welcome to "squawk alley." i'm carl quintanilla live with jon fortt at post 9 of the new york stock exchange. the sell-off continues as the market is facing its worst week since the great financial crisis tech sector's off more an double digits from its most recent 52-week high bob pisani and mike santoli are here to conduct off the hour, evaluatin evaluating, characterizing various asset classes. how is junk? >> it's sloppy today it's held in very well credit spreads have been okay. but through the etfs you can see people who are pulling money from that asset class. that's another wrinkle where you're starting to see the kind of radius of stress expand. we've been waiting for the market on a short-term basis to get to further extremes of being oversold, vk a lot of fear, accelerating to the downside. we saw it this morning

98% of the stocks to the downside s&p 3,000, 10-year yield at 1.25 if you were right on this move, that's a really logical place to say, fine, let me cash in a little bit i think that's what we saw this morning. >> not to guild d lily, but we were almost 1,000 points caterpillar has had a spurt in the last few minutes 3m has been positive merck and pfizer i'm not saying anything is turning around but some people are buying here. the problem is the information vacuum here. the old saying, you can't trade on fundamentals, trade on the technicals the problem is we can't trade on the fundamentals because we don't know what the earnings in the p/e ratio should be right now. we saw that with the dispute with goldman going to zero percent earnings growth for 2020 then technical, everyone was saying we're watching the 200-day moving average, we went through that just after the

open it's hard to trade on fundamentals right now, hard to trade on the technical, and we need a lot more information on what's going on globally >> about a half an hour ago we saw this, you know, attempt at a rally and also reflected in european stocks in their last half hour of trade mike, how important is the european close >> i don't know if the european close is important what i do think is important is to start to see the stuff that got hit first and worst to maybe stabilize a little bit that does include some global markets. it does include, by the way, things like airlines and hotels. the stuff that's been really weak right in the center of what we're trying to price in here, and i think that you actually have seen that what we also have seen is things like microsoft responding negatively to that warning and also apple obviously, nobody can come in here and say we saw this thing coming, i don't think. but i had pointed out that in december apple accelerated from the 280 level to 330 on nothing,

on this crowding effect of everybody buying the stuff we thought was going to be okay no matter what happened and the momentum moves then we're back to 280 it's not like you've cut into muscle where some of the blasted-out stocks might have reached a level where it just makes it you can also step back i think it's not fruitful to spend any time figuring out precisely dollars and cent, how this infex wiction will work, because you can't. the value of corporate america has been taken down by one-tenth in five days >> we were historic on the s&p last wednesday and the entire global markets, we've been talking about this, all down 10% in the last couple weeks but the s&p, 10% in six trading sessions and something you never see, going from a 52 week high to a low, take a look at southwest airlines, 52-week high on february 14th.

i don't know if we can put up southwest air. it was $58 or so february 14th today it's at a 52-week low. let v less than two weeks later gone from a 352-week high to a 52-week low. that's pretty weird even going back to the 2008 financial crisis >> as for the s&p, we haven't gone all-time high to correction in six sessions since the '20s >> that's right. >> as we're talking, starbucks, 85% of the roughly 4,300 stores in china are operating again, so does the market want to see that >> yeah. >> do they want to see the cohorts say we're on the case? >> they'd like to see it all work together. in terms of -- i think you want to be able to te v see thsee ths are able to manage through this. we need to change our behavior

and respond to reduced deand v mand and we haven't done it yet. the market is rushing to a point to pricing that all on in. when you see the intensity of this concentrated selling, it does seem a lot like the mechanics of early 2018, even though it wasn't as fast you got to an 11% or 12% decline in two weeks instead of one week back then. we had 10-year yields went to 3% can the economy handle it? did we run too far, too fast you'll have this chopping-around period that will be necessary no matter what happens. >> you mentioned coming back to work it makes me think of what eunice yoon told us a few minutes ago about beijing, somebody getting reinfected from somebody coming back to work too soon. you have to wonder how much is v of this coming back to work is people are feeling better or the government wants people back at work >> the markets are aware that

could happen because we don't know we have to sit and watch i think the question would be what would calm wall street down at this point? and so the natural knee-jerk reaction is, well, let's have a coordinated global policy response let's have massive fiscal stimulus let's have aggressive central bank actions, monetary actions but it's not clear that's necessarily going to fix things. your prior guest in the last hour mentioned that, saying cut rates more aggressively, is that going to deal with the issue it's not easily fixable in that kind of manner that's the kind of problem the markets are having getting their hands around it. >> the cyclical stocks, get to a depressed level and new infections have not exceeded our fears, that's what you want. it's not like we're going to get this under control in a hurry and some policy measure is going to placate the market.

>> i don't think we're looking to eradicate the virus we're trying to convince enough people they don't need to alter their economic behavior. we don't know where that mike, bob, smart see you again real soon. as we have mentioned, microsoft warning on guidance and supply chain issues due to the coronavirus. l josh has more on the story for us >> microsoft surprising investors with that warning saying it won't meet quarterly guidance for the segment that includes windows due to the coronavirus, sh the more personal computing segment, windows and surface, accounting for 36% of total revenue in fiscal q2. microsoft saying the problem is not demand but the supply chain, returning to normal operations at slower pace than anticipated. the rest of the business appears to remain on track for now, so they have xe v questions this morning. they wonder whether deals slated

to close in q3 could slip due to travel restrictions. it may not come as a complete shock to the market from apple and what hp said this week, saying the outbreak would impact results in it fiscal q2. the company's cfo said he thought the impact would be temporary. which companies could worn next? rich steves says other companies include intel, amd, and western digital, gefen v given their exposure to the p/e market and qualcomm with its exposure to that industry. >> bob peck joins us this morning, chairman of internet global banking and barclays at post 9 different chair again, today >> thanks for having me. >> i have to ask what you make of the i don't know going list of companies, not warning but saying we don't know enough to warn at the moment >> i think that's number one

the number-one take-away we're getting from the board level, the c suite is just be prepared, be ready, whether that's for what could happen because of corona, whether it's pushing for an ipo, whether it's an m&a deal the best you can do is just be ready for your current plans it's interesting, when you take a look back and say how did we get where we are today and where are we truly, in 2019, the markets were up pretty strong, s&p up about 29, nasdaq about 35%. as i pointed out before, you had that anomalous fourth quarter in '18 that took you down 20%, so you look across that, you had the s&p up about 15%, nasdaq up about 20%. strong, healthy, but not ebullient, sort of reasonable. now you bring that forward to today and what do you have given what's happened in the first half of the first quarter of 2020 you've got the s&p up about midsingle digits, nasdaq up around double digits or so, and that goes from october 1st to basically today. you haven't had this really

overinvesting run in the markets right now. >> you don't think there was a chase on high growth in the nasdaq, in tesla, virgin, in the first quarter? >> there absolutely was. right before the drop, the all-time highs saw that spike my comments are where we are today versus the beginning of the year you had a spike in between and it's come back down. went wh when you pull that lens back, let's look over those 15 months, and where are we, i think what you're seeing is it hasn't been ebullient, it's been sort of prudent by the markets, honestly >> you're arguing where we are now, and we hope on the ground as far as people's health, that that condition continues to improve, but market-wise and tech stock-wise, where we are is reasonable >> yeah. when you peel it apart, so the tech market, where are we there, last year everything was up. strong across the board. when you peel the onion back and do that same analysis from

october to now, you see only two that are up, semis, which is very strong, software, which has been strong as well. year to date today, 2020, the only tech market that's actually up is software, which is flat. everything else is somewhat down >> what we're hearing out of the likes of microsoft, hp, perhaps dell later today, about having to push out guidance and say we don't know exactly what's going to happen, that's happening as we're seeing plateauing numbers as far as new infections over there. that's good news in a way. but we're just starting to see the impact on companies and uncertainty flowing there. what does that mean? does that mean that we're going to see these same concerns from companies plateauing a couple weeks out in a lag does it mean we'll start hearing about demand disruptions out of europe because we see what's happening in europe and south korea? >> absolutely. none of us know for sure right now, but the one that was

interesting was last night when priceline, booking.com reported. they had to take guidance down, as we know, but what was indicative of the story was while the guidance came down, the stock is actually trading up today. part of the question has to be what's baked in so far, particularly for the subvert cals, that, you know, we would all think would be most impacted, travel, tourism, those types of things. and how do you think about the subve subverticals that will benefit peloton, not going to the gym. delivery, depending on what's going on there there's a bunch of different areas that can play well depending how this virus goes. >> it's a good point expedia down a percent marriott is up they were one of the -- it was their turn in the machine last night. >> yeah. the other thing to look at as we think about ipos going forward, how they fared during this market if you bought all the tech ipos

in 2019 and held them to today, you'd be up about 25%. not bad, right however, if you look at maybe only from the first day pop to today, how would you be about the full positions on the pricing? you'll be down about 8% or so. it hasn't been that great. what's more interesting is that any portfolio manager needs to build a position over time if you look at day 30 to today, how has that been? down slightly. the ipo markets, the point i'm making, haven't been as ebullient as well. you see investor discernment on the ipos, everything leading up to pulling its ipo i think that shows a level of healthiness in the market. >> what's happening to the ipo window now >> yeah, it's great. >> we saw doordash confidentially filing an s-1 they could b sit on that far long time. >> stloi >> absolutely. none of us know what's about to happen with the coronavirus, so therefore let's continue along

as planned and we'll adjust along the way. going for an poif poipo, keep p forward. you saw that with doordash if it's m&a, continue to push with that. you saw morgan stanley and e-trade, intuit and credit karma. let's keep pushing along you're coming off anime maye market that was the fourth best of all time. m&a market that was the fourth best of all time the companies have a lot of cash on the balance sheets. the poipo will continue on but adjust the last point on that is the election we should be wary of the election a lot of companies' plans are let's get our ipo done before july or august and do you get a push out of that because of corona and if so, does that go after the election or slip into 2021 you'll see those plans adjust. >> that was goldman's point a couple days ago. they thought near term drop

could continue, but that would migrate more to election risk in the coming weeks. >> absolutely. >> we have a month left in the quarter. we know there's going to be more guidance down. >> yep >> you wait until you hear them or try to buy in front of them or sell in front of them >> you want to position those subverticals that should benefit from the news coming out the pelotons, teledoc, et cetera. they'll be less inpacted by that i saw jim cramer this morning talk about dividend-paying stocks and stocks that are more stable and secure that could help with your portfolio that's the bay v wway to think i because none of us know what we'll hear in the next hour or the next week. >> what about stocks with heady valuations based on dreams of the future thinking tesla thinking about, you know, virgin galactic, things like that

>> those are the most at risk. virgin is down 40% from the highs. you've seen that correction. one thing we've learned is that the ipo class of 2019, maybe in ride sharing specifically, was you're seeing investors focus on unit economics and past the profitability. forgiving on profitability, as long as the core business makes a profit for ones with those bigger questions around that or that path to that, i think those are more at risk >> good to have you. >> thank you >> we're grateful. >> appreciate it >> bob peck. as we mentioned, starbucks is announcing it's reopening hundreds of stores in china. kate rogers has more on that >> starbucks announcing just now with a letter to its partners posted on it website is now has 85% of its stores in china currently operating.

the stock is well off the lows of the day it's still lower, just under about 2% remember, china is a very important market to starbucks. the company says it's its second home market. we'll read you the letter from kevin johnson saying with the number of cases slowing, we are seeing early signs of recover in the region the situation is improving throughout major parts of china. we have 85% of stores open across china shanghai grocery has reopened, one of its largest stores there. during its last report, the company said things were going so well, they had considered potentially raising guidance for the year coronavirus will have a big impact on their earnings next quarter. they didn't wind up lowering guidance, maintained it, but they're keeping their eye on it. 85% of starbucks china locations back up and running. back to you. >> kate, thank you

meanwhile, a check on the major averages dow, s&p, nasdaq, all fighting back from the lows they were all down about twice as much as they are now. dow is down about 4 5. s&p down 1.7%. nasdaq, the worst of all, down about 1.9% but they were down at one point nearly 4%. the president holding a news conference on the coronavirus last night, naming vice president mike pence to lead the response to the outbreak eamon javers has more on what we heard last night eamon? >> that's right. as we watch this market try to rally back in real time here, last night the president was talking a little bit about the stock market sell-off that we saw happen before that press conference the president very careful here to present, you know, an image of optimism to suggest that the

united states government has got this and is prepared for anything that might come i had the opportunity to ask him about that stock sell-off. here's that exchange >> to be clear, the dow jones drop mrd than 2,000 points this week are you suggesting it was overblown? are financial markets overreacting here? >> i think the financial markets are very upset when they look at the democrat candidate standing on that stage making fools out of themselves and they say if we have a president like this, and there's always a possibility, it ice an election v is an election, who knows what happens. >> i pressed him on none of this is to do with the coronavirus? he said no, it is. but clearly reaching for other explanations for sell-offs we've seen this week and attribute v uting it to the democratic candidates' debate on national television the president here acknowledging that the virus is playing a role but suggesting there's other factors involved in the sell-off we've been seeing throughout the

week >> eamon javers, thank you >> you bet carly fiorina joins us now worth noting she led hp through the sars outbreak back in 2003 good morning >> good morning. >> when you see what has happened with hp's warnings on coronavirus with its call, microsoft last night similarly warning on the outlook we're expecting to hear from dell in a few hours. what do you think? >> well, i think it's prudent and i think it's predictable, honestly these are all companies with hugely concentrated supply chains in asia in general and china in particular. so i don't find it surprising. and i think we don't know what we don't know, obviously but i think they're being

prudent and i don't think we should be surprised. >> what is the information, the data, when you're in the ceo seat right now, trying to give investors as much good information as you can, of course trying to keep your people safe at the same time and deliver products of high quality? what's the data that you're looking for out of the base of your supply chain at a time like this >> well, let me say first in terms of keeping employees safe, now would be a time for all companies, no matter what their size, to review their emergency preparedness plans i know that sounds so basic, but actually, when i arrived at hp, we didn't have them. an emergency preparedness or emergency response plan includes things, for example, like do you actually know where all i don't have v your employees are working at any given time and can you contact them quickly when you need to do you have evacuation plans in place for every single location?

do you have emergency response teams in place and do employees know who they are? can you communicate broadly with your employees and i do think it's important to recognize that employees are going to look to their own companies for much of the information about what is really going on in some cases, the information out of governments may be suspect, and so companies have to take it on themselves to inform of their employees and make sure that they have the plans in place to keep their employees out of harm's way. we're reminded of this as well last night with this terrible tragedy at molsoncoors with regard to the information you're trying to pass on to investors, i would say now is also perhaps a time for companies to evaluate their supply chains and how concentrated and consolidated they are i'm not suggesting that coronavirus should change your supply chain plans totally, but i do think there's always a

tradeoff between a supply chain that is consolidated either regionally or by partner and one that is diversified. reviewing that balance again at this point i think is prudent. and finally, i think the best you can do is to tell investors what you actually know don't speculate. but i think as i indicated before, i think at this point most of us would say common sense suggests there are going to be surprises here, if any, on the downside, not on the upside. >> you mentioned supply chains, carly. what does diversification mean when you're not talking about borders and governments and tariffs but a virus that travels easily >> that is of course part of the issue here but many companies have a consolidated supply chain to not just a single city or a single region but to a single partner

and so this would be a time to say do we have too many eggs in one basket when something unexpected and unforeseen happens? there's no question a virus travels over borders and no question that the locus of this virus was in china, is in china, and affected particular parts of the supply chain more deeply there than anywhere else so, again, i'm not suggest nag supply chain plans should change because of coronavirus i am suggesting that this is a reminder to always be looking at supply chain planning and trying to assess that balance between the benefits of consolidation, and there are real benefits, and the security perhaps or the lowering of risk in the diversification of a supply chain. >> carly, how much and how long if you're a ceo, c suite executive, do you decide to

curtail travel, even domestic travel, at a time like this, not just to conferences but also to go meet with customers do you do that now do you set in place very specific criteria under which you do that? what would those criteria be >> yeah. i think that's a really hard call i'm not an expert and don't have the benefit of all the information available. i would say curtailing domestic travel at this point strikes me as an overreaction i do think that if there are large gatherings of employees that have not yet been announced or planned, that you might postpone those, if only because employees are nervous about it i don't think there's any indication at this point that air travel or train travel in the united states is particularly more dangerous than it was a month ago when we didn't know about the coronavirus. >> so as a --

>> i say that as someone who gets on an airplane a lot, however. >> that's what i was about to say. are you curtailing your own travel, even domestically at all, given the concerns out there? >> no, i'm not i'm not. i just got off a plane yesterday. i get on plane again in a couple days i don't feel particularly any more at risk, and of course, look, there are germs in airplanes so people need to be prudent about all the things the doctors tell us to do, wash your hands, don't touch your face all those things are good cautionary notes we should be reminded of. >> funl inally, we always love ask you about politics because you did run for president. one of the comments made by others and the president is the stock market decline is not just based on the virus but the effect it would have on the economy and the president's ability to get re-elected. what do you think of that? >> yeah. i don't know, frankly. i mean, stock markets move in

mysterious ways sometimes because they're driven in the short term by more emotion than perhaps we'd like to admit but i think generally speaking, this massive sell-off in a relatively short period of time is not about politics. it's all about the coronavirus and it's all about the unknowns of this virus. now, having said that, apart from the coronavirus,er wep getting news that says maybe things in the global economy aren't quite as strong as we thought. i mean, growth in china was slowing lock befoslow ing long before this virus manufacturing output is down in this country european companies economies are slowing. there were cautionary notes before all of this news of the coronavirus, but i think the lack of information and the unpredictability of the effects of this virus are what's spooking the market this week. >> and the market has, indeed, been spooked, even though we're off the lows

the dow still down more than 500 points right now the s&p down nearly 2% carly fiorina thashgsnks a lot that perspective >> thank you >> not all the stocks are in the red today. dow has cut its losses in half dominic chu has a look at the biggest gainers. >> as we talk about the overall markets and coronavirus, there have been spots in the market where traders and investors have been playing the tug of war and the war has been won to the upside on the bulls for some of these names, and it may or may not be specifically tied to developments around fears in the coronavirus. of course drugmakers are a key focus. gilead services and moderna have been tied to possible vaccines, cures, trials, drugs, you name it with regard to coronavirus. on a yaer to date basis, gilead is up about 12%, moderna up about 27%.

a lot of optimism being built into these type of companies netflix, this notion that if people end up staying in more, not traveling around, what do they do with their time? do they stay at home and stream video? that might be part of the thesis behind why net lix on a year to date basis is still up 20% and in the last couple days moving to the upside. another one to watch here is carly fiorina, you guys were just talking about it, will it actually curtail business travel what if people do hypothetically cut back on travel for business and go to video conferencing zoom video, a recent ipo from last year that does video conferencing, those shares, 71% to the upside in the last few days does coronavirus play to that thesis and one other place that might

be directly tied to the floo it to quality and consumer staples, also perhaps to some products. check out what's happening with clorox shares. year to date up 13%. in the last couple days, weeks, a sharp move to the upside why? it's a disinfectant. wipes, all kinds of materials. certainly, jon, carl, this is a trade that's been interesting to watch play out despite the fact that we've seen so much red on the screens for past six days. >> dom, you see things before the wires, and people are look agent 52-week highs today on the s&p. you've got clorox, mentioned gilead, and cme. if you're betting on an increase in certain types of volumes. >> absolutely. i would say ice is probably in that mix as well as you start to see a churn in trading markets

but this whole idea is as traders and investors start to handicap what exactly the story lines could be, again, this could be a notion where coronavirus is playing into the investment thesis, but for some of these stocks it could be a real-world benefit to see some of the volatility return to the marketplace, also more demand for some of their products, of course 3m, an upgrade today. that might be driving some of the action there i have heard some traders talk about the notion they make those surgical masks and whether or not there could be a huge demand for those. tens of thousand, maybe millions of variables for every trade, but a lot of those points being talked about not just in trading circles but perhaps on main street as well >> dom, tech-related stocks that i track, speaking of, the stay at home trade, look agent what's up for the past week peloton, ride those at home. chewy. you have a couple dogs >> i do.

>> dropbox, etsy and of course zoom >> so the e-commerce stay at home trade is something i was watching a v as well i thought amazon might be a true beneficiary of that and you could see shipping-type companies playing into that. that hasn't played out nearly as much elt si had a catalyst with regard to financial results and forecasts, but the e-commerce trade is very interesting only bauds because we've seen things happen in china. that's faded in the last couple weeks. whether or not there's a bit of staying power for the stay-at-home trades or coronavirus or tech trades, that remains to be seen one thing in that wheel house, i have heard a number of folks talk taabout the idea there migt be structural changes for supply chains in china. the story might be in the beginning stages for what happens in the future with

technology >> true that guidance better than expected at etsy that does not hurt thank you, dom chu time for a news update sue herera has that for us at headquarters more congressional reaction to the virus here's what's happening at this hour senate majority leader mitch mcconnell saying he expects the senate will work hard to approve funding to fight the spread of the coronavirus. >> i have faith that we'll consider the right sum to appropriate at this time to ensure our nation's needs are fully funded i hope they can work expeditiously so the full senate would be able to take up the legislation in the next two weeks. saudi arabia halting travel to the holiest sites in islam over the fears of the coronavirus. that covers mecca and medina and could disrupt pilgrimage fans of millions later in the year

steven seagal is seen here with president putin of russia he's agreeing to pay $314,000 to the s.e.c. after being charged with unlawfully touting a new cryptocurrency offering. segal failed to disclose that he was promised a million dollars in cash and digital currency for that endorsement you are up to date back to you. could the outbreak of the coronavirus throw off airbnb plans for later this year? that is the question deirdre bosa is answering. >> according to several people i spoke with, yes, coronavirus will impact those plans to go public this year because as the outbreak raises fears about a downturn in demand for travel, airbnb is particularly vulnerable its global footprint, it's grown to more than 7 million listings

in over 200 countries. 2 million people on average stay in airbnbs each night. the company has suspended bookings and offered refunds in several chinese cities including beijing and is monitoring official guidance in other impacted areas in a statement, they're focusing on how do you best support stake holders including their hosts, guests, employees, and community where is they operate. comps, expedia and booking, they have slid 20% and 14% respectively in the past couple weeks. this does not bode well for an ipo. airbnb might have to adjust its own look they want to project more certainty and put their best foot or quarter forward when tapping public markets that is looking increasingly difficult. kathleen smith at renaissance capital notes that valuations in the travel sector have contracted and that will impact

the valuation calculus for airbnb tom davidson there's a real risk coronavirus could delay that debut. market volatility is dampening investor appetite for other investments on the side. doordash did file for an ipo this morning but did so confidentially, meaning it can wait as long as it wants or perhaps that it needs to raise capital too. >> deirdre bosa. joining us this morning, airbnb investor, brian simmerman, welcome back, good to see you. >> thanks for having me, guys. >> i won't ask any questions about the virus. we won't be epidemiologist here. but i will ask you about the degree to which it's unwinding some of these valuations and where you think we are relative to the neighborhood of the reasonable right now >> the great thing about venture capital is it's such a long-term

asset class. we hold stocks for for 10, 15, 20 years sometimes even in the most vulnerable macro environment the best investments are made. my job is to just pick those good companies, again, over the course of 10, 15, 20 years >> brian, we had credit karma on earlier this week, getting acquired by intuit for $7.1 billion. from everything that we saw in that acquisition, it looked like a great potential ipo candidate. given the uncertainty we see right now, both from coronavirus and the election coming up, do you think more companies that have a choice might opt for acquisition rather than a go public move? >> yeah. there are items that make you pick a strategic direction,

whether the coronavirus or macroeconomy or anything else. i think credit karma decided this was the best route forward for the company. this is nothing new. companies are making these decisions all the time and of course making their decisions for the long term as well. >> would you argue at this point that vcs have a lot of dry powder to work with? have they been building that dry powder in expectations of some kind of black swan to come along? how would you characterize their willingness to start dipping into that? >> yeah. we've certainly been, you know, raising, and we still are extremely bullish long term on the economy. some of the best investments in history have been made in some of the most interesting macro times. google was a phenomenal investment post the dotcom crash. facebook was a phenomenal investment post the real estate crash. you'll see some of the best companies transcend any macro environment. our job is to keep picking those. >> is there any secular story?

you were talk about really long-term stories that have made a lot of people very well althy. are any of those at risk because of a discorruption like a coronavirus? 5g seems like one you could point to if you were starting that list, but maybe you've got others >> again, i think all of these things come down to the individual performance of an individual company and less the macro environment. the great thing about this job is that asymmetric upside is the most important thing what happens to the market, what happens in the macro is less important than finding that amazing company in any macro climate. so i'm being sincere when i say that has always been my job and still my job to find those companies that will transcend any macro environment and be amazing companies. >> is it any easier or even different finding those companies in this post softbank environment? of course softbank itself hasn't

gone away, but its fundamental thesis about pouring a whole lot of money into certain types of companies with regard to how soon their model might even work toward profitability, and that's been questioned. in the past few months, where we've seen so many of softbank's bets not even including rework, kind of falling apart, has that benefited you? >> not necessarily directly other than, you know, perhaps if there's less capital going to work in these company, perhaps valuations get better. even that isn't that important from a long-term perspective whether you get into a stock or a company at price x or x plus 10%, you're going for these asymmetric upside companies and that's all that matters. while valuations might come down a little bit, again, that's great, that's fine, but it's not the most important thing in the long term. the most important thing in the long term from a venture capital asset class perspective is finding these companies long

term that will be worth $10 million, $50 million, $100 million. that's all we have do. >> i did hear a lot of complaints from your colleagues in venture capital out in the valley over the years about softbank's impact on valuations. would you say perhaps that was overblown? >> i think most things transcend any macro environment. softbank came around and had a micro impact for a while, and maybe that continues, maybe that doesn't. but i'll guarantee over the course of 10 to, 15, 20, 30 year, even that will be a blip, right? like the most important thing againis that these companies dak a long time to build and they are critical to find, and you must find them that is venture capital. you must find those asymmetric upside companies, period it does not matter what the kind of macro climate is at any given time >> i think what jon might be asking is we agree the business model construction happens over a long period, but if you do dent a marginal investor, does

the valuation structure over time take a hit? maybe not the business model but the valuation structure if you take -- injure a big marginal player >> yeah, i mean, probably marginally, right? i'm not going to say that valuations aren't going to come down a little bit or go up a little bit obviously, these things do move things at the margin in terms of the grand scheme, it won't be off by a magnitude. it will definitely move things unlike traders, from a venture capital perspective, i'm thinking in terms of multiples of 10, 20, 1,000 x returns, not the marginal 10%, 15%. i can't. >> how important is it to you whether airbnb has an ipo this year >> not important to me again, we've been -- we invested in airbnb i believe in 2012. we're happy to hold the stock

for as long as possible. >> you've got a nice game either way, i suppose given that, are you advising companies that are close to that potential event, if they ask you to not really worry about it given all the volatility we see in the market? better safe than sorry >> yeah. i think that companies need to consider all aspects to decide whether to raise more money from public, private, get to profitability quicker, those are always strategic discussions happening at the board level of any company. it doesn't change. it's an important question now i don't think any one macro event changes that over the course of the long run, right? this is a critical question for all these companies i'm talking with we all absolutely discuss this factor, you know, and every other factor in deciding this, but it's not a question that you decide on the fly. it is a question of what is in the long-term best interests of the company. >> right

finally, and i know this is hard work, but on a day where we're talking about potential disruptions to travel that might not be ephemeral, right, they might be long lasting, what do you say to investors who are worried about models that echo lyfts or airbnbs >> i'd say in any company's lifetime there will always be blips, whether it's this or any other issue. of course this should factor into your model of the company what i don't think will happen is over the course of the next 10, 15, 20 years, i think that the company's performance is going to be the thing that matters the most regardless of any fliblip of course you take into account anything happening in the macro economy, but from my perspective, again, it does not change any 20-year outlook on a company. >> very long-term view helps for people to keep in mind

given the kinds of volatility and big drops we've seen over the past few days. brian, thank you >> indeed. no problem still more ahead on today's sell-off but first, rick santelli, what are you watching today >> i'm watching the market self-adjusting to some extent with interest rates going down and thinking kevin moore says the feld can't wait. i think it's more like a kid on christmas eve. i just can't wait for santa claus! our golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call, we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks.

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a all right. another one of those volatile sessions session low on the dow is down 960. we have s&p 3,009 or so. we obviously repaired some of that damage and moving back a touch. the 10-year remains stubborn at 1.28 and the vix has remained elevated all day, right now close to 33. let's get to rick santelli and get "the santelli exchange." >> good morning, carl. thank you. you know, there's so many things to talk about during these tumultuous periods, exogenous shock, and i've seen quite a few of them, tech wreck, taper tantrum. we've had a lot of shocks to the system one thing i found over the years, never underestimate how exogenous shocks can get a life of their own and cause other channels to be opened up but i really do think at some point, you know, we've had thousand-point down dow day, i think this will be more of a "v"

than many think, my opinion, and we will have 1,000-point up days as far as how the bulls are looking what the's going on in stocks as they lay low, well, i think they can't wait. mr. houston in his op-ed today, i think the equity bulls can't wait for fed to get involved, for the fed to ease. i understand this pavlovian training that the markets have had is tough to extinguish, and even though jay pow knell the beginning of his tenure went a long way in that regard, it looks like he'll fall into the fed fund futures trap or at least the road is paved in that direction. will an inoculation of lower interest rates help this everybody knows they won't they'll help stocks, which is what it's about. they will subsidize equities by easing, giving up the moral high ground when we have lasting inabilities of course to affect what could be a recessionary environment. just consider this, gdp on data that probably will be reversed

through the coronavirus, 2.7 on q1 gdp from february 2019's 2.6. since the underpinnings of the economy aren't bad, we know the shocks of supply chains will have lingering effects, but i think it's to supply chains will have lingering effects but i think it is overdramatic finally, if we have technical analysis, many say this shocks makes it useless wrong, wrong, wrong. the whole key in technical analysis is that humans whether in 200 b.c. or two minutes ago usually respond in the same way in stimuli, emotion, fear, agreed all of these come into play with exon nows shocks there is however one big lacking void to technical analysis, extremes okay if you are in an extreme historical price, whether it is the highest price and the lowest yield of all time, those

positions are very difficult with resepect to technical analysis as we continually make new higher highs for example, on 30-year bond prices and new all-time historic low yields it is hard for technicals to pinpoint where that will stop n. which case you are supposed to use more of a time premium or a time pursuit in other words, look at cycles, look at the amount of days with regard to -- counts to the last extreme high asks low asks big anniversary dates like july bottoms in 2012 and 2016 once we establish some type of bottom then the technicals will come into play full force. jon fort back to you. >> rick santelli thank you dow, nasdaq, and s&p now down 2% once again, dow flirting with 600 points down. a reminder as we head to break "squawk alley" is on the biggeck screen, yes, you can we are also

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payments getting shaken down this morning square bag notable exception kate reasony has more. >> jon, major payments companies warning travel and spending could be impacted by the coronavirus. just this morning, paypal cutting its first quarter revenue outlook saying cross border e-commerce is already being impacted by the virus,

this just after massacre tarred slashed its first quarter guidance that stock on pace for its worst week since '08, mastercard and visa also heading towards their worst week in a decade square surging 7% after better than expected fourth quarter results yesterday. i sat down with the ceo at square's headquarters here in san francisco. she tells me their business has not seen a material impact from the virus and it is not likely to affect this quarter's upbeat guidance >> with coronavirus, we have not seen any material impact to our results in q 4, nor so far in q 1. it is included in our guide. we don't envision a material impact to our results. we serve sellers and individuals across a broad away of industry asks consumer spend times. we are underindexed to categories like tourism and travel this is an area that we will

continue to monitor. international today is a relatively small part of our business, but it is growing quickly at 52 fundraise year over year growth in the fourth quarter. it is the second straight quarter of faster growth. >> analysts were focused on strength if cash app it has 24 million monthlyactiv users arc 60% jump year over year cash app revenue also rising 147% year over year, half of that came from bitcoin trading while square makes most of its money in the u.s. international expansion has been a big push for square the cfo telling me there are still a lot of unknowns around the virus. for now they are focused on growth in exist, markets. let's get a check on where we stand in this selloff today, which continues to be an important day to watch the markets. dow is down 539, and half of the lows of the session. we are down 2% back in three minutes.

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we see eat emerson,mulating when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. gee blew through the 200 day on the s&p but we managed to hold 3,000, which some said was very important. i am watching virgin galactic. a week ago today, it was 42 and

change down to 19.11. more than half this one week. >> rockets go up, they also come down watching the weeks, it went from high school to mid life crisis quick had the past week. microsoft with the warning last night. not much worse than the rest market so far today. >> we will watch all of the classes on an important session. let's get to the judge back at post . >> appreciate it i am scott wapner. stocks under selling pressure yet again, another tough day on what is the worst week since the financial crisis the investment committee is ready to go. "halftime report" starts right now. we begin with stocks in correction territory it has been