♪ good morning welcome to "squawk box" here on cnbc we're live from the nasdaq markets. let's take a look at the u.s. equity futures i don't even know where we're coming from and where we're headed this point we're down by about 556 poupts this comes after the biggest one-day advance since december of 2018. but you're right that was giving back half of what we had lost the day before. now we're losing half of what we gained yesterday >> yep >> it's getting a little hard to keep track of these, but these major swings are continuing not only on a daily basis, but hourly basis s&p futures down, nasdaq off by 184. and if you're watching the treasury market this morning,

watching for wild swings right here 10 year yields 0.7% and that's pretty stable compared to where we were two days ago >> i checked that, what's the problem with the markets but there's a lot going on breaking overnight, this should have been somewhat helpful you would think. bank of england announced emergency cut. lowering the bank rate by 50 basis points to .25% england's central bank also announced a new funding plan to support small and medium sized companies as well as new steps to help commercial banks lend more we'll get a live report from london in just a couple of moments. now an update onthe coronavirus. in the u.s., confirmed cases have now topped 1,000. want to get to meg now who joins us with the latest meg. >> good morning, andrew, case counts drived to 119,000 overnight with almost 4,300

deaths among the hardest hit countries, italy, iran, and south korea and they tell dramatically different stories. italy reported highest daily jump in deaths yesterday to more than 600 of more than 10,000 cases. south korea seeing new cases decline yesterday to the fewest since february 25th. widespread free access to testing, contact tracing, and strict social distancing measures being credited for the decline. in the u.s. case numbers continue to rise with increased testing and tracing of known outbreaks. seattle reporting an additional 74 new cases yesterday massachusetts declaring a state of emergency as cases jumped to 92 cases also climbing quickly in new york, almost doubling in new york city to 36 and growing to 108 in west chester county new york's governor cuomo saying yesterday he's bringing in the national guard to help with the containment zone in new rochell closing schools and other meeting places washington also plans to

announce restrictions on community gathering of more than 250 people >> we've been talking about the different approaches that different localities are taking. out in seattle, washington state, they have not closed public schools new rochell, it's two places to see how each of those work this isn't federal authorities saying what should happen, each locality taking its own approach on how it's best to contain or try to minimize at least >> that's right. we see that with each of the crises we saw it with ebola it's the local public health departments that take the lead in the community so, you are seeing disparate responses in different parts of the country. governor cuomo yesterday saying this is a matter of life and death. and that one cluster the in new rochell, more than 100 cases, he's saying that's the largest in the country even though there are so many cases in the seattle and king county area those in new rochell connected to one original case >> can you just walk us through

one piece of this which is right now china, if you read the reports, is coming back online, right? wuhan coming back online people are starting to go back to work. we're looking at some of these numbers in south korea which look like they've gone back up again, can you talk about the time period? the reason i ask about this and sort of where we are in terms of where china is to the degree you think that's the movie we're watching and we're going to be repeating here, what that timeline actually looks like >> that's a timeline that assumes we take strong measures the way china did. but the timeline that this has been playing out is since late january. that was when we got the first word that this was a virus that was spreading from person to person so, this has not been going on for very long, but of course it ramped up so quickly throughout the month of february. >> but meg, the likelihood is that began, i imagine, weeks earlier. >> well, that was in china when they discovered it was communicating person to person or at least when they told the

world that it was. and certainly, you know, it's a virus capable of doing so, so probably yes you know, they only notified the w.h.o. that it was a new virus at the end of december >> meg, i'm really excited about this, and that is that regeneron and santa fe -- figure there was some possibility of this, and that is that you may not be handling the exact genetic structure of the coronavirus, but what kills people is the body's immune response in the critically ill patients in the lungs. so, they've got a rheumatoid arthritis drug that handles the overreaction in the immune system and they're rushing to test it for the sickest patients with coronavirus 19. and there's a quote here in the journal. several patients in the study, a very small study over in china, got out of their deathbed and walked out of the hospital after having taken some of the -- and you could -- these drugs already -- this is not the remember terim

tess veer. this is something for rheumatoid arthritis that treats siymptoms of the immune system doctors can do off label stuff this this would help someone that was really sick, you could see this almost being available near term, could you not >> yes, joe. the fact it's on the market, they can manufacture it. that would be incredibly promising for those severe patients and there is precedent for using these immunomoj lair drugs that can tamp down the response when we first saw the cancer therapy, there was a tremendous release and they treated that with similar drugs that tamped down the immune system there's definitely precedent for this and it could be very helpful if it bears out. >> could i just say on that note i've heard people say they have inhalers at home that have

steroids and things they would stock pile that could be the worst thing you could do if you add steroids to a situation like this >> in the old days of biotech, sepsis was the holy grail. they all fell by the wayside in their attempts to conquer sepsis which is also a cytokine cascade of bad things. i think we've made a lot of progress recently with that. this is, you know, getting some pure r purell on there? you touch something? this is what we don't know megan. maybe something like that could be one of the data points that make you feel better because that's really what's scary 80% of people don't -- they have mostly mild symptoms, 80%, right? >> that's right or at least they don't have to go to the hospital for their pneumonia. i think that's how that characterizes that 80% figure. but certainly drugs that are already developed could be the

nearest term approaches here they have given it to more than 100 patients -- they said hundred of patients in the u.s., europe, and japan on compassionate use. so, it's outside of clinical trials but being used as well. >> i saw reports last night and talked to somebody saying it's being used in the state of washington very successfully there were people unfortunately trying to stock pile it literally right now which is also the other problem >> did you get any lev quinn >> that's an antibiotic. >> i know what it is you were saying yesterday you were thinking that might be worth stock piling >> there are people also in the state of washington -- i've been talking to lots of doctors who are using it only once you get to pneumonia by the way, it doesn't necessarily solve the underlying problem. >> it wouldn't -- >> because it's for bacterial infection. >> any of us should not be playing doctor >> part of the issue is there are complications meaning if you

have corona and get pneumonia, the complication and you'll get a bacterial infection. >> pneumonia by definition is -- >> right >> meg, let me ask you by the experts you talk to, which of the local authorities is taking the right approach in terms of shutting schools, doing more draconian efforts although even if you look at what's happening there, stores are open, people are still out on the streets i guess comparing to what's happening in new rochell and seattle, what's the new approach based on what experts would say? >> i think experts would say there are good things about both approaches but what a lot of folks who have said, he thinks the u.s. isn't doing enough across the board. if you look at what's happening in italy, people are completely delaying elective surgeries for right now. don't go to the hospital for things you don't need to go to the hospital for people in the u.s. are talking about whether we should encourage people to do that as we try to prepare the health

care system. >> meg, thank you. we appreciate it >> it's probably good that none of us self-medicate including you -- unless you're talking about -- >> alcohol >> -- tequila. i've been self-medicating with that a little bit. emergency bank of england cut. we're going to talk about the markets next u.s. equity markets right now, 600. that's like chump change at this point. 600 in our sleep anyway, we'll see what happens all over the map yesterday up 1,000, down 300, back up 1,000. so, strap yourselves in. we're coming right back. today's big number, 1,010. that's how many points on average the dow travelled each day over the lasseions the index is down 15% from its all-time high hit february 19th. the barkins are empty nesters now.

so it doesn't make a whole lot of financial sense for them to stay in this great big house. but, well, this is home. it's where they raised their three boys. could they downsize? sure. 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.

remdesivir. breaking overnight the bank of england announced emergency interest cut of 50 basis points. steve, what's the reaction there? >> reporter: well, i tell you what, i just looked at the ftse 100 and it's barely up on the day. the key level here is 6,000 and we were way above that at our highs yesterday before the emergency action it's not just about the rate

cut. it's about the stimulus measures below the surface as well. we've got the tfsme which is basically term funding for small and medium sized enterprises and it is significant but it could free up around 100 billion pounds for smaller companies who were starved of credit back in 2008 plus countercyclical buffers are being introduced, potentially another 190 billion pounds that the banks can lend to small companies as well. >> it is a different form of shock than 2008 and as president la guard knows well, the financial system was the core of the problem in 2008. it was the core of the problem

and it -- it is in a very much different place where we can draw on the resources of that. there is no reason for this shock to turn into the experience of 2008, virtual lost decade in a number of economies if we handle it well becky, what we're all looking at of course is is there global coordination? is the bank of england working not only with the checker because we're going to hear what they're going to say about the stimulus checker short and long time for the economy but also about the global coordination. i remember back in 2009 at the g20 here in london, it was president barack obama's first big conference and then in september at pittsburgh g20 coordinated a stimulus package it's interesting to hear mark carny talk about not only

coordination with the uk checker but also higher degree of coordination he mentioned between the central banks around the globe. that means not only the foc, the boj, but the ecj it looks like this is very targeted and it's basically telling the banks do not hang on to the money do not starve small companies of credit because that was one of the big problems in 2008 and 2009 and they said that the regulators will be watching very, very hard. they don't want to see bigger bonuses for bankers. they don't want to see bigger dividends for shareholders what they want to see the going straight to the medium sized company who are the bedrock whether it's uk, u.s., or global as well. a bazooka, i'm going to run three miles up the road to here what a man who was unknown to the world a couple of months ago, one of the most important finance ministers in europe. he's going to deliver a stimulus

package which was supposed to be the post-brexit, the post-election bazooka for the uk economy. now nobody talks about brexit. it's all about coronavirus back to you all. >> that was the most exciting, compelling analysis of an interest rate cut that i have ever seen in my entire life. i'm sitting here on the edge of my seat. earlier i talked about, i said bank of england interest rates and then i moved on. listening to that, i see i did not give this -- >> the proper. >> -- the proper amount of -- wow, sedgwick. thank you for that thank you. very compelling. thank you. for more on the emergency move in the uk and the impact on the markets, let's bring in david bee yan coe, america's chief investment officer it is important and it's part of a concerted effort for central bankers which, you know, people have questioned whether that's

really the answer for the whole crisis >> my question is is it really coordination or their hands were forced because the u.s. moved first? >> the whole world's following markets and the bond market says rates need to be lower and there's no reason for central banks to disagree with that. we expect the fed to cut next week 50 basis points -- >> again >> yeah, again and there could be a follow through of another 25 basis points in the april meeting. >> which would put us in negative rates >> what we've got going on here is that the world economy is putting prevention ahead of production and the cost of containing this virus which is not going to be a plague, but the cost of containing this virus is probably going to be sharp global slowdown, recession in europe, quite possibly a small recession in the united states i'm expecting the small bear market now in the s&p. >> i've been asking this question is past couple of days

but i'll ask you too you believe the markets believe that the u.s. -- i want to understand what you think the markets think is going to happen in the united states vis-a-vis cities being shuttered, complete travel being shuttered, how long that goes on for measured against whatever you think the trump administration and washington are going to do from a stimulus perspective because we started having the conversation about bailouts just in the past 48 hours but we're going to be talking i think a lot about that over the next 7 days. >> look, stimulus is never a net positive stimulus is always a cushion to the shock that's in process. and of course, you know -- >> but if you're an investor, find out two things, what's the determinative value of how bad it could get measured against what else is going to happen along the way. >> the market historically always seems to settle down long before its obvious that things are going to improve so, you have to factor that in but then there's always -- >> things are still deteriorating. things are still deteriorating

what i was concerned about a few weeks ago were there vulnerabilities in the oil mashl market, the possibility of a drop in interest rates i warned oil could fall to levels more than you could imagine and i don't think that's over >> you didn't warn based on saudi and russia >> i warned on excess supply and sooner or later with the demand destruction somebody was going to have to do what they had to do to defend their market share. i'm still concerned about the vulnerabilities which include the european economy this is not just about supply chains i expect the s&p to suffer a material profit procession in 2020 with earnings down about 5% year on year and i don't think the market's priced for that >> you don't think the market's priced for a 5% -- >> we got within a hair of 20% so how much beyond 20% >> where are we really. >> we were down 19 -- >> we were but were we now

>> down about 16 i think we will be down -- a bear market would be going under 2,700 on the s&p >> okay. >> and i think 20 to 25% downward is what the market does i think 2,500 on the s&p to 3,000 is the trading range until after the election >> is that a flush out situation? people are talking about a v type of recovery but other people are starting to talk about this looking very different. >> it's going to be a w likely because i think what we've got going on -- >> in the economy or the market? >> whenever we touch bottom on the market, i think it's a bottom that's likely to be tested >> okay. >> i think this would be the bottom of the process. >> remember we were down 12 and then now we're down 19 but we didn't close -- yeah, we did close. >> we did close 19 >> but now we've gotten some back all right. but then you have to ask yourself if you're at 20 and the ultimate low is 25, do you try to time that >> and you don't try to time it. i try to always emphasize it's

not a binary decision. it's not all into equities or all out of equities. we're still underweight equities we're looking for opportunities to close that underweight. we're doing it with growth stocks, with u.s. stocks we're not value fishing. >> you're underweight with the emphasis being where in cash? >> we're struggling what to do on the fixed income side and taking down longer term treasury allocations. we're looking to corporate credit opportunities but we find ourselves -- cash is a reasonable alternative when somebody says there's no alternatives for a short paerd of time, cash is definitely reasonable >> the question is what do you sell to get there if you've already seen this huge drop? >> we're resold. we're trying to buy back slowly. this is what we do in asset allocation strategies. we're underweight and looking to move back. >> 25 would be -- you wouldn't time it. 40 ought to know and there's been some people talking about 40 for a while, that the market is overvalued.

i'm hopeful the sorkin bottom is in >> sorkin? >> yes, i am when we were down 20, i'm hoping that's -- >> you know what i hope you're right. >> i know -- i know how you're feeling. keep talking it up because that's what we need. >> you know, 2021, when we get into these moment of weak profits, we try to focus on normalized earnings. i do think the s&p is capable of doing $170 of earnings in 2021 or higher. >> we can't see the future and i mean i'm hopeful that warm weather, like seasonal flu -- i don't know, seasonal flu goes away for a reason. >> what about allergies. >> i'm hopeful for something like an anti -- a drug that's already existing if something comes like that, the market at that point -- >> we're going to get through this it's just the cost of containment and putting prevention overproduction. >> thank you, david. and a programming note be sure to tune in to our special coverage of the market

turmoil tonight in a cnbc special at 7:00 p.m. eastern in the meantime, pepsi co i near a deal to acquire rock star energy that deal could be announced as early as today the reported price is $3.85 billion. pepsi has been rock star's distributor since 2009 but the acquisition would expand the company's ability to market the drinks including putting some of them under the mountain dew brand. coca-cola is also involved in the energy drink through it's stake in monster beverage. >> remember when everybody thought monster was going to be taken out. the list of cancel ld events piling up, coachella, stagecoach, ivy league conference basketball conference, and countless meetings around the world. we're going to talk about

biggest events next. as we head to a break, take a look at crude prices, a barrel costing 33.26. we're back in just a moment. apps are used everywhere...

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nasdaq looking down 130 points major events are being cancelled. that's weighing on the global economy. postponed or even going virtual to mitigate the spread of the coronavirus. joining us now to discuss the economic impact is richard add yas. he's developed and led some of the globe's most prominent events including the world economic forum in davos. good morning to you. >> good morning, andrew. >> help us fry to understand what's going on with all of these events across the world, the decision making. so many of them have been shuddered. those taking place in april and may. >> yes >> what i'm interesting about is what's going to happen in june and july and august and september. then i want to get into a conversation about the world of insurance at events like this. >> i think it's an important question first of all, we need to put in perspective the impact of our event industry it's a $1.3 million industry, so it's not a small one and it's supposed to grow to

achieve $3 trillion by 2026. >> that's taking out the air that's taking out the hotels >> just thinking about conferences, sporting events so, today we live in a period of time where we have no visibility my conviction is that we should cancel and postpone and reschedule all events for the next two months. >> for the next two months >> absolutely. >> that brings us through june 1st? >> absolutely. when i observe -- i'm not an expert from the world health organization, but i look at what is happening the peak of coronavirus in china was end of january the peak in the middle east is happening probably end of march. we see that grow the peak in europe when i hear all the european leaders plus it's expected to be by the end of the april and the united states, i don't know, but only the past two days the number of coronavirus doubled. so, i think that the next two or three months, we should not have

any potential ope. we should have consensus of definitely cancelling and postponing everything until the end of may >> so, do you have clients who don't want to cancel right now >> we have clients who are waiting to the very last minute which have a very bad impact to the economy. you cannot wait until the last minute this is scary and this is also has a negative impact on the economy of the companies and also you have people who are coming it's not easy for them to cancel that >> we were talk about south by southwest yesterday and there was a report in the "wall street journal," interview with the founder of that company about the fact that they did not have insurance for a pandemic >> absolutely. >> most of your clients -- >> they don't have it. >> they do not have it >> no because this is what we call cab force measure, insurance are not insuring you for that >> when there are conversations

with sponsors for example or others who paid money to be participants -- >> it's case by case and you have to negotiate if you're clients -- my company, seven major events were postponed to the autumn, the fall of 2020 and spring of 2021 >> what is your worry this is going to change the business of gatherings long term >> it will not >> people were talking about zoom as a company where people are going to do teleprenz and things and more people are going to work from home not just right now but potentially there's a view that could extend itself into the future because we're going to learn a new way of doing things >> i don't think so it will happen i think it's something which is temporary. we are involved on some g20 events coming for the whole year 2020 in saudi arabia and when i see how the attendance is during these digital event, it's not the same commitment it's no so easy to have very

deep conversation virtually. i'm personally convinced that the face to face is still very important and it would still happen from the sense. >> and my other question is in terms of what i call the circuit, there's a circuit of these events is it possible that because of this -- because of the virus and the fact that even one gets missed that there's a new scramble a year from now to create competition for those events so, for example, can is happening in june. still i think is on the calendar i think that's been knocked off just yet >> it could happen virtually >> but does it return absolutely next june with the same type of attendance does somebody else try to front run them and try to create a new event? >> i don't think there's a risk. i could be wrong but the brand is strong enough to definitely come back even stronger in the next eight

months you know, i don't think there is potential damage i think it's a temporary crisis. we need to look at it very kindly >> there are also money 2020 >> at the end of the day, many governments are trying to put financial incentive to support companies. >> that was my final question which is we're going to talk about bailouts s. your industry going to be go hat in hand to washington and elsewhere saying we need money because we're falling to pieces here how many people are going to go bankrupt because of this >> i personally think that the small, small companies will be very impacted. and i think that 20% of the industry would go bankrupt -- >> 20% of the industry will go bankrupt >> 20% of the industry because you have a lot of small, small players. it's an industry with a lot of small players who unfortunately cannot financially resist to the

lack of cash because it's a cash industry >> richard at yas, always good to see you when we come back we're going to talk more about the markets. stock market futures are on the move the dow futures indicated down by 563 points. this comes after the market's biggest gain, one day advance since december of 2008 that happened yesterday. s&p futures down by 66, nasdaq down by 184. still ahead, we'll talk about the new measures that new york city is taking to help stop the coronavirus outbreak the chair of the city's commit teen health will join us in just a few minutes. 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...

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good morning everybody welcome back to "squawk box" on cnbc the futures this morning are under pressure big market day up yesterday and big down day for the futures futures indicated down by 611 points s&p futures down by 72

nasdaq off by 200. okay elon musk tweeting last night -- get your twitter out -- scouting locations for cyber truck gigafactory, will be central usa. a few minutes later he tweeted model y production for east coast too. so, you can start imagine where this may or may not be this will be like the amazon hq 2 guessing game. musk introduced the all new pick up with the price starting just below $40,000. tesla stairs took a hit during the volatility but are still up 50% year to date anyone want to make a guess where on the east coast he might do that? >> no idea >> let's get aoc involved again. aoc or mcc one or the other we'll see who gets that. by the way he's got a big business or supposed to have a big business in buffalo, took tax credits to do it for the solar panels up there and it's

apparently not working the way it's supposed to be. so, you're right, there may be politicians involved in this one way or the other we'll see. coming up, some results out of yesterday's pivotal democratic primaries we'll have the latest numbers next there's the man, there's the other guy. he's going to stay in probably, but maybe fruitless. as we head to a break, take a look at the future, lower, 650 down from yesterday's big rally. we'll have more on the volatility in the markets. you can watch or listen to us wel cinrippgo on the cnbc a 'lbeomg ght back the barkins are empty nesters now.

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welcome back everybody six pivotal primaries took place yesterday as voters went to the polls to cast their boll lots in the democratic presidential race kayla tausche joins us now with the results and what that might mean from here >> democratic voters overwhelmingly favored joe biden in four of those six state contests last night. vice president joe biden winning mississippi, missouri, michigan, a key battleground there, and extending his delegate lead to 150 delegates over vermont senator bernie sanders thanks in large part to the lion's share of african-american voters in those states as well

as many anecdotal stories of voters who did not want to vote for hillary clinton in 2016 so backed sanders then instead but were voting for biden this time around so, 150 delegates is the lead that biden currently have over sanders. but nbc news is not ready to project the results of north dakota and washington. north dakota too early to call washington too close to call now, both candidates cancelled rallies in ohio which is one of the state contests that were scheduled for last night, biden holding a speech in philadelphia instead where he south ght to ry the troops >> to come back for the soul of this nation. this campaign is taking off and i believe we're going to do well from this point on take nothing for granted want to earn every single vote in every single state. >> an nbc news exit poll conducted among voters asked the question about which candidate

would be most trusted to handle a crisis voters said 50% of them would favor biden to handle a crisis, 31% said that they would trust sanders more to handle a crisis. so, certainly an important indicator of how viewers -- voters are viewing the current state of events in light of their voting decisions strategists say that next week's contest could be pivotal as well with florida on the calendar and if vice president joe biden wins that contest, he could run away with the nomination guys the other big news was of course both bernie and biden cancelling their rallies they had planned in ohio yesterday. expect to see a lot more cancellations? >> they're really taking it state by state one of the reasons they cancelled the rallys in ohio was because of a recommendation from the governor of that state who said that hosting any indoor large scale events was simply unsafe in the wake of the first coronavirus case in that state so, they wanted to make sure

that they were respecting the recommendation of the state government there they have said throughout this campaign that they will follow the recommendations of the cdc and the medical community, and they will make these decisions as they see fit. >> kayla, thank you. joining us to talk more about the results and what it means for the markets is james pin cue kass he's a cnbc contributor. james, when you look at what's happening with biden stepping up at this point, it's hard to figure out how the market's going to be valuing any of this because the market's focused on what's happening with coronavirus right now. how do you break it down though? what are your expectations of what investors think and what business think >> going into this very few people on wall street thought bernie sanders would win they were sort of discounting that they assume trump would win. even if bernie sanders got in, that was never going to get passed now i think you need to take the

other democratic agenda a lot more seriously joe biden could win and even though he doesn't have the radical agenda that bernie sanders had, he's calling some very large tax increases, very large tax increases on the wealthy, higher taxes on business it's a $4 trillion tax increase. some of that would undo the trump tax cuts, but a much larger tax increase that hillary clinton was calling for. if these polls keep showing joe biden beating donald trump by 5, 6 points, maybe more, investors will have to figure out if in an economy that's barely growing what impact of massive tax increases might be >> i guess the other question is if biden does take off with this, what happens with bernie sanders? if he agrees to step down with his challenges, is there some pay off or some nod to his agenda that biden's going to put into his own campaigning >> people who -- candidate who is lose like to see their agenda

then somehow adopted by the winning candidate. of course the winning candidate won on their own agenda. i wonder in the end how many sort of #neverbiden people there are going to be in the sanders campaign and i'm not sure those people would vote for, you know, the democratic nominee anyways but i don't think what we're going to see -- i don't think we're going to see joe biden adopt medicare for all i don't think we're going to see joe biden adopt a wealth tax or seizing 20% of companies and giving it to workers which is the bernie sanders plan. >> i saw crazy analysis yesterday about some polls and i don't know how people actually act when they do go to the polls. so, it's all preliminary but they were saying that biden people when you ask them are more likely if bernie ended up being the president, they're more likely to vote for him to defeat trump or whatever because of the democrats but they asked the same question to bernie people and they weren't as quick to say yeah, i would go right for biden if it is biden

they're more entrenched in really wanting their candidate >> they voted for trump. >> they went on to say that biden people are old and they're going to be scared to go to the polls of coronavirus and that young people don't vote anyway, they say they are going to but they sit on their hand. >> i heard conspiracy theories that corona will push the election which is completely crazy. >> all they things you look at the democratic nominee has now flipped and democratic nominee is ahead in term of the betting markets now. >> if older people don't go to the polls because they are scared and younger people don't go to the polls because they don't vote, there will be nobody to vote. 12 gen-xers. >> i'll take that.

finally we get our due >> who will joe pick for the veep >> i think he'll pick a woman in a state that he needs to win >> does he need minnesota? >> i don't think he'll pick anyone he ran against. >> interesting give us some options >> that knocks out 47 people >> he needs to pick up another state especially he won't win wisconsin. arizona is a state he could pick up >> jimmy, thank you. great to see you okay meantime new york is one of a handful of states that now has declared state of emergency due to the coronavirus governor cuomo deploying the national guard to new rochelle

in westchester county just outside of new york city where 119 people have tested positive. joining us right now on the "squawk" news line is new york city council member mark levine and chair on the committee public health. good morning to you. thank you for joining us >> good morning, guys. happy to be here >> help us try to understand where you think this is in the city and what other mitigation efforts we might be seeing over the next 72 hours? >> you used the right word, mitigation we're moving to a new phase here this is beyond the point where we can contain individual cases, where we can track down patients and trace all of their contacts. it's out there in the general population that's what we call community spread we have to move to the hospitals for capacity, in case we have a spike of acute cases we have to do more to protect vulnerable people, elderly

people with pre-existing conditions and we're going to have to move forward on social distancing measures right now the only recommendation city has offered is that older people and those with pre-existing conditions avoid large public gatherings. >> are we moving too slowly? >> we are moving rapidly in new york city. and i expect to see new moves in the coming days, maybe as soon as today there could be a general recommendation for people to avoid large public events. >> seems like it should have been made several days ago if not a week or two or three ago >> all of these have major costs. if we close the schools hundreds of kids will have nowhere to get break last or lunch. parents will be unable to get to work >> we realize this is a mixed message to the community

don't go to work but send your kids to school don't take the subway but if you need it go ahead and take it you admit it's the too late to contain. >> they are carriers kids go home to their parents and grandparents and then you have a real problem. >> because everyone of these actions has a real cost it has to be taken by way the pros and cons and a real assessment of risk >> here we are in new york city. broadway is still open madison square garden is still open obviously the subways are still open restaurants are still open what are your thoughts on those, and to the extent that both the public and we're a business channel so a lot of investors out there trying to understand what may or may not happen

economically, how should we think about it >> well our understanding is that transmission is largely through very close sustained contact. that's why it's mostly in families it's not like measles where you catch it by walking in the same room with somebody >> what about a stadium? >> mostly transmitted by touching contaminated surfaces and touching your mouth. as for the economic impact it's going to be massive. it's already hitting asian neighborhoods weeks ago. we talked with businesses revenue down 70% people in chinatown many are closing. that was driven by prejudice the city is now offering 0% interest loans and grants to small businesses to stem the tide of closing. we're a tourism driven economy that bottom feeds down people are telecommuting and spending less money at restaurants and other

establishments this is economic shock for new york city without a doubt. >> what shutting down madison square garden or broadway. >> there will be an announcement soon to recommend people avoid large public events. the mandated closure may be coming soon. we've had 36 cases in new york city we want to keep that in perspective. health official that i trust are evaluating this every single hour >> what do you think the real number is? you said 36 cases in new york. what do you think the real number is? >> if you were to test everybody who is asymptomatic it would be higher there's not a lot gained by that new rochelle where they tested thousands of people who are asymptomatic, yes we have a higher number, a hundred plus in westchester. we have to focus on people who are sick real potential life threatening symptoms inpatient in hospital if you're mildly symptomatic you

should stay-at-home and self-heal. 80% of people don't gelt chronic symptoms and no reason for medical system to be clogged with people who are mildly symptomatic. >> we'll cover this situation over the next days and weeks still to come last month's jobs data was strong how much impact is the coronavirus having on small business blackrock rick rieder will weigh in on the wild moves in the market and fixed income. "squawk box" will be right back. has always been our guiding principle. (sensethe lack of control when iover my businessai, made me a little intense. but now quickbooks helps me get paid, manage cash flow,

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it's a responsibility. emerson. consider it solved. stocks staging a wild rally after yesterday's close. this morning a sea of red as coronavirus fears hit wall street we'll run you through what you need to know ahead of the open >> financials in focus after the bank of england cuts rates >> the number of coronavirus cases now topping a thousand in the u.s. what the government can do to stem fears the second hour of "squawk box" begins right now good morning welcome to "squawk box" right here on cnbc take a look at u.s. equity

futures at this hour the markets giving up much of the gains that were taking place yesterday. half the gains dow looks like it will open down b-1630 points if we opened up right now. s&p 500 will open down 71 points nasdaq looking to open down about 190 points let's look at the all-important ten year note. that's something we've been keying off of and focusing on these past couple of weeks we're at .70 still under. >> watching things in free fall recently >> breaking news to tell you about crossing the wire. becky mentioned the possibility just earlier about texaco with the transaction. let's get to sara eisen. >> reporter: good morning. yes pepsico is making a bid to

buy rockstar it's a private company the rationale is interesting i talked to the ceo about why the sale is happening and why now. pepsico had a 10 or 11 year distribution deal to distribute rockstar energy drinks energy drinks have become mainstream johns on the says it's a move to play more aggressively pepsi did similar moves to get into the energy drink business he told me he wants to bring rockstar to another level. they can increase the scale. he wants to do more with most dew. mountain dew has been a weak spot in pepsico's portfolio. pepsico is refraining from adding caffeine levels to their

drinks like mountain dew now that they own this they can actually do weigh more with brands like mountain dew and kick start and form other partnerships in the energy category, a very fast growing category coca-cola has a stake in monster which is one of the leaders along with red bull. so clearly the big beverage diet guys are diving deep into this space. as for coronavirus fears and market volatility i asked johnston, i said you're still doing multi-billion dollar deals he said we're confident in the long term and that's why we're still going to continue to do this deal. >> all right, sara you either like mountain dew or you don't. do you like it >> reporter: to me it's a little sweet. they are launching a mountain dew zero >> i think you have to grow up with it.

>> i did they have a great new ad do you see the brian kranston ad and the mountain dew comes out of the elevator. it's not advertising it tastes like mountain dew. >> reporter: pretty specific demo they feel mountain dew created the energy drinks category for a while it was the young college kids totally mainstream as everyone has gotten so busy in life i'm more of a coffee drinker myself >> all right, sara thank you. back to the coronavirus. as it spread investors are looking to washington to help bolster the economy and the white house is floating some ideas. eamon javers joins us now with more i saw you -- did we just show you ask those questions or does everybody show you you're always so front and center >> announcer: as long as you show me, joe

>> when we talk economy they go to the expert >> reporter: alleged expert. yesterday we never got the press conference the president said he would hold to lay out the details of his economic plan and never got full details of the economic plan. we got a couple of leaks and a couple of nudges from larry kudlow the national economic council director who said yesterday in the white house briefing room that the centerpiece of the president's plan is this payroll tax cut he's talking about 0% on the employer side, 0% on the employee side on the payroll tax. at least through the end of the year that's the proposal. but white house officials are talking about the idea of making that permanent that is an enormous change to tax policy because according to experts that tax brings in as much as a trillion dollars a year so i asked larry kudlow in the white house briefing room yesterday where are you going to replace the trillion the dollars from and here's what he said >> let us put the proposal out in concrete details and flush that out and we'll have much

better answers right now i want to stay in my lane and i think the health story, the coronavirus story is very important here. we will do the best we can to give you specific plans and details once we flush them out >> reporter: this is a proposal now that is coming together in real-time as we watch it larry kudlow, steve mnuchkin the president went up to capitol hill yesterday to talk to senate republicans to gauge their interest in all these different ideas they are kick around behind-the-scenes. one idea under consideration is some kind of a relief for the shale oil industry not clear what form that would just take but they are talking about it at the white house given those oil price declines we've seen in the past several days they are aware that industry might need some help they are trying to figure out how to do that, guys >> indirectly tied to the coronavirus. >> reporter: right >> the supply and demand considerations that have been going on long before the virus

got out. all right. >> reporter: critics say you should go with bankruptcicy and let those guys go bankrupt and get new owners and recapitalize. >> right now still a lot of private money out there. >> for now >> some of these companies could go into a bankruptcy satisfaction with the airlines, if they go hand-in-hand. this is the conversation we're about to have. >> what were you doing yesterday, trying to generate some sympathy for your long days or something and then you got a bunch of tweets that said thank you, you were gratified. >> reporter: thanks man. >> i tweeted out -- >> reporter: yesterday was a long day i tweeted out my first of 5:30, my last one was 7:30 twitter is not always accessible

great to see >> okay. maybe. >> reporter: not always. >> not always. all right. i appreciate your long days. >> reporter: thank you >> we pay you. >> reporter: that's true i'm not running a charity over here >> the dow's recent moves have been massive if you've been watching yesterday we saw another rally of more than 1,000 points but not a steady upstream. we saw up and down and all over the place. this is the third time in a week we saw rallies of over 1,000 points joining us now is stephanie language and kevin gettis stephanie, let's start with you, yesterday much of the day i heard people saying the reason the markets were up so sharply is because of this plan for some sort of fixed goal stimulus. is that the case and what do you think of the plans that have been rolled out to date?

>> i think you have to take a step back and assess what do you think ultimately is going to happen, because you are going to need this fiscal and monetary response to the economic weakness that we're expecting in the next couple of quarters. it's always been our assessment that the coronavirus will run its course, but in the meantime we'll see a lot of economic weakness i was supposed to be in new york with you guys this week. there's travel dance, hospitality. there has to be some offset. yes, i think the market was reacting to the fiscal package there's going to be a lot of near term weakness but if we can see some offset then the markets are going to look that eventually we can get through this economic shock and eventually come out on the other side >> kevin, watching fixed income, watching the treasury market and stabilization at least we've seen in yields still 0.7% for the treasury how does that

impact everything that you're watching >> the treasury market has run away, so to speak, from the rest of the fixed income market on the real idea that we're about to hit a recession and looking forward, whatever the other fiscal opportunities beyond what the fed can do the rest of the fixed income market is something that we're watching very, very closely, because when you get to a stage like this you start to become concerned about spread widening, credit spreads in general away from the energy market and the opportunities that may arise so this is a trade for the hope that the coronavirus will be mitigated i guess the word is now, but fixed income itself is kind of seeing the back side of the catapult with higher spreads and higher yields. >> what's happening with the companies who want to take out debt at this point >> yeah. so the problem is that there's not -- in the corporate space right now, this is something i

just mentioned, spreads have gone out two and three fold and we're not seeing a whole lot of buyers on the back side so liquidity is being stretched if i was a company and i want to tap the capital markets, there's still an opportunity it may not be now because you need acceptance on this and we saw yesterday in a lot of trade sheets where sellers out weighed buyers three to four to one. a tenuous time there's an opportunity for capital market but may not be for a week or so >> stephanie, what do you watch on a daily basis what matters to you when you try to determine whether to put money in stocks or not >> what we're trying to determine at this point will this be a short term economic shock or will this start feeding into business confidence and consumer confidence where your ultimately see businesses get worried and start laying off workers and that translates to the consumer the consumer has held up the economy the last couple of years so we're looking for signs that

there is some impending weakness i think from a stock market perspective what you have to determine is what is actually priced in at this point. >> what's your guess on that >> my guess is that right now earnings expectations are still around 7% for 2020 we don't think there's any possibility of that. but if you assume flat earnings for 2020 and apply 16 times multiple we could see a little down sided from our lows on monday, maybe 5% to 10%. i think we're getting in the vicinity where stocks could be more attractive. it all depends ultimately on how the coronavirus plays out and what kind of economic shock there s-but we're getting optimistic that we're getting closer to those bottoming levels >> right i want to thank you both good to see you. coming up, the virus impact on small business and the government's response to the

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welcome back we take a check on oil right now. you're looking at wti crude at 33.38 if you're buying it by the barrel it's off almost 3% right about now. meantime we do want to have a conversation about the world of small businesses because they are getting squeezed as the coronavirus fears continue to impact that world. i want to get to marty mucci who i think is with us are you with us? >>yes i am >> tell us how small businesses are thinking about this. we have potentially from eamon javers a payroll tax cut which could be coming. and potentially other stimulus measures as well >> i think right now what you're seeing we took a survey about

two weeks ago and about 66% of small businesses -- these are businesses one 500 employees -- feel like they are prepared if the coronavirus gets more widespread i think some of that is because of the technology that's out there today. many folks work from home. they have laptops. they have wi-fi connections and they can do that about 50% have really felt they had no impact at this point, although things are moving pretty quickly the biggest impact that most small businesses are having right now is their anxiety of their employees. what can you do about is that you can communicate with them. make sure you have work from home assessment that you assess whether they can work from home. you look at mother things you can do at your businesses depending on your size so i think there's careful kind of analysis and thinking and planning now but not feeling all that panicky at this point >> not a panic yet i was going to say later today at 3:00 p.m. the ceos of all the largest banks of america are

expected to meet at the white house with president trump and others as part of the administration and one of the thing we're expecting him to talk about is for banks to extend loans for small businesses how important is that and what do you think that could look like >> well, i really think that it is important anything that would give them more confidence that they can get through a kind of a short term not knowing how long this will be but most feel it will be a short period of time that could hurt small businesses like restaurants and so forth where people are not coming out, not going to those businesses. if they could have either low interest or no interest loans or some kind of cash infusion that could help them in a short period of time that would be really helpful to hold them over we're still in that full employment time. other than that, they are fully employed and people do want to keep their employees active and employed and retained. >> you don't sound very nervous. i'm very happy that you don't

sound nervous. >> what if the world really does end, marty >> that's andrew's question. >> okay. all right. >> it's not whether the world ends it's that there's so many small business, joe -- >> i understand. don't preach i under. i got it i got it >> for better or worse -- >> he probably knows >> i'm not sure. okay >> all right >> i was going to say -- >> i'm not sure. >> marty, just so we're clear the polls and studies that you have been working on are two weeks old? >> yeah. so things are changing fast, you're right andrew. one thing we're miss is a lot has changed in the last few years from a technology standpoint and while businesses like restaurants that are looking for incoming customers there are a lot of businesses that can have people work from home paychex have 8% to 10% of our employees work from home we're assessing more of that the big thing is communicate with your employees and

customers. we're holding web areas for our customers and clients. this is how you prepare, communicate, communicate, communicate with your employees and customers letting them know how you're preparing not a panic yet. certainly concern, though. >> marty, you said what you would like to see from the government would be low interest or no interest loans made available to small business. what do you think about the administration's plan for a payroll tax holiday for employees and employers? is that helpful or no? >> yeah, well i think it's helpful but that usually would spur more consumer buying and spending i'm not sure that's as much the issue. it always help if people feel they have more money and a little bit more they can spend this is a little bit different issue. this issue is how do we make sure small businesses in particular under 500 employees can sustain less demand for a while and be able to get through those rough periods. >> how do you think about if we were to extend unemployment insurance one of the other ideas

that's on the table. >> i think that's helpful. >> is that more helpful than the payroll tax cut idea. >> i would think so because, again, it's something that is making someone feel a little bit more comfortable the employees that are worried are those that are going to get laid off possibly temporarily and how do i help myself through that is it more sick time pay is it unemployment benefits? what is it what most businesses are still going to try not, to you know, lay them off if they don't have to because it's tough to hire and retain right now employees for your businesses if the demand is sustained or comes back pretty strong >> martin mucci thank you for joining us this morning. still to come this morning the latest on mortgage rates and reaction to bank of england rate cut. s&p 500 laggards not minor laggards declines by as much as 50% when you talk about occidental

petroleum or apache. >> time for today's trivia question when was the last time the new york stock exchange halted trading prior to this week the answer when "squawk box" continues. uh uh. is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac! you got it. you know aflac! boom! get help with expenses health insurance doesn't cover. get to know us at... aflac dot com.

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now the answer to today's aflac trivia question. when was the last time the new york stock exchange halted trading prior to this week the answer, october 27, 1997 the dramatic decline in the ten year yield success felt in the mortgage market. weekly mortgage applications are out just a moments ago diana oleck have the numbers >> reporter: numbers were huge last week. up 55.4% for the week ending march 6th compared with the previous week according to the mortgage bankers association seasonally adjusted index. all on refis refi applications speck 79% for the week and 479% higher compared with the same week one

year ago highest level of refis since april of 1979. it's all because the average rate on the 30 year fixed fell to 3.47% for conforming loans with 20% down. that's the lowest since december 2012 freddie mac had it lower nba is doubling it's 2020 refinance originalations forecast to 1.2 trillion, 37% increase from last year and strongest refi volume since 2012 mortgage applications to purchase a home increased a much milder 6% for the week and 12% higher annually. potential home buyers are weighing these very low interest rates against their concerns over the coronavirus effect on the overall economy and employment and the stock market. they are also facing a record low supply of homes for sale

now mortgage rates are expected to stabilize soon and have even popped a little bit higher this week as lenders try to deal with the incredible surge in demand still to come on "squawk box" this morning russia and saudi arabia hinting at more talks despite their price war. we'll speak to the former head of saudi aramco management team. we'll talk to him about oil prices cases of the coronavirus topping 1,000. the latest on the outbreak straight ahead later this morning more whipsaw action for investors futures sharply lower this morning. we'll talk safe hey convenience and opportunities in just a bit. "squawk box" will be right back. the barkins are empty nesters now.

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saudi aramco ordering aramco to boost output. russia responding saying it could boost production by half a million barrels a day which would put that country's output to a record 11.8 million barrels a day. both sides continue to negotiate and you can see crude right now

is down again today after a rebound yesterday down about 3%. for more on the saudi-russia standoff let's bring us our guest, former saudi aramco head reservoir management given what happened to crude prices we thought that both sides would be forced back to the table to or maybe it was just wishful thinking, maybe to have some type of understanding that, you know, this isn't helping anyone but it seems the rhetoric or things even deteriorated further in the last 24 hours is that a fact and how do you see this resolving itself or not at all >> well, the short answer is it will be resolved it's only a matter of time because it's not in the best interest of any of the major parties, whether it's russia,

saudi arabia or indirectly the u.s. to continue with the current situation. price wars have always been part of the dna of energy markets, especially oil and gas markets what's very unusual, and i would say extraordinarily unusual at this time is it's coincidence with what's going on with the coronavirus, a crisis globally, which truly magnifies the impact on the global markets. and that's why i believe that common sense is going to prevail and the parties, whether in the next coming weeks or in the coming months will find a way for a solution it's not a sustainable thing what's going on right now. >> who do you think -- i'll rephrase it. will thereabout a double blink

will both side blink or does russia have to -- is it about u.s. shale producers and making them feel pain, or trying to actually put some of them out of business? what's the dynamic behind the supply situation we understand the demand situation. >> yes you pointed to something very, very well because there are visible factors and invisible factors. in my opinion, the elephant in the room is the shale production, specifically the overall what we call the shale revolution that's really the thing that's impacting the markets and either way you look at the conflict between saudi arabia and russia, the real aim right now is to send a strong signal to the shale producers.

and that mission has been accomplished, perhaps it has -- it has gone in directions that neither party was accepting, neither rush nor saudi arabia was expecting. that's why i believe we will see a return to normalcy and we will see some sort of communication, whether it's open or through back door because in the long run, and even in the mid-term over the next two or three months the current situation doesn't favor anybody. in the short term the advantage is clearly with saudi arabia because they have the lowest development cost, operating cost of any producer. much lower than russia >> there are reports that trump administration is considering some kind of bail out or stimulus package that would include frackers, shale producers in the united states

does that make sense to you do they need a government bail out? can they go through the regular bankruptcy process is there money on the sideline if we get to that place? >> well, yes, that could be a consideration. the fact of the matter is even before this situation, there was quite a bit of leverage in going on in the shale markets. according to our own analytics, over the last two years one out of three wells drilled were uneconomic at prices up to $55 so you didn't even have to see the prices drop to the 30s to see -- >> but from a policy perspective would it make sense? does it make sense i ask only because it feels to me that these are companies, private companies that took risk and it's unclear to meow

systemic their failures would be if, in fact, that's what takes place. >> you know, i'm from the oil industry so it's hard for me to be objective on this clearly, a big government intervention is not the right thing to do. i think the way forward is innovation only a few years ago people were arguing that anything below $80 shale oil was uneconomic look what happened at $40, $50, the u.s. production increased to 13.5 million, close to 14 million. almost 9 million barrels out there comes from shale producers. that happened with $50 to $60 oil. those companies that are super efficient, can innovate themselves, can benefit from new generation of technologies are

the ones who will be the new leaders of oil and gas, including shale. so the answers are the companies looking at themselves and see how they can improve their efficiency and i believe even at $40 oil, even at $35 oil the super efficient companies can differentiate themselves >> thank you very much and we'll see how long everything we talk about, is about duration we'll see how long this lasts before these two sides -- >> it won't last very long >> okay. excellent. i used to like low oil prices. low interest rates i thought they were good now everything is upside down. thank you. when we come back we're watching global financial stocks the bank of england cutting rates earlier this morning take a look at some of the big banks over the last week some big declines.

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welcome back the "squawk box," some of the worst lows down about 700 points on the dow giving back three quarters of yesterday's rebound from the 2,000 plus point drop the day before the s&p indicated down 8678. which would put it, puts it well below that previous support level that we saw. in fact it will be down at 28 -- about 2800 this morning. but we did see 2750 a while on monday's close saw the nasdaq also weak the vix has indicated it's been pointed out the me vix has indicated close to 60. >> today >> 60. that's much higher than it was, higher back than when you were writing your book. right? >> meantime, amid the stock

market turbulence wall street executives are heading to the white house today. this is what almost feels like a repeat of 2008 to discuss the response this time to the coronavirus break out. wilfred frost joins us >> reporter: top executives as you said from most of the nation's top banks will attend a meeting at the white house 3:00 p.m. eastern time hosted by the president. in attendance is ceo of bank of america, citi bank, but jpmorgan will be present and ceo gore don't smith in place of the recovering jamie dimon morgan stanley decided not to attend the main focus of the middle east is medium and small company lending. the president need to work with bang executives to encourage them to help struggling companies through a coronavirus short term struggling pressures.

banks have done that before in the face of other challenges for their clients like hurricanes. we can expect the topic of functioning of markets and levels of liquidity to be discussed. ceos might be asked if there's tweaks in regulation that could enhance liquidity in the short term bank stocks rebounded yesterday but still down sharply year-to-date and aside from policy discussion with the president today, investors will also be interested to hear directly from the bank ceos but pretty much for the first time during this virus related crisis is the selloff in their stocks overdone we'll certainly try to pose that question today >> thank you i guess the big question in terms of getting that money out, we just talked to martin mucci his point was he would like to see lower 0% interest rate loans coming from the administration that would be more helpful than a payroll tax cut. >> reporter: it will be

complicated how this evolves whether it's a large group announcement or if there's hard policy behind it the most common way most analysts i've spoken to think this could to be done is just getting the government to talk to the regulators and encourage them to lower the amount of capital the banks would have to hold against loans to, for example, small companies or, for example, loans to a specific sector like energy or airlines and in doing that, that might give the banks a little more flexibility to take a bit more risk on in the short term. of course the off set to that will a bank still go ahead and make a loan to a company that they think is going to go bust or has a risk of going bust just simply in the short term they hold less capital against it that's the most common way we could get there but unclear how much differencethat would make extreme example in italy where the government has come in and backed the banks to temporarily

remove all interest payments to all companies and all mortgages to consumers but nobody expects anything of that scale here. >> thank you we'll see you later today. >> when we come back the latest numbers on the spread of the coronavirus in the united states and steps that officials are taking to stop the spread. take a look at futures at this hour. down 780 points for the dew futures. s&p futures off by 94. nasdaq down by 252 we'll be right back. but totally cool here. woah! and here. woaaaahh! -oh yeah. woah, kid. she gets it. [ roars ] woah!! get it all out. so when you're ready to let yourself woah, there's only one place to go. universal, baby!

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welcome back the futures right now worst levels of the day now down more than 800 points on the dow nasdaq indicated down 258 points and almost 100 not quite on the s&p 500. the covid-19 cases surpassing 1,000 now in the united states as the virus continues to spread in places in the united states and elsewhere, obviously, globally >> reporter: good morning. the virus now has been detected in 38 states and washington, d.c. the largest hot spots in the seattle area, new york, northern california and massachusetts at least 31 people in the u.s. with the virus have died most connected with an outbreak in a nursing home outside seattle. we're now seeing mitigation efforts unfold across the country. schools and public gathering places like churches and synagogues will be closed for two weeks in new rochelle, new york washington state also expected

to announce today restrictions on large gatherings. as u.s. testing capacity is finally expanding now reaching more than 15,000 patients a day according to data compiled by the american enterprise institute there's another concern. supply of the materials required to run the tests particularly r and a extraction tests. a major manufacturer of the products telling us demand is challenging its capacity and it's ramping up production and hiring new staff becky >> thank you very much for more on fight against coronavirus in the united states let's welcome dr. martin blazer. also dr. gander. i want to thank you both for being here you know, if you are somebody sitting at home trying to figure out what you should do there is so many mixed messages coming across what should americans be doing right now, whether they are near one of these hot spots or whether they are not

people tell you stay-at-home, don't do these things yet for many of us life goes on as normal what do you think? >> you know, we're in the early stages of an epidemic. and the key is to flatten out the epidemic so it's not too bad. we got -- social distancing works. >> you don't want too many cases at once so it doesn't overwhelm hospitals. >> the longer you delay it some people won't get infected. maybe treatment, maybe a vaccine. delay works in our favor or individuals they want to delay their exposures. >> dr. gander, we had a health official from new york city on earlier this morning and it's the localities taking the lead on these issues. very mixed responses in new york city you have the national guard that came into new rochelle, schools there are sit down in seattle it's a different story, public schools are open what's the right answer? >> i'm concerned about the lack of testing in new york city still, the volume of testing is

still quite low. seattle has actually been very proactive. university of washington has scaled up testing along with the gates foundation they are offering drive through testing. >> at parking garages. >> they are hoping to do home base testing soon. the problem is if you don't know what the number of cases is and where they are it's very difficult to address a problem like this. >> when you say testing should it be to the point where anyone who has any sort of symptoms or afraid they were exposed to it should anybody be able to get a the test >> they should be assessed and screened and there are ways we can do this in tiered fashion. there's more common viruses we can test for if those tests come back positive like the flu then we can test for other things. there needs be a process >> we've had people come on and say don't go to big public events broadway is open

madison square garden should be open what should people be thinking about. what's okay and what's not >> everybody has to assess their own risk some people are at more risk than others based on their pre-existing conditions and age. i want to get back to testing. we're the greatest industrial country in the world we could put out all the tests we need so that people get tested often if people know their status then they can self-quarantine we can control things if we can deploy enough tests. >> what about number of people who are asymptomatic or very low symptoms should they be tested too? >> it's hard to capture. that's one of the reasons why this virus is so bad it spread from asymptomatic people if we can capture people who are symptomatic. we can't stop i want but we can control it testing is very important part of that. >> if the goal is to delay and this goes back to broadway

theaters and stadiums and the like, why wouldn't the advice be straight up, for the next two weeks cut it out >> but then what happens on day 15 >> this goes to your whole delay strategy, right? by default if i buy you two weeks i bought you two weeks >> yes, sure sure you can do that >> the question is what's the economic damage of that? >> how do you assess the risk when you're dealing with situations where you know people are going to die >> yes absolutely >> what do you tell people >> well, you know, i think you have to emphasize who really is at risk. again it's people with chronic medical conditions people who are older >> what's old. >> we do see an uptick over teenage of 50. 70s and 80s at the highest risk. and health care workers. this is flattening the curve if you see a spike of people in one day, say 30 people, 100 people come in the emergency

room in one day that's very different from 100 people over the course of a week when you have emergency rooms flood with patients it makes it harder for us to attend to the other issues we'll be slower taking care of you and sloppier with our control. >> what about when you read the 35-year-old, 40-year-old that doesn't have any underlying conditions is there a genetic predisposition does it happen with influenza that 35-year-old, 40-year-old sometimes die? >> sometimes it's bad luck it's very much the extremes of age for flu. >> but not for this. with kids too. it's frightening >> it could be a dose effect a dose effect that health care workers, people are coughing on them they are getting a very high dose >> like doctors in wuhan >> where somebody who gets it

from the subway, maybe that dose is much less >> 120,000 globally and 3600 deaths so you would say that there are 90, 100,000 people that were mild symptoms that didn't need hospitalization. >> much more than that >> much more than that >> it's a pyramid. the deaths are here, the cases are here, mild infections are much, much bigger. >> what do you mean the numbers -- >> hill moans of people have been infected already. millions in china at least most of them have not been ill >> then they actually are on the other side of it you don't get re-infected. >> anybody in general, anybody who has an acute viral infection like this gets life long immunity >> my question is china really on the other side of it. are they putting people back to

work >> we may see an increase in cases that people are coming back to work and school. >> summer is coming. >> follows the same rules others have followed but may not. >> it's been highlighted that china does things that you can't even believe in terms of human rights in trying to stance this that we can't do here. if we don't do quite as much do you foresee our hospital system of being completely maxed out to where people can't be admitted downing that's still possible? >> i'm concerned we have fewer doctors per person per population here than we do or than they do in italy >> we have plenty of lawyers >> fewer hospital beds and doctors. yeah so we have less capacity to absorb a big surge in cases. that's what i'm worried about. >> what should we be doing right now? what would you direct federal and local authorities to handle that >> we need prepare for that.

some of that may be just like they did in wuhan creating make snaflt shift facilities i'm not advocating quarantine centers which is more problematic. so i wouldn't advocate for that. mobilizing people who maybe it's retired doctors and nurses maybe people in the military people who can stipulate and help >> the center has to be in people as homes. keep people at home as much as possible bring care to them >> thank you both. >> big hour ahead on "squawk box" we're right back in just a moment legendary terrain in telluride,

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more market whiplash on wall street futures pointing lower has the fixed income market changed forever? now that rates are hitting all time lows and the fed is expected to cut rates again a special interview with blackrock's leader is straight ahead. >> popular online trading platform robin hood three strikes, suffering it's highest profile outage on monday we'll speak about its future final hour of "squawk box" begins right now

good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin we're down 800 on the dow now down 770 watching this closely once trading starts you saw yesterday we were, i think up about 1,000 and then down a couple hundred and then we ended up trading higher at the close. but this morning, whole new ball game >> roller coaster. >> treasury yields this morning have been on the ten year have not been a major factor for a lot of what we're seeing because they kind of stabilized a little right around the .7% range, .7,

.73, .69 >> 30 years back above 1%. a big move from where we were a couple of days ago we begin this hour with team coverage of the growing overseas impact of the coronavirus. nbc's claudia is in italy is on nationwide lockdown as the number of cases approach 10,000. we begin with steve sedgwick on the emergency rate cut by the bank of england. >> reporter: thank you very much we're back to historic times like the three of you were involved back in 2008-2009 we all remember how we were looking for coordination, we were looking for action on both the monetary stocks from the central banks, fmc and cohorts and from those holding the purse strings the treasury and here in the united kingdom so from the bank of england where i was earlier we saw two types of intervention from the bank of england. one was physical intervention

with interest rate cuts and a lot of stimulus going in the economy including another 290 billion pounds we also saw intervention from the outgoing governor of the bank of england talking about coordination, not only with other international central banks but also with the treasury as well. here we are the city of west manipulate hysteric literally about 25 minutes away from who richie sumac -- he just became the chancellor here in the united kingdom, it will be a long term stimulus package blow the spending levels out of all kilter much bigger than we've had historically going back to 1955. we'll spend an extra 600 billion pounds over five years to galvanize the uk economy brexit and that big win that boris johnson had at the recent

general election now this has been scrapped and going to become the coronavirus budget as well we'll stand up in 20 minutes and try to calm the nerves as well that's the third part of the action today we're seeing here in the united kingdom. verbal intervention, the physical intervention on the bank of england about 50 basis point cut and now hopefully fiscal stimulus. can we afford it that's the big question. yes, the austerity years have come and gone but the government has been spending huge amount of money than receiving in revenue. there will be no tax increases this time around this will be a message from the chancellor trying to calm the nerves of the markets and very interesting to note the level of the ftse 100 and the international markets especially the european equity markets as we come in to this we're trading significantly lower than we were than yesterday.

our high yesterday we didn't know about the 50 basis points we didn't know about the 290 billion pounds that would be released via banks to small businesses be interested to see what message the markets are receiving. this is very interesting situation. it does feel very familiar to what we all experienced about 11 years ago. back to you. >> i want to go to rome. our reporter is on the steps of italy. >> reporter: last couple of hours the prime minister of this country announced that the government is setting aside $28 billion to face the damage caused by the coronavirus epidemic here in italy for the past few weeks we can't estimate what that damage is but if you think about it within the last few weeks shops, all kind of businesses have been closed shut down, factories shut down. no tourists left as tourism

industry took a massive hit. all that together the damage caused by the coronavirus to the economy of this country which by the way was still lag behind even before the event of the coronavirus, still lagging behind the rest of europe and still trying recover from the previous recession the damage could well be into the billions, could well match the $25 billion, $28 billion that the government is setting aside. we don't know when this emergency will end so now on friday the economic minister said they willlay out how they are going to spend immediately 12 billion euros, about $15 billion of debt package leaving the rest on the side to face what's coming next. guys we were just talking about, for me the greatest country in the world, i can't imagine italy without tourism. it's mind boggling to me to

think about that it is -- how much is it representative of gdp, do you have that number offhand has to be one of the biggest parts of any country in the world. >> reporter: the stimulus package was about 1.1% of the gdp and when you talk about tourism, of course this is a hurricane for everybody. i live here and never seen anything like it if you just look behind me, i'm standing right at the coliseum most of the time especially on beautiful sunny days like this, it's not only the most crowded place in rome most crowded place in whole of italy. europe so many people around most of the time it's barely like four or five people now, just look down, there down road. this is very indicative of the damage this coronavirus has done the country. so many cancelations

the minister here in italy said that cancelations went up between 70 to 90%. that's a lot massive hit for the you'rism industry and of course for the whole economy. >> i know exactly where you are. i was just there like a year ago. >> that's right. >> first century like we have nothing here. just amazing >> reporter: you can teach me something about rome >> no. if you do go to the forum you need someone with you because you can't possibly looking around understand. it's so amazing. >> reporter: absolutely. such a shame you can't even go into the forum you can't go anywhere. museums and other sites are closed >> plan on coming back got that going for us. god willing.

anyway, thank you. last time we saw our next guest in late january the ten year was assisting right around 1.6%. since then we saw an emergency rate cut by the fed and the ten year fall to just above .3%, if you can believe. hard to imagine. this morning ten year is yielding .718. to joining us more to talk about the fixed income we're joined by mark rieder. he oversees more than trillion dollars in fixed income assets probably been going up your fixed income assets have been going up when everyone said they couldn't go up more how safe are these assets now given that -- i mean i guess we can go below zero. seems there's more room for rates to go up than go down at this point >> you are right what you have to think about in

this environment this is not normal this will be a sharp decline in economic conditions and then we'll recover. we'll talk about this, you know, we got to these levels -- i don't know whether it's a month hence or six months hence we'll talk about these levels. you're right rates should move higher what the ecb has done in terms of negative rates the fed will not do that fed won't go to a negative rate. i can see them buying a lot of assets they will taper their program they don't like to call qe but it's going a longtime before we go to negative rates. he we shifted down the rate of where the normal rate of range, range of rates is and it will be there for a while. some of the things happening are pretty incredible. inflation market we'll get a cpi report that shows inflation running at over 2% yesterday, five year inflation break evens were at 60 basis points now they are up to 70, 79

basis points people have to think about is this temporary, and, you know, how much do you want to own these rates. we've been selling some of our interest rate exposure recently including today. these rates are not normal could we go a bit lower first? i think so you could see 55, 50 basis points on the ten year note. over the medium to long term these rates will be in the rear view mirror. >> before that book "perfect storm" what did we used to call these things mother of all. what did we use before that? i don't know so oil, you already got these unbelievable low rates and then oil goes down 30% in a day to below $30 on top of everything else it's weird you see so many -- they are not all related they are related the to some extent but it is crazy that there are so many things around to push rates down that i don't think you could have ever foreseen this? >> no.

a bunch of people are out there i told you this would happen really i don't think anybody really predicted that you would see this sort of pandemic that's gripped the economy globally and quite frankly shutting down. when is the last time you're shutting down whole businesses for an extended period of time we know in the u.s. we're not close to peaking look what happened in china it happened and then peaked it's hard to say are we two weeks, a month away from that peaking dynamic. like you say, then you get the oil dynamic simultaneously some of that is demand driven for sure but it's a bizarre set of circumstances and i think one of the things you got to think about, you got to go away. i don't know what the tallest roller coaster in the world is >> this is pretty incredible >> the range, you know, there's opportunities here the equity market, i do a lot in equities, you're taking some industries out there

you want to own three months, six months hence got to be patient and very conservative in terms how you do it >> are there certain industries you wouldn't want to own three to six months from now i'm thinking about cruise ships as people's behaviors change >> yes take the flip side of that, energy is a tough sector think about credit today we were going through where parts of the energy market listen that's a tough sector and going to be that way for a while. retailing is changed permanently and does this put another accesslerrant on that. you look at the equity market we've been looking at and adding to whether it's defense whether it's technology in different parts of it. memory in different parts of it. health care in different parts of it. take the baby out with the bath water. some things you want to own. you have to start picking away at those >> the biggest thing to figure out is how severe of the

economic impact and how severe of a crunch will we see. will authorities shut things down like we saw in china or not. it's confusing when you talk to local authorities like we've been doing here. there's not federal guidance they say local authorities are doing things catch as catch can. we are trying to protect as many lives as possible but too much of an economic kick to do that just yet >> i total agree part of when you think about managing, you think about the economic paradigm ahead of us. the news flow will get worse before it gets better. you have to think what that means. the depth of this -- i don't recall a guess is a reasonable comparison where we are. i would argue it's different because you created a long term -- this is going to be pretty deep. and then quite frankly let's talk about what italy is doing 1% of gdp.

i'm less concerned about monetary policy today. they will take the rates over the next couple of meetings. if you take 1% out of gdp and put it in the system over a short period of time if we get fiscal policy that's sort of magnitude is pretty powerful that's what we need. until we see that markets will be tough it occurred to me it's not the depth of the slow down, we could shut things down for a month, we need duration. things would snap back really quickly if we got a handle on this who knows how this finally resolves itself. really not the depth of this it's the duration of it that really is scary. you can see a quick v versus a u or what's even worse a w let me ask you we have jim paulson coming on. he's been talking about the reaction of tips to what's happened with yields and he said

this is a little bit different than we've seen other times that made him feel better about things can you just describe what's been happening with inflationary expectations versus what yields have done? >> sure. listen to me as you described earlier with oil coming under pressure, the inflation market has ratcheted down and quite frankly nobody is in the market today, we've been picking away in the last couple of days nobody is in the market trying to buy protection inflation. think about what drives inflation in this economy and it's more of a service oriented economy and you think about shelter and look what's happening to interest rates, look what's happening to the housing market it's interesting from an equity point of view. if you think what that is, where service inflation is it's the lowest we've run in the last ten years. as you get to the back side of this, particularly if you get significant fiscal stimulus. not only getting fiscal stimulus pumping more liquidity in the

system it's hard to see a paradigm where inflation stay at historic low levels. we don't think inflation is a big problem. but are you going to pick up from these levels? >> do you care about the form of the fiscal stimulus? some of the things they are talking about. what should the fiscal stimulus look like as far as you are concerned? >> listen, the way joe described it is right. let's say this is a sharp deceleration you close businesses down. there has to be preamount of money that go in state and local governments that can turn around and form this state of emergency paradigm small business lending of a short term nature. things like tax holidays things like unemployment insurance that get at people that are quarantined >> tax cuts being made permanent. >> i think tax cuts could help i would argue more of a

temporary dynamic at play that will impact the economy. got to get what is a sharp deceleration and what's one of those things that bring you from here to there. >> at least you got your stupid tesla. oil is going to 50 cents a gallon you'll be paying to charge that thing up eventually. i'm kidding. we just know you love your tesla. i love the tesla too i love elon musk i love everything about it i was just kidding about it. thank you. >> i was going to say think about what you described, energy is in a structural different place. it's just different. it means that energy we can bounce from here but a long term decline. >> i wasn't asking you to talk about that i was just needling you. anyway thanks. now down 850

>> okay. 840 right now for the dow futures. when we come back what happens when you can't buy and sell stocks on the most historic day. what's users of the trading platform on robin hood after three outages. when we come back we'll talk with an early robin hood user what it can do to gain back users trust. >> pepsico announcing a deal to buy rockar ergstney for $3.9 million. stay tune. you're watching "squawk box" on cnbc we see breakthrough medicines

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. welcome back to "squawk box" dow down 840 now gown 787 dow jones industrial down 93 on s&p, nasdaq giving back 253 points right now the online trading platform robin hood suffering another big glitch robin hood's third outage in the past week and a half and causing a lot of anger as you might imagine among company, 10 million person user.

we know you got some big news this morning talk about on your largest fundraising ever, whopping dolla$3.6 billion. what now about the robin hood situation? >> this is a pretty uncertain time a lot of volatility. a lot of companies affected by it, unfortunately, and robin hood like other companies has challenges the good news they are stabilized at this point and functioning with their customers. >> three days in a row and a week and a half. >> it's been a real test unprecedented volatility in the market real test for the company. i think at this point we feel confident they got it right. >> why do you think this company won't be sueed into bankruptcy >> again, i'm not on the board i think at the end of the day this is something that we're going to work through with the

company and we feel really confident that they got the right technology >> do you feel confident in their leadership if you're a customer of this company you got a problem. >> look, again, we do feel confident. they are taking every measure, they work with customers and go through the process that they are going through with them. >> do you anticipate writing down your investment >> not at this point we feel very confident of the core business. we've been a disrupter it's a young company in its early days. four years in their lifecycle. they scaled to a point where they are a significant player in the market which we're excited about and i think the future over time will be bright for the company. >> have you done any math on the liability? >> yes we feel really good. >> what do you think the liability looks like i'm asking because there are viewers who are watching us right this minute, who are robin hood customers saying to themselves, they lost money on these days because they anticipated trading.

>> at this point i'm not in a position to comment on that, obviously, but we know everybody has felt that. >> let's talk about, the better news on a very bad news day right now is that you have now raised your biggest fund the question of course what you'll do with it. it may very well be there's lots of opportunities if you wanted to be in the distress space. that's not yours >> we're in the early stage of venture growth and capital business we're excited to be having the largest fun ever as an investor you're looking at both worlds. you have an existing portfolio we're obviously very focused on in this current environment. we see a ton of great fundamental opportunities. wreerp investing in technology and health care which we think are the two growth stories in the economy and innovation economy and so we feel very encouraged in terms of what we're seeing >> casper is obviously one but

direct to consumer franchises that you've invested in, there's now a huge question mark around those types of companies >> look, i think this has been going on for six months. i think the good news is that it's always getting back to basics on fundamentals, the economics of the business, the gross margin story and those are things that we think will build in value there's certainly some volatility for companies like casper and others but long term -- >> you don't think that model is broken and the reason i say that is you look at advertising on facebook and instagram which basically was the access point for some of these companies has now gone to a place where the acquisition cost is so high that it is demonstrably unclear whether these businesses can survive. >> like anything you have to pick your spots. there are certain categories that lend yourselves very well to the consumer model.

we don't think it's going away obviously there are certain challenges and certain businesses but over time it's a growth story >> we wish you well with that $3.6 billion coming up break being economic data. the latest read on consumer prices is out in minutes that's next when "squawk box" returns. yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market.

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welcome back to "squawk box" this morning right here on cnbc seconds away from the february cpi data show you futures before we get, there dow down about 822 points. rick santelli is standing by at the cme. rick, the numbers? >> reporter: our february read expecting a headline number of unchanged is up one tenth. now if we look at year-over-year cpi it's up over .3. year-over-year core is fascinating because that's had 23 straight months of being 2% or higher. will this be 24. i wish i could give it to you. the data is coming out in drips and droves we do have headline in year-over-year here we go food and energy 2.4.

welcome to month number 24 basically two years straight of 2% or higher and if we look the at the month over month basis that's as expected up .2 real fast. up .1. core up .2 year-over-year. up 2.3 year-over-year. core up 2.4 for the 24th time basically two years in a row how is the market reacting with this we're at 70 basis points on the ten year note yield. how do you make 70 basis points look high you start at 60. markets do have a rebound yesterday. how will this turn out i can't tell you how it will turn out but i can until one the thing we live in a country with the most resilient economy on the planet i want will be resilient at some point in the future. becky, back to you >> what's the mood like there just versus two days ago when we were looking at ten year ticking below .4%?

>> reporter: you know, i can't speak for the rest of the country or even the rest of the city of chicago but i can tell you whether it's my commute to this exchange or staying on the exchange floor, there's a sense of calm, of concern, of hopefulness and of course a little bit of nervousness that the problem with any crisis in any facet of the economy or of health care or any sector is that usually crisis you don't get the most efficient ways to progress, it's usually messy many false starts. they have come to expect this. but they are very optimistic and it is really quite literally and i don't sense much panic shech shelves are full around here i'm not a great case study chicago at least with what i'm involved with seem normal with concern. >> rick, thank you we'll check in with you soon confidence on wall street taking

repeated gut punches over the last weeks with coronavirus driven sell offs and rallies in the stock market and oil price wars saudi arabia launched this weekend. joining us now is ian bremer you have lots to study things are changing rapidly. let's start with the oil crisis taking place between saudi arabia and russia. how does that change things? >> obviously, it is a serious problem for a lot of countries around the world who are taking it on the chin and that rely on oil production and export. a country like mexico whose growth has been seriously underperforming recently, growth that has been very strong now sinking. a lot of demonstrations, security problems and seriously underperform what will they do. ecuador, subsaharan countries and putin yesterday coming out and saying actually i would like to go for another two terms. the timing of that and we knew

he would change the constitution, clearly on the back he understands that russia's economy is heading absolutely nowhere good. both the russians and saudis are expecting this price war will last for a while >> who has the upper hand? >> the russians do >> depending who i talk to we heard different things what saudi arabia is having so much oil and being able to with stand it longer why do russians have the upper hand? >> a lot more control in governance with putin and russia than mohammad bin salman >> he locks people up if he doesn't like them. >> a lot more he has to lounge putin doesn't have to. the fact he's engaging in serious domestic transform jays against a very conservative group of elites, it's just harder for him to pull that off. at the same time let's keep in mind the saudis balance their budget by 84 bucks and russia it's more like 40. also a much larger piece of the

saudi economy sthathan it is for russia russians can outlast >> public policy question for you. we the talked about bail outs all morning. trump administration considering bailing out frackers, shale. does that make sense i made the argument before a lot of these guys were highly leveraged, may be private money on the side that could come in potentially but at the same time there is arguably a public policy question about whether you want to have a strong shale industry relative to all these other things going on around the world. >> it's very relevant to have a very strong shale industry in the united states. >> you prop them up >> so much more decentralized in terms of oil production than it was the last time we had a serious oil war beginning in the '80s where you went from seven super majors down to three i think the ability of americans to snap back when oil prices move will be much greater and i think that's okay. i also think that fact that the

republicans and democrats want such different kinds of stimulus, where everyone is worried about the u.s. economy, just means the size of the stimulus will be bigger because everyone will get what they want that's how you get this through in an election period. that should be market positive >> okay. let's go back to how we're kind of watching this play out and you're following pretty closely what's happening in russia, south korea and italy. how do you think the different types of approaches that we've seen there eventually make their way here or do they >> of course they do because you already see the trump administration putting the scientists upfront in a way a couple of weeks ago they weren't. you had people saying oh, my god are they going muzzle dr. fauci. they won't muzzle dr. fauci. that's not a good message for the trump administration, the american economy but it doesn't stop them from getting it out. that's important very different in terms of the american ability to roll out

testing very quickly we're still lagging very dramatically behind. i have no doubt the private sector is taking it seriously and the american government is pushing it but make it harder for us >> more bad news before we get good news. >> that's right. a couple of things, a huge difference between italian, french and brits the italians they got it wrong early and now they are maximum response a lockdown that we've never sign that country and have a big impact on their economy. the french government pushing hard for eu stimulus while at home macron is doing very little indeed the danger for france if this expands is a hell of a lot greater. while in the uk, you know, you got fiscal policy and monetary policy coming together you have boris johnson with his scientists around him. a much stronger approach he's actually looking pretty good right now if you ask me where trump is

compared to macron versus boris johnson he's closer to macron camp not necessarily where you want the american leadership to be >> one thing you said is that in a fiscal stimulus will come together, both sides will get everything and a much bigger package. i don't think that happens quickly. maybe that's why you see markets indicating down. fiscal stuff takes longer. >> probably may when congress comes back and when you have other pieces of legislation on health care. >> a longtime. and particularly how quickly the situation is changing. >> we're about to see american numbers get much larger but also because, you know, if you have stuff coming on boat from china it's six weeks so, we see a lot of photos on social media people saying oh, my goad no toothpaste. that's not because of panic buying but you're seeing impact of supply chains playing out >> we extend unemployment insurance to 99 weeks. i think we did before.

>> during the financial crisis >> how do you think that will change the dynamic >> i hope to orientation of our stimulus will be towards things that will affect individual workers, especially those that are worried about having to come in to work irrespective of whether they are sick or not >> seems like it's obvious president trump has said that. both side of the aisle get on board with that. >> a number of companies are moving in that direction before they have to >> walmart just did that >> some fast food companies and others one other point i would raise china. we do see a lot of chinese companies restarting pap l they want to show they are making numbers but not getting a restart. they turned on the electricity having trucks move around. countries like china, former soviet union they are very good domestically at having their leaders leak orders when they have to. if an order comes down from top

and say you have to hit these numbers and you know you can't, you'll find a way to meet the numbers. we should not expect the chinese economy to rebound as quickly as the government is presently setting. >> how will we know when it's real what should we be watching >> they will give a lot of information. social media in china is robust. i talk to a hell of a lot of chinese on the ground. you do too it's important to have your ears in china the there's a lot of anger right now. in wuhan you hear the china government saying we should express gratitude to the chinese communist party. internationally there's appreciation that china is taking hard measures domestically it's mixed. the fact it's mixed we're getting a lot better information. >> do you believe the numbers in china, by the way? >> no, i don't >> mixed because they are angry at how severe those reactions they were. >> they don't believe their leaders.

their leaders take care of themselves and aren't taking care of them indifference to the plight of the average chinese because they don't trucht what comes out of the chinese government >> when they say they are getting back to work and things are going along and coming out on the other side -- >> we should be much more cautious the chinese government is so concerned about the potential of an additional outbreak and rightly so there's going to be a lot more slowness in getting the chinese economy really back running. not only in sort of making the orders work across the board but getting the migrant labor back, having the kinds of mechanisms you need in place to ensure that they are actually -- they can't go to everyone in an apartment block and say send in voluntarily your temperature every day. people would just check the box. there's a lot going on in china. you can make numbers for whatever you want. turning the system around is a different story.

>> thank you see the market now gregg downer 885 points. >> coming up what to watch what's another wild day on wall street jim paulson will join you next you'll want to hear what he thinks about hitting bottom in the current downturn and which investments he likes right now as we head to break take a look at the fang stocks bcawbo oatching "squk x"n cn

>> welcome back to box everybody. take a look at the futures setting up for another big loss. dow futures now down by 873 points s&p down by over 100 points. and the nasdaq futures indicated down by 273. let's talk about some of the things investors will be watching monday's low as we test those numbers. mike santoli joins us with the reasons why. >> today will be, i think, almost every day for the last three weeks s&p has opened down or up at least 2%. we're swinging around 3% per day. these areas that the market might find pockets of supply and demand come pretty significant here's a two year chart of the s&p. four times during this waterfall decline you had a day where 90% of the volume was selling volume, was in declining stocks. that's some extreme washed out levels yesterday we got some response to that washed out conditioning.

you had a reflex rally where 80% of the rally was to the upside i want seems as if that low for monday is basically this low from june of last year, unclear if we're going to be able to hold that. we might get there somewhere today. not too far down below current levels goldman sachs call that perhaps we can decline, 2450, just for perspective that gets you not quite down the late 2018 loss. rebound later this year towards levels of 3,200 which we saw nearly three weeks ago very dicey trying to handicap this stuff yesterday's rally looks guilty until proven innocent. here's a bit of contrast nasdaq 100 leadership area of the market on the way up really remains well above those levels that we saw last june. so it seems as if this -- even though it got punished it's preserved more of an upturn and shows you at least right now

some residual willingness to hold these large growth stocks we'll see if that lasts or if everybody has to get punished before this episode is over. >> our next guest we've been talking about all week this happens once in a while with paulson, doesn't it at the risk of being too arcane or making it too hard to understand, i was having quite a bit of trouble trying to figure out what you were saying in your latest note. it was bullish, i think in terms of finding a bottom but hit to do with the behavior of yields based on affiliationainflationay expectations and tips. you went back historically if it was the way it happened in '08 a year later you're 9% lower but if it happens the way you're saying it happens you're 12% higher over the next year.

i guess i saw that i want to hear the story how we can be 12% higher in the next year >> i think the bond market is playing a big role here. i think it has all the way through. we worried even last year what does the bond market know that the stock market doesn't now of course it's broken down below 1% yields. people are worried are we headed for negative yields on wall street. that's as big a fear tass coronavirus in some regard it doesn't escape my attention the bond yields in the last three days have had their first major bottom since this whole thing started. if we can bottom the ten year yield we might bottom the stock market it's important to look at that what i looked at is how different the message is coming from the bond market today versus what it was in 2008 in 2008 between roughly the last half of 2008, between june and the end of the year, the ten year treasury bond yield fell a

little less than 1% but the embedded inflation expectation and tips what the bond market is suggesting is there, their inflation expectation fell about 2.5% over that same time period from 2.5% to zero. even though yields were falling in 2008, the real yield was surging, higher, hurting an economy that was already in pea peril. >> that put a damper on economic activity >> that's right. today is very different. in the sense we've had this colossal collapse in bond yields here, but they've gone down much more than have inflation expectations, indeed we have a negative real yield today so if real yields actually collapsed here this year and over the last year and the result of that is it's a benefit to an economy that's under stress.

i think it's a very different message and if you look back historically over the last 20 years or so when nominal yields fall faster than inflation expectations you tend to have a better response in the future from the the stock market than you do if the nominal yields fall and the real yield goes up. i think it's a little encouraging. yields scare you when they're falling so fast, but it's a better message for economic growth and a better message for the stock market than people perceive >> you got a lot of time on your hands to have noticed that >> i still don't understand it >> i told you the other day. i get it in 2008, if the yields fall and inflationary expectations fall further, you're getting a negative yield, right? >> joe, i'll give you one more message out of the bond market people are worried that bond spreads or credit spreads are blowing out. if you look at investment grade

credit spread, it's risen dramatically this blowout is occurring when the mortgage rate is falling it's all about how much the treasury yield is going down not how much the mortgage rate is going up normally when spreads blow out, it's because the mortgage rate rises or the corporate bond yield rises. here we have corporate yields falling and supposedly that's going to pressure balance sheets i think it's a different looking credit spread blowout than in 2008 there's different messages coming out today >> what does that mean you would put money into stocks right now? >> i -- becky, i don't know where the bottom is here i think we're close to it. this thing oozes panic to me the ferociousness and speed by which stocks have fallen and now bond yields, it looks like the end of a colossal panic than the

beginning. oil, too you're right i would start to nip away at it on these down days that we have. >> right that's my point. if you don't -- what do you need to show you that the market is understanding the panic? if you don't think what we've seen has been representative of panic, then i don't know what you want at this point that's usually when -- it's easy to be even more frightened but it's always hardest, right, at that time to keep your wits >> it is >> we've seen it so many times one of these days you'll figure it out >> one thing i would say, one of the things that's happened here, we've become completely untethered from economic data, economic and earnings data no one cares about it. >> because we don't think it's real >> but jim -- >> you're assuming the worst,

you don't know how far it's going to go. >> that's what i was going to ask jim. the math you've done on this >> i'm sorry >> assume two months out, everything is shut down. what happens >> i guess what i'm saying is if you have no fundamental, you know, thing to look at to keep you grounded, what happens is you end up pricing securities on the basis of your worst nightmare. >> right >> so investors are just pricing on their fears what's going to happen now maybe yet this week, tomorrow's claims, we get confidence numbers this week. we'll start actually getting reconnected to fundamental information about what's happening on the ground -- >> but i have to say the stuff we heard from the airlines, the cruise industries, the realtime information they've given us has been the worst nightmare type of stuff. >> i agree here's what i think could happen no doubt the economy will slow we'll get bad economic data

coming out the question is not is it going to be bad, the question is is it going to be worse than feared? if it turns out the economy is not collapsing as bad as we feared, that's good news >> right >> we could have a bad news becoming good over the next few weeks. i'm welcoming just being reconnected to some fundamental information flow as opposed to just based on what's -- >> human nature, you assume the worst. >> i do it, too. >> the market does too so the market may already be assuming worst case. we'll all know at some point hopefully we'll be around to see it >> all right jim paul saab, thanks. >> down to the new york stock exchange, jim cramer is there right now. i don't know if you saw angela merkel with these comments that 70% of germany is ultimately going to be infected, the goal

is to slow all of this down so that hospitals don't become overrun. that's the question of whether that is the same kind of story that will come here. >> right that's the public health nightmare. 80% of the people who are -- there's a lot of semantic here's, who are infected probably will not have to, but that is just a huge number of people that might go to a hospital that's just an incredibly bearish thing. there's no sugar coat. you have to hope one of these drug companies really has something good and if they have it, say regeneron, which is working incredibly on antibodies and other drugs, you hope they have something. i appreciate what jim paulson said to me, owning oil stock, a cruise ship stock, anything transport, i don't -- i only

like the drug stocks, utilities, the highest growth tech. i'm talking about liking 20% of the s&p. 80% of the s&p i want to sell. >> what's the charitable trust going to do today? >> we have a huge amount of cash we're not buying until we take out monday's low >> you're expecting that given that you just said it. >> yeah. 2238 for the s&p 21,600 for the dow that's where we got the lows from when we thought there was going to be a bear market by jay powell we revisit and test the lows that's when we put some cash flow on it >> everybody is measuring what happens on the down side the other wildcard in this is what we hear out of the administration over the next week or two or three in terms of stimulus measures, how you think that changes the dynamic >> could be great. i think that if they go full out, and if the congress comes

back and really they make some serious things and help public health, i think it's very, very big. the payroll tax, all of those things do matter extending the filings, putting money in peoples hands, no-interest loans. all of that matters. >> we'll see you in a couple minutes. >> okay. do you realize how many different taxes we pay? sales tax, different p-o-s systems in all seven countries. and online sales? that's a whole other system... and different regulations. therere'realal eate e crits,s, . and we have no way to integrate all that? no... but bdo does. peopopleho k kno knonow o.

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let's take a final check on the markets. the dow futures are down by 950 points the nasdaq down by 289 the opening bell in less than a half hour. join us tomorrow right now it's time for "squawk on the street. good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber on the new york stock exchange. dow futures down about 900 here after yesterday's 1,200 point bounce goldman today declares the end of the bull market, sets a mid year target of 2450. europe had gains, they're basically gone oil is down a buck as the saudis boost capacity worries about the virus putting stocks on track to give back most of yesterday's gains. the wild ride on tuesday saw the