably over for biden. >> what do you think, stephanie, final point, investors need to know if it's sanders and sanders becomes the presumptive

candidate. >> constitutional think a lot of the selloff is coronavirus but part is the reaction to sanders doing really well in nevada. i think the market will certainly not react well but i still think trump can beat sanders. so we have to moderate the final outcome to that probably. >> we'll see how the economy goes in the meantime thank you both thanks for being here stephmy miller, schwartz. >> countries are grappling with mitigating coronavirus some are calling for central banks to step in and other say the fed isn't the right fix. here is the latest on crude oil that lost all its gains and at session lows. strod % this week and wti is ju aun48.60. we're back in two. of trading goods and services. nasdaq operates among the largest markets in the world. and our technology powers markets from indonesia to chile. great markets are built on a foundation of trust

and integrity, forged through leading edge technology and a smart regulatory framework. as technology advances, regulation must keep pace to allow the markets to evolve. today we see an opportunity to modernize regulation, to make markets more accessible to investors and entrepreneurs of all sizes. from the graduate buying her first stock, to an institution investing in thousands. the markets belong to everyone and stand as a symbol of economic advancement, social progress and limitless opportunity. that's the tomorrow that we envision and to get there, we'll have to rewrite it today.

♪ nations are scrambling to find ways to deal with the economic shock of the coronavirus. for example, hong kong says it will give out $1,000 cash to adult citizens for total payout of $9 billion. other countries are hoping stimulus measures from the government or central banks will do the trick joining me now is bill lee chief economist former deputy division

chief of the ifm he served as representative in hong kong during the sars epidemic bill, good to see you. how serious do you think coronavirus is >> oh, it's very serious because this is a virus we have never seen before. what's happening in the markets so bar is it's a vote of no confidence in the public health care system and globally, particularly in china and also in europe. but i think the evidence so far shows that the u.s. isn't doing so badly we had all cases come in and all primary infections with no evidence of secondary infections so i think there's a strong vote of confidence in numbers except for that mismessaging that came from the cdc about the u.s. system. >> right is it your expectation that the virus won't really spread here or that you're just not that worried if it does >> i have some confidence that so far our screening methods and the procedures the health care system put in place have been pretty effective despite the fact that we had the travel coming into the united states. going forward, what i don't have faith is whether italy or european systems will be able to contain it so the flow from

there might actually slip through our system and i think we would like to hear from the president how can we strengthen it. >> absolutely. we earlier had an economist who says it feels like an economic pandemic because people have to respond to something even if it doesn't happen here. i can tell you anecdotally everyone is talking about what to stock up on and what do you have to do if you have to stay at home to work and all these things it looks like that economic impact could be large. >> fear is our greatest problem right now. i think the fear has to be something that is contained by policy for example, i think one of the best things the fed can do instead of reducing interest rates say all small businesses can have regulatory forbearance if they're overdue on their loans, it's okay can't meet payrolls, we'll find a way of tithing them over this is to restore business confidence so whatever shock hits them on the supply side, they'll get through it. >> that's brilliant. they recollected do that can they pull it off >> they can do it with one announcement because the fed and

banking regulators are in charge of regulatory forbearance. if the credit rating agencies could say, oh by the way, your credit rating will not be harmed if you are delayed in your payments during this crisis period even better those are the procedures i think the chinese have to put in place to save their small business as well as their supply chain starts to get unlocked. >> you know, if i were president, i think that was a pretty good suggestion except i can't tell the fed what to do theoretically. president trump is going to come out this evening aside from the measure the fed could take, is there something the president could do to similarly instill confidence >> well, unlike what the hong kong authorities did which is give everybody $1,000, which will likely be saved, the president could say we stand behind strengthening our public health care system whatever money they need is available to them and we're going to open up the spigots that's the one message needed to reassure the public that our

safety is a priority. >> does that apply to everybody or is that just one piece of the u.s. health care system? >> there's a lot of screening procedures put in place during sars never went into any airport without having a temperature screening device we need to talk about pulling out people who show evidence of some kind of flu symptoms to examine them and test them for the virus. those are the kind of procedures that are really done at the local and state level so that the federal coordination of those efforts can be improved and the funding of those facilities can also be improved. >> great thoughts, bill. we have just a second left i'll put you on the spot ten year yield, sit going below 1% >> there's no recession in site. manufacturing is a small part of the u.s. economy even the service pmi went down, it's all transportation so forget this recession scenario, please. >> i know you're not really going to address -- i know you're not a prognosticator,

can't answer that -- >> i no longer work at citi as a chief economist. >> bill, good to hear from you thank you so much. lot of good ideas and concepts that's bill lee. we appreciate it that does it for "the exchange" today. i'll go join tyler for "power lunch" and see you there ♪ thank you very much, kelly we'll have you over in just a moment i'm tyler mathson. new at 2 at wednesday on "power lunch. the dow turning negative giving up all of 460-point rally as coronavirus fears grip wall street and the fda warns we are on the cusp now of a pandemic. and as more and more corona cases pop up around the world, the u.s. readies its response. president trump will hold a news conference in just a few hours, 6:00 p.m. eastern we're expecting it we have the details there. plus, the crude crush picks up steam oil falling further from that key $50 a barrel