panic. it's worked and the economy is sound. i'm still watching china people have moved from china to italy or other places, but i'm still watching china, and i've gotten to know tim cook very well, ceo of apple he's a great man i was just really interested in the interview with him yesterday because he was rather optimistic about reopeni ing factories and starbucks feels the same way on the stock part, it may change and it may worsen, but right now these sort of realtime regional bank surveys, people should pay atengtention to them. they're sending off good signals on the economy and the numbers in january exceeded expectations. that's why the atlanta fed thing is at 2.7. now, we have another month to go for the quarter and after that, so we'll see i don't think we're good to take

any precipitous policy, at least not at the present time. >> how much more shock can this market take before there's long-term effects on the economy? what do you think? >> look, the market -- the market's had a short-run correction, and i guess it's 10% or 11% or something. we've been through this many, many times before. and i don't think even though it's front-page story and nobody likes to see their asset values go down, i just don't think at this point it's going to have much of an impact. i will qualify that, depends how long this lasts, how deep it goes, but i could cite a number of historical experiences. the one i remember the most, i was a cub scout way back when,

and i remember the 1987 market crash and i remember president reagan going out and saying the economic v economy is fundamentally sound, and it actually grew by 3% or 4% in the next couple years after this crash. president trump said it in this room two nights ago, we just think the economy is sound, and therefore i just don't think this short-term stock market plunge is going to have any long-term effect [ inaudible question ] not at the moment. debra. >> if you had a friend who was thinking of taking a cruise or going to china, what advice would you give them? >> stay home >> larry, what effect do you think this will have on the president's re-election campaign >> i think the way he's handling this will have a very positive effect on his re-election campaign

as a longtime trump friend and watcher and of course the last couple years i've been working with him, for him, i thinkone of the best news conferences he's given and he laid ut, really historic and unprecedented actions. this is a government-wide effort so i think folks are going to look at that and say, you know what, he's doing his job very well i think therefore at the end of the day it's going to actually help him on that >> larry >> yes, sir. >> what emergency powers does the administration have to ramp up domestic production of the n-95 masks and other personal protection equipment >> i wouldn't want to go into specifics. there are things we can do love to help, things we can do love to unclog logjams if they exist. i don't want to go in any details on that right now. just a couple more yes, ma'am >> can you help clear up some confusion about communications having to be funneled through the vice president's office? many officials saying that is

what has to happen but the vice president's office has denied that do government agencies need to clear their coronavirus communications through the vice president's office >> there's a lot -- look, we always have coordination here. always the nec has to clear things, the president, the ultimate clearance authority, the vice president and this task force. we're just trying to coordinate our messages it's a government-wide operation. i will say no one's being stifled, no one is being told what to say. you have veterans -- i come back to that point. you've got veterans in nih and cdc with immense knowledge of these things they've been through this before and we are all ears. we want to hear what they have to say we want to hear what they tell us so there's a big difference between stifling and

coordinating i think you have to coordinate it's a big government. so, no, i don't see a problem there at all i don't see anything wrong with that whatsoever. >> officials on the record said there is no approval process, but you're saying there is >> there's no hard and fast process, no. but people have common sense you have this task force -- actually, i'm a member of the task force -- and there's a lot of coordination going on right now. here's the thing this may not be what you were looking for, but i just want to tell you, this is such a serious matter that not only do we want all the information we can possibly get, we would like to have coordinated messages just to stop any confusion with the public it's a real hard thing to do but there's no hard and fast, you know, you can say this, you can't say that

no, that's not the case. but we're sharing information across multiple numbers of agencies we're doing it through that task force. and we're just trying to coordinate, so we're speaking with one voice as much as possible that's all i'm saying. let me -- yes, sir >> you mentioned in the fox interview that the president has been on the phone quite a bit. has he spoke on the ceos of these companies impacted >> i think so. >> which companies >> i wouldn't divulge that that wouldn't be right >> the it mostly travel? >> it's across the board one of the great parts of my job is i've gotten to meet, work with, and get to know a lot of these ceos that's why i cited the tim cook interview. he's a terrific businessman and he runs a great company, and he knows a whole lot about china. he would not have said what he said if it weren't true, or at least on the ground what he saw.

that's very, very important. we're keeping an eye on everything right now we understand this is difficult, but sometimes the psychology is a lot worse than the fact. and i understand that. that's, you know, perfectly understandable human trait you plan for the worst but it doesn't necessarily mean the worst is going to happen something else >> you mentioned tim cook before sort of broadly, what have you done and what did you do back in those meetings weeks ago to try to deal with the supply chain problem? >> well, you know, the government doesn't run the economy. we can learn and report on it. we can't control that. china has taken tough steps and closed down factories or whole areas. we have to live with that.

as you know, in this room i've said several times, the president mahas from day one wanted to engage with china. he's talked to xi. we want to help them we wanted to send experts weeks ahead of when they went. we're working with the world health organization as well. we're only as good as the facts and the facts may be harder to come by in some cases. we can't control that. my point about the supply chain, i understand the economics world and the investment world is really about that because it could slow down growth for a couple quarters. we just -- i'm scanning in "the wall street journal" today, for example, looking at various stories. north american auto production is proceeding apace. there are problems overseas, especially china china auto production is terrible, sauto sales are terrible and they'll have a poor

first quarter gdp. but looking at the regional fed reports is the best i can do right now. we don't see any evidence of major supply chain disruptions i'm not trying to say nothing's happening, and i think there will be impacts, but to be honest with you, at the moment, i don't see much that may be ahead of this because the next few weeks in march will be important and we'll get new information on that through february it looks okay and i think investors and ordinary families should take some comfort from that we'll take this a day at a time. thanks very much appreciate it. >> is g-7 still on >> yes, it is. >> finance ministers and the later summits? >> the later summit's mid-june we had our meetings yesterday. we finish up today still on stay tuned for more. >> thank you, larry.

>> that is director larry kudlow, now a member of the task force which is tasked with arresting the coronavirus spread saying we're not taking any precipitous policy on the economy, at least not at this time he says we're dealing with this almost a day at a time he said market have gone too far, expected to come back, urges people not to overreact. the president is talking with ceos from across the board we're keeping an eye on everything he says in terms of medical personnel, no one is being stifled, no one is telling anyone what to say. >> he did also say i don't think at this point it's going to have much of an impact, talking about the market reaction potential impact on the real economy he believes that will be contained. >> let's bring in ken langone, joining us on the cnbc news line, billionaire investor, co-founder of home depot, ceo of

imaved associates. how are you? >> well. how are you today? >> quite well. i'm hoping for your perspective on this market reaction and the administration's handling of this challenge so far. >> look, this is a scientific challenge, not a political issue. i'm comfortable that the best scientific minds in the world right now in this particular area are focusing on it. i think it's a serious issue i think it's an issue that we have to be diligent with but on the other hand, you look back in times p.a., whether it was the hiv in the early '90s, whether it was ebola, sars, you go right down the list, i think that everything's being done right now that should be being done, and more importantly i think that the public is conscious of what it can do,

pretty simple stuff, wash your hands, keep your hands away from your face, if you have a disinfectant, use it this is all pretty simple stuff and everybody's capable of doing it i'm not suggesting that this is not a serious issue, but i'm saying to you that as far as i can see from the standpoint of the stock market, the reaction far, far surpasses the issue and kevin morse was on "squawk box" this morning and he said something, and i totally concur with him -- i wish the fed had done other things in these previous nine years to have more in their toolbox than they have right now. that said, i would rather own a high quality company that yields 2%, 2.5%, 2.75% dividend and this buying a long-term bond where i know i'm pretty much signing up for losses so i think it's a time to be cool

it's a time to be rational i think it's certainly a time to make certain that our leader, all sides, all parties, get off the issue of the politics and get on the issue of the science. and by the way, carl, that includes to me the media as well i think this hysteria is being fed in part by the media >> and that's -- we do have you on tv right now, so you are a voice of reason perhaps on the media right now. i want to ask you along those lines, you've dedicated a significant amount of your time and innings if resources to public health, the langone medical center as your name on it has this particular challenge exposed any issue with our health systems preparedness for this type of a virus

or on the contrary, do you think the united states and our medical system is in a good position >> i think our medical industry is in top-flight shape i've had the benefit of a memo from the dean last night, all the trustees, all the people involved at the medical center we've taken every imaginable precaution we're dealing with it. we know how to deal with things like this. i think we're no exception i think if you go to all the great medical centers in the united states and, indeed, around the world, they're not taking anything for granted. on the other hand, they're approaching it in a very rational, calm way, as you should so i'm very comfortable. i'm not going to change my life or i would expect most people will change their life i had a chat with the vice dean for research at nyu the other day, and i talked to her, and she assures me that as of right

now, she's not that concerned. we're making the necessary -- we're taking the necessary steps, but you have to let it unfold as i said earlier, the fact that you've got the most competent and most able scientific minds around the world focussing on this right now, i'm absolutely convinced we'll look back at this in two or three or four months and say, my god, what a fabulous opportunity it would have been to go into the stock market or to add to my positions. >> given that, ken, what, if anything, do you think the fed should do here there are some calls, we had on this morning on "squawk box" for some coordinated action among central banks. is that necessary if in three to four months we'll look back on this as perhaps an opportunity that some people had to buy stocks >> what coordinated efforts can they have? interest rates are so low now. as i said earlier, my hope would

have been that they would have taken rates up over these previous nine years to a level that effectively that's one more tool in their kit, because if the rates are higher, they can do a meaningful cut. but right now, look at where interest rates -- what else can the fed do i suppose they can do more qe and all that kind of stuff, but i think that's not the issue right now. the issue is not availability or money or shortage of money there's plenty of money around if you lower rates you're going to just make the argument for corporate dividends that more compelling >> that's for sure, ken. i'd love to get your take. we're trying to get people not to overreact and your point is absolutely true. are you thinking more about the consumers' behavior or companies' behavior when you have nestle and jpmorgan cutting international travel, microsoft and facebook canceling events? which is more important to pay attention to right now

>> well, i think the corporations taking those steps is sensible. you know, we don't know how bad this is. we don't know how profound it is, don't know how widespread it is i think what's being said is if you don't have to make that trip, don't make it. but on the other hand, i don't think -- i don't detect any kind of -- the airlines canceling flights f s for a simp reason. when your load is down 75%, why lose money more importantly, why provoke the possibility of bringing the disease back if you go over there? so right now what i see are all these precautionary steps, which i think are very temporary in nature, and i think they'll prove upon reflection to be the right steps to take. with regard to the consumer, the consumer has to be careful in how they deal with themselves personally i said earlier, wash your hands, don't touch your hands to your

face if you're around somebody that's coughing and kwheezing and sneezing, be careful don't put yourself in harm's way. i think right now what i see more of a problem than anything else is this panic and there is a panic going on. if you look at the market, the market's down, what, 4,000 points in three or four days that's hardly stability. but we'll get through this fine. the important thing i think is let the scientists do their work let the government leaders do their work i think, by the way, the president's early actions regarding blocking off people from coming from certain countries was brilliant, and it was courageous, and he did the right thing. i think, for example, this committee, this task force, have all the best minds in america involved in it, and i think it will be great. but i urge everybody, be calm, be cool, and be collected. don't let your e motions run away with you.

there's plenty of time to worry. right now let's try and do as much as we can to continue our normal lives, but my god, don't give up on america and don't give up on the world it's not that time >> all right ken langone, thank you billionaire investor and entrepreneur with a message of calm for the market. scott nation and barry banister join us this morning. good to see you beoth. barry, who would have thought this came along when everybody was getting constructed from a cyclical point of view now we have people looking in the rear-view mirror in the period of post august calling it a fed-induced breakout what about global growth >> did come out of the blue a little bit, but a vix of 49? the fear index is at 49? it was 44 in march of 2009 when the world really was coming to

the end in an economic sense so this seems to be a panic and overreaction ready for a short-term bounce. i do think we need the fed to send a signal with a quarter of a point very quickly, hopefully next week, maybe monday. it's not the cure to the virus, but it is a signal >> a signal -- what does it -- how does it help, barry, if you could help viewers understand, what a fed cut does for the markets, the economy what is the constructive element in an emergency cut? >> looking at the ten-year break in inflation, it's been plunging with the 10-year yield they're not meeting their inflation mandate and they probably do need to steer a little bit towards the easing side i've been a critic as you know for a couple years on the fed policy, they had no business going to 2.4% last year or staying at 1.6% right now when

you look at the major countries in the west minus the u.s., they're at zero. our spread is so wide. there's all kinds of good reasons to cut and it's a good signal >> scott nations, i hear the argument that this is a panic. certainly, the vix went from around 15 to 46 today pretty quickly. we are back at october levels even right now, which is not that far haven't lost all the gains for 2019 is there an argument that this is really taking some euphoria or perhaps unnecessary exuberance off the table, but this isn't a panic at this stage? >> i don't think this is a panic yet. why do i say that? because in a real crash you see discontinuous trading. that is trading that gets really sloppy, nobody can understand what price they're likely to get, and while the numbers have

been ugly, the trade has been relatively calm. you may not like the price but you get the price you expect while we're off more than 10%, there aren't been air pockets. it hasn't been discontinuous or ugly, and that's really the sign of some sort of a crash, discontinuous trading. what could cause that? if we have some sort of contraption, and every crash is husbanded by some sort of financial contraption that comes unglued, unwound, the worst possible time and injects leverage, that might be overnight repos or ill-liquid etf. that's when we see discontinuous trading and chaos. >> scott, so often when we talk about these drops, we talk about them as though the levels where we were trading right before them were completely rational by historic standards i don't know that's necessary the case this time

given where we are now, if we're talking about the s&p, if we have a valuation adjustment to where it's more in line with historic levels and we are considering a short-term hit to corporate profits because of coronavirus, what do you think is a reasonable level where the s&p would be settling out along those circumstances? >> i would think between here and another 5% down would make a tremendous amount of sense remember if the fed keeps rates too low for too long, and i'll disagree with barry completely and agree can ken langone. they've kept rates too low for too long and asset prices got inflated into a bubble not the first time the fed has done this. they did it in the late 20s, in the middle of the 2000s and we know what happened at end of each of those decades. this is not subjective look at something objective like the taylor rule, which says that the fed funds rate should be about 300 basis points higher. so if the fed has been looking at the economy, can't find

inflation, it's only because they've been using a 50-year-old measure that's outdated. all they had to do was look at asset prices >> barry, one lun from rbc cutting now when the fed is 100 basis points below neutral further cements the dangerous precedent set, that the only independent variable in the policy reaction function that matters is what the s&p is doing of late. don't you think a cut is going to reinforce that view >> yeah. a few things one, the causality runs from the stock market to the economy, not the other way around that's just reality. also on the other speaker's point, yeah, i would like to wave a magic wand and make the trillions of dollars of debt go away, but the fact is it exists. if we do raise rates to anything approaching a taylor rule, we're going to get a massive deflationary reduction i don't know if that would stand

politically. as far as rbc, fourth quarter of 2018, the fed only needed to touch the neutral rate to trigger a nearly 20% drop in the fourth quarter of 2018 in the s&p. i believe we had one month we were down about 2.5% on retail sales, which is the causality i referred to earlier. so, you know, it would be nice to take the medicine, but i don't think this is the time for experiments of -- you know, after you're pregnant, it's a lit late to become chaste. >> one thing to barry. when kudlow said literally 20 minutes ago that the stock market is not the economy, you don't think that's entirely true >> well, i just look at, for example, the year to year s&p 500 correlation to the year to year consumer consumer confidence it's tightened up in the last decade so, yeah, i think the wealth effect matters a lot for marginal propensity to consume by stock-holding individuals we have already maxed out consumption and no savings and

lower income, so, yeah, i think the stock market does matter >> scott, last word? >> carl, my point would be that this may not be the time to react for the fed, but they've had the last half of a decade to do it. and they were cutting rates at a time when we had 2% growth in the united states, which is not great but pretty good, and a stock market at all-time highs up 30% for the year. neel kashkari kept saying they couldn't see inflation and wouldn't raise rates until then. if you couldn't see inflation, it's only because you didn't nowhere to look. >> not till you see the whites of their eyes to quote somebody else on that front scott, barry, thanks, guys we appreciate your time as always >> thanks, carl. >> thanks. >> a global shortage of facemasks has sparked companies with suppliers seema mody is inside the

manufacturing plant at 3m. hi, seema. >> hey, carl pressure on 3m, the world's largest factory of these res ray or thes. it's increasing staffing and expanding its assembly line with these robots tone sure it can meet the demand. there are a number of respirators that 3m specializes in, the most popular this n-of 95, designed to fit around your mouth and nose and it filters 95% of air born particles. 33 million are in stockpile, but it needs 300 million as the risk of the coronavirus becoming an outbreak in the u.s. continues to rise. 3m is trying to accommodate the domestic demand and fulfill the orders coming in from around the world. >> the global demand right now for respirators is very high because so many governments and hospitals are preparing. and 3m and other manufacturers

are ramping up production as quickly as possible. but it is such a dynamic situation. >> making matters even more challenging, 3m just got done sending a number of product to australia where medical workers were fighting those wildfires and now coronavirus hit, a lot of supply to xhooin, achina. so they're working to get everybody more >> it's literally the story of the month. 3m's performance, which did remain one of the only dow components green today our seema mody in south dakota markets about to close in the uk and continental europe today coronavirus fears sending major indices down another 4%, tumbling into so-called correction territory the airlines took a hit after a warning from aig

they're expecting the virus to hurt full-year earnings and bookings easyjet has a similar warning. the stock 600 finishing february with a 9% loss that is the worst monthly performance since 2001 >> let's get the latest on news and a news update. sue herera has it at headquarters thank you very much. here's what's happening at this hour, everyone in geneva, the head of the world health organization raising his assessment of the seriousness of the coronavirus outbreak but also saying the virus can still be contained >> we've been monitoring developments continuously, and we have now increased our assessment of the risk of spread and the risk of impact of covid-19 to very high at global level. >> tokyo disneyland closing until march 15th to slow the

spread of the coronavirus. that's following a government request to cancel events where large crowds gather and could spread the infection and in the middle east, palestinian protesters clashing with israeli security forces in the west bank city of hebron rocks thrown by protesters were answered with stun grenades from israeli troops the confrontation occurred during a demonstration marking the 26th anniversary of a masker at a holy site to both muslims and jews that's the news update this hour back to "squawk alley. jon, back to you >> thank you, sue. china looking to its largest names in tech to control the outbreak of the coronavirus. deirdre bosaexplains from one market in san francisco. deirdre? >> the chinese government is tapping their enormous reach to spread critical information and control the outbreak alibaba has more than 700 million users.

tencent's wechat has 1.5 billion. for many people, they're an i y indispensable part of their lives and their work it tells users the latest coronavirus numbers and points them to resources like official accounts and latest articles this would be as though facebook's platforms and amazon were harnessed to distribute the latest government information and tools in the case of an outbreak the chinese jingts go a step further. they're helping to track users' health and whereabouts alibaba and financial are exploring a nationwide rule at a rating app to help governments tackle travel. in shanghai, the local transportation authority is asking subway passengers to scan qr codes so they can trace people in close contact with suspected patients what do they get out of this authorities get to tap into the tech giant's networks to harness big data, and the tech companies

get a major traffic boost of other businesses within their companies are facing uncertainty and a slowing chinese economy. earlier this month, alibaba warned of a drop in revenue this quarter as coronavirus hits supply chains and deliveriedelis back to you. >> deirdre, thank you. our next guest is working with u.s. hospitals to train people on how to better track the spread of a virus like this. there is a capability of making an impact using artificial intelligence but it's not trained properly doctor, thanks for being with us >> thanks for having me. >> so tell us -- give us a sense how can artificial intelligence help in a case like this and are there ways that reliance onn on it for the wrong thing can hinder a response?

>> it can help, absolutely one is in drug discovery two is in mining of data in hospitals to improve treatments in real time three is to identify clusters when public health organizations work together. the technology exists but very few health care work esches are trained in its use more importantly trained in use of platforms that can make the technology applicable quickly. can it be misused? of course. when data sets are very small or people attempt to build things that aren't ratified, of course. machine learning algorithms can become biased quickly. again, a very important reason why training is so key additionally this morning we see that the twin technologies of ai and online are very important at points of crisis like this ken langone said earlier be calm, cool, and collected. i would add be creative, look agent drone delivery of drug, autonomous delivery of foods,

canceling of events in favor of holding them online. these technologies it's logical to assume will receive greater scrutiny and investment and influenced by moments of crisis like this. >> doctor, what would you say are some of the potential consequences when surveillance apparatus gets turned and combined with artificial intelligence to be used for public health? i mean, are there good circumstances for that are there potential pitfalls as we watch the chinese response, some people, i don't know how well informed they are, suggest that perhaps in the ear early stages china relied too much on surveillance and control and the data they had and that might have hindered their response what happens when you start to use surveillance apparatus for health reasons >> this is why training and preparation and creativity are so important at moments of crisis, it's hard to implement a system which is perfect. using only one metric like body

temperature or two metrics body temperature and range of motion and movement of potential agents it's often insufficient. buttressing that information with posts on social media, with clinical information that can be reasonably shared makes the algorithms stamarter and better and evolve more smartly over time these moments of crisis shows where training has to occur in order to respond better next time it's moved a lot of activity online, so even as governments are trying to figure out where disease factors are moving, where the hotspots are, where the clusters are evolving, people and companies are figuring out ways downtown my inbox b this morning is full of messages from colleges and universities and k-12 schools figuring out what they're going to do if classes have to be canceled, for example. this combination of ai and online is not only a way to control outbreaks when they

occur but to get getter and more resilient before the next ones >> do you expect us to see more changes in methodology like we saw from the chinese last week i just wonder what you think that would do love to public perception of the spread >> i think you're asking great questions. what would be logical would be to see evaluation of not only the technology but also public policy americans aren't going to be as comfortable obviously with the methods that the chinese government uses. you will see public debates. in the chinese point of view you'll see them working very hard of course to apply the right technologies quickly you'll see innovators come in and propose and implement test cases of technology with understand thing that the public health panic is real this is not going to be the last time this happens. preparations need to be made for resilience >> doctor, finally, a question

about message discipline from governments versus message control. by the accounts that we have thus far, the virus was allowed to spread early in china because the government tried to control the message from doctors who early on were trying to alert people to the dangers of this virus. in the u.s., the trump administration argues they're trying for metsage discipline, to coordinate through the vice president's office where are the lines -- where should they be drawn between discipline and control so that the people who know the most, who have the truth, are able to share it as quickly as possible versus making sure that there aren't all kinds of messages floating around and confusing people >> great question. it's tough on the one hand, message discipline helps prevent panics that are not productive and could even be counterproductive. on the other hand, having open flow of information helps with discovery. keep in mind the coronavirus outbreak was first detected by

an ai. figure figuring out how companies use them is really important with this outbreak, we have a different set of technologies that were available with prior outbreaks like sars and% they're grappling with what are the policies going to be i think you'll see that in the public >> dr. anne marie, keeping us grounded in the science. thank you. >> thank you so much >> it has been a week full of huge reversals we turn to dominic chu i'm looking at chips right now, largely green. microsoft up what else you got? >> it's been interesting because amidst all of this it was just about 24 hours ago that they were highlighting some of the big moves in stocks tied towards positivity around kron vice. you may call that clorox is one of the stockings we highlighted

yesterday as been being an outperformer during this whole coronavirus scare in the last week or so in markets. look today, down 7%, as a big reversal has happened in those shares another one, moderna, credited with having one of the experimental treatments that could attack the coronavirus at some point those shares were up strongly last week. down 10% another reversal there netflix, online streaming, could they be a beneficiary, people stay home, stream more video it was positive but today down about 1% in trading so far today. the one standout that's still trying to hold on to that upside momentum has been in zoom video. now they're down 7% as well. you can see earlier today they were higher. but some of these coronavirus winners so to speak have been reversing. we also want to look at what's happening with the energy sector

overall. look at the spilder. the ticker xle there at a ten-year low on pace for its worst week and month since october of 2018. meanwhile, oil is continuing its slide. wti benchmark crude down 16%, on pace for its worst week since december 2008. could we see energy and technology the two worst performing sectors, if there are bounces, could those be one of those places we'll wait and see if that happens this afternoon back to you. >> dom chu, thank you. i do just want to mention what's happening with the major indices right now. well off the lows. the dow now off a little less than 500 points. that's about 1.9%. the s&p off 1.5% the nasdaq has had the bigger recovery of all of them, off just 0.6%. all of those well off the lows of the morning

the dow has been down more than 1,000 points at various times this morning shares of vmware lower this morning after a mixed quarter that saw the company fall short of some estimates but beat on revenue. that's down about 7% today amid the broader sell-off pat kelsey joins us from palo alto good morning >> good morning, jon always a pleasure to spend time with you thanks for the opportunity to spend time with you and carl today. >> we'll talk about the quarter and vmware, but first the coronavirus, covid-19, the adjustments the tech industry is making what are you doing with business travel what impact is it having on demand that you're seeing out there in the marketplace >> well, thank you, jon. certainly our hearts go out to those who are being immediately impacted by the virus. we've taken a moderate view in our business

we've seen the supply side continue largely unaffected, and the interest and tech trfgs remains high the supply side or the demand side is doing well the supply side much more affected by the hardware aspects of delivery. so we're seeing more impact there. you've seen that in places like the apple impact in our business, we moderated our activities for travel. we've eliminated some of our major events we saw the mobile world congress i was looking forward to seeing you there. some of our sales kickoffs we've moderated. we've seen many of the remote workforce aspects. we've worked to give our employees more flexibility to work from home we've seen business strength in user computing business as customers want more of that workforce agility as well. overall, moderation. we continue to see tech having a very powerful future and the interest in the demand

of their transformation to remain very high having just gotten back from mobile world congress on tour, as i describe it, in northern europe, the interest in vmware and those technologies for transformation remains extremely high in the market >> what insight can you give us into the process that vmware and companies like it might be going through in deciding what types of events or travel to go ahead with and which to pull back on even domestically we see a number of events, facebook, for example, getting shelled, companies pulling out of events. i've heard a one-off, anecdotal basis nashgs it has to do with who are the health personnel on site have the event organizers time to tell companies what they dool if there's a problem even if there's not the expectation there's an outbreak in the area, if the organizers

can't answer those question, well, then we're not going what's the process weyou're goig through? >> we have an emergency response team as every company does and trying to assess how many people would be traveling from areas of greater risk employee concerns as well. we want to be sensitive to their concerns and giving them more flexibility. for instance, next week, we're continuing with our u.s. sales kickoff in las vegas we feel the risk of that is low. but we've eliminated the apj and europe events, preferring instead for a virtual kickoff that gives our employees the same benefits of kickoff but doing it in a fully districted fashion. we're trying to be sensitive, and obviously our emergency response teams are acsesing all of the best-known information source around risk management on a global basis we're trying to follow the industry trends. we did pull out of mobile world congress, but we're interacting

with gsma to understand their plans. when they came to that decision, we were in full support of it. >> i do want to mention as we're speaking session highs across the board for the major indices, dow down 318 points or so, the nasdaq mass gone positive, near the flat line. i want to talk about vmware's business weaker than expected billings, revenue arguably ex-pivotal. your mix was more towards so software as a service. explain what happened and when it will clear up >> we had a mixed quarter that finished a strong year major acquisitions we grew in the double digits we had 15 quarters now of double-digit growth. in the fourth quarter we saw this acceleration in the subscription business, something we've been working on for a while, so that's exciting.

but that depresses near-term revenues as those businesses grow more rapidly. we saw an extraordinary number of late-quarter deals, and simply put, we didn't get them all finished at the end, which also fwaukz or the as well we own it. we have to execute better. we have enough demand. we see enough interest to set double-digit growth guidance for the year that we just communicated on our earnings call yesterday we feel like we continue to satisfy digital transformation for our customers across our portfolio of products. i'm excited about what the year will present >> end of last year, very beginning of this year, i was hearing in the cloud ecosystem from amazon, microsoft, google, others, that they were hiring sales forces, really pushing strong into this year, expecting the growth has this issue, the coronavirus, affected that at all, or do you think the cloud momentum in

terms of pursuing aggressive sales is going just as strongly as it was at the end of last year >> yeah, our view and the view i've set is that digital transformation is a ten-year cycle, and gdp, tech spend, software and cloud spend is higher than that i don't see that changing this year even though gdp might lower the overall stack a bit. in the cloud hiring, the vmware activities in multicloud, our partnerships with amazon, azure, google, ibm, alibaba, all of them remain strong and we're seeing strong demand interest from customers continuing as they see this transformational ability. because digital transfornation is not an i.t. budget item it's a ceo priority. we see that continuing unabated into this next year. and our partnerships with all of the major clouds are gaining

momentum in the marketplace. huge interest there. >> that long-term focus we keep hearing so much about. pat, always great to have you. appreciate you coming over and being on with us good quarters, mixed quarters, and everything in between. good to see you. >> thank you, jon. >> the dow is 500 points off the lows nasdaq has gone green. microsoft is green apple, the chips, clorox, which has been a huge winner this week, jim cramer recommended selling it this morning, down 6% vix has gone from 49 to 43 it comes on the heels of goldman saying they see 75 basis points of cuts in the first half. no outright recession around the world. and a short-lived global economic contraction so we'll see if this holds we did get similar action yesterday as well. let's get "the santelli exchange" at the cme hey, rick. >> good morning. there's one word i hear from

trader, especially the younger ones some of the older guys have seen some of these big days or weeks like 1987, but the word was ferocious. i like this word it describes the market and gives me a way to summarize the week all the talk we are hearing, listen, 50, 75 basis points, obviously, this piece is my opinion. it's "the santelli exchange. and i think it's crazy talk. i think right now the fed doing anything, any central bank doing anything, would be wasting movements into a strong gale-force wind. and "e" has to be for ease because this is the place we're hanging out. why? because the fed put us all there. that's why e they have this parental feeling to make it a large signal in terms of "r," it's rates, and i have never seen anything like it i've been looking at interest rates since 1979 this has been a breathtaking

move it's hard to use technicals because especially the long end is in extreme ranges the golden immediate has an expansion of 1.6 and we can look at a variety of different patterns that can give glimpses of where an extreme new low yield or high price stops. but way more art than science. over the skis. you know, this one i like. how many times have we talked before the coronavirus that many thought we were getting over our skis but it really didn't matter because it certainly seemed as though the low rate environment was okay it did take an he can on nows shock like coronavirus finally, the markets we are all talking about the credit spreads as if it is approaching some sort of disaster indeed it may. i don't have the crystal ball. but i will tell you this, when it comes to credit markets that if the spreads are widening

because treasuries are falling like a rock for reasons that are more global in nature, the spread should widen. when you have to worryis when it widens because the other side they go guns hot and that isn't the case here finally, i, for implicit when did the s&p or the dow or the nasdaq have an implicit guarantee, whether by government agencies, the federal reserve, that this has to be utility for investment you know, all these big boys calling for cuts these huge brokage firms, the huge equity firms, why are they calling for it we never marry much from them when they are up 25, 30%, they are talking hig positions at least in my opinion. organizations, this is a nice one. i will tell you why. you think of things like world health organizations listen, all of these big organizations that are trying to help guide the globe through this, they all have their heart in the right place but at the end of the day how many people in washington, how many people out there put huge

confidence in organizations like the u.n. listen, when things like cad funds, w.h.o. has a vested interest because whether they get paid out or not on some of those is determined whether it is labeled an epidemic or pandemic they may have some dogs in the hunt finally, unable to price this is a big one. what does unable to price mean that means that this coronavirus is beyond the markets. what we are seeing here is not pricing in corona. it is pricing out uncertainty. that's what it's doing and finally, safety. is there any bigger word than safety on ferocious? i will tell you what, moving into safe harbors, whether it is the yen or whether it is interest rates s going to have a digital outcome. it is going to have a v bottom because there will be a point in time where safety is no longer required and the pricing of those investments will not make sense. jon fortt, back to you. >> rick santelli thank you as we head to break, quite a

bit of action for all of the major indexes this morning we are to have lows. the nasdaq was briefly positive. but that attempt at a rally is now being tested on all the major averages over the past ten minutes. sellers have kicked back in. let's take a look at the biggest nasdaq gainers now nvidia, xilironx wng them. qualcomm, booking holdings and micron "squawk alley" we'll be right back great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk

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store schools, options include dividing students into smaller groups or in a severe pandemic closing schools and using internet-based teleschooling to continue education. >> that was the director of the cdc's national center for immunization and infectious diseases citing the need for more remote work facilities in case of the spread of the coronavirus. we have a guest. i do want to ask you whether you think at large we are at a bit of a turning point when it comes to either learning or working remotely >> i think if i step back and think about citrix we are opportunity enough to work with roughly 100,000 enterprise

customers around the world in every geography and every market talking about how we can make people more productive, more engaged and as a buy product give them more flexibility into the way work is changing because we have long espoused this idea that work is not a place but it is a thing you do and giving people the right digital tools to be productive on their terms, frankly, they can accomplish some amazing things. >> i do want to give people a checkon the markets while we are talking. the dow down 00 points, nearly 3 pbz. and s&p and nasdaq following suit nasdaq back in the red david we have seen that zoom which has a recent ipo, does video conferencing has gotten a lot of orders, the stock has done well as people realize the need to work remotely. i wonder how much of that is actual new usage that's going to continue and how much of that is companies hedging and saying hey f something gets bad we need to have this tool in your back

pocket is the react here kind of a back pocket tool or there real usage that's going to increase, do you think? >> i think collaboration tools, whether you are talking about zoom or go to meeting or many others, it is a part of the overall story. you know, if you step back and you think about the environment that most of our customers are operating in the typical krirks-- our custom, giving them something that's secure that's available any time anywhere that's the complete picture that we talk to customers about. video collaboration or email or some of the productivity solutions it part of the is the up challenges they are facing. really need to step back and take a more holistic view of their business structure not just in continuity, but where work is going and the trends we are seeing across demographics and the ability to tap into new

work forces. >> for all the investors who have obviously been hurt by the decline in shares of travel companies this week. what is the role of travel in american business from here on out. >> i think travel right now is somewhat of a temporary phenomenon that's being impacted we are all still going to travel and collaborate in a lot of different ways look at krirks itrix as an example. we build the solutions to allow other teams to be mobile everybody is effectively a mobile worker. we have between 25 and 50% of our teams in any office at any one point in time because they are out with customers they are working from non-traditional locations. everybody is effectively a remote worker. giving them the tools to enable them to do that is real really critical never going to replace the ability to work face to face with a customer, a business partner, on employee, but there needs to be a level of infrastructure to be able to support all of the alternative work styles whether we are talking about a current situation like the coronavirus or just much more broadly, the

fact that we live in an environment that has a lot of disruption. >> david thank you. good stuff david hen shell of citrix. next welcome back we get a jobs number pmi, we will look for the south carolina primary over the weekend and see how the race is shaping uchl let's get to the judge, and the half. i'm scott wapner the fastest correction the stock market has ever seen getting a little bit deeper. welcome to the "halftime report," where we are focused on your money, as always. the investment committee is here with me. stephanie link, jon najarian, shannon saccocia, benn brent venn gel audio rob seechen of ubs dan greenhouse is back he's chief economist and strategist at solis ma