went to 30 in a week and change. uber does not operate in chien camera, barely operates in south korea. it's ridiculous. >> so cvs health, this is a company that's been hit by two factors, not only risk off but political risk with the aetna exposure we like it, think it's attractive here. >> unusual activity, delta, 50 calls in april. >> watching the airlines among other sectors very, very closely. that does it for us. "the exchange" starts right now. >> thank you, scott. i'm kelly evans. big drama on wall street today stocks trying to claw their way all the way back dow down 350 points right now. down from their highs to wipe out this year's gains, the worst week since the financial crisis, 80% of the s&p is in correction territory and no sector is spared in the sell-off today

real estate, tech, all dropping 1.5%, 2%, and ten-year yield hit a new record low of 1.272% before coming back 1.31 on your screens. crude fell below $36 a barrel now. it's clawed back above 37. the sell-off reflecting concern about the widening concern of coronavirus. we begin with meg tirrell with the latest on that meg? >> more than 2800 dead, the world health organization saying today the novel coronavirus has, quote, pandemic potential and every country needs to prepare accordingly. new cases outside china for a second day, surpassing those in china. in japan with almost 190 cases, schools will be closed through march. in iran, friday prayers canceled south korea, numbers have surged

passed 1,700 infected. in the u.s., the first person who may have caught the virus through community transmission is in treatment in uc davis medical center the patient was transferred from another hospital and there was a delay in testing because of narrow federal testing guidelines. >> meg, that's what i wanted to ask you about. with an do we know about this particular patient, the way the case was handled seems that the ball was dropped unless they say that no, no, no, the restrictions. >> because of narrow federal guidelines from the cdc, which currently say you have to have travelled from china and have the symptoms of the coronavirus, that they won't be tested. they were treated at another northern california hospital before they were transferred to this one which has experience in treating novel coronavirus we don't know how many people were potentially exposed before this patient was put into

isolation. >> do we have any other information about how this patient might have contracted it >> we don't know that. the cdc says it's possible it was a travel-related case. because they can't trace the transmission, that's why they're saying it could be the the first community-acquired case. >> wall street is very much locked in on that. meg tirrell. the dow is down 960 points at the lows today bob pisani is at the new york stock exchange tracking this for us bob? >> wild intra-day swings, including the premarket, as we figure out where the earnings are for 2020 goldman says it will be zero lot of debate about that i want to show you the s&p futures, including the overnight. we closed somewhere around 93 or so, moved down to about 10:30 this morning, including the overnight and rallied -- not

quite but almost all the points back again the markets don't really know how to price this right now. there are betsware dramatically oversold what's that mean, oversold without getting technical, when american express is down 16% in 3 1/2 trading days, folks that, is stupidly oversold this is the bottom here at 1030, exxon, visa, united technologies, you can go an entire career without seeing those numbers and the market decided someone was interested in buying. >> for more on this rapid sell-off and what policy response we should expect, joining me from brookings, brian belsky at bimo capital markets and rick santelli. brian, let me start with you how would you describe the market action? you've been pretty constructive. not the type to panic and start selling into one of these

downturns. so at what point do you think, look, this is stupidly oversold, to use the bob pisani phrase, or totally justified? >> first of all it's an honor to be here on a day like today. quite frankly, kelly, fear has been the epidemic in our investing world since the crisis, okay and winston churchill said it best fear is a reaction, courage is a decision today at least, we saw some courage with respect to the market bouncing back now it's very difficult to make one-day decisions on these types of moves from a fundamental perspective, until we start to see a demand issue come in -- right now we have a supply issue. if supply and demand become a problem on a fundamental basis, then numbers will change. >> right. >> until then we have to have courage and faith. faith in our business is investing in fundamentals and the fundamental construct has

not changed the last week. >> plenty of people are willing to say, brian, i think we're going to get to that worsening point in the economy i'm selling now. you can wait until you have the evidence in front of you i don't want to wait for that. that's their decision to make. to the point on community spread that meg was making with coronavirus off the top, you have someone as respected as jp morgan out there saying, look, if you get community spread you're talking maybe more fed rate cuts, downgrading production it's not fear, so to speak it's fundamentals. >> it's tough to say that, though we're getting ahead of ourselves. it's been a structural trend to default, to be negative, and hope for the best. underpromise, overdeliver. we've had 16,000 people in our country, 16,000 people in the current flu season that have died in the united states alone. we have nine active vaccines the gestation period, nobody

knows. the worst thing anybody can do is be a strategist or economist and say this say pandemic. let the health people do that. i think it's way too early to jump to conclusions. >> david, let me bring you in here as you watch the economy and think about the fed response there's been a lot of argument over whether we had a great discussion yesterday about whether there would be regulatory forebarns that they cou forebearance what do you think is appropriate? >> we have something that's very much a supply shock to the economy. think of it as if there were a sudden shock to productivity it's mostly outside the united states those companies that are vulnerable to china and europe are going to be most hardly hit. the question is, how long can we

be insulated from this here? the u.s. economy is in pretty good shape we could probably take a hit i think what -- there's not much the fed can do for a supply shock. there is some demand side. if everyone starts canceling trips to disney world, imf is talking about canceling or having a virtual meeting here in the spring i think that will pressure the fed to cut interest rates again. i don't think it will do a lot of good but that's the only tool they have that's practical. >> rick, there's not a lot of rate cuts left, so to speak. we're talking about one and maybe more this year what do you think about that tool as a response versus others and just the simple fact of where we're trading today with the ten-year yield going 1.3%? >> yeah. i think any more rate decreases, any more stimulus would not only be a mistake, it would be'

mortal sin of financial negativity why should we take our future insurance when we really have an issue that most likely isn't going to go away, something that's truly recessionary? what's going on now will not be inocculated by lower rates i have a great respect for david, read his work for a long time to do something like give away an ease because it's something to do just makes very little sense to me. and as far as the marketplace, i think we're going to close the stocks in positive territory today. listen, i know it's bad and there's human element involved i'm sympathetic to that. but i think everybody is overreacting, cover your butt mentality in a social media world has gotten out of control. the way the stock market has leveled and become this onion of put your positions on when volatility is low, it's their choice but the deconstruction of that is always much quicker

and think about this if we start to move into positive territory with the rebalancing pressure of the buy side tomorrow in stocks, you could see people running after these positions, and that could change the psychology. none of us are doctors, but a lot of us know about the markets and i think the market is overreacting. >> to that point, david, about whether this is the right time to use these rate cuts, you have jp morgan saying these developments ease their call for the june meeting and risk of return to the zero lower bound are rising because of that. >> look, i don't think the rate cut -- we would rather have a vaccine than a rate cut. the fed has to say -- first of all, the bond market is anticipating a fed ease. that's not the reason to do it but that's one reason it's driving long rates down. secondly, the fed has to think about a couple of things one is, it has the risk to the economy gone up more from june

saying a rate cut would help and secondly, we know people at the fed who think when you get as close to zero, where we are now, the right recipe is do more earlier, don't wait in order to avoid hitting the zero lower i don't think they decided yet i don't think they want to ease now and then discover it will be a v-shaped recovery. after all, forecast for the first quarter is around 2% they want to wait. the odds of easing go up every day that it looks like the virus is spreading beyond china. >> david, rick, thank you. david russell, rick santelli we want to get to breaking news on facebook. jewel gentleman boorstin, what's happening? >> facebook is canceling it's f-8 developer conference may 5g9 and 6th in san jose at the san jose convention center, annual conference where it gathers about 5,000 developers, entrepreneurs, media, people to

come and listen to mark zuckerberg and other leaders of the company talk about the future of facebook and the way they want to expand their footprint. it's a place where mark zuckerberg in the past has showcased the augmented reality and given his vision for the company. facebook saying they'll no longer be doing this in person but will figure out other ways to connect with their developer community and make announcements without that in-person component. shares down about 1%. >> facebook is canceling it's f-8 developers conference. some of the sell stocks in this sell-off, tesla, virgin galactic, down 38% for more on what this loss of momentum means for the broader market, we welcome dom chu

are these canaries in the coal mine >> it's chicken and egg at this point. tesla and virgin galactic, beyond meat, they were created because of investor optimism and perhaps somewhat degree of euphoria is the way to put it. when you have those pullbacks happen, the ones that went up the further often lead to the downside it's not just those things to a much more milder degree, but important degree, it's amazon and microsoft as well there have been relative outperformers but if you look across the board, the best companies within all sectors have been taking hits on this thing. etfs that attract momentum versus volatility have all gone down 5 to 8% in this sell-off. it is pretty broad based

that's the takeaway from this whole thing. >> what do you read into these >> there's an old adage, live by the sword, die by the sword. >> right. >> it's so funny because investors have short-term memories when things are bad -- long-term memories, sorry, when things are bad and short-term memories when things are good. tesla, we had fundamental issues with tesla investors feel pretty confident that moment sum working, so let's buy tesla. it may not be that simple but it is that simple. >> especially if there are younger investors, for example it's amazing these instagram accounts and tiktok, young people who own tesla, own vergen galactic and they they understand the company better than you do, and they're right. >> mr. santelli said it best, we're in a dangerous world,

controlled by social media by the way, that's part of the reason why the market has been going down, because of the lack of information experience, perspective, longer term works be careful when you think you've got everything figured out, sell, because you're probably wrong. when you think you're the dumbest person in the world, buy, because you're too critical on yourself. i would be careful of someone doing this all the time trying to figure out stocks. >> it's interesting you bring that up. one thing we haven't focused as much on, crypto currencies. >> or weed stocks. >> bitcoin has pulled back pretty big in terms of momentum. you talk about momentum stocks it's the upside moves in asset classes being sold off as well it's become about traditional havens, like treasuries in gold. >> so my point to put a button on this conversation, brian, do you think the sell-off is the kind of thing that's needed to reset the market, get the froth

out of these high-flying stocks? by the way, the market itself, you could argue was, quote, unquote, overdue for a correction was it not >> we were going to have a correction market was up 30% last year. i'll quote another really smart guy, paul, wrote this small book in the corinthians, said stand on your guard, be strong don't be nervous you're sesting for the right reasons. you have a great investment adviser, financial adviser and a process. don't scrap your process because of fear today. stick with your discipline and remember equities in the united states are the most stable asset in the world from a high quality standpoint investor also want quality bonds have dipped because investors are coming back and buying our income as well. >> john, do you want to respond

with your own scripture quote? >> i'll keep corinthians and the rest in my back pocket tesla, future demand china, sales were a bright spot in 2019. can the company make up for coronavirus loss now tim higgins, reporter for "the wall street journal" and brian belsky is with us as well. we can't shake you today tesla stock took off after earnings toward the end of the year people felt better about the fundamentals what's changed, if anything, for tesla that justifies the lower stock price? >> part of the rocket up was that the china market was coming online now concerns about can that factory produce the vehicles it's going to need and is the demand going to be there in china? part of the story about tesla and china, the overall market has been down two years now. they've been becoming that trend. can tesla continue to be the

outlier or will it be locked in with everyone else >> the chinese market was not looking great before this. saturation or their own car brands were doing better than foreign one wuns >> couple of things, tariff war, slowdown and too many brands in china. a structural reckoning that was going on tesla was so unique, it was offering a more expensive electric vehicle than is typically purchased in that market essentially, they were selling a luxury car, created a cool brand that also happened to be a luxury vehicle. >> if both supply and demand are in question for tesla, what's the most important information for tesla investors to find out now? >> february and march deliveries, how bad was this affected just today reports out of china suggest new car registrations were down dramatically compared

to december. it's murky because tesla has a new way -- bunch up at the end kind of a tradition. once we get through the quarter, how bad was it a sign of the year to come perhaps. a lot of people were expecting a profit this quarter in part because of china. >> brian, do you want to see a stock like tesla start taking off again, turning around, or would you prefer a rally that leaves tesla and more of the momentum stocks behind and has more of a quality value names leading the way? >> high quality is the place to be we would like to see tesla be more stable in their delivery. cash flow. the big problem there is the secular decision within the chinese community to spend mo y money. real secular change in terms of their savings rate if they're scared, which they currently are, i think the demand/supply issue in chien wra with respect to tesla is the number one thing in terms of a stock, we want to

be in those names stability and invisibility of earnings is strong and we're not seeing it in a type of stock like this. >> are you excluding names in china that have a big presence or are you picking them up because you like the opportunity? >> we're looking at how stocks did with the majority of revenues in china versus s&p 500 companies that mention coronavirus in their earnings report the stocks that have the majority of revenues in china outperformed those companies that have said anything about coronavirus. with an does that tell you fundamentally, things are pretty good there, relative to these people, and mr. santelli said it right again, people trying to be more defensive and mention it first in case something happens. what we'll ultimately see is a demand shock coming out of this pent-up buying or orders that will off-set the negativity.

>> any sign of that for tesla, jim? >> since 2008 when they did nearly go bankruptcy because of the way the market reacted, this time they have more cash on hand they went to the market, raised $2 billion they have a kooug. it's almost as if elon musk is preparing for potential bad days we don't know that, but they have cash now. >> great point thank you both good to see you today, tim higgins and brian belski. as americans prepare for coronavirus, how will that impact stocks? big box and wholesale retailers like costco and dollar general have been sold off on supply chain concerns, taking a leg lower today but grocery stores like kroger, is up good to see you. welcome.

what are we hearing from the grocery stores about people stockpiling? >> next week is the big week if kroger, dollar tree and costco repo report, i think you'll see some benefit. >> why is kroger up and costco is down? >> kroger is a local play. costco won't benefit on the grocery side but may lose money in the electronics. >> even people that go to costco for supermarket staples, that's those electronics if they're going to see a pull back is that also true for the dollar stores that often need that discretionary impulse buying >> there's a difference. dollar general is more of a grocery store, 75% of sales are in a grocery category. dollar tree half is discretionary. for a dollar tree they immediate that discretionary type to get people in the door. >> it's been tough for kroger.

now they have the backing of berkshire hathaway. >> it's a short-term policy, a three to six-month bump and from there, investor also focus on concerns out there, mainly amazon competition as they roll out free delivery. >> we're perform rated on the entire group mainly due to competitive concerns you look at the group. we don't see the stocks working until you get clirt on the competitive front. >> we heard from david and others that this idea that shortages may spark inflation down the road the back end of the year a, do you think that's going to happen b, if it does happen is that positive for the stocks? >> poor chicken, beef. if we start to see more exports go to china and other markets you may see supply shortages outside of that, i don't see a major supply. >> would you be buying pressure

of the dollar stores, who has the best dislocation relative to the price value? >> we like costco, pulled back to $300. it's a great entry point we think their business will offset any weakness in discretionary. we think it's a great enter point. >> anybody that you think the market is too optimistic about or misreading the opportunity here >> bj's wholesale club is reporting next week. there could be a stock-up opportunity in the short term. next three to six months that company is struggling to grow their top line sales you could see weakness. >> are all these companies ready for people to come and start stocking up on two-weeks supply? >> i think they are. supply chains are i think it's nice we have lead time in case the coronavirus

outbreak becomes worse i think they'll be able to handle demand. >> thank you very much names bucking the trend and rallying, despite the sell-off let's go to dom chu for more on that. >> the silver linings playbook names that are bucking the trend, not just today but on a year to day basis as well and have to do with coronavirus. netflix. why netflix? part of that investment thesis, whether it's right or wrong, is do you spend more time at home streaming video if coronavirus gets worse, does netflix stand po benefit it's up 20% at this point. the other one to watch as well, what's happening with zoom media or zoom communications, from last spring that specializes in business-to-business conferencing calls, conferencing services up 60% year to date. right-hand side the last couple

of weeks here. as people maybe hypothetically travel less for service, do they clorox shares, record high today, people using more bleach for sanitizing wipes. >> up 11% this career, dom thank you. casino stocks are one of the names getting slammed on cor emn coronavirus fears. >> what's making me feel sick? motion sickness here i want to show you what's happening today when we saw stocks slumping because of coronavirus concerns as the losses lessened here, the one that i'm really focused on here, wynn is up 4%. look at it earlier today it was going crazy we're seeing this up and down movement

week to date, these casino stocks are taking it on the chin, first casinos with macaw properties mgm, las vegas sands off in a big way. mgm is off 15%, win, las vegas sands, they're gaming operations have been allowed to open but coronavirus concerns are preventing a real ramp-up of visitors again eldorado, boyd, churchill downs, caesars, red rock. week to date, eldorado down 20%, red rock, churchill downs, they're taking it. penn is still positive for the year coronavirus could lead to an economic downturn to fewer people feeling flush enough to visit these casinos. some of this is pressured selling, kelly the gaming rates are also off,

double digits this week, or very close to it today. but there again, you're seeing a bit of a reversal again today as the market losses lessen. >> contessa, the other interesting question, and it's a great point that these were hedge fund names as well for the casinos themselves, how are they preparing for extended weakness in macaw or if people start to shy away from las vegas? >> penn, which has almost 50 properties nationwide, coast to coast, the biggest domestic in terms of how many gaming operations it runs we're paying attention to the cdc right now and we're pulling together a plan which to me means there wasn't already pandemic planning in the event of coronavirus it's been since the cdc warned that the outbreak would happen here on the other hand, wynn operations were shut down entirely in macaw, customer-facing workers would have to wear masks

in january they had gone through and put hand sanitizers throughout their operations in las vegas. they were already doing takeaways from macaw in las vegas. everybody says we're not seeing a materialed impact, canceled conferences. we're likely to see that change. i think they're taking their cues from the cdc. i talked to an expert who said more important companies are starting to pay attention to cdc. what's it look like if employees have to stay home, if we're ordered to shut down our operations, how do we keep our people safe? >> bsolutely they have to have those discussions now. >> that's right. >> and have those plans under way. contessa brewer, let's get to sue herera now for a cnbc update >> hi, kelly hi, everybody. the cruise ship and more than 6,000 passengers and crew getting permission to dock in

mexico, after the ship was denied entry at two caribbean po ports over fears, later disproven, that a crew member was infected with the coronavirus. a woman who recovered from the coronavirus has tested positive as a second time. she acted as a tourist guide in wuhan before testing positive the first time she sought treatment a second time after sore throat and chest pains returned. lori loughlin and fashion designer husband mossimo giannulli will be going to trial date february date october 5th the trial date was set a day after their lawyers claimed new evidence would exonerate the couple cdc basing obesity study findings

that's the news update this h r hour back to you. >> my next guest says the next two trading days are what he calls gifts. why and where he sees the best opportunities. he means gifts with a "t," not people freaking out. light bulbs are one item customers should prepare to sue customers should prepare to sue fewer of in pendence. we ta mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo. my dream is to help millions more people like me.

welcome back to "the exchange." the coronavirus has the global shipping industry at a stand still as lack of containers continue to grow and that could lead to rail and trucking industries, too. listen to what the director of the port of long beach told us. >> we've seen a decline 2 to 20%. rail side, decline of rail activity in and around our port to the tune of 25% and with the blank sailings that have been announced, we expect that impact to continue to grow in the weeks ahead. >> blank sailings are canceled cargoes. some big names are feeling the pain

jb hunt down 9%, kansas city southern rail, union pacific are down 10% my next guest handles logistics for the biggest companies in the world. bob costello is joining me welcome. it's great to have you here. when have you first started seeing an impact and how bad has it gotten? >> we started to see that in the fall during the trump tariffs and were probably off 30%. >> wow >> yeah. we're still off about 30%. the carry-over from the chinese new year normally when they get back to manufacturing at 100%, about the second week of february and they have not done that yet, and they're still at about 60% capacity why is it that light bulbs in particular are one area where people might start seeing a shortage >> well, we used to have manifests that would come in, we would do 15 to 20 loads a week as of right now it's stopped dead and we are looking at next week having literally one load

come in. >> wow, what else? what other kinds of goods people not be thinking about? >> goods coming into savannah that have now slowed down. glucose strips for diabetes machines that are now going to be hopefully not but looking in short supply. >> has there been a previous instance like this that you can use as a template for when we might expect those products to start coming again and how quickly we might be able to get back up to speed >> the chinese new year has always been the time we've had a sl slowdown, and basically get ready for the slowdown this time around, it was the tariff that started and continued with the end of the new year, chinese new year and lack of manufacturing and now at this point, we're positioned -- i think we're positioned in a way such that we're able to handle the decrease going forward. >> you mean financially? >> financially i think the supply chain now,

the sourcing of the supply chain, we have great customers, good partner customers that are looking to source out more toward europe and other areas to get away from the reliance on the chinese. >> one final question, what's happening with the containers in this country that are so integral to moving everything around it sounds like a lot of them have been stuck in the wrong places why is that and how quickly can that get fixed >> you have the imports coming in and the exports aren't able to find their way so a lot of containers are building up here on the east coast. ultimately what's going to happen when it does break this will be a run on containers and they'll probably need to manufacture more containers from in china to get those exports out of china because all the boxes are here pretty much. >> wow bob, thank you appreciate it. >> thanks for having me. >> bob castelo

stocks are selling off again today, dow in correction territory as we continue to searching by about 520 points. so are there any buying opportunities that this sell-off has presented? willing to venture out in this territory. cnbc contributor it's good to see you you have a list of names you think people might be looking to pick up on this sell-off. >> i do, kelly not to diminish the potential severity of the coronavirus but this is a gift the next two trading sessions are truly a gift i know a lot of the financial adviseers are underneath their desk right now stand up and look what the market has presented these are some losers i'm going to talk about. american airlines, pell networks, exxonmobil these names have been thrown out nearly 25% lower in the last trading session. if you look 50,000 foot high, kelly, what's the s&p 500 done all 500 names this week?

monday we violated the 50-day moving average, three trading sessions later, 200-day. all these volatility events, the vix go over 30 you have acute situations where you have to capitalize by rebalancing, repositioning or buying some of the names lastly, kelly, three names to add to these pits are rocking behind us a lot of repositioning in the treasury markets it's an opportunity to add cme duke energy has been a winning name to own the last ten years but lastly, i think if you look at microsoft, certainly the guidance being cut, that's going to be coming up, every s&p 500 company. these names aren't discounted. today is the day, or tomorrow. >> jeff, i don't hear you piling into this whole stay at home theme that has netflix up and zoom technologies up and uber and lyft down because no one will ever take a ride share again. why aren't those up?

why aren't you part of that group? >> i'm old school. my university of notre dame football games, what's important now? what's important now essential names in the u.s. economy, zoom, we like zoom. we use zoom. but people will interact unless millennials take over everything. >> not there yet thank you so much, sir good to see you. appreciate those ideas here. >> you got it, kelly. this sell-off is hitting every corner of the globe, not just here in the u.s it's hurting multi-national companies in a big way currencies are becoming a bigger and bigger issue you know who we're going to. david rosenberg and our own sara eisen joins us where are we in the currency complex? what are some of the levels you're watching here >> something different and interesting is happening, kelly, in the currency market the dollar is actually weakening for a change

why? after all the hand wringing about china, europe and global growth, the u.s. growth picture is now the market's main worry also the odds are spiking for the federal reserve to cut interest rates, which would weaken the u.s. dollar as well and other safety plays are really shining in today's market we're talking the japanese yen, swiss franc, traditional places to put your monies in a weak market the president took a swipe at the fed and the strong dollar. take a listen. >> we've been hurt, in my opinion, very badly by our own federal reserve, who has also created a very strong dollar there's something nice about a strong dollar but it makes it harder to do business outside of this country. >> the president has been effective at driving down the dollar with words like that before he has actually threatened he may do something about it before like direct treasury to step in and weaken the dollar to help

the economy. no threats here yet but the mere complaint from him about the strong dollar spooks the bulls the dollar had been on a big upswing this year and that's been tough for companies that are multinationals this fall-back could be a sliver of good news. >> people in the market are more focused on things like japanese yen. a lot of americans looking to travel might see the euro below $1.10 and think that's a great time for me -- but no one is going to go to europe right now. i would be shocked if people felt like this was the right time with coronavirus. >> you don't hear much talk about the weaker euro and, therefore, plan all your trips to europe. you are going to hear from companies from coca cola, to nike, just getting over the impact of a strong dollar the last few years they'll start to feel it again and start to warn about it again. that's a secondary negative

impact to the already slowed down chinese economic when you start to look for these multinational earnings will the market give them a pass on the weakness in china and coming from abroad >> sara, we appreciate it. working over time. sara eisen at the nyse. >> you expect this to be semi permanent? what do you mean by that in terms of the earnings picture? >> what i'm talking about is that this coronavirus will be with us a lot longer than people have been talking about for the course of the past month, where i think most pundits thought it would be a short-lived affair, maybe it would last for a couple of months and we would have some miraculous recovery out of it. i think it's reasonable to say that this is a pandem ic, that this is a far different situation than we had with sars. at least with sars -- remember

i'm in toronto we all know about sars in toronto. once you got the symptoms, you got them very quickly and knew what to do that's not the case with the coronavirus. the symptoms show up late. by the time they show up you've already spread the disease around that's the big risk. >> yeah. >> taking a look at the services sector the reality is that maybe some of the good sector will come back you know, empty airlines and vacant hotel rooms, you know, that's economic activity that's lost permanently that's what i was talking about. there not be the recovery people think even after this thing ends. >> basically it's a rolling drag on the economy instead of a one-time hit have you kcurtailed travel, david? >> i'm booked to come to new york the middle of march

i've got no plans to cancel that trip, and i don't really have any overseas travel really until the fall i may end up canceling that, depending on how things end up going. i can tell you this much i do believe that this issue is going to be with us well into the summer and probably into the fall, and that's why i think that the dampening impact on economic activity, how you model fear or uncertainty, anxiety as an economist, what happens is that the savings rate goes up and spending growth goes down. it's a matter of magnitude, in addition to the impairment we're seeing in global supply chains i really thought last week the apple announcement was really a watershed event and you'll see more of that in the months ahead. >> i wonder if you're correct, what this will mean for the political election coming up in the fall, obviously, for the

president, if we're not talking about just one quarter, but maybe a second or a third. what kind of fiscal stimulus response might we see if it gets to that point? maybe it won't because the fed will cut rates here, which more and more people are talking about. i don't know if that's something you would expect or even makes sense here. >> no doubt that the fed will cut interest rates i'm not going to say it's a necessary antidote for the coronavirus, which is a health issue, but we've had a dramatic tightening in financial conditions high-yield spreads have gapped out now almost 100 basis points, equity market in correction mode the fed obviously has some sort of baseline forecast for growth. that's underpinned by some trajectory of financial conditions and those conditions have tightened. the fed will have to cut interest rates the question is by how much. is it an effective antidote to this sort of situation the answer is no but it's at

least going to offset the financial tightening impact that we're going to be seeing you mentioned on the political side, i don't think in my lifetime i've seen a better campaigner than donald trump i think he is already playing his cards with the blame game to the democrats and to the fed but i think that there's something else to consider here. if the virus comes to the u.s. and starts to spread, we start to see mobility restricted, things that are happening in asia and europe. what happens in terms of the primaries. >> right. >> what happens in terms of -- >> they've got an app for that, david. don't worry, it will be fine. >> then you have to think about what's going to happen if there is -- you have to think outside the box here. >> sure. >> if there's mobility restrictions it's more likely to happen in urban areas as opposed to rural areas and rural areas is where most of the president's support is you can can actually go area by

area to see how this position will play out. it ultimately will probably play out in favor of donald trump's ha hands. >> interesting thank you. the dow is down 600 points right now. more coverage on the other side of this break. crude oil dropping another 4% today. it's down more than 13% over the past week. we'll hear from a trader about whether there's more pain ahead next "the exchange" will be right back ♪ ♪ ♪ ♪

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voas the republicansupported mayor of new york city. bloomberg: they are male, minorities, 16 to 25, you can just take the description xerox it and pass it out to all the cops, throw them against the wall and frisk them. vo: and he blamed the end of discriminatory mortgage practices for the financial crisis. bloomberg: redlining if you remember was the term and don't go into those areas and then congress got involved and local elections were as well and congress said it was not fair, people should be allowed to get credit. vo: those policies were racist, and mike bloomberg was wrong to support them. but, thankfully, there is a better way tom steyer will be a president for all of america.

tom will use his experience starting a non-profit bank for underserved communities and fighting for clean air and water in black and brown communities across the country to put social, economic, and climate justice at the heart of his presidency. that's how we make real change. steyer: i'm tom steyer and i approve this message. welcome back energy is getting slammed this week. a really tough -- >> $45, which is what.

the impact, some reports, 3 million barrels a day. that's a third of their demand we don't know the full impact in europe now an we don't know the full impact in the united states demand for oil was weak before this all started because of the china's trade war. i would expect it to continue. demand for gasoline has been weak over the winter and there's nothing in the horizon that says this is going to improve anytime soon >> so of course with the oil, you have the double edged sword, for a lot of other things we're watching more on the demand side, but right now, it's psuppd demand been a lot of supply offline any sign that's coming online? >> well, no. not in the united states if you look production, we've been pretty much flat for the last three weeks opec production is something to worry about. next week they meet.

march 5th and 6th. if they don't announce a cut, a seven figure out, got to be over a million barrels a day. they say 5, 6, 700 barrels a day and russia's on the fence saying well, we don't know yet, then oil's going to slide to $40. that's another edge of the word the because that will hurt a lot of frackers and you'll see production drop a lot. >> but it reminds me of natural gas. all those producers need to pump in order to stay profitable even if that's driving the price down and you wonder if we're going to keep setting a lower like we have with nat gas. >> it's possible but i don't see the money flowing into the space as it did in 11, 12, 2013. you know profits looked to be that they were going to be outside the moon here as far as the frackers go, but that hasn't happened

at all in fact, most frackers are not profitable at this point you know, there's a few places, eagle ford, a few other places that could produce in the low 40s, but not too many. >> so you said we were talking about if opec doesn't cut enough, oil could slide to 40. we've talked about the downside levels to watch. what could be upside here? where do we start looking for if this thing recovers, whether it's today, maybe in the next couple of week, maybe opec comes out with something big anythi you'd want to venture about the upside >> i think $50 would be the line pretty much. if we cross back above that, then i think we head to 53, $55, as long as opec sticks with their commitments. demand should start to rise a little bit as we get deeper into the summer, but the coronavirus could put a kai bash to that there's a lot of uncertainty in the market i think you'll get the initial if opec says we're going to cut

1.2 million barrels a day, you'll get a pop off that. then it will be b a wait and see attitude and see if demand sarts to pick up >> hard to form that bullish picture. thanks very much for joining me ch appreciate it very much we know coronavirus is impacting public companies, but what about those waiting in the wings to public public? air bnb had grand ipo plans going into the year, but it's already feeling the impact from the virus who's spending bookings in china. meanwhile, door dash, which might be help ed from people ordering food from home. with me now -- diedra, let's quickly begin on door dash opportunistic? what do you think about the timing of the filing >> i think it's hard to read too much into because door dash filed confidently. that means they could wait in the wings for however long they want but it is interesting in

the time of such u market volatility and taking really the first step in an ipo, what it could also tell us is that door dash needs to raise money whether or not markets are going to be volatile it may have to embark on that. >> and these markets are are going to be trickery seems now. for air bnb, the coronavirus is a double whammy because it not only makes for rough market timing, but also a real economic problem for them to deal with. how is the company doing on that front would you say? >> yeah, it's a big time their business is on obviously a two sided marketplace and neither side of that or the company itself can really afford to absorb a hit. when you look historically, their cancellation policies have been b strict and the reason is that it's not a hotel. it's somebody and they have one room they're counting on that money

to make rent similarly a traveler can't afford to take a big hit and historically, that trust has worked but we've never dealt with this kind of issue and again, the company itself looking to go public trying to make those financials. last quarter wasn't as good. they need to be abe the show they can be profitable so it's really tough and i'm looking at these companies facing double whammys. we talked about apple week air bnb is another one of those companies facing a double whammy >> what is air bnb doing with coronavirus in terms of cannes calculation policies >> they are actually suspending listings in a number of chinese cities and offering refunds. the company says they are closely monitoring other marketplaces under u the world and listening to officials and reactinging that way but just like everyone else, just like its potential public comparison companies like expedia and bookings.com, they have to see and judge the impact

and they plan public not just in the quarter we're in right now. but also their outlook that's such a critical piece a company going out to investoring saying this is where we're going. it's difficult the longer the coronavirus goes on and how uncertain it is. >> so what happens if they can't go public when they hoped? >> when i look at a company like this, i think there will be investors that say that's not an opportunity in the private markets. i think they're a strong enough business that even if this is a really big hurdle for them, i think they'll be okay. the companies whose businesses are predicated on cash, that's what i worry about the most. there's going to be a ripple effect if the public market start to become less opened, you'll have a rush seeking more market capital and the ones counting on this, we're already seeing that.

>> that's also why you can view it very differently. we know it's got some 3 billion in cash where as door dash, we know that is a cash burning business how long can it afford to wait air bnb could be fine waiting a year or two, but bigger questions for door dash. >> that's a great point. it's why they were exploring the direct listing but when going back to what you said about this being tougher for companies predicated on the cash infusion, you don't have to name names who you might be talk iing abou in terms of where we watch the ripple effects of this >> you guys have been talking about one sector, which is this sector of delivery and stuff they're burning cash uber is public some of their rivals are not other types of marketplaces. i think there are lot of businesses that have grown up saying you know, we can make the unit metrics work if we can get to scale all those scooter companies aren't making money. i think a lot of those companies.

>> thank you both. good to get wrour perspective on a day like this with the dow down 663 points. that's how the private markets might be impacted by what you're seeing on the public exchanges today. not a pretty picture that does it for the exchange and for more, follow us on "power lunch." i'll join tyler for that >> you will indeed kelly and we'll welcome you when we see you in a moment. what day what a week. what a month welcome, everybody your money is in a world of hurt today. once again, the at session lows was down almost a thousand points it was a midday comeback cut the losses to under 200, but now, trickling down again as you see the dow off 658 points coronavirus fears, it is the black swan here and around the world. it continues to swim and make investors nervous. right now, we are looking at a sixth straight day of losses and not just modest losses big ones for the dow, nearly 3,000 points