bah last, the dry powder that you're able to use to deploy if and when you do a rebalance and never changes. never go all offense and the lesson is relearned by investors of this generation. >> liz, thank you for being here liz young. dow down 1600, greater than 6% "the exchange" starts now. thank you, scott welcome to "the exchange," everybody. i'm kelly evans. turmoil on wall street today the major averages down more than 5% and the dow down more than 2,000 points this morning, still on pace for the worst day since 2008 now market wide circuit breakers triggered four minutes into the session this morning after the s&p fell 7%. every sector except consumer staples down at least 10% from the recent highs the same goes for all but two of the 30 dow stocks. oil, the big driver of today's selloff. tanks more than 22% and hitting

a low of $30 a barrel. up to 33 right now, the lowest price since february of 2016 and today's the biggest drop in oil since the gulf war in 1991 history is being made in the bond pits. the 10-year yield fell below 0.32%, hit an all-time low of 0.318. there's the 2016 lows. white house economic advisers set to meet tonight for a form of stimulus. let's get to it all with bob pisani at the nyse as always bob? >> kelly, hello. stocks opened big and the market halted three minutes into trading after the s&p dropped 7% there was a mandatory 15-minute halt and then the s&p and dow both came off the lows and the race right now and plenty of very serious damage and talking particularly the energy sector down 17% energy stocks. banks down roughly 12%

industrials, materials, semis down 5% to 9%. consumer staples down 2% and the market starting to make distinctions for the first time. i watched halliburton open look at it opened down 26%. halted with the rest of the s&p and then reopens 9:52 a.m. eastern time it is halted again due to volatility eight minutes later, halted 10:00 a.m. and then halted again. third time down 35% or so three trading halts in one day oh boy that's a pretty rough day, kelly. >> that is a huge drop, bob. we will have more on the oil action throughout the show today. let's talk about yields today, as well. 5, 10 and 30-year treasuries hitting record low yields. 10-year rebounded to about half of a percent right now the 30-year hit .7%. now let's check in with rick santelli at the cme watching this for us.

>> yes, kelly. 2-year and 3-year only maturities not in full history mode, meaning 5s, 7s, 10s, 30s, the levels of today never been seen before and to show you how crazy the levels are, a percentage tied with them. i hate percentages but it really drives home the home 24-hour chart of 2-year. low yield 24 bounced up to 42 that bounce is 75% they bounced 75% currently at 40 basis points it is now down 11 look at a 10-year, bounced from 31 to 60 round it out basically it was up 100% now, if you look at it now, of course, we are trading at 51 basis points which is down 25 basis points on a day. 30s? they went from 69 to 103 they rallied 50% off their hardly traded low yield. before our time zone as you look at it now, trading

down 37 basis points so what we really want to see here is a day like this closing higher but we're nowhere near that quickly the vix and the ty and 10-year is higher and hovering of levels well populated at 2013 we have done a lot of trades between 94 and 96. kelly, back to you. >> thank you, rick for more on the mega market moves and whether we hit capitulation yet, i'm joined by kenny pulcari here with me here on set margie palteli, and jim murio. it's great to see you all. kenny, you could have bond defaults in weeks? >> oil down in the low 30s then raises the spector in the high yield bond market defaults, a

week, week and a half, if oil rallies back to 40s for some reason if russia and saudi arabia come back to the deal and oil rallies to the 40s then that is cut way in half. >> are those kinds of defaults already priced in? >> well, they might start to be priced in today with the action we have seen kind of in the energy market. you have seen some of the bonds down 20%, 30%, 50% some might ought to be priced in and too early to tell because i can't imagine that this price war of saudi and the russians is anything that either side wants. and so you have to really believe that it's some point to come to the table and talk. >> jim, let's bring you in on that game theory this out for us. how do you expect us to read the news flow between saudi and russia russia out today saying, no, no, no it's fine. we can weather it. we are hitting the levels on the asset classes. what are you watching? >> oil's obviously the biggest

story. i agree with most of what kenny said my threshold on the defaults is high 30s and probably okay but what's more important is we outlined that they don't want it they have to know that we don't want it, too it seems to me likely that something good could happen there. if it doesn't, defaults could be weeks. as far as the stock market, interesting, the price shock at oil came at an awful time. peak economic, you know, concern regarding the coronavirus over the weekend on social media and as soon as a market is that fragile regardless of the story, a market moves that much, we see that kind of negative reaction in stocks and one-two punch makes me believe this is the capitulation, last push, also predicated on oil rallying up in a couple of days. >> okay. you think capitulation if we find a bottom in the oil price cathy, it is interesting to see the dollar index falling, below

95 almost at 100 a couple of weeks ago. you would think a flight to safety pushes up the dollar, hurts earnings prospects for corporate america. could that give us a little bit of an offset here in a good way? >> the answer is simple. the reason why the u.s. dollar is sold so aggressively is because everyone seems to believe that the most aggressive stimulus particularly on a monetary policy is the federal reserve. they're looking for another significant move, possibly down to zero and possibly negative rates and the expectations of action not taken yet on aggressive level is causing investors to bail out of u.s. dollars and something to watch closely but unlike before where it was a smooth one-way down trend in the selloff, the phase of right now there's a lot more volatility because we are in high alert for central bank as well as government actions and that could cause a lot more volatility in the u.s. dollar.

>> well, i was going to say volatility might be good in the marks if we get it to the upside kenny, something that leon cooperman talks about every time on our air he says why not reinstate the uptick rule? he said forget central bank action, fiscal if they do that it does more to quell this selling. >> 1,000%. the market is fragmented 9/11 the new york stock exchange was the central marketplace. today 11 exchanges in 50-plus alternative venues and so therefore, in a sub-decimal environment which price to figure out the plus or minus take because it trades so fast and trading in all the different venues this is the price that we g use i guess. >> great point. >> it is a point, absolutely right, because without the short sell rule you get this extra downdraft in pressure on stocks that create action like you have seen today which is mind blowing. >> we are looking for

adjectives it is shocking to see how fast we have fallen it is within thing to say the markets priced for a correction and certainly were the speed of this one is unusual, hasn't it >> yeah. it reminds me very much of '08 where the market went down without people understanding why. and what it says to me is we still don't have all the facts that tell us why the market's going down and i think it shows a virus shows its affect on the so many countries in the world that are treading water right around zero growth, couldn't take this virus hit and so i think the market is reflecting negative growth and even recession in many, many countries and real disappointment out of china. that's what i think the market is telegraphing today. >> i'm with you on the countries but what about the u.s.? maybe we were at a 2% run rate it could have been a little stronger or less but we weren't at zero and now we have a 16% chance of negative rates by the summer were we really in that bad shape? is coronavirus going to turn out

to be that severe of a hit >> well, i think the course of u.s. rates unfortunately for we investors is still down. i think we join that zombie land of zero rates that are prevailing around the developed world and i think it's more an effort to provide liquidity and to ease any downdraft in our economy as you have this disruption in supply chain. >> jim, i see you nodding your head of negative and zero rates. tell me why. >> i absolutely do think we are going to zero rates. these pits we have seen option play that is presuppose zero rates, too as far as the correction and the violence of the correction, too, reasonable to assume in 2020 a normal corrections are going to be quicker and more violent just because every level of market participant now has an immediate access to markets. that didn't exist 15 or 20 years ago so to me it seems like if it's just the normal correction and trimming the hedges, it is much quicker

economically pervasive that could be something different. >> cathy, last word to you. >> the greatest possibility for recovery is coordinated action by the g7. low lying fruit are things like swap lines or coordinate easing or they could coordinate to fiscal st fiscal stimulus. otherwise you are gong to see the u.s. become japan and i don't think anyone wants that to be the case. >> not me or kenny or jim or margie thank you all. we appreciate it. let's dig deeper into the action of oil with crude plunges after the opec deal to cut production fell apart last week and then talk of an all-out price war of saudi arabia and russia pavel, i saw somebody on the street today downgrading the whole energy complex saying it's basically armageddon for the industry what would your response be? >> let me give a little bit of silver looning

the first is the last time we had an oil crash four years ago the bottom was 26 bucks a barrel for wti. we are not far from that point today. that lasted literally a matter of days. oil stayed below 40 and we are well below 40 now for roughly 100 days so this is not gong to last forever in fact, my bias would be for this lasting a shorter period of time than it did four years ago because as your previous guests noted the violence of the selloff is just unprecedented. by the time oil bottomed in 2016, that down cycle was already running for a year and a half whereas we're now barely four to six weeks into this thing. >> do you, pavel, think something has fundamentally changed with opec after this weekend?

it sounds like you don't think so that it might be a temporary face-off and i could see a case for the market saying, no, we don't think opec behaves like it once did to keep up prices from now on. >> saudi arabia needs oil around $80 a barrel to balance its fiscal requirements. 30, not even close the saudi economy will collapse if this lasts for a long time. the other difference versus four years ago is aramco is a public company so those investors mainly saudi nationals who bought on the ipo last december are now sitting on losses. does the crown prince want to explain to those investors why they lost money? because of his actions probably not our sense is there's a lot of politics in this between saudi and russia this is not about u.s. shale let's emphasize this point i would look for saudi to probably blink first because

their economy is more oil centric. they have this aramco dynamic they did not have four years ago, but frankly, russia at these prices cannot last for a long time either. >> right so they're probably going to wait each other out. neither mbs or putin, neither within of them looks like the kind of guy to be first to blink. this is a game of chicken. >> it is i'll tell you this watch april 22 that is the constitutional referendum in russia this is the biggest political event of putin's 20 years in power. once he gets past that, he'll be in a position to show flexibility, including in foreign policy until then, no way too much nationalist fervor that he's trying to stoke by -- we got six weeks to go until april 22 i think the industry can survive that long. >> so, pofl, do you cover the

crude itself or the companies here >> well, the companies and look. there are lots of blue chips that have investment grade balance sheets that are able to act as consolidators as some of the weaker players, probably go under, if certainly this continues. so i would look to names like bp, conoco and occidental as those companies to withstand the pain, there's obviously going to be some pan. >> by the way, occidental down 38% today. >> indeed. look you got exxon, the ultimate energy blue chip, lower today than it was during the financial crisis. >> wow. >> there's know scape for from any of this but the level of dislocation is not rational, particularly for those stronger players to withstand the pain, act to consolidate, gobble up some of the smaller players, become more efficient an then come out the other side. >> okay. we will have more on this

throughout the show. pavel, good to see you we appreciate it thanks now a stock sink and bond yields hit historic lows, we have people making a comparison of 2008. my next guest disagrees saying that crisis about the consumer balance sheet and this time it's corporate america's. for more let's bring in bob michael for jpmorgan asset management and steve liesman, as well bob, i will never forget the headline of last year saying the 10-year going to zero and now you look like the smartest guy in the room. this move you could argue you saw coming before developments of coronavirus and opec. what happens next? >> well, i think what people need to realize is that the u.s. economy never achieved the escape velocity we would have liked and policy rates never got as high as we would have liked

to see and then faced in an environment last summer where the fed needed to come in and coming in from 2.25%, 2.5% and very quickly at the point you think if it leads to recession they have to bring rates down to 0 and the rest of the world will come into the u.s. bond market and bring the 10-year down to 0. of course, i didn't foresee coronavirus but -- you didn't have to. >> it does look like we're headed to recession, at least the probability gone to 50/50 and the market's pricing that in. >> before i bring steve in, bob, if we don't have recession then what does this whole thing unwind if that event doesn't come to pass? >> it doesn't unwind i think what we're seeing today is i know that yields are very low. i know there's been a shock to the markets but right now the bond market is relatively stable government bond yields are stable at lower levels and credit spreads are stable at

much wider levels. frankly, we are all waiting for a policy response. we want to see if the fed or the ecb come in, whether they say something to indicate some sort of policy and we want the hear out of washington and brussels so we're looking for that type of support. >> all right i'll bring in steve with the graphic of the day from your team this is the market betting a 16% chance of negative rates come july we make the graphics up the show them on tv. >> i didn't know you needed it. >> i printed it out here because it's so shocking to me tell us what we're seeing. >> let me update that number it moves around a lot. >> when you have the 10-year - >> june? 18% now for july and 15% for june. >> wow. >> i have never actually seen the thing that i look at from refinitive with a negative rate. but let me tell you my reporting tells me today the fed stepped

in this morning for additional liquidity to the overnight market and many people familiar with what's going on and i think bob has this, as well, the fed to do much more on the liquidity front. that the bond market not necessarily trading all that well that there are half-point gaps in the bid aspect. if you could bring up the evercore full screen to show you what christian duga said after the fed with the increase in the repo overnight and what he said, a former new york fed official, it's a baby step with only short-term changes, limited term funding and no global reach. in our view, much more will need to be forthcoming and very soon. what i've been hearing people talk about the rekindling of swap lines dollar swap leans. united states and europe provision of -- special discount window provisions. the idea is that there are problems in the program not that

obvious. i'll pause. >> are you seeing or hearing the same kind of thing in terms of liquidity here not just the levels of rates, mr. michael? >> i have no sound. >> steve >> it's been several people i have talken to one other thing to read you, kelly. just came over barclays changing the call very much along with what bob was saying we adjust the outlook of 50 basis points of both the march an the april fmoc meeting. >> that's zero. >> yes exactly. we also expect the committee to increase its monthly purchase rate of 80 to 100 billion per month and extend the purchases into q3. you can call it qe if you want or a provision of liquidity into the market but this is very different from friday when it seemed like people not uncomfortable with how the treasury market was

trading but on friday i got the first inklings of problems there. >> what's the latest with the rapid tracker of gdp >> kelly, if i thought it was meaningful i'd bring it to you. >> okay. >> we are tracking 1.5 i don't think that accurately reflects the market on the expectation of q1 gdp. it's a formulaic thing for times going well but right now the data that will tell us the impact of the coronavirus is not out yet. the good news on that i guess is that the data hasn't been that bad. >> okay. >> it is relatively good so that we have been tracking 1.5 to 1.7. we'll see if in the coming weeks the february data and then after that the march data begins to reflect a slowdown. >> the forecast is much lower. bob michael, do you want to address -- steve said he was hearing of liquidity issues in the bond market especially

are you experiencing that out there? >> yeah. i'm worried about liquidity. right now we have seen market makers move around positions, try to hedge and that's caused a lot of the price dislocation what we haven't seen is flows out of credit funds in earnest and given the shrunken size of broker dealer balance sheets out of the crisis it remains to be seen how they would play out. >> bob, if i can just ask you, what we heard beginning on friday were the half-point spreads of the bid ask on the treasury market. have you seen that tell us how unusual that is. >> steve, i've been doing this 40 years i have never seen that before. last night i got a message from our london office. there was no offer on the 30-year treasury futures we have never seen that before so these are unchartered times, for sure. >> bob, to what extent are we seeing margin calls out there? to what extent do the margin

calls reflect the lower price, but also, the lack of liquidity in the market? >> we're seeing some of that right now. it's moderated a bit over the course of today. we need to see if there's some policy response before the close today to see if that rehmans stable. >> bob, what is the fed need to do here? there's talk that people, my sources have been telling me, they need to step up with dollar swap lines with the u.s. and japan, u.s. and europe i heard talk to provide access to the discount window at a reduced rate and perhaps a term rate do you have any thoughts on that >> i think they need to do all of those things. there's no way to talk about financial conditions indicators as something they model and follow and then when they fall to pieces and indicate there's been one or two tightenings step back and do nothing. they need to get liquidity into

the system and they need to put the pressure on washington to figure out how to get lines of credit to small and mid-sized enterprises. >> do you think if they had a targeted stimulus package at coronavirus, that sort of thing, not a bland package, could that do a lot to help forestall this decline in rates and the problems of the market >> yeah. i think it would stop it in its tracks i think for sure in that environment the fed would still be down around zero but the 10-year would hover and maybe get as high as .75%. that seems crazy but this time they do need some help on the fiscal side. >> bob, are you also saying that the 10-year note we are seeing now is not reflective of fundamentals but more of constraints inside the trading of the 10-year saying that the authorities step up with the appropriate programs you are talking about the 10-year yield to rise in that case

>> yeah. i think what we are seeing now with the 10-year is the expectation gnat fed will cut 50 basis points at each of the next two meetings and go to zero and maybe the 10-year drifts lower and the probability of recession is greater than 50%. i think that's what's being priced in the 10-year today. fiscal package helps to diminish the probability of recession and then that gives you a bit more breathing room in the yield of the 10-year. >> bob michael, we greatly appreciate it. thank you so much, sir. >> thank you. >> steve, thank you, as well a lot of good information there. we'll watch to see what else may come from the fed or the white house today. let's quickly check mashlts this afternoon with this going on the dow down about 6.5%. at the low down 2,000. remember the dow was 500 away from hitting 30,000 earlier this year a 6% drop for the s&p. nasdaq off 5.4% today and the state department is now

discouraging some people including older, vulnerable americans from taking cruises. the cruise stocks are down sharply again today. let's get to seema mody for the latest. >> kelly, in an industry already challenged by the coronavirus fallout, this warning from the state department being heard loud and clear analysts saying earnings estimates for the cruise lines to drop by half as travelers think twice about getting on a cruise and the added cost of quarantines and transporting customers. steep fall of cruise stocks raised concerns of how levered the cruise lines are looking at the debt to equity region, norwegian 135% the company today saying it secured a resolving credit facility of $675 million for additional liquidity and not helping is the carnival "grand princess" stuck off the coast of california for a couple of days and expected to dock at the port of oakland at around 3:00 p.m. eastern. for now back to you. >> they haven't figured out how

to handle the cruises. thanks they have lost more than half the market cap this year. we have stocks plunging as the price war over oil broken out between russia and opec. crude dropping as much as 30% in the session on the news. joining me is fred kemp, president and ceo of atlantic council. fred, welcome. want to know your thinking in terms of the struggle, power struggle essentially, between russia and saudi whashld yo what should our viewers watch for? >> if you're really try to bet the markets and figure out what will happen right now with a demand shock coming at a time of an oil price shock, is the situation tactical in other words, are they going to kiss and make up relatively soon, russia and saudi arabia, or strategic people don't look at enough the relationship of putin himself and mohammed bin salmon.

two strong men in early february we are picking up that bin salmon tried to get putin on the phone with his father king salmon to talk about production cuts. at first putin would n't take the call at all and then taking the call he wasn't willing to go in for the cuts and set up the opec meeting last week the russians are upset because the saudis have not come through on their promise through the opec plus deal unwritten promise which was to invest more in siberia and lng facilities and then a geopolitical part which is putin pointing at the united states never liked the shale oil producers an wants to take them down and upset at two sanctions, north stream sanctions for his pipeline to europe and then the ross nef sanctions on venezuela. you have personal clash and geopolitical clash at the same time. >> in this case, though, both are going to be losers here until it's resolved. beneather russia or saudi it

sounds like can balance the books with oil where it is trading now and people in the market think it will be resolved in days or weeks what are they missing? >> if i had to bet on whether it's tactical or strategical, days or weeks, 50 very 50. it's logic said it's not in anybody's interest 50% why it's not solved is leaders who are emotional are not always entirely lodge cam and one has to watch both aspects of this unfolding. >> you mentioned the u.s. shale angle here what do you think happens in terms of america's interests because, unfortunately or fortunately, the shale revolution means we suffer from the falling oil price. it is a net wash but that mean you would expect -- the president this morning tweeting, hey, this is good news, lower gas prices for consumers and offset by the oil producing regions that suffer.

how would you expect america to play a role in this if any as it continues? >> well, there's no doubt that over the short term that shale producers in the u.s. could be hurt by this and especially those operating at more than $20 in terms of costs per barrel and so, that's a real possibility. and the saudis and russians, government intervention can make them do certain things an the u.s. government can't make shale producers do those things. watch venezuela and iran they're on a knife's edge with the political systems and support for their people and these low prices, they're really in much deeper trouble than beforehand but the shale producers will bounce back and the prices will bounce back, as welt so what's going to happen is they may win market share but the saudis and russians but they lose revenue you can win some market share but you lose more on the revenue side over time. >> okay. fred, thank you, sir.

>> thank you. >> welcome back to "the exchange." it is half past the hour let's check in on the markets with another manic session the dow sinking 2,000 at the lows we are off the lows right now. you can see there crude down 20% right now and of course the 10-year yield went below .4% half a percent as we speak bob pisani at the n k3wryse andn hall lanld at the nasdaq bob? >> the s&p did rally after the circuit breakers kicked in and reopened just before 10:00 eastern time but just barely and just above those levels where it was originally halted. big movers on the dow. jpmorgan with a rally and bear in mind not much of a rally. still essentially down 12% so jpmorgan down 12%. caterpillar, rallied but been

drifting lower it's trading right at the lows for the day. there's jpmorgan caterpillar. same with exxonmobil rallied right after that trading halt it, too, drifting lower. it's been drifting down going into the half hour finally only one stock positive, walmart. we have seen how the grocery stores doing generically why are gold miners down that can move in relation to demand concerns of global demand for gold being a little bit lower if the global economy slows down and puts pressure on gold mining stocks back to you. >> reminld us what we are looking for next circuit breakers here. a 13% drop, right? >> the initial drop halts stocks when the s&p down 7% that happened at 9:33 eastern time now the next level 13% for 15

minutes. until 3:25 after 3:25 there's no halt at all unless it drops 20% or more. hitting 7% you don't halt but going to 13%. >> okay. main question that people were asking thank you. let's flip over to the nasdaq where the names of the semiconductors are hardest hit today. >> absolutely, kelly nasdaq down more than 5.5%, least impacted but you also have to look on the flip side opened up below its 200-day moving average and it is the only major index not to close that level only two stocks in the nasdaq 100 in the green o'reilly autoparts and dollar tree big tech names falling today, especially those with high exposure with china with tesla down more than 9%. western digital and mercado l

ibre down. united down and service reductions rail stocks falling on fewer containers of china meaning lower volumes for the business and want to take a look at the fang names along with microsoft, actually creating a third of the point declines and microsoft's fall also appears to be linked to the $10 billion jedi contract. a judge ruling that the challenge to that contract it does have merit. kelly, back over to you. >> a reminder of the other stories today, as well thank you. as stocks continue to plunge today, critics have been left wondering did the fed act too soon with the emergency rate cut to key off the action this week? what can the actions accomplish? let's bring in randy costner great to see you today i don't know if you were listening a few moments ago with bob michael and steve talking

about the major gaps in treasuries market participants talking about access to the discount window, randy. what measures do you think addition a l additionally here? how would you assess what's happening in markets >> it's extremely important. they up the amount of so-called repurchase agreements, reserves and the liquidity they put into the system and they need to do as much as the markets want and the markets are going to have nearly insatiable appetite and want to stay really short, safe and that's liquidity that the fed can provide. >> people ask me why isn't now the time for treasury to issue tons of debt and if they did that would the treasure hoovering it all up? next step sounds like bond buying or quantitative easing. these are tricky questions

we're on the precipice here. >> for sure. i think what you have to do is have a reason for issuing the debt not just issue it for issuing's sake what will you using the resources for? using them to allow taxes to be lowered at least temporarily so people have more money in the pockets, more investment incentives, more expenditure on health care? good reasons to issue debt if you're just issuing debt for no good reason that causes tumult in the market. >> yeah. so basically should wait for a plan from the white houseso that at least then saying, okay, here's the reason to issue the debt but it does go back to the question of ultimately if the fed is doing more bond buying to expand the balance sheet at zero and could be in six or eight weeks at this point, won't they effectively be monetizing the u.s. debt? >> well, i mean, when the fed does quantitative easing,

purchases a lot of debt, it is buying it. you could call that monetization when i was there we didn't they don't call it that now. usually that has a bad connotation leading to high inflation. even though the fed balance sheet 800 billion to 4 trillion we have seen low rather than high inflation and doesn't have that consequence >> yeah. so it does have a bad connotation and i think people wondering about -- let's putt it differently, the moral hazard. why not have the u.s. government running huge deficits with huge debt because there's demand for the bonds right now including from the federal reserve. >> and so, as long as the good reason for why you're issuing the debt and doing something productive with it and useful for it, if there are good infrastructure projects to put them out to, making sure that credit is available to small and medium-size enterprise, making sure to fund unemployment insurance, the unemployment rate to go up, all sensible reasons

to do it the market is uncertain if they say let it rip and start spending for no clear focused reason so i think this is a time of -- it is important to have a coordination of monetary and fiscal policy. >> a final quick question i have to get in here do you think the fed buying equities is out of the question? >> i really hope the fed doesn't get to that. the bank of japan has done that, and right now certainly enough assets like government assets and government notes and bonds and mortgage backed securities for them to buy. in japan, there aren't that many liquid assets to buy i hope we don't have to get there. >> hope springs eternal. governor, thanks. >> yeah. >> thank you for joining me today. former member of the -- former board member of the fed i should say. let's go to contessa brewer

with a cnbc news update. italy's reported the largest daily jump in deaths from the coronavirus. the overall death toll surged 57% to 366 that's the death toll. the number of cases jumped 25% since sunday to just a little more than 7,300. health an human services secretary azar's telling americans the trump administration has a plan to combat coronavirus and that the u.s. economy remains strong. >> president trump is leading a whole of government response with the vice president helping him on the public health issues we are facing with the novel coronavirus. that is his number one concern >> what few travelerspassing through the airport in seoul, south korea, greeted by empty terminals. more than 100 countries have implemented restrictions on travel to and from south korea that's the news update this hour back to you. >> thanks very much.

well, there are now more than 111,000 coronavirus cases worldwide. meg tirrell is here with the latest at this hour. >> a lot of news this morning. cdc holding a briefing just now. a doctor saying based on the trajectory of the outbreak and a new virus and no immunity, likely many people in the u.s. this year or next many exposed and become sick. the risk grows with age and underlying conditions. the world health organization saying just now the threat of a pandemic is very real. but that it would be the first pandemic in history to be controlled and we are seeing countries taking more efforts to slow the virus' spread italy restricting the movement of 16 million people cities in ireland canceling the sainlt patrick's day parades and in the u.s. schools an universities closing temporarily and new york state governor cuomo announcing today is making hand sanitizer. >> okay. because we'll take - >> floral bouquet. >> great yes. that will take the edge off as

we're rapidly trying to prevent the spread we appreciate it. turning back to stocks, plummeting on coronavirus concerns and on the crash in oil prices over the weekend. russia refusing to go along with further cuts in oil production launching a public price war with saudi arabia announcing massive discounts to the selling prices for april joining me with more is dan yurgin dan, boy, do people want to hear from you today what is going on between russia and saudi? how does this end? >> i think it will end eventually when they feel the pressure is great enough it may also end when the -- we'll hear from washington from the oil patch and what this affects a u.s./saudi relations seeing a freezing up in the u.s. oil sector we reached a peak of 13.1 million barrels a day afew weeks ago in this country and not staying number one with the prices. >> yeah.

i don't know what the goal is at this point, if it should be to produce more and in other words is the geopolitical angle to this right? both economic interest of people of how much they want and can produce and also the politics. >> this is a triple whammy oil, geotoll picks and the virus and of course starts with the virus. in the first quarter we estimate that oil demand compared to last year down almost 4 million barrels a day and what you have is a battle for market share within a constricting market and as you know you just had the governor with the hand sanitizer. the u.s. is moving into this thing to people virtually, not traveling, not having conventions and everything and see demand in north america and europe also actually going down i think as we have seen it already in china maybe not as far as that but this means that this market is going to be very difficult and countries are not going to be able to make up on volume what they lose on price.

>> right even if they take the price cuts, no one to take the oil basically. let's ask you this as we move through the year and, you know, you continue to -- well, let me put it differently. how long can the u.s. oil patch stay productive? what are we talking about in terms of bankruptcies and total hit if oil is down at these levels my earlier guest thought oil to bounce back. this can't last long what if we go back to the era of $10 oil? >> i mean, i don't think this can last very long because it's going to hit everybody's finances including that of the countries and i think some way somehow they will have to find some -- something to do but i think the russians took the view that this impacted the virus was going to continue to unfold and that there's going to be more demand problems and, of course, the russians also more than the saudis don't like to see the growth of u.s. shale what it means for the u.s. shale

i think everybody this weekend spent their time looking at their budgets, slowing down activity, stopping activity. as you say, we'll see bankruptcies, we'll see some people gasping for oxygen really trying to survive. so this is a very difficult bracing period for those companies and, you know, it is going to -- the impact is going to continue until there is some resolution here and the recognition that a battle for market share in a constricting market is not going to get you more money. >> i wonder -- if the peak is producing 13 million barrels a day, what might russia be trying to get down to below ten? six? seven? >> i don't think if they're that precise. the russians are very peeved with the sanctions that we put on their $11 billion north stream 2 project and looked at that as really the u.s. trying to push more of its energy into the european market. so i don't -- i doubt that they have a number but certainly

expect the u.s. not to be number one an they want to be back in the position of number one. >> do you think that's going to come true? >> well, i think that we'll see u.s. production if we maintain this kind of low price environment we'll see u.s. production coming down notably a year from now it will be a good deal lower than it is today and russia will have pushed up above its 11.2 million barrels a day and they'll be number one and the saudis pushing up but i think there's going to be pressure, including i think political pressure from the united states to bring some resolution, particularly aimed at the saudis given what this will do not only to the oil producing states but also to the states that are in the industrial supply system in the middle west that are very key to the u.s. shale revolution and there is an election coming in november. >> yeah. we will be talking to an oil field services company after this, in fact. dan, again, thank you, sir. >> thank you. >> vice chair of ihs market.

we have breaking news out of the white house. eamon, what is going on? >> reporter: wall street executives coming here to the white house on wednesday to meet with president trump they're going to be discussing the response to the coronavirus and presumably the economic fallout we have seen across markets of every shape and size over the past week or so now, this news was first reported by "the washington post." the official telling me it's not clear who all is going to attend because those invitations just going out right now. but clearly, the president wants to talk face to face with the top wall street figures in order to get a sense of where they are in terms of their response here. ultimately, we are expecting a meeting this afternoon with the president of the united states and his top economic team, as well they're i'm told going to be presenting the president with a range of options to consider to respond to the economic damage that we have seen from coronavirus, not clear whether we'll see any decision points here this afternoon or whether they're going to wait and sit

tight to see how things unfold over coming days but the president is going to be getting a range of options to consider from the team arriving back at the white house in just a short while. kelly? >> thank you eamon javers at the white house. the markets are now down more than 7%, not enough to trigger the circuit breaker like earlier. as you heard bob discussing a moment ago, stopping trading action once, we have to be down 13% to stop trading action again so, again, down about 7% for the major averages oil down worse than that, 34%. that's putting it well below the break even point for many companies to operate in the texas oil patch. get this according to the dallas federal reserve, energy companies especially in texas need prices around $50 to break even so with crude well below that it puts thousands of jobs in jeopardy. joining me is reporter sergio chapa. sergio, you know, the last couple of weeks we have been asking people in the houston area of the impact of falling

oil. they said it is limited, limited. i don't think it's limited anymore. >> definitely. the industry here is used to that boom and bust cycle of oil prices and, you know, back in 2014 and 2015 we had $100 per barrel oil and that fell off a cliff and then went as low as $26 during that downturn it caused something like 75,000 jobs during that downturn and only 40% of those jobs came back and now with what's happening, you know, over the past year, with the shale slump and then now you have this dramatic drop in oil prices, just almost instantly overnight, you know, starting on friday and continuing through today you know, the industry's looking at this and it's rather reminiscent of that downturn this is shaping up to be the second down turn in five year's time. >> what i was going to say, though, not to make light of it,

most people now don't remember the last down turn unless they were in your area because the u.s. economy kept growing. you know the region itself bounced back ultimately does anything make you think it could be worse this time >> right you know, the houston and the texas economy, they have done a good job of diversifying you know kind of easing dependence on oil and gas if you will. medical and technology and, you know, and things like that like to diversify the economy so, you know, the effects won't be as blunt as they were, say, in the '80s or during the last downturn but there's still concern nonetheless. one expert i talked to did some projections just at $40 a barrel, 14,000 jobs lost by the end of the year if this ends up being a prolonged price downturn lasting six months or more there's already like at $40 a barrel or less, 14,000 jobs that

could be lost by the end of the year and nothing to sneeze at. >> no, not at all. we are looking at the prices of the equities today diamond back down more than 40%. con cophillips down. we were speaking with dan dan, it's possible we could go from producing 13 million barrels to something dramatically below that if this lasts for some time. would that favor consolidation among the larger companies do you think the people would pull back that much or keep trying to pump in order to pay their own bills? >> you already saw calls for mergers and consolidations before this happened i think you'll see those calls are more pronounced now given what's happened. you'll see companies with nice hedge books will be able to ride this out if it's a short term disruption, companies with hedge books that had nice profiles with $54, $5, $50 oil on books, companies that

had hedge books with that will be able to ride this out just fine you'll see companies that have low debt and cash, they'll be able to scoop up assets. you're going to see that this time around. just like you did during the last downturn. i think you'll see sectors like the service companies be hurt the most followed by emps. it's going to affect midstream and downstream and petro chemicals. all in different ways but the effect is the same in this call for this consolidation >> that's before we take into account the larger economic spending effect. thanks it's good to get your point of view today the fed announced that half point emergency rate cut last week as you can see from the market action today whether it's in the crude names, just stocks in general, nobody seems to be cheering this move plenty of people are saying it didn't go far enough others are saying it didn't go far enough

crude prices are collapsing and the whole question is what might the fed move there's not a lot of good options rite now >> that's the real problem i think the market st screaming out and i hope that wall street or who meet at the white house underscore this issue is that fiscal policy is our key lever here as randy pointed out earlier, you can issue debt if it's for a good reason and this is for a good reason. we need to worry about the effect on the overall credit market the way to do that is not just with fed rate cuts although we will get more. we'll be at zero by april. >> crazy >> i think it's much more important to step up on fiscal policy to bridge this period in times so we havesomething to rebound off of once we get through the disruptions created by the coronavirus >> it seemed we were operating

fine when participants didn't think we were able to go to zero everybody piled into treasure say we're going to zero. i wonder should the fed have stood up and said we're not going to cut rates here. it's too soon to know the impact >> it's a great question finance ministers on the call, you did expect some coordinated rate cuts. that's exactly what we got we knew going into this that if he hit, a real bad economic time the fed was limited in what they can do i think that's what's coming home to roost now. we need to rely on fiscal policy this is not something that congress and our elected officials can sit out. they have to step up and work

with the fed, coordinate how they will deal with this this is back to the cry issues we know one of the lessons of the global financial market crisis is we didn't step up enough and keep it going enough during the crisis to make it less painful there's good reason to issue it to bridge this period in time. >> i haven't heard the word austerity in years i don't think anybody is thinking about that yet. i want to go back to something you said about what the market has priced in. i don't know why the fed needs to worry about that. if the idea is we want yields to go back up, we're worried about the price action in stocks and bonds, a fiscal announcement could havesoevered th esolved i time yeah they're going to make fed cut to zero. doesn't mean they should you know what i'm saying >> they still have to.

if we get into a disorderly correction, they don't have any choice all bets are off it is their job to try to stimulate as the economy falters. it's unfortunately, they do not have the ability to force the rest of washington to do something. i don't think holding rates up high to try to do that is the best way we did see that once in the past that was in 19990 and it didn't turn out so well for the h.w. bush administration when alan greenspan with held easing to try to get to austerity back then we ended up in a recession we had a hard time getting out of they have to respond to the economic fundamentals. >> i'm saying if they got up, even know, if the government is going to spearhead this massive

effort then it wouldn't have made a difference. >> i agree >> it wouldn't have mattered how much the fed cut >> it would be the lesser of the problem and we wouldn't be looking at the fed to shoulder a burden we know they just can understand shoulder. i think that's what you're seeing you're seeing markets scream out and say help us with fiscal stimulus we need something here to get through this period of time. how can low energy prices help consumers who are no longer going out to supporting events no longer driving as much or staying at home or not able to work it just didn't have the same positive impact that it once did either given the other changes and the knock off effects into credit markets are quite significant. >> thanks. let's go back to what's been happening in the oil patch today's historic price in the oil price has investors wondering what would be the next

shoes to drop i'm joined by chris white. chris, thank you for coming on tv today to talk about what's happening. are there any misconceptions about how bad this looks for the energy industry? >> i think people confuse the short term with the medium or longer term. our industry because of efficiency gains has been contracting in size and reducing investment to better supply and demand this adds fuel to that fire and therefore i think you'll see the contraction of investment and contraction of u.s. oil production accelerated faster. painful in the short term but probably brings us the beater place for the stronger companies. >> i was amazed to read you were founded in 2011. you provide the services to the oil patch like we always say kind of like selling picks and shovels in the gold rush it's a good place to be until it slows down you never had to do a layoff or reduce your work force, as i

understand it. you have more cash than debt right now. this will be kwiequite a trying time >> it will be. 2016 was quite a trying time we had $26 oil we had in the regions where we operated the rigged count collapse by two-thirds here maybe we get a one third. i think we'll get a meaningful pull back. i think it will be stressful times. those are tough to go through but they work to advantage of the stronger players i think there's a number of strong players in our industry that will be better for it yes, this year be a tough year for industry >> how low, for how long does oil price need to be before a company like yours has to really trim the work force considerably >> hard to say really our activity is dictated by what our customers are going to do. i think it's a certainty that our customer, the oil and gas producers will shrink rigs and lower demand for frack services.

the whole pie will get smaller liberty will do what we always try to do which is grab a smaller piece of that pea. the other question is how long does this last the pain at mid-30s oil, it's not just in our industry, it's around the world. >> lasting year is very believerable >> your company can get through that >> absolutely. >> all right we thank you for coming on tv today. >> thank you for having me on on a rough day. >> not for the faint of heart. that's only one of things going on in this market. we'll continue to watch it

closely on "power lunch. i'll see you there thank you very much, kelly we'll see you in just a moment it's a historic day on wall street with all of the major indexes down by record amounts the dow is within about a percentage point of bear market territory. oil having its worst day in nearly 30 years since the gulf war of 1991. dow, lowest level since january of 2019. what's going on? you've got russia and saudi arabia duking it out in an all out price war. that has sent crude down as much as 30% today it is down very strongly from a month ago. the energy sector down 19% on pace for its worst day ever the entire-year-old curve yiel 1% you see it there a