good morning welcome to "squawk box" on cnbc. we're live from times square andrew is out today. our guest host is liz young from bny investment management. let's take a look at market. right now you'll see dow futures are indicated up by 71 points. s&p futures indicated up by 3. the nasdaq up by 33. as joe mentioned, the dow futures have swung 1,000 points. a lot of road they've traveled overnight. this comes on the heels of last week's massive declines in the market the dow was down by 12.4% for the week nasdaq off by 10.5%. we're watching this very

closely. the treasury yields are probably the more important story we're watching this morning. let's take a look at that. you'll see the ten-year is yielding 1.067%. mike santoli point - >> the two-year at 0.73 right now. it's been cut in half since valentine's day. i think a lot of the push and pull of futures from when they opened last evening, are we going to get a surprise rate cut? we've had central banks around the world comment on that. it's been stunning considering bond yields were already very, very compressed coming into this weekend and now we've just stretched the new lows. >> at one point 0.69%, that still stuns me for the ten-year. we've been continuing to watch these numbers drop rapidly this is the story people will watch closely. we should point out, stocks in shanghai surged overnight on

speculation that authorities will stimulate the economy soon. as mike mentioned, there's talk of potential coordinated central bank move. that's something our guest host talked about on friday, an op-ed he put in "the wall street journal" thursday. you can see the nikkei closed up by 1%. the hang seng was up by 0.6% the shanghai composite up by 3.15%. we'll get right knot next news but in the old days, money supply, news would come out. the headline was, stocks sell off as asteroid heads towards the worth, destruction likely at 10:00 a.m. but market rallied in the afternoon. i mean, the fed, really, is that going to be what - >> i think the context matters. >> i understand. he made the case - >> i didn't mean that context. i meant the dow was down 3,500 points last week if we're bouncing in a very overstretched market to the

downside, at least because we already priced in something pretty dramaticin terms of new cases and economic impact and the rest of it i think in the short term the idea that the fed is going to use what ammo it has, perhaps, is enough to at least kind of lubricate the markets. >> well, we're disconnecting again between the fixed income and the equity markets we had that -- maybe we didn't know how it was going to resolve itself well, it did but with stocks coming down. 106, we thought the ten-year had to stabilize before we needed stabilization. the ten-year before the markets recovered, maybe it doesn't recover. but 106. i figured at 115 that it was headed back to 1.25, 1.50. >> even if we get news from the fed this week they're going to be more supportive,ist a band-aid it's a sentiment band-aid. we'll continue to get bad news from the economies here and

abroad, we'll continue to get revisions in earnings. the fed can only keep us afloat and we'll probably chop around we talked about this last week we'll probably chop around in a range until that bad news is over >> back to the actual news about the virus. the first case in manhattan has been confirmed the patient, a woman who recent recently traveled to iran and isolated in her home a man in his 70s died in washington state he's the second patient to die from the virus the first death was reported on saturday both patients who died had other health conditions. there are more than 80 confirmed cases so far in the united states let's talk about the impact of the outbreak on the markets after last week's selloff. a trillion dollars lost by six companies. apple, microsoft, alphabet, amazon, facebook and visa. legendary investor leon

cooperman weighed in last night during a cnbc special. >> we've had plenty of 12% corrections but none that i recall in three days we have gone from complacency to fear in a short time frame to have a strong conviction and to answer your question about the stock market outlook and what people should do, i think each individual has to have an opinion on two items one is the coronavirus and second is the election outcome >> mike, i think the correction, the rapidness of it, the decline coming from an all-time high is what caught people's attention. >> and relatively rare in both those respects the damage done in a short period of time in terms of the number of stocks down on heavy volume, way below the trend. all these indicators of how far the rubber band is stretched is -- are very extreme right now. the issue is it means the markets are up settled you would only get that way if people were caught way offsides and they have an outlook completely in a fog.

i think that's why you have the volatility index above 40. the bond market in a buying panic right now. all those things suggest you should probably be pretty reserved about making bold predictions about where you go from here and what it's going to take >> in the time we've been talking, we're talking about the markets essentially flat at this point. dow a second ago was indicated up by five points. the s&p turned slightly negative - >> one relevant marker here is the low in the s&p from friday morning was around 2850. we closed 100 points above that. you had this very big rally late friday that's an interesting point because that's essentially where we were trading much of last summer during that pullback and we were afraid of the flat yield curve, afraid of recession

>> explaining the friday narrative, short covering. that wasn't obvious that that was going to be the response late in the day. the response could have easily been, we have two days to find more cases and more deaths and we could have -- there's 80 but going into the weekend, i think the consensus or, you know, the -- if you just looked at the knee-jerk reaction was, i don't want to be long for these next two days. >> which is why it was mechanical. >> it was. >> it's like i'm learning from betting on basketball. it doesn't matter who's playing, either team can win. and on friday there's no way -- it was a 50-50 flip was the market going to melt up or down. it was gratifying. i watched. at 25 till we were down about -- 25 to 4:00 we were down 950 points i was like, we could be down 1,950 by 4:00. watching it shave 600 points off it was like, well, at least i don't have to be in agony all

weekend long worried about monday. >> usually closing on a low friday after a stress week is not a good thing that's what the textbook says. in these markets, i'll go to baseball, if you get blown out one day, momentum is the next day's starting pitcher >> that's true, too. it's basketball time march madness, if we have it this year. >> they'll probably have it. just may not have a lot of crowds. >> it will be on tv. >> let's finish this up because it's been a great year anyway. goldman sachs out with a new note over the weekend predicting the fed will cut rates by 50 basis points at or before its next meeting later this month. and an additional 50-basis point cut some time in the second quarter. goldman says to expect policy makers from those in canada, uk, india and more i think i knew that after talking to kevin on friday. joining us david albright,

five star bond management, like $10 billion in assets. in the last three weeks you've been -- really your moniker is midas. you have been the greatest manager of money across the board of anyone. everything you've touched in the last three weeks - >> thank you very much, joe. >> isn't it true do you feel smart? >> unfortunately, the equity markets haven't done that well. >> but let's talk fixed income is there any area -- i guess bank loans. >> bank loans and high yield, the most equity -- >> and they vent done as well. >> high yield is off a a point and a half. >> what about muni >> they are seeing massive inflow 30 billion this year buckeye brought a tobacco deal in ohio. we bought bbb tranche. it was up five points.

25 times oversubscribed. it's sort of an irrational market right now we think if any market is full of value, high yield munis, they're up 4.5% year to date which is crazy, counterintuitive seems like there's an irrational exuberance, especially in the muni market. >> there's been an irrational exuberance in the bond market for three, five years. there's so many times it would be like, god, i wouldn't dare put my money and no matter the duration, you would have done okay. >> this is it. it's got to be it now. >> if you're late to the defense game here, where do you buy in the bond market? i think people are worried, it's too late to get down on equities it's too late to get into bonds. where are the opportunities? do you buy corporates? do you buy munis >> we've been doing a quality trade the last 18 months

we bet on the consumer we've done jumbo mortgages we've done a lot of asset-backed securities which are extremely liquid, high quality now we have plenty of fuel for the fire i've been taking an opportunity to fill out positions ten days ago were expensive qvq, stations casino, charters communication. taking bits and pieces, it's not all or nothing if you're not in the market as of now, you should have some diversification, you should always be in bonds one thing that's looking very good, joe, cash at 1.5% versus the ten-year at 1.06 >> does that last? >> i'm not sure. but it does seem like an attractive alternative. >> you say what you've been buying that's on the corporate side that means you don't expect some nasty erosion of credit conditions i'm trying to read how the credit markets respond it seems like this has been an equity pack muni pack.

>> it does you have to be careful there's been a lot of fallen angels we've avoided high-yield energy which is down. we've avoided some blowups in emerging markets a big bet coming into the year we made is to stick with the u.s. dollar. the highest yielding g-3 the u.s. dollar, if you look at currencies with the exception of the yen, they're off 3% to 10% you have to pick your places, pick your spots. credit watch very closely. it's a case by case basis. you want to be able to pick credit >> can i ask both of you, does this feel like the type of situation where, okay, we've gotten scared but it's a buying opportunity? does this feel, we've gotten scared and more panic to come? >> we're down 12.8% from the high on february 19th. on average the equity market is down 14% every year.

12.8% is still less than that. i think if we -- if we aren't nearing a recession. if you believe we're not going to go into recession because of this, a bear market or a correction without a recession is usually about 15% to 25%. we still have room to go on the down side. i don't know this is a time when jittery investors should try to throw new capital into the market i think for the moment it's worth riding out. >> although a year ago -- maybist not a full year when whomever were saying recession ot odds have gone from 45 that 25 we were all worried about it there was nothing there. you turn the light on looking into the abyss, there's nothing there. i'm afraid the turn the light on now. the coronavirus could do it. >> it could but we don't have any data yet >> in the beginning it was this

is a supply side shock now it's more of a concern - >> the phantom recession that made no session is no longer -- i could certainly, eisley explain -- >> i think the issue is you are already at a relatively low level of nomal growth so anything - >> globally, you mean. >> globally. here as well >> if the unemployment rate were as it were here, consumer confidence is great. >> what i'm saying is people are now talking about, well, maybe we get a technical, statistical recession here two quarters of near zero growth that doesn't necessarily change the picture. i don't know if you think it's picture. >> for us i have a buy list. where have things traded off in the bear market. las vegas sands, macao - >> their action was cut by 87% for the month of february. >> in china we own some internet online gaming names, which have

done extremely well. if you take a look at the cruise lines, the airlines, if you take a look at restaurants, retail. anything that's traded off we have a buy list we're not jumping in with both feed we don't think there's a recession, at least not in the near term and taking a hard look at credit. >> totally different -- i don't know if i'd look at the stocks of those the bonds maybe. do we go under a point i mean, we're only 0.16. do we get under? we don't get under zero but -- >> the fed came out and told you the neutral rate we have is zero their neutral rate is negative negative rates haven't worked around the world you have 15 trillion of negative rates. we haven't stimulated growth, haven't stimulated inflakes, allowed access to capital from weaker companies >> we don't necessarily try to get there to do something.

sometimes we end there. >> i think the bias is to the downside at least for the short term on rates. >> david, thank you. stay with us you're here for three hours. >> i am. >> three hours when we come back, preparing for an outbreak in the united states we'll talk to health policy expert dr. zeke emanuel. all dow stocks are in correction territory barring this morning's rally, depending on where we go, the dow is indicated by about 62 points 11 in bear market territory. down more than 20% from the recent 52-week highs names like boeing, exxon, 3m and disney we'll talk more about this later this morning "squawk box" will be right back. at fidelity, online u.s. stocks and etfs are commission-free.

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new overnight, china confirms 200 new cases new survey data showed china's manufacturing activity slumped in february. the purchasing manager's index came in at 40.3. that's the lowest reading since the survey was launched. japan reporting five new cases overnight and controversial

school closures began there, creating child care problems for millions of workers. auto sales in japan tumbled 10% in february as the virus outbreak led to production disruption south korea reportedly nearly 500 new cases overnight, bringing the total to more than 4,300. >> that's pretty amazing just all this. in china, you see the -- or japan, the article that in japan, people -- the flu season is being minimized because people are washing their hands so much and staying home from work that the normal flu season, people are doing better. >> things like hand washing, let's do that all the time. >> i started, i started. >> thank you. >> you're welcome. china, that's a bizarre cases. 200 cases. the size of china, 200 cases and a pmi of 40? that's a disconnect and shows you the fear is what's doing it. >> it's not fear china intentionally shut down

and tried to quarantine -- >> because of the fear of the coronavirus. >> maybe you don't - >> i understand. i understand. >> maybe you only tested two. >> the number of new cases is not proportionate to the economic damage that's being done the same thing can happen here. >> the economic shutdown is the type of thing that china, by the way, moss of us have been applauding them for taking these extreme measures because it meant it didn't spread rapidly to the united states. >> the amount of cases in a country like china to see the economic damage versus the actual number of cases - >> they don't have to be infected in order to come out of the workforce, right they quarantine enough people, they don't all necessarily need to be affected they're not at work, they're not producing anything that's the issue and then it builds on itself you pass through a certain area and those people can't go to work for a certain amount of time at some point, almost a third of the workforce out of work. >> if we have this type of damping of economic activity with 80,000 or 90,000 total

cases globally, what happens if we have a million cases? then it won't be as proportional because we've already discounted - >> you discounted a lot of economic activity. >> yes, exactly. you just wonder, god, if we could get a quick therapeutic that could deal with the symptoms with people that get it worse than other people. >> it would be great. >> then we may go back - >> eunice tweeted today about how stem cell therapy supposedly worked in a patient who was very sick from this. >> we might go back -- was it fdr, the only thing to fear -- we might go back and in hindsight say that at some point. i'm hoping i'm hoping then the zombie apocalypse scenario. >> let's bring in a medical voice to talk about this right now. zeke emanuel, university of pennsylvania vice provost for global initiative and former obama health care policy adviser. dr. emanuel, thank you for being with us. >> good to be here

>> let's talk about what you think right now, where we stand with this, what's likely to be the situation here in the united states. >> first off, i would note if you look at the nasa satellite nitrogen oxide observation over china, which tests, you know, industrial production, car, driving, it's virtually clear now. nothing happening in china i think that leads you to the problems that was noticed. there is a lot of fear and there are a lot of people who are worried. i think for any individual, as pointed out, the risk is low but collectively from a public health standpoint, there could be big risks i think what we're going to see in the united states is we now have 80 cases. as we test and test more people, you'll see that number rise. double every day when we really get testing out there. we know that in washington state, for example, it's been circulating in the community for at least six weeks, back to january 20th or something like

that it certainly has been passed from person to person. we know that long-term care facility, there are going to be a lot of people who are probably infected and i think, you know, that does stimulate fear this is a lot of psychology, as pointed out, but psychology does play a big role, as you know it plays a big role on wall street and plays a big role in how people are acting. i've noticed the university of pennsylvania, you know, the phrase an abundance of caution, you're going to see that people will say, maybe i won't travel to this meeting do i really need to go somewhere? and i think you've seen the airlines, they recognize it. you're going to see this for all sorts of cruises, i think, are down for a very long time. i think people are cautious. a rate hike isn't going to change that kind of behavior. >> zeke, you point out the long-term care facility. we're focusing on that because particularly for people who

areundarhave underlying conditions, the virus could be worse there are several things we know put people at increased risk older people probably the immune system isn't working as well you have comorbidity, smoking, lung function, you'll see that have an effect on people young people don't seem to have -- are often asymptomatic or mild symptomatic. in washington state where the guy came back from wuhan and passed it on and saw it late february the teenager recovered at home, no problem that's the scenario you're seeing let me remind your viewers, that doesn't mean if you're young, it can't be very serious.

it's just a very low risk of that, kind of like the flu. >> it strikes me because there's an incubation period of up to 14 days and we're just getting testing kits out, any snapshots of where we were a week or two ago in terms of what the infection is that may be the concerning part. >> the 80 is a substantial undercount and it's an undercount because of the testing. that's probably true in china as well we don't know exactly what their protocol is. there's some suspicious of the data at the moment i think the main issue is get more testing out it does raise an interesting dilemma. who do you test? if a number of people are asymptomatic, do you test people -- we need some sense of prevalence what's it like in a community, say in washington state, where we know it's in the community, what's the frequency there and how many people will convert to a serious illness?

we just don't know that given the fact we've had all these problems on the testing kits hopefully they'll be resolved very soon and we'll have more widespread testing so we'll have a handle on the epidemiology, who's getting infected, how it's spreading and how much it's spreading to people and what proportion of people are actually getting sick. that will be very important for making prognostications about how bad this is. let me say one other thing the president keeps talking about it's going to go away with the warm weather that's possible but it's also not possible we don't know. to make basis of policy on that -- or to use that as a basis of policy, to me, seems to be a mistake we need to prepare for the worst and not hope for the best and make our policies on the hopes we need to be prepared this might not go away. >> what needs to happen in terms

of that preparation? i've heard about shortages when it comes to things like respirators, the masks, any needs for the hospitals that might be there on the front lines. what needs to happen >> i think you're right. you're already hearing potential shortages of drugs they're not here today but soon they might be because of all the raw materials made and drug made in china we need to prepare that supply chain. >> because of problems in china. just to be clear problems with the supply chain in china for those drugs. >> 90% of the raw chemicals come from china we need alternatives to that and we need them pretty quickly. everyone is focused on the masks but it's not just the masks. you need gloves. you need the items over the gowns, over the clothing and remember, you're going to need to change those quite frequently as i point out we have about 250,000 icu nurses alone

forget the doctors if they're changing their masks five times a day, that's a million masks a day. just to give you a sense of the magnitude and numbers of things we're going to need. in addition, i think, and i've been saying this for a while, we need some hospital surge capacity we don't know where hospitals will be overwhelmed. we just don't -- there's too much that's unpredictable about this situation at the moment. >> you're not saying that average people on the street need these things. you're talking about hospitals you're not suggesting other people should stockpile these things >> no, no. the average citizen should not go out and buy masks and gloves. that is not helpful. wearing the mask is probably counterproductive since we'll either wear it wrong, take it off, not dispose of it properly. remember, the coronavirus is in droplets it's not just in the air and if you have a droplet and

you just put your hand on the mask and then on your face, that's a problem as was mentioned, get the flu shot make sure you have that to distinguish so you don't get the flu. if you do have symptoms, you know, it's more likely to be coronavir coronavirus. wash your hands a lot. don't share utensils stay home. if you go to the hospital, go to the emergency room, call ahead to tell them why you're coming because you're whoer ed about so they can treat you differently so you don't sit in the waiting room potentially affecting other people if it turns out to be positive i think that -- you'll see facilities triaging people with different symptoms in different ways so we don't have cross-contamination as much as possible. >> dr. emanuel, thank you. it was good talking to you today. >> good. thank you. coming up, much more on the market impact of the coronavirus outbreak advocacy groups calling on the ncaa to hold march madness

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70 to 80 points. now the dow is indicated down by 140 points believe it or not, these are minor swings, compared to what we were watching overnight we'll continue to see what happens. the s&p 500 indicated down another 20 points. the nasdaq off by 33. elliott management has taken a roughly $1 billion stake in twitter and nominated four members to the board elliott has been in talks with twitter's management about it's desire to find a full-time ceo twitter's jack dorsey is also the ceo of square, of course, and he said last year he plans to move to africa for three to six months this year there was a lot of talk over the weekend about whether there was a political move because just connections with the president but this seems like a pretty easy one. when the ceo has two jobs and says he's moving to africa, that seems like a pretty easy target. saying you're moving to africa

for three to six months, easy time for these guys to step in - >> square and a big company now. when it first started it was this thing i have on the side that maybe is promising. it seems like it's at least one job to run that company. coming up, wall street veteran peter krause joins us to try to make some sense of the worst week for the stock market since the financial crisis that's next. a reminder you can watch or listen to us live on the go, on the cnbc app. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

you probably are aware of this this was the worst week for wall street, since the financial crisis dow fell 12% u.s. equity futures at this hour have now turned negative when i woke up we were up 400 points there's been a 1,000-point-swing. tough to see a lot of bounce without -- unless the ten-year finds a footing. the yield i'm talking about, not

the bonds themselves joining us now, wall street veteran peter kraus, chairman and ceo of appeture investment we're not looking to you for the dire forecast. although in reading your notes, you believe there will be time for us to work this out. you point to china as having -- and they maybe can do more draconian things than we're able but you think they're on the other side of the crisis >> i think china has shown discipline quarantining their cities the thing about this virus, we don't know about its mortality rate, we don't know how fast it infects people although it appears to be quite contagious and reasonably deadly, more than a general flu. one thing that's interesting is china had some success quarantining that may be a model for the rest of the world if the virus continues to spread. >> you're pointing to an economic impact. >> that's what i mean, is that

the economies will slow. and the market is reacting to that. >> you're pointing out -- that's what we've been saying how bad it gets in terms of the human cost is one thing, but how bad it gets in terms of dampening economic activity, having everyone stay home. that's a totally different say you say in china, it was three months and you think factories are beginning to come back to work, not at full staff, but -- i mean, is that an inflection point? is that a second derivative? it's not going to go the other way and close again. >> it could. we know these viruses have waves. this could have a second wave that could be significantly more challenging than the first we do know factories are coming back on stream we know they're not fully staffed. we know economic activity by looking at general gablgs is not anywhere near where it was but we do know production has started. >> you see the volatility in our markets continuing, but you actually put an outer range on

what you feel -- and that's dangerous. but you're saying maybe another two weeks, maybe another three weeks. >> i think it will take two to three weeks for us to understand better what the mortality rate is and the speed of infection. it will also take that long for us to understand whether quarantines are working or not that will give us a much better gauge on how long this economic -- >> trying to make test kits as quek quickly as possible. some day, maybe before a vaccine, but a hope for something that works to ameliorate the - >> but the vaccine is not available until -- >> but a therapeutic could be available much sooner. >> look. i think we're going to find that medical capability is going to expand as we get to know this virus better, things will get better the thing we don't know is what the second wave will bring and what the impact of that is as i say, again, we don't know the effect of quarantines. if quarantines work, we'll see more of that around the world. that will affect economic growth.

>> it's safe to say they haven't worked already though? >> no, i think it's not. i think quarantines have worked. it slowed the virus. it's a difference of wiping it out. that's not going to happen but slowing it so the rest of the world has a chance to catch up that's what china proved and you're seeing it in northern italy. >> the number of cases compared to the population of the world is -- you need scientific notation to go out far enough to where we are. >> if we actually counted them all. >> you're right. but that in and of itself is possible if you're missing some totally because their asymptomatic - >> the piece in the journal of medicine friday this could be a once in a century pathogen he's been worried about because of the way it transmits, the way it doesn't kill the host and much more likely to go viral. >> there was a research piece last week that was dramatic. they said the mortality rate was

between 0.5 and 1% they said 30% of the world population will get sick that's 2 billion people. 2 billion times 0.5 is 10 million dead that's a big number. that's going to happen over time, if it happens. i think the economic impact is really the effect of what the quarantining does and the slowdown to the growth look, the bond market, as you point out, is actually pretty dramatically impacted. the ten-year is around 1%. it's fallen -- >> crude is at 44 today. >> again, demand it's not as if in the financial world there are sign posts there's serious distress. >> it seems like we're not necessarily waiting for that magic advance. the market has to reprice to a point where the more probable outcome is okay. >> i think that's a fair point two things will -- two things are likely to happen either the market continues to

be volatile, goes up and down, looking for some kind of balance as the world clarifies or it dramatically declines to the point where it's so cheap, it won't go down any further. i doubt the latter i think it's much more in the former where we'll continue to see market volatility. it probably heads farther south as there's lack of uncertainty but that will clear up over time. >> what would be a dramatic decline? >> dramatic declines we've seen in the past, whether it's '87, 2000, 2008, peak to trough is 80%. that's a big move. you're down to 1,700 that could happen. >> that would be back to where you got out of the market. >> no. 2,600. >> 2,200. >> 2,600. >> you were here at 2,200. >> 2,2020, that would be - >> let me ask this there's nothing to fear, but fear itself. that's what we're hoping the eventual outcome that could be with the actual

human cost but not the economic cost the economic cost could be very, very fearful even if we do dodge a pandemic bullet, so to speak >> what i'm trying to say is the quarantining, which seems to have an effect, will likely reduce the impact on humans but it may actual ly exacerbate the impact on the markets. >> the dow had gone down by 50%. he said that in 1933. >> correct me if i'm wrong, it came back eventually. >> it did. >> by the '50s. >> the great thing about equities is they go up over time. >> if you wait long enough. >> i'm long watch bands every time you come in here. how many do you have >> i have a few. >> do you have 20? >> probably. >> probably have 20. it's so cool and it always matches the ties this guy is a d-a-n-d-y with -

>> you could do this yourself. >> i have two different colored socks on you have something i don't have. >> everything you wear is gold get a pink watch band. >> i'm working on my socks, matching those in the morning. and remembering underwear so it's -- anyway - >> i'm not going there. >> thank you, peter. appreciate it. when we come back, a look at which stay-at-home stocks are avoiding the pain from last week's selloff we'll have those names next. as we head to break, take a look at the biggest premarket decliners in the nasdaq 100. that is led off by american airlines we'll be right back. >> announcer: don't forget to subscribe to our podcast you'll get interviews, original content and behind-the-scenes access look for us on apple podcast or on your favorite podcast app and subscribe to "squawk box" today.

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. the dow losing more than 3,000 points last week as fears hit the markets but stom stocks are still performing well as people start to work from home a look at where some of the safe havens might be at stay at home stocks the lead analyst at rbc capital markets. i guess i'll start off by saying it gives tail wind to certain types of internet stocks. >> good morning, mike. i hope not but to the extent that there's assets out there in the internet

space that would benefit from people cocooning and staying in for entertainment there's a couple of names that come to mind the most obvious is netflix. i also think that social media stocks like facebook that would be a form of communication connection a little bit of entertainment and information would be an obvious beneficiary. maybe twitter as a news service and maybe a snapchat and maybe a music name like a spotify. all of those would fall into that beneficiary camp. >> netflix has held up it's essentially retained it's value through the whole sell off and as somebody that covers it, what you really think is this would be a driver of incremental new subscriptions or people saying i'm buying something that's not going to be disadvantaged by what's going on. >> i think it's probably the latter more than the first at least you would probably stem churn. this is if you're uncertain

about your ability to find other entertainment, live enterta entertainment options in the next month or two you'll probably be less likely at this particular point irregardless of late that would be the small win in this environment would you see that as something that's going to last for awhile? alibaba is at the top of the list the travel companies both of which have had march quarter results going into the june quarter and amazon and ebay have supply chains into china and uber consider uber is, both of

these companies get about 15% of the rides from airports. so they're a negative derivative of anything that shuts down travel a little bit of an edge that uber would have is on the uber eats side if we're going to be unwilling to go out into the public areas they'll provide us a hedge against the airport travel exposure. >> do you cover twitter or do you have a thought on this activist movement that we're hearing about this morning if you were going to be concerned about product changes. i don't want to say it's dysfunctional but it's an unusual management approach and then something of a misstep.

our concern was that the company was verearning it's an interesting fix. it's not irrational. >> it's not irrational what do you think specifically aside from getting a full time ceo if that is, in fact, what they're trying to do needs to be done at twitter right now? i mean, general reinvestment in the product? is that the deal >> i would think so. we know this is an asset built up and had nice growth in users over the last several years. we had double digit growth in daily users over the last two

years. but the big issues are on the advertising side and that's product development and improvements and i don't know where the blame lies but some of thathas to lie with the ceo. >> and you mention that the general social media space, who knows, might be able to get some traction here. i wonder about this other element of the sell off which is not necessarily just coronavirus and the impact but you had some crowd positioning in the big tech stocks. where are we in that process as far as you can tell? >> so mike when you say crowding i think, you know, relatively fully valued stocks and that large cap internet space most of

these names were at pretty reasonable valuations. there was one at the beginning and i would argue that that was facebook and one in particular at the beginning of 20 and i'd argue that was uber. there's still a lot of upside in that stock. we'll talk about what names to watch next and later we'll talk to the him for his take on the markets role in all of it stay tuned squawk box will be right back. os through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com

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should they downsize? nesters now. probably. will they? not as long as thanksgiving is a holiday. planning for the future is about more than just money. let equitable be your guide. stocks surge after the worst week since the financial crisis. this as goldman sachs predicts the fed will cut rates before the next meeting later this month. >> apple has upgraded and big pharma in focus as the president gets ready to meet with executives those stories and other stocks on the move this morning straight ahead. >> plus how consumers are

changing their habits with fear of the coronavirus spreading as the second hour of squawk box begins right ow s&p futures right now down by about 35 the nasdaq off by 61 part of this is because people are waiting to see what happens in the treasury market we have seen historic low levels set once again and if you have been watching the ten year this morning you have seen it sitting

just at about 1% just above 1%. swoer keeping a close eye there. right now the ten year is at 1.051% the two year at .715% and you have said that's important. >> that's the one that really tells you what fedex peckations are oing so there's a big rally that we're working. >> it's really just a small bounce in the last week but we're in this mode where it gets to be twitchy and jumpy. >> first coronavirus patient in

manhattan. it's a woman separately a man in his 70s died in washington state from the virus. he was the second patient to die in washington state. the first reported on saturday both patients that died had other conditions >> goldman sachs out with a new note over the weekend predicting that the fed will cut rates by 50 basis points at or before it's next meeting later this month and an additional 50 basis points in the second quarter goldman also says to expect action from policy makers in canada, u.k., australia, india and more on friday we were talking about all of these things. it looks like some of that was what we might expect at least what other wall street banks were expecting. >> we had that statement there but as far as the wall street people cut the markets cut sooner and they're beginning to price in drastic cuts from the fed that may come on an emergency basis. jp morgan saying it cannot rule

out rates going to zero >> i think they wish the market would give it a little bit more time as it wants to have i want to show you the outline as well that gets to what santoli was talking bout

they mark down their forecast or outlook for the fed. escalate the effects from supply change to the u.s. consumer. the down side risk have clearly grown. our analysis suggests that in a more adverse scenario the impact of supply chain disruptions would grow quickly and consumption cut backs driven by virus fears could be quite large. obviously there's anticipating the market impact. the fed funds rate over 1.5% exceeds the 30 year. it exceeds everything else

stocks ignored the signal from the bond market. you would come on and went down 150-130-120 and kept going and i forget who it was that said it's hard to think about a rally in stocks. >> you keep saying that. people say this for a long time that they tried negative rates in europe and it didn't work did they really want negative rates? >> no, they orchestrated the negative rates. >> over there. >> what do we know

>> no, i'm talking about nominal negative rates. >> there were people over there. draghi was one of them the majority of the ecb thinks they do have them. >> well, here if we get there, we're not trying to get there. the fed is catching up with where we already are it's on the brink of recession in the whole region and we are not there. then we literally take half of the ammo almost out of our bag and say we're not even in recession but we're going to lay all the tools on the table and what if we do go into recession? we have that much left. >> that's one school of thought if i might give you the other one that's the research that says as you get near zero, the closer you are to zero the more quickly and powerfully you ought

to use the bullets that you have on the other hand there's the idea of the market decline and you can put a floor under it and provide a psychological boost to both markets consumers and businesses through the rate cuts. is that the situation where the fed can't fight the market though >> i have been talking to a lot of people out there. there's a lot of other things that could be done it doesn't have to be only rate cuts there's regulatory things that the fed can o.

they could lower their liquidity that's out there i expect, beyond the idea of what kevin was talking about is i expect the fed to be very creative not only that but they don't want to go negative. i'll have to spend some time explaining. >> let's welcome richard fisher, the former dallas fed president

that is now a contributor. did he call you and tell you what he's going to do? >> i'm about to get on a plane to go to australia what do you think is going to happen in your view in the terms of the fed one thing we didn't mention is the reactivators and countries that are having problems rates were already so low. the 10 year at 1%.

that's the lowest rate in the global trading markets in over 800 years. this is an astonishing thing so money is cheep from the 2 to 5 year all the way out the question is what is the efficacy of cutting here and as was pointed out earlier if you want to spend whatever you have left now and then we got a little bit of a pause. they go to the dallas fed and then went back home and made all the right platss i had one client that was long bonds and using it.

>> it's 300 basis groups. >> we're overreacting here and asking the fed to do something that may not have the kind of impact that everybody would like and there's a hiss terrier so this thing is this panic is a little bit out of control. the fed's job is to be the steady hand and calm things down i'm sure they will do something to calm things down. it may not be a significant rate cut but they have all of these tools. do you have things that go along

with it or have differences. >> this is really a confident game right now it's not that they're going to stimulate consumption when everybody is cocooning as your prior guest said in response to a virus. so there's very little that they can do right now and it's more of a signal that we're on the case i debate myself whether an emergency rate cut effectively endorses the panic in the market there's no doubt that they're going to cut rates if and when it does spread and really hit activity in the u.s., what can the fed do on the supervisory front to encourage banks to provide the liquidity to households and businesses that are going to see an interruption in cash flows that's going to be as important as rate cuts. >> can we just go back to what

you were saying earlier which is one of the things i was trying to puzzle out. there's a mechanical way to think about this which is the decline in demand and the decline in investment and decline in growth lowers the neutral rate of interest if that ends up being the case then relative to where the fed was, it is too tight and so you must come down to meet the new neutral rating and if you -- if all you did was put that idea in a box andnot thought outside of that at all, you would lead to the need for the fed to come. >> absolutely. without a doubt the fed is going to be cutting rates. the question is do you want to go methodically at the meetings, gather information, recalibrate to what the neutral is this thing isn't going to happen from one day to the next it's going to happen over weeks and months

how much do you want to recalibrate. evaluate as data comes in. so, you know, i think -- >> there's also risk here that if they were to act precipitously -- >> that's the idea. >> and you and i both know having been at the fed methodical is the way that you like to approach things

on the other hand we're in that position and the committee is thoughtful about it you can never get out of that trap. >> the real issue is to draw it. >> the real issue is it real economy. >> we have but we have stuff to do. >> and with leading situations like this is the committee dynamic. he put out a statement friday but it was a j. powell statement. it wasn't an fomc tatement they actually have more of a real effect on the real economy. >> that's what the fed would like to see.

no one knows what the fed does except for those of us that have been there and study it but it works politically. i think the physical response and the regulatory response, health care response, these are the key dynamics to deal with this and hopefully they will bring something forward that will take some of the pressure off of the fed. however we are trading at very high prices underlying value >> let's not get carrie addway

markets are impressive mechanisms and we're seeing that right now. >> have a nice day. >> thank you i never thought about this but someone writes in that ties are the dirtiest item that men wear because they never get washed and by the time this is all over, no one is going to be wearing a ie >> we may go there. >> i may have to come on explaining a different four letter word abbreviation we asked for jokes not one was funny.

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>> she most recently held the same title >> an outbreak fall out for businesses amazon restricting all essential travel in the u.s. as the coronavirus continues to spread. they told employees to hold off on planning group or team meetings >> yeah and he is fine. >> dave clark. >> not that unusual. >> >> the coronavirus has investors spoofed and has many investors ready to stock up on goods. surveying stores a lot over the weekend and joins us right now with his findings. it's good to see you. >> good to see you. >> so let's talk about this

what did you see over the weekend when you were out shopping and checking things out. >> the malls were empty. it was very light as far as the people that were there i was also at costco and stop and shop and it was literally the busiest i have ever seen the costco i was in and it's never busy at the end of february. it's very normal end of february you're supposed to be able to drive in and park. there's supposed to be shopping carts. there was neither. i had to drive around the parking lot until somebody pulled out to park that's never happened to me including at christmas and

thanksgiving. >> the west coast to the east coast people were out and stocking up. they want to make sure that they stock up in case there's supply issues down the road. >> evercleaning product out of the aisle gone but it was the same story at costco they were buying rice. packaged rice at such a rate that the people were stocking the store. >> does this actually matter >> i don't think this is a few days you're going to see this go on for a long time.

60 million pop in america came down with the swine flu over a one year period. 275,000 of them got hospitalized and 12,000 or 13,000 of them died this thing may not look like that but right now people think it's going to look like that we could see the stocking up going on for quite awhile. this could cycle through >> what does it mean that the shortages are more likely to happen. >> all the gas was gone and it was all in people's tanks of their cars we're going to see that. i literally asked people that the children's aisle was -- the children's aisle for flu and cough and cold medicine was completely gone. there was nothing there. so i asked are you bringing more out from the back and they said we don't have anymore to bring out from the back. when i got to the pasta isle

only organic expensive pasta was left are you bringing it out from the back >> no it's just whatever is here is here. >> will they replenish sure but the supply chains will get strained and we also know that some things come out of china, the supply chain is already strained so you don't stop buying online and once you buy a product online you keep buying a product online once they have your credit card information and you figure out how to use it it gets easier >> it's really good news if your

target and costco. all the same people. they got the supply chains and the data basis and the delivery capability and they can make it all happen so for people that are less strong if you will in the ability to deliver the product to the customer, they're going to lose >> i backed up the range rover. >> >> that may be the best one. >> shares of apple this morning details straight ahead and then later the former fda commissioner -- scott is going

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>> it's slightly off and perhaps a fed ease for the official meeting and then take a look at oil at this hour that has been another story bouncing there a little bit. we got down below 45 on wti now just above that level at the moment president trump will hold a meeting today at the white house to discuss the coronavirus with pharmaceutical executives. just tweeting about it saying progress on the vaccine and cure is being made. the concern of course is the prospect of a widening epidemic in the usa and shortage of supplies for drug makers first quarter sales will be hurt

due to the outbreak in china also the impact on supply lines will have a negative effect on results. >> an analyst called to tell you about apple being upgraded to outperform among a list of factors they talked about opportunities offered by the company's strong balance sheet. let's check on shares of apple this morning you can see they're up by 1.4% in what is otherwise a down market right now still looking down by 180 points. >> multiple media reports say that elliott has taken a roughly $1 billion stake in twitter and nominated four directors to join the board. it's known for its activist campaigns has been in talks with management at twitter about the desire for the company to find a full time ceo. jack dorsey also the ceo of square he said he plans to move to south africa for 3 to 6 months

let's talk about the impact of the outbreak a trillion dollars in market cap lost by just 6 'canes. we had plenty of corrections but none that i recall in three days and we have gone out for complacency to fear in a very short time frame and to have a strong conviction to answer your questions each individual has to have an opinion on the virus one is the coronavirus and the second is the outcome. >> i saw bernie referring to another billionaire and he's talking about his appearance

next week. he thinks it's about keeping what he has for himself because he's so greedy and if you listen to lee cooperman, i mean, let's see what the cover on the journal today. industry's fret. does bernie have any clue where private sector jobs come from in this company and where tax revenue for all the things he wants to do, where does that come from? why are corporations and the private sector and industries the enemy? why are people that succeeded the enemy? will you answer me that? i'm looking at you because you grew up here. >> i grew up where >> i don't know. >> he wouldn't say it and wouldn't be leading on the democratic side if it was not a message with people that are going to be voting. >> do you know what i saw?

and i was going to tweet it out but i'm not political. so i didn't tweet it out so it was one of these things -- it's a -- what are those they got places to plug? there's five sockets and then they have their own cord so it was one of those and plug in the end of this thing and that's how it's going to work. >> i'm going to have to look for the schematic or no. >> it's a power strip. >> much more onthe market movers plus a former commissioner mee one we have here all the ti dr. scott gautley is going to be next at synchrony,

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inc >> when we return, market swingers and then the latest on the spread of the virus in the united states up to date info. what you need to know and then

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>> market swings again this morning. dom joins us with charts that you need to see to deliver >> we talked a lot about how widely the dow futures have swung. for those that look toward the s&p 500. it was around 3:30 a.m. eastern time when we hit the highs we saw around 3,021 for the s&p futures. and all of a sudden that decline and that was the high so far if you look at 10 year yields the high today was 1.16% 1.16 right around here. and now we slid down and higher than that and ten year yields are 1.9% and

then gold prices are pressure we saw over the past week and big pick up in the move over thursday and friday and 2% just a hair below $1,600 per ounce. so whether or not that comes back to gold prices remains to be seen but between treasuries and gold and stock futures if this is any indication of what the regular trading session is for stocks it could be a wild ride today back to you guys. >> thank you i think. >> when we come back president trump getting ready to meet with pharmaceutical executives we'll ask about that and where we stand in the fight to try to contain the virus in the country. as we head to a break, all 30 dow stocks are in correction

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>> she has the big headlines this morning a dramatic change in the picture in the u.s. over the weekend as

the second death was confirmed and more cases in california, oregon, washington state, and in the first case in new ork. well the meeting is not only focused on vaccine development the ceo is also attending and that company is working on a drug for the virus executives from johnson & johnson, mederna and others will also be there. guys. >> thank you very much. >> okay. we are joined by a couple of gentlemen that know what they're

talking about. thank you. he serves on boards and the author of the race to stop epidemic just to start off on a little bit different tangent, when did we discoverpenicillin? it was in the 30s or so, wasn't it what we have done in the whole history of human existence it's amazing. where we are right now. >> commercially available in 1944 we had a longand successful history of diagnostics and therapeutics >> and we're better and better

why shouldn't we be hopeful tho come up with it quickly. >> i was in the emergency room seeing patients. i don't have a rapid diagnostic test available what happened in the united states is that the cdc created a test sent a test out to 50 states and said oh, hold up, don't use it let us fix it. but right now i don't have it at my fingertips. i have to make my case plead to test people. this is not good there's 88 cases in the united states there's going to be thousands by next week. >> what do you do with people in the emergency room if you can't test them? >> we have an outstanding team of infection control practitioners that know how to handle this. >> are people getting sent home

because i read reports over the weekend? that's only the 32nd test we have done. that's a national scandal. i'm a practitioner on the firing line and i don't have the tools to properly care for patients today. >> they can't take proper precautions. >> you can talk about this for weeks. this is what we need to do i think a vaccine is a year or two away we need to think about what we're going to have in the fall. hopefully this will start to disapate in july or august but it's probably going to come back in the fall. >> why isn't something existing that might work? >> well, we have an hiv drug

that we're studying right now. the message today is we're hearing from this administration that the risk is low and things are probably going to be okay. you don't immediate to change your lifestyle that's simply not true there's going to be thousands of cases here we already moved from containment to mitigation. you're going to see widespread disruption todayly li daily lif. >> what does that mean in terms of what people should do on a daily basis? >> we'll have outbreaks in the u.s. there's no question about that in parts of the country we're past the point where we can contain this we'll have to look toward mitigation, washington state, california it doesn't need to become epidemic here in the united

states >> china had testing how were they able to possibly be on the downside of the epidemic >> places we think are clear are starting to have rates creep up. but do not believe the false reassurance. >> doesn't that lower the denominator on the mortality. >> absolutely. so i see numbers like 1-2% thrown around. we're using data out of korea. >> what is that? >>.2,.2% the economic effect is much more than twice the rate of the flu. >> what do you make of the diamond princess that's not a typical population but the case fatality rate there

is going to be above 1% there. >> absolutely and make these informed decisions about whether march madness needs to be cancelled. >> are there different levels of panic around the country the reason i was asking is i was in detroit last week and i asked a room full of clients and investors are you worried about coronavirus and they said no i said are you not worried because you think you'll catch it and still be okay or because you think you're not going to catch it >> we're probably a couple of weeks away from significant measures to try to mitigate spread in northern california as

well. >> it has an incubation period of a couple of weeks so are we always going to be behind the 8 ball on this? we're reacting to the news two weeks later? >> we have a lot of undiagnosed cases to his point now there's probably thousands of cases in this country that we need to turnover we're going to have a surge in cases before we start to catch up to the actual level of spread it's a big country 330 million people so even if you have several thousand cases your risk of contracting it is still low but that could change quickly. >> japan is taking extreme measures like closing schools. >> they're not diagnosing their cases there as aggressive as south korea or italy. >> we'll see school closures here, definitely we're hearing that it's going to go about just like normal. that's not true and to speak to the earlier question, i'll tell you, i'm not really worried about coronavirus but when i'm walking around times square in the emergency room every day i'm very worried

thanks for joining us today man. >> >> because i ride the subway? >> no, because you're sitting next to mat. >> >> there you go. >> how many cases do you suspect you have seen if you had enough cases? i bet there are thousands in the united states and the longer we wait to get testing up and running the worst this is going to be but i'm telling you we're not there -- >> why did i think there was shipping tests to california in bulk. >> the testing capacity by the end of the week. so we have about 100 public health labs that will have a capacity to do 100 tests a day.

and that's going to make it a lot easier for physicians like our guest to order tests that's not available yet so if you're worried about fear and uncertainty we're still in the thick of things. >> just this idea of testing and trying to get all the numbers out there. did the cdc screw this up? >> well, the test didn't work. and get their tests out there as well we weren't just waiting for one test because if we had a hiccup which we did, we now see that. we lost about three critical weeks. >> doctors both thanks for being

here >> thanks a lot. >> appreciate it >> more on the big move and the impact the virus could have on the economy next and later his advice for investors ahead of the opening bell ua b wl rhtack.

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a roughly 75 point loss at the open after being up as many as 400 points in the session two market heavy hitters the chief economic adviser and the whorton school and what the virus means for tech and airline investors. the final hour of squawk box begins right now. >> good morning and welcome to squawk box here on cnbc. live from the nasdaq market site in times square. i'm joe kernen with becky quick

and mike santoli our guest host for the show is liz young. she is director of market strategy at bny melon and the futures are all over this morning in pretty large point and percentage moves.

a man in his 70s that lived at that facility had died on saturday they reported the first u.s. death a man in his 50s that lived at the same area as the nursing facility in several states including california, florida, illinois and new york in a statement posted on twitter, the new york governor said the woman in her 30s had contracted the virus while traveling to iran and it has been a situation since arriving home a short time ago president trump tweeting he would be meeting with executives for some of the pharmaceutical companies on a development with a vaccine the president said progress is being made and then he tweeted a minute ago i was criticized by the democrats when i closed the country down to china many weeks ahead with what almost many

recommended. and delta airlines is suspending flights until may. that's where most of those countries have been and they contracted the virus >> in the u.s., the focus is now also on the federal reserve and whether we'll see an interest rate cut at the next meeting or even before that steve joins us now with more on those expectations. >> it's actually global going back for a discussion the last

hour and the latest on the outlook. no probability of a basis point cut. and before the march meeting but overall the fed funds rate, this is the key here, is seen plunging and you can take a look at what the outlook here for the market currently going all the way down to 0.4% or 1.25% of sk cuts between now and the end of the year goldman sachs sees the economic impact from the supply chain to the u.s. consumer. in a more adverse scenario the impact of supply chain

disruptions would grow quickly and consumption cut backs could be quite large at the same time, here on squawk box and now in the economic commentary, a vigorous debate about rate cuts in the face of this virus capital economics and fiscal and monetary stimulus can do much to support demand in the very short-term and stress in the markets and corporate finances and possible deleveraging in the financial system we hadn't talked much about that. >> that is one area. >> you don't want to mention.

>> joining us is the president and investment strategist and we have seen in the 10 year yield and the school of business and let's start with you we're not far off of that 1% target that you called for the ten year does this surprise you how quickly it happened? >> the speed of the movement was surprising you're right i had expected it to go to 1% for quite awhile and usually when they start to go down very, very fast and this time was no exception, we're almost at 1% and overnight we were at about 103. my next target is 75 basis

points. >> i'm just looking as i have always said on your program looking at economic growth expectations and now this coronavirus all of those suggests that you have a drop in yield coming it's hard to track that on a day by day basis and understand what is happening what's the best that you can see from all the sources that you can glean. >> that's for paul. >> sorry >> this was not like 2008. this was a real shot to the economy and it's effectively freezing economic activity and the fed needs to ease but the important thing to understand is

that the fed can't fix this problem. it has to be part of a mosaic policy responses and the fed will want to be bold but part of a action because the fed doesn't want to get in a foot race to zero by itself is that what you're talking about or do you think something more working in tandem with the administration to roll out physical and monetary fixes at the same time. >> you'll definitely see coordination on the central bank side but this really has to be an all of government response so the fed will be part of the government so therefore this tug of war going on between physical and monetary policy will recede and we'll see a concerted response from all sorts of authorities which is not just

fiscal and monetary but all sorts of regulatory agencies as well is that fair >> i agree with you 11%. you have a shock on the real side and then an echo shock from wall street. is it the market panicking >> i think the next the most

important influence that i see, the reduction in the ten year yield is that at some point you're going to start easing begin. not to estimate and we're going to do more i'm expecting a lot more of that so much in terms of an economic recovery and you cannot fight the biological problem by monitoring like the fed is there. that's what i want to pick up

on band aids work we talk about this idea of being behind the curve can it wait until the march meeting? i think it can wait. now the fed has to confirm that but i think that the market has already done the job and is waiting for the confirmation and the fed would like to confirm what the market has already discounted as part of a mosaic of policy responses. so i would certainly not use the charge the fed is behind the curve at this stage of the game

because this is a unique shock and the marketplace is responding appropriately and then the fed will respond to the market it's important to note that while everything is very, very dire right now, where yields have gone in the market and where the fed is going to take yields actually increases the valuation upside for the equity market once we get more clarity on the biological front. >> all right the fed has no role here that's why i say i doesn't come in. >> we have to go but it seems weird for you to be arguing that you're going to have a 75 basis point ten year yield where the fed remains at 1.65 on the fed

funds rate i don't know if it has any role at all but it would seem like that would be way out of sync with where the ten year yield is. >> i'm not saying that it's going to stay at 1.625 i think the federal funds rate is going to drop by at least 1% more we didn't talk about it so far we talked only about the ten year yield but i think both of them are going to go down. >> you're going to be wrong this time finally going to be wrong. you're going back to the well too many times take your profits. get out while you can. i have been saying that since 3% you have to be wrong this time you have to be no i'm kidding you need a new barber. >> maybe that's the look he's going for. >> no, it is but why is the question i have known him -- how long have i known you paul? 30 years

>> pretty close. >> i would do it if i can pull it off i don't think that i can. >> thank you the clroronavirus and what you a do to safe guard your portfolio. is he okay >> i have not heard. >> anyway, last week he got more than 11% that was the worst week since the financial crisis we head to break take a look at the biggest premarket decliners in the s&p 500. stay tuned you're watching squawk box on cnbc i have an idea for a trade. oh yeah, you going to place it? not until i'm sure. why don't you call td ameritrade for a strategy gut check? what's that? you run it by an expert, you talk about the risk and potential profit and loss.

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they're halted by a number of airlines. corporate trips are being suspended. also small businesses that are telling people that you're not going out on the road for a little while and we're seeing more cancellation and change fees being waved by airlines here's an example. take a look at american and delta. it's waving change fees for tickets bought by now and the 17th they announced they're cutting their flights to milan united still flying to milan will that change in the next day or so? united ceo putting a memo out over the weekend saying based on current trends it's likely that additional schedule reductions

will be necessary united is also in the process of dealing with so in flights that have been brought down in having so many pilots that they don't know what to do with right now and they're offering some pilots vacation at a reduced pay. remember they brought down their schedule to china. also flying a reduced schedule to china and because of that they're saying on some of the routes how about if you take a month vacation expect to see more of that being offered in the next few days. >> got to be creative not knowing how long this might go on. >> thank you appreciate that. >> apple shares were at least 20% below their highs on friday and the stock was off 12% last week alone leading big tech names down that does not necessarily mean all is lost. it could be a bad omen, could be

an opportunity joining us to talk about that and what may work for your portfolio, dan morgan, the senior vice president and portfolio manager. and perhaps just unwind of a some what crowded position so where do you come down? >> i feel like they have performed well and if you step back and think about everything that is going on, the world will eventually, hard to predict when that's going to happen but eventually return to what will be undeniable truths. some of the truths are 5-g concept of health care which impacts wearables. i think about services, apple has the position within that so my view is this, for the small

group of investors that have the luxury of doubling down, i think that apple is the story to double down here simply given the strong will exit and apple is one of the strongest companies. keep in mind apple trades at a discount to the other tech companies because of this combination of hardware services and wearables that hardware piece which the company has long been penalized for i think -- exiting this will actually be an asset to it and be positive. so putting this together, this is going to seem like i'm out of touch with reality but i still think apple once we revert to some normality is a $400 plus stock. >> let's see when normality may come we are only back to prices that it never reached before until mid december that's how kind of fast the rise was before we did top out.

so does apple seem like a decent risk reward here or how would you handle it everything that we're banking on with apple going forward is still intact we're still looking for the holiday quarter for the 5-g roll out. we have a $400 phone as gene was saying about the services and changing dynamics of the revenue stream. and call space and about $5.20 a share. so it's made a big run for us. so i would think as gene was saying you look at this as an opportunity to find the stock

here 14% growth in profits for fiscal year 2020. it creates an opportunity going forward. i would agree, i think people that can look at the stock and think 3 to 5 years out, you should do well. >> this is a question for either of you apple is one of the first companies if not the first company to come out. >> i think it's more just a company that wants to communicate well it does not bode well in the near term. their business has impact on the demand side which has been articulated 17% coming from china. obviously you have the supply side that's impacted by china but i think that really misses the point. i think what you have here is high caliber company in the

communication on this something that seems really subtle and is really important in terms of the quality. and i think the markets going to look to period alabama as kind of a barometer going forward to when things normalize. >> we look at doctors, yeah, sure they're down but really not much more than the overall market does that seem like it reflects just an underlying positive trend in that area or do you see more room for those to come in as the asian supply chain and everything else. >> sundays are kind of in the line of fire right? you have issues with production and in that part of the world, a lot like qualcomm and they're a very large percentage of their profits from china so i think the semi-conductor sector is a little bit ahead of

itself we surpassed the previous peak we hit in the summer of 2018 we dropped off on the tariffs. waiting for this turnaround that's now been pushed out to 2020 so that is still going to be a little bit of a tough group because if you look at the core fundamentals we can talk about 5-g and going forward we can talk about all of these things that should happen that are positive but you still look at pricing and you're still looking at autos as very ifficult >> we still have it going forward. >> was that not something that was a consensus for everybody down 15%

>> broader large cap tech over the past week and it's down 15%. still up 20% over the past year. but you should simply take away two things one is that very few of them are infectious disease experts and it could be difficult for timing and also to think about what are undeniable truths. what are things that humanity is going to move to with or without the coronavirus. and 5-g, connected devices and what's going to happen with the autonomy of those. i don't put microsoft in the camp >> thanks a lot. appreciate it. >> still to come this morning. market commentary that everybody should pay close attention to. we'll speak to jeremy siegel from the wharton school. as we head to a break, check this out, a measure of the recent market carnage of all the

stocks in the s&p 50 more than 96% of them end last week in correction territory that's down 10% or more from the ayst recent highs. st tuned squawk box will be right back.

>> welcome back. the futures this morning are under pressure we have been bouncing around

at times we have been up over 100 points down by over 200 points. coming up, mohamed el-erian told us not to buy the dip and then said this >> i would say continue to resist, as hard as that is to say good-bye because it's worked in the past. there's a lot of uncertainties out there. i understand the inclination to buy on the dipment i understand that's what it is conditioned to do this is different. >> that's don't buy twice. both correctly icompletely different world sos now the time to buy the dip? we'll ask mohammed when squawk box returns. vo: don't fall for negative,

untrue attacks against mike bloomberg. bloomberg has been praised by president obama. obama: he's been a leader throughout the country for the past twelve years. mr. michael bloomberg is here. vo: mike worked with president obama to combat gun violence and improve public education. as president, he'll work to combat inequality by launching a new initiative to spur african american and latino homeownership and small business growth. and he'll beat the divider in chief. bloomberg: i'm mike bloomberg and i approve this message. >> ceo and chairman jack welsh died at the age of 84. his wife says more than anything else, leader, business icon, management genius, more than those things although they're

all true too, jack was a life force made of love, pure, bright, undeminutishable love. his passion for people his brilliant curiosity about everything on earth. his generosity of spirit toward friends and strangers alike. he changed the world and somehow, crazily somehow he also managed to be the greatest husband and stepfather giving our family 20 amazing years of adventure, happiness and joy our hearts so much larger and fuller having known and loved him are broken >> he's been called a white collarrevolutionary. >> my name is jack welch. >> from working class massachusetts kid to ge plastics engineer to ceo.

he took an old line industrial company by the throat and through ingenuity and vision and sheer force of personality turned it into a global leader in finance and health care during his 20 years running general electric from 1981 to 2001, jack welch drove the market value from $14 million to more than 400 billion. he was called a name he hated after cutting more than 100,000 jobs during his reign. establishing a blueprint for other ceos along the way he slashed payrolls and closed factories and sold subsidiaries that were not number one or number two in their industries. >> for the mediocre is one that is short lived. >> he was passionate and unstoppable. a visionary that spear headed the shift from manufacturing to

financial services through numerous acquisitions and always made sure to point out he made his best deals on the golf course in 1986 ge dove head first into the media business with the acquisition he was made president of nbc and in three years it made it's first move into the cable industry with the consumer news and business channel cnbc his decision to spend more than $150 million to buy cnbc competitor financial news network was key to cnbc's later success. >> it's no different and what we had to do was to take it from being a text to the locker room to show what it was all about. how the winners felt and how the

losers felt. that's what cnbc was designed to do. >> by the end of his ten yeure e was known for more his dynamic style. he pioneered in the work place abandoning management bureaucracy and archaic business ways he emphasized the value of candor and encouraged employees to speak up and be up front and work hard. >> good corporations create a healthy atmosphere where people can thrive and benefit their families i believe that. >> a man of surprise, he often unexpectedly stopped in at offices or sometimes in the newsroom in 1999, fortune named him manager of the century before stepping down in 2001, he set up an internal succession race for his job calling the even actual choice the most important decision he would ever

make but the company struggled in the wake of the 911 attacks which was devastating for the lending unit that he had dramatically expanded while he was ceo. his retirement turned out to be anything but he continued to lead the dialogue of modern business as a management guru that concentrated on winning and never looking back. >> how can i have a regret an irish kid from salem ends up with the greatest job in the world and i was trying to make $10,000 to live on i had a great run. >> that's great. what a life. and anybody that's been at cnbc for awhile, this is not talking about a business associate it's talking about a friend

that's almost as close as a family member. so it's all the way back that was jack's idea and back in the early 90s and there's a lot of people that take credit for earning cnbc now that were ringing their hands and afraid to spend the money and i know for a fact that's where i met him in about 1992 and he loved cnbc so much that we all got to be like this and we'd be at a function i remember the first time that i was a total nobody and we were up in connecticut and invited me to come sit at a table.

not with strokes he broke 70 that day. >> you have to have people that you don't want to disappoint in life that drives you to be better that's one of the people that you never wanted to disappoint it was close and very warm but also you wanted to make sure that you didn't disappoint him as an employee or as a person >> never do anything that was another thing

>> what jack meant to cnbc and nbc permeated across an entire landscape. >> also noting so much of what people take for granted about business came from it. it's one or two in the industry andget out the idea that the core business of ge was kind of good management during his reign and that was really it and he had this discipline and running it through and he had the jack welsh management to catch that on to current and future generations >> do you remember when mark haynes got in trouble for a down

market day i wasn't there that day. you were there you tell the story. >> mark had -- it was a scary day and, you know, we have one idea and came for a red cross helmet because the futures were down, i don't know back then, probably 200 points was a lot back then. we had the middle management type between now and he was running the place and just said get that off don't ever put that on again you're in rouble you work for them and then seeing the guy above them and the way it played out, that was jack. >> active in everybody's lives and active in every aspect of the ge business all the way

down when you say you were nobody, you know, i was a nobody and i met him and he was so engaging wanted to know about the business wanted to know what you're doing every step of the way. he cared that much about every

aspect >> it's going to be celebrated by cardinal timothy dolan. days to be determined at this point. it will be open to the public. that service the burial will be private and in lieu of flowers they're asking that donations be made to the boys and girls club of massachusetts. >> he was so joyful. >> jack died at the age of 84. ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse.

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the chief economic adviser warned about buying the dip. he made the call here on squawk box twice. first on february 3rd and again last tuesday since then, the market has sold off sharply. mohammed is back with us on squawk newsline and we're also joined by wharton school finance professor. i want to start with you you have been telling people not to buy this dip to this point. we have seen the markets going quite a bit deeper what is your call this morning >> so it's no longer the easy

call it was easy because valuation, fundamentals, and technicals were either flashing red or yellow fundamentals were very rapidly and people underestimated what it looks like and they were complacent valuations were elevated and technicals were really dependent on central banking now rather than have two red lights and a yellow light, so my advice to investors is very differentiated depending on the type of investor that you are and what your initial conditions are. it's not the easy call that it was on the prior two occasions i was with you. >> so what are you watching? what do you follow now is this a situation where you follow the economy or where you try to follow the case count and how things are handled here in the united states? >> who you are so if you're a tactical investor this is an opportunity which is

for you. technicals in command, on the volatility with experience over the last 12 hours in futures you see this almost happening to fixed income markets and what's happening to corporate markets and a ton of opportunities if you are confident about your ability to move quickly and opportunities because of how indiscriminate the sell off is if you are a long-term investor, i would wait i think fundamentals will be even faster i think policies and fun mentals are going to go in favor of bad fundamentals initially so i would wait. if you're a short-term tactical investor there's lots of opportunities out there. >> over 90% of the volume of a

stock is due to its profits more than one year into the future. there's so much uncertainty that we have a short quick recession that could have it long-term va significantly impaired given that, we were a little bit overextended at the end of january, so ewe're taking off that top and we're down to the position where you have good, long-term values and in my opinion, i say stay the course for all long-term investors, if you had a lot of cash, i would put some to work going forward let me also say, it makes no sense to me, the fed should have cash at 160, which is the funds range, with a ten-year now at 1% i mean, i understand that

there's supply side, disruptions as a result of the virus, but let's face it, this is mostly going to be a demand induced slowdown people are canceling trips they're canceling events it isn't because there aren't boats and there aren't venues and there aren't planes. it's the fear of getting the virus. so yes, i think the fed can help, can cure it, but can help by going down vigorously, and i hope they will follow that course >> jeremy, this is liz young just to follow on to your point, i think the market does trade more on expectations than it does on events, so at this point, with last week's drop, have we baked in all of that worst case scenario, and going forward, if we continue to get bad news, do we even really react to it? is it already baked in >> well, i think that some of it is definitely baked in by the way, i think in the last

segment, what was it dr. mccarthy, i thought he was tremendous, author of "superbugs." he was saying we'ring if to see a lot more news about outbreaks here in the united states. the silver lining of that is that he believed the death rate is much lower than the 2% that we've been getting so far, and that it might just be twice as bad as the seasonal flu. now seasonal flu kills a lot of people, but i think that we're going to get bad news. people going to cancel you talk about canceling march madness, can you imagine that? what other events, conventions, conferences, seminars, schools, wow, that bad news can still come, but again, looking beyond that, i think we can look beyond that, because we've gotten over these bugs in the future -- in the past you know, there's a lot of value

out there at current levels. >> mohammed, one thing we haven't talked about etch today is what might be happening behind the scenes, deals in the works that may get unhinged a little bit or a freezing up of potential for people being willing to reach out and to deals as a result of how quickly the numbers are moving what do you think? >> becky, that's an important point, because we know from experience elsewhere mainly in the merger market, we don't tend to look at that very much these sorts of economic sudden stops expose massive structural vulnerabilities both in the economy and in the marketplace, so look for liquidity stresses when it comes to fed really impo understand what the fed can and cannot to. it can fix market functions and it will. look for it to focus on the stress areas, mainly direct

liquidity, and it will cut weights probably in a coordinated global manner, but that is going to be more impacting expectation than actual economic activity as jeremy says, whether interest rates come down or not that's not going to influence whether you travel or not so the interest rate mechanism will be used, will be used in a global coordinated fashion, but it's not going to be helping in turning around economic activity what matters from the fed is whether it can fix market malfunction and finally, they will target the medical profession, because that's such a crucial sector in the recovery, and they will target the most responsive and most vulnerable segments, so that's another thing that investors should be looking at, because there's going to be very targeted fiscal action around the world. >> mohamed, jeremy, thank you both for your time i have the feeling we'll be

coming back to you again very soon >> thank you let's get down to the pyeongchang, jim cramer joins us now. how fortunate for both of us and all of us here to know that human dynamo, i'm trying to figure out a way of describing welch, on a business level, just the most dynamic individual but on a personal level as well, jim. it's hard to really put into words. it is for us >> fabulous teacher, hilarious i don't know if people remember. incredibly funny >> smart >> joe, i had the same experience with our previous management i was co-hosting with mark haynes at the beginning and was reprimanded by management, just said don't come back and when i got back to my office, i got a fax from jack welch saying that was unbelievable, you got to come back on i took the fax to whatever management they had here and that was it. that's how i got on tv, because jack said i don't want him off tv, i want him on.

what jack saw, he saw excitement and fun in business. he championed business he celebrated business, and i think that we should all follow what he did and what he taught us, which is be optimistic celebrate business and what it can do i understand what you said, he hated knneutron jack i don't blame him. he saved the company i imagine we all know not happy after his regime but great guy >> i think i remember was that wave four? we go way back, too. >> it was a company i said was way fraud and it was a fraud, and the sec looked into it and by the time the sec -- i was never shorted but the time the sec looked into it to see what it was the company was out of business >> i remember that >> jack loved that >> and you know what be nice to have a jack welch at certain times, wouldn't it, you see things you're throwing your hands up and he would come along with well, god has spoken now, and you're wrong, and finally,

you know -- >> right >> -- it was amazing he was something else. >> he was not a 50/50 guy. he was not an -- >> hugs always and all business matters as well. thanks, jim. >> we'll be missed, thank you. >> he was there through all of that "squawk box," coming right back. the barkins are empty nesters now. should they downsize? probably. will they? not as long as thanksgiving is a holiday. planning for the future is about more than just money. let equitable be your guide.

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mpbltsz i want to thank liz young for joining us this morning. thank you. time for "squawk on the street." ♪ welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. it was another wild future session. a thousand point swing investors weighing fundamentals along with hopes for central bank intervention and we have upgrades jpmorgan, ge, apple and more europe is red, down about a percent, ten-year 1.07 they peaked on hopes central banks might act to combat the economic fallout from the