breaking news. u.s. stock market futures are limit down even as the federal reserve slashed rates to stave off recession in the face of a global coronavirus threat. life in america changing rapidly as governments at every level take drastic and unprecedented steps to try to slow the spread of the pandemic. major retailers including nike and apple, shutting their doors for weeks. we'll talk about the fallout for the u.s. economy it is monday, march 16, 2020 "squawk box" begins right now. good morning i'm becky quick at cnbc headquarters joe kernen and andrew ross sorkin u.s. equity futures hitting limit down after dropping 5% that means they can't trade any lower this morning those are the curbs set up by the exchanges.

you will continue to watch what's happening with the etfs, however, because they are not held to the same restrictions. can you see the dow etf is down by 9%. the s&p etf down by almost 9%. that gives you a better idea of where the major averages would open if we were open here. there are some circuit breakers that could kick in as well once actual trading starts you have a limit of 7% we hit that last week one day. 7% down -- actually, two days, if we were to get down 7%, you would see a halt of trading for 15 minutes that level today is 135 points level two would be if were to see 13% decline, another halt for 15 minutes if there was a drop of 20%, before the final 35 minutes of trading you would see trading halted for the remainder of the day. last night the federal reserve cut its interest rate from 1%

toer to er near zero. the fed and five other central banks are also activating swap lines. the goal is to try to calm disruptions and overseas dollar fund markets we'll have more from steve liesman in a moment. checking treasuries, which had the yield had gone up above 1% on the ten-year and we're still well above the lows that we saw in recent weeks even after the fed action. let's look at -- there you can see we're just under 0.8% on the ten-year european markets, take a quick check of those they're about what you would -- what you would expect. not as bad as etfs are indicating here for our markets. overnight in asia, check that. asia down not nearly as -- about half the losses were -- we saw in europe and less than what we're seeing here. >> let's walk you through what's going on right now

there are more than 153,000 confirmed coronavirus cases globally with more than 3,000 now in the united states the u.s. death toll is at least 61 cities and states are taking action to encourage social distancing right here in new york city, the city is closing all of its public schools. also limiting restaurants, bars, cafes to serve only takeout and delivery nightclubs, movie theaters, small theater houses and concert venues are all being or ordered to close starting tomorrow at 9:00 a.m. local time retailers are also closing apple says it's shutting all of its stores outside greater china until march 27th to reduce the risk of the virus spreading. its online store will remain open what's taking place in new york may soon be coming to other cities throughout the country and the efforts to slow down the spread of this virus is going to take an economic toll. in washington over the weekend the house passing emergency

coronavirus virus, including free testing and paid sick leave. the senate expected to pass the bill this week want to get to eamon javers who has been on this story all weekend. eamon? >> good morning again, andrew. what we're learning from the cdc is they're asking all americans to cancel any gathering larger than 50 for the next eight weeks. so for two months the cdc is saying no gatherings anywhere in the united states of larger than 50 people. we're also getting a new tweet here overnight, this from the national security council at the white house. they're trying to correct some rumors that are running rampant on social immediaty. they're saying text message rumors of a national quarantine are fake there is no national lockdown. cdc.gov will post the late ens guidance on covid-19, #coronavirus they say no national lockdown despite what you may have seen on social media. last night at the white house president donald trump said he met with a number of -- or by

conference call talked to a number of the top grocery store chains and retail chains in the country. donald trump saying that americans need to hold off on mass purchases he's trying to hold back panic buying we've been seeing in the grocery stores. >> you don't have to buy so much take it easy just relax people are going in and buying more i remember, i guess, during the conversation walmart said that they buy more than they buy at christmas. relax. we're doing great. it all will pass >> reporter: so, officials last night, andrew, suggesting they'll have more to say this morning. there's another meeting scheduled at 10:30, a press briefing with the coronavirus task force at 10:30 east coast time at the white house. we'll bring you that and all the information from it as soon as we have it, andrew. >> thank you, eamon. the federal reserve taking some extraordinary emergency

action slashing trits zero in an attempt to stabilize the markets. steve liesman joins us for more. hello again, steve. >> good morning, joe absolutely historic actions by the federal reserve on a sunday, which have echoes of the financial crisis back of 2008-2009 where the fed tried to take action before markets opened instead of doing things like it did in the crisis over a series of weeks or months, they did a lot all at once here let me go through the things they did in their emergency action cutting rates to zero. a full 100 basis points or one percentage point that was the first thing second, $700 billion of asset purchases, $500 billion of treasury, $200 billion of asset-backed mortgages -- agency-backed mortgages. they'll come in for the first time this morning with a $40 billion purchase they slashed the reserve requirement for thousands of banks to zero. gave some guidance, by the way, on liquidity coverage ratios that might create additional space on dealers' balance sheets we'll see. finally, they ease the terms on

discount window lending and on those dollar swap lines. now, i asked during the emergency press conference that jay powell held about the economic outlook whether or not recession can be avoided. let's listen to what he said we'll come back and dissect it in just a second here's what powell said yesterday about the economic outlook for the next couple of quarters >> the second quarter it's probably going to be weak. in fact, in the view of many output declining, output lower in the second quarter than it was in the first quarter after that, it's very hard to say how big the effects will be or how long they will last and that's going to depend, of course, on how widely the virus spreads, which is something that highly uncertain and i would say, in fact, unknowable >> so, let's go back now and talk about the way we were talking about this virus a month ago. it was a first quarter event with some spillover. likely rebound in the second quarter. the fed chairman just

essentially wrote off the second quarter. he used the phrase, output decline, which suggests the possibility of a negative second quarter. so, everything that we've been talking about, and i don't know when this actual transformation happened maybe in the last week maybe in the last couple of weeks. the market might have sniffed this out much earlier, has been pushed ahead or forward at least three months now, where i think a best case scenario is some form of a rebound in the third quarter now and then you heard that he was very uncertain about that so, guys, there's been a big transformation in the economic outlook. a big transformation in the earnings outlook is what the fed did enough powell was very clear. they have additional tools they may use. they may be talking with the treasury he talked about using the emergency powers i think what the fed wants to see is how markets clear this morning. becky, in answer to the question you asked in the last hour, i still have to wait a little

longer to see how spreads are trading this morning i do have some information from one market person who said things are a little better this morning. >> market -- mohamed el erian will be joining us he said the market technicals will be flashing red here. i guess that's what he kind of wait to see. steve, what time do you think before you really have a better idea of what's happening >> well, one dealer just told me 6:30, and i can get on the phone and talk to a couple of folks who are up and watching screens this morning i'm wondering whether or not, if there is a response, is going to happen when the fed actually comes in remember, they said they're going to do $40 billion of outright purchases interesting what powell said yesterday. he said, we no longer can be an intermediary here. in other words, lending money to people who can then go in and borrow and do repo the fed is doing direct purchases here powell said that came from their observation of what kind of effect they had with their

friday action and earlier on wednesday, that it wasn't enough and they're finding they have to do more and more and more. it's a matter of confidence here do you think the fed can go in and make the treasury market right? that's the bet you have to make this morning, that they can make this very, very important market work i don't think very much matters to them beyond that right now. >> steve, can we talk about the treasury department and some of the comments that steve mnuchin made yesterday one being about the view he doesn't think he'll see a recession. let's talk about some of the policy responses, both of us and everybody at this table and becky in new jersey, we all covered the financial crisis one of the things -- >> there's only two of us. >> one of the things that took place there was cheerily the treasury stepped in in a very big way. mnuchin said yesterday he wanted to go back to congress this week and ask for powers that he thought were taken away after the crisis as part of dodd/frank what kinds of steps do you see the treasury taking over the next week or two

because i think, in large part, investors are going to be betting one way or another at this very point on the policy response >> so, there's a couple things here the first one i've been talking to people about is a backstop for the commercial paper market. i believe the fed needs the help of the treasury to do that there's also discussion about whether or not the fed could accept other assets from nondealers or nonprimary dealers. that would be something that the fed would provide additional backup to assets in the economy. i don't know right now whether or not -- well, you would, actually, have to go to congress probably and get approval to do things like lending directly to banks. the change in 13-3, or the emergency powers act of the fed, said the fed can still go in and do that stuff but it needs now the approval of the treasury to on provide that kind of directed -- that direct -- >> let me ask you a different

question and i don't know the answer. so, i'm asking out of ignorance. at this point, given the rules that were put in place after dodd/frank, if the treasury department were to decide it wanted to or needed to bail out the airlines, for example, which would have a huge impact also, for example, we were mentioning boeing, or becky mentioned boeing, all of these things would have to happen collectively could treasury do that today without the approval of congress >> i don't think so. the question becomes - >> that's where i think we have to start talking about >> no -- well, i don't think so, because i don't think treasury has a pot of money it can allocate for that. i think it's going to have to go to congress. there might be some capacity, for example, for the treasury to give the federal reserve approval to lend to the airline industry and then i have to go back and reread 13-3 as to whether the

fed could actually do a loan directly to a company. i do want to point out that over the past, i don't know, five years or so, i have been reporting comments from people that said, hey, you took away powers from us to deal with these crises that are going to be a problem if we do have another one. there have been warnings about that from several senior fed officials and former fed officials. >> we heard it from ben bernanke, paulsen and -- >> those folks - >> i'm curious where you land on this i don't -- you know, the financial crisis was arguably a man-made crisis. i think today this is going to look much more like a natural disaster with man-made mistakes. >> unfortunately, it's not ruling out across the entire country at the same time unfortunately pfl from the policy perspective you'll have people in congress who don't think it's that big of a deal yet, who have not seen it in their own districts.

>> andrew -- becky is absolutely right. they have to go to congress for t.a.r.p. twice before they got it it doesn't matter the source of the problem in that what's happened now is creating a man-made crisis in the sense of markets being seized up. in that respect, the playbook is very much the same, which is job one is get markets to work it took some time last - >> steve, the difference is, we're talking -- the difference is, this is actually a main street crisis, not a wall street crisis yet you almost have to save main street to protect wall street. meaning if, in fact, the companies run into material problems, then it becomes a wall street problem you want to prevent that from happening. >> i don't agree -- well, look, i agree. look, they have to come back and help main street helping main street, though, is an be issue actually for down the road, andrew do you really want to help people right now to go out and do more things >> no, but there is -- there is

another idea let me tell you about a piece that you may not have seen yet former fed governor has a piece in the journal today he lays out this entire situation. he says that that jay powell, what he did last night, he filed a 2008-style barrage that will lylely be only modest help for the crisis at this point he's calling on the if ed to establish a new credit facility to ensure sound businesses and households have ready access to cash to get through the crisis under his plan, borrowers would have to demonstrate they're able to obtain -- that they're this unable to obtain credit elsewhere but they were solve ant january 1st before the crisis began what do you think of that, steve? >> i haven't read kevin's piece. he's a smart guy that sounds like something well beyond the fed's capacity -- >> in terms of being able to implement it >> yes. >> this goes back to the bridge loan idea. >> you talked about people getting a loan from the small business administration.

it's not an easy process the small business administration will make dollars available. it is not an easy process. the ability of the bureaucracy to get this money out there, really unclear at this point we just set up testing facilities we're just trying to figure out how widespread the virus is. my faith in government, perhaps, is a little less than kevin's, which i would find unusual because i know he has very little faith so, you have to be careful here. the 13-3 authority, if i'm not mistaken, would have to come from the treasury and treasury may have to go to congress for this sort of thing i do think, andrew, you have to triage this situation here job number one is get the markets to function. i'd say job number two -- and you have time for this -- is to deal with the wall street fallout. i think a lot of this comes down to your faith in the fiscal authority. can congress and the administration come together to provide meaningful economic aid that can avert worst case

outcomes in that's really the question. >> the question is, what form does that take, right? and this goes back to jason furman's idea of literally helicopter money, sending everybody $1,000 a check maybe that's the easiest way to do it. it's not to spend that money we don't want people necessarily running out on the streets and going to bars and restaurants. that's not the objective but the objective is to pay their mortgage. >> the answer is very easy. >> and their rent. >> the answer is very easy after exhausting all other alternatives, we'll finally figure out the right thing to do. >> in the process it could be a lot of pain. >> look, there's time on this. people need to hunker down right now. economic activity needs to come down that is a positive aspect of dealing with this virus. over that period of time, there will be some pain out there. it will be the job of the government to see and find a way to address that pain in terms of paid sick leave, in terms of loans to small businesses to get

them through again, andrew, in the middle of the hurricane the government cannot be out there providing loans to people. the government, that makes you apply for a loan afterwards, the government cannot alleviate -- >> what i'm saying is if you want to create confidence in the system, you come out ahead of the game and you'd say, we're going to be providing -- >> andrew, it's just way too late for that. what we learned is the government did not have an off-the-shelf plan i'm not blaming any one administration here for that forget that. there was no if in case a virus, break the glass plan that planning did not take place. it's too late to be ahead of the game, andrew. >> we are so far behind. what i'm suggesting to you, though, if you were trying to instill confidence both in the market, in the economy and the american be people, you would come out with a big plan that says, look, we will get through this and we will be providing loans to people when and if they need them -- >> they will. >> -- or providing cash when and if they need them and we can do

the math and divvy up the money in two months, if that's the case if people don't know that's an offer, the confidence in the marketplace you're seeing today and the confidence in the streets will be very different >> i'm actually optimistic they're going to get there i -- i believe ultimately in the american system. if you ever watched how we eventually geared up for world war ii, i guess we screwed up for like a couple years and then we finally got our act together and created the most massive military machine - >> i imagine we will get there i'm just suggesting daish. >> we're going to get there, andrew. >> we will get there the question is, when we'll get there. >> the failings -- >> i'm suggesting we get there earlier rather than later. >> i think they're going to get there, andrew. i just don't think it's going to happen very quickly. that may be okay in the sense of you don't need the economic activity right now >> okay, good. thanks steve, let's bring in barry

knapp, managing partner at iron sides. barry, let's -- how do you see things playing out at this point? we haven't spoken in a while >> good morning, everyone. a couple of -- a couple things come to mind in listening to your conversation with steve look, there's been three stages to this panic. the first one was supply chain disruptions and the delay in the global manufacturing and trade recession. it moved on to then the consumer demand shock, which we're clearly now in the midst of. and then the financial panic and i'm now on -- the thing that i would point everyone to that really was overlooked last week, and you guys, you know, andrew and steve's conversation just hinted around this a bit, which is really what kind of went

haywire last week was the mortgage market. there's lots of discussions about the function of the treasury market but you had reportedly the single biggest creation of mortgage supply since the financial crisis on tuesday, some $19 billion in mortgages were created because of the burgeoning refi boom. then you follow that up on wednesday and thursday, also very big days, 10-plus billion dollars. you created about $40 billion, yet mortgage rates went up on the week this is why, you know, the fed stopped the mortgage paydowns they agreed to buy $200 billion worth of mortgages if i was watching any particular part of the fixed income market this morning, that's what i would be watching. if you start to see that mortgage rate tighten relative to the treasury rate and the mortgage market really start to function, that is -- >> what does that tell us? >> that's the most direct channel for the fed into the

household sector. >> what is that telling us why did rates go up, other than rates at the end of the week >> it was just too much supply and a market that was stopping to function. remember the thing that kind of shocked even the equity market on tuesday was when the stock market was going down and rates started going up and that's the point when the so-called risk parity trade started working. that's when daliao started to run into difficulty. it was so much mortgage supply listen, the fed has been transferring -- or shrinking their mortgage portfolio for some time. it's something i've been writing about, about how this mortgage prepayment option was being transferred back to the private sector and eventually there would be a problem i thought the problem would be when they ended not qe, not because of the coronavirus but this -- getting the mortgage market to function is how the fed can most directly impact the household sector mortgage -- you know, mortgage

interest is a percent of disposable income is the lowest level since the fed began tracking it in 1980. they can drive that mortgage rate potentially down towards 3% that's a boom for the consumer on the other side of this. so, that's really what - >> you say there's too much supply what does that mean? who's getting stuck here who's not stepping up to it? the banks don't want to loan to consumers at these levels? what does that mean? >> they were just -- you just ran -- you just ran out of buyers by creating all this supply, you create a mortgage-backed security someone has to buy it. you know, the money management community, the bank community, you know, they're all out of the market. >> who wants to get locked into these things for 30 years. it's a tough commitment for a bank to take on. >> it is part of the reason it's a tough commitment as well, becky, is that one of the changes from post-crisis was to make the -- make the cost of holding that

mortgage servicing right, of actually holding the mortgage on bank balance sheets really problemtive. they jacked that risk-based capital charge way up. >> why >> if you look at bank assets, you see small banks are buying mortgages and holding them on balance sheets but not - >> because they thought there were too many mortgages to people who shouldn't have got enthem >> yeah, but that ese are fannie and freddie -- >> alex rover is joining us from jpmorgan securities. can you explain what's going on, alex, or at least add to this -- add to the discussion here >> yeah. so, i mean, looking at what the fed rolled out last night, you know, it's obviously sort of getting criticism from a lot of different sides. i think what they did will go a long way helping to stabilize the interest rate markets, which were in serious need of

stabilization as of the latter part of last week. they have done a number of things here. the rate cuts are the most obvious. maybe the least obvious are asset purchases. they're going to buy $500 billion in treasuries. they'll buy $200 billion of mortgage-backed securities which will help the liquidity that barry is addressings they'll buy $40 billion of treasuries today why is that important? we've been going through a period where -- with a fair amount of uncertainty about the economy in the market and, obviously, downward pressure on interest rates you know, that in sort of a technical fashion has led to an unwind of what's a very large levered trade in futures a lot of that has wound up through various means, putting a lot of collateral on the balance sheets of dealers to the points where dealers have been having trouble intermediating the market you know, the plumbing has got

clogged. i think what the fed has done with this package, take care of the plumbing right now does it solve everything and fix the economy and make the coronavirus go away? no, but it's going to stop things from getting worse in the system they've also put in place things to help the banks be more prepared to help out corporate and retail consumers i think in terms of -- in terms of lower -- you know, lowering the discount window rate, they took the discount window rate down to about 150 basis points effectively they destigmatized it what they said is after the 2008 crisis, it became, you know, sort of verboten for banks to use the discount window. now they're saying it's okay to use the discount window. they want the banks to be able to provide credit to individuals and to companies so, they've put in place things that will help them do that. they've also put in place a facility to help foreign banks

get more dollar liquidity. they're not just looking at the domestic banks they're looking at the cross-border flows these are also really powerful things for the markets here today. so, and then i would say the other thing i think is important is they've -- i think they've been looking closely at the money markets. the money markets are a key piece of plumbing as things are flowing through here we started to get some clogging in the money markets last week given sort of the flight to quality we've seen, the selloffs we've seen in equities, we've seen something on the order of about $200 billion move in the money market mutual funds just this past month. and so what that -- what's that done is i think it's create a lot of demand for short-term treasuries, so for bills and bills that have been somewhat scarce given the risk demand ist also created demand for overnight repo one of the things the funds are

concerned about is they're concerned about this money could move out just as quickly as it could otherwise. so, they're trying to be very conservative with their money. and so what we're not seeing is necessarily as much money being invested further out the curve so, prime money market funds, for instance, haven't been buying cp very aggressively. and part of that is they're looking at liquidity management. hopefully some of what the fed has done here would address that it would help, i think, if the fed gets to a point where they put in a cp facility for directed credit. that will take some time i think what they've done here is things they've needed to do sooner rather than later. >> thank you barry, we'll speak to you soon thank you both appreciate it. nike and apple among the big names closing retail locations in the united states courtney reagan joins us she has more on this front right now. you think this is just a precursor of what's to come? >> i really do i feel like pretty soon we won't need these lists and we'll say everybody is closed. they'll continue to change these

lists. at least this is what we have now when we're living in this new normal in a country where officials are asking us to limit our gatherings, encouraging social distancing and imposing curfews, and closing bars and restaurants. among the retailers we know right now are closed, mostly here for about two weeks, include names like apple, nike you mentioned, underarmour, lululemon, columbia, abercrombie & fitch and urban outfitters and warby parker, glossier, away, and that's not a completely exhaustive list. the good news is for most of these store employees, they will continue to be paid while the stores are closed. others are shortening hours. these are mainly grocery stores, which makes sense. they have to have time to restock their shelves and clean their stores these names include walmart and neighborhood markets, and sam's clubs locations, publix, natural

grocers, wegman's, trader joe's and some kroger stores banana republic and gap are operating under reduced hours. anderson estimates average annual earnsings will fall 18% for specialty retailers in ther coverage as a result of these closures aaron murphy estimates nike and lululemon's earnings will fall 2% and 3%. that's holding up better wild under armour could take a 16% hit. the national retail federation are telling consumers, quote, retailers, particularly grocery providers, are working with manufacturers, suppliers and government agencies to make concern essential products and services remain readily available to customers the groups are also urging customers not to hoard, saying, quote, hoarding products only

contributes to the fear surrounding the virus and any hoarder acting with malicious intent to drive up prices on a secondary market should be prosecuted to the fullest extent of the law that is largely, of course, referring to folks buying large quantity of things they are not using personally and trying to resell secondhand for higher prices. >> you saw that story on the front of the "new york times" over the weekend about the guy and his brother who had gone around and bought up purell all over the place and then amazon and ebay pulled it so they're not allowed to sell it and now they have 17,000 or more of purell they can't go rid of. >> i think that's why a lot of these statements put he's these statements because this fear hoarding begets more of it it becomes a psychological problem. when they see others buying it, whether they want to use it for themselves or more malicious, like what you're talking about, it makes the situation worse as we were talking about last

hour, all the retailers are working closely with the supply chains and also with the government to make sure that all the essentials will be there for us yes, we're seeing empty shelves, but that's because people are buying it much more than they normally are stores are truly restocking overnight and every day as much as they possibly can. >> courtney, before you go, and i know it's something we were talking last hour as well. as you go down the supply chain, not just the people working in retail, and i've been speaking with ceos all weekend, and one of their concern concerns is two, three weeks from now, getting employees to a factory, for example, getting an employee to a warehouse, getting -- may actually become more complicated. >> right, xa accountexactly. we've been watching what's been happening in china to see how that country rescaled up the workers going back into the manufacturing or distribution center and to see what's happening. of course, we know they are, i guess you could say, ahead of us with what's going on in the virus outbreak we know that the factories came

back online 25% at first, maybe 50% at first as employees were getting healthy again. to your point, the social distancing i think this is a new normal that is a legitimate fear. i think we all have to watch it very closely that just sort of goes even more to the fact that, let's not try to buy and hoard more than what we actually need so there is enough for everyone, so there won't be a problem because like you're suggesting, maybe they won't be able to get the normal supply that they would typically get because down the line it's not being manufactured at those same quantities. >> all right >> courtney, thank you >> thank you meantime, and to this very point that courtney was just making, store shelves are empty as the coronavirus spread shoppers across the country are, i hate to say it, panic buying and stocking up on toilet paper and pasta. frank holland joins us with more on that story. frank? >> reporter: good morning. it can take as long as five days

for a store to go from empty shelves to restocked and this high-demand environment created by the coronavirus, we're at the morton williams super markets on the east side where you would normally see things like pasta, meat, paper products, today those shelves are completely empty. i have spoken to food distributors and they say generally even if this environment, things like sanitizer and toilet paper can be restocked between the next day and business day after an order is placed with a distributor, however, it depends on what time that order is placed i've spoken to the food manufacturing saying they are shipping directly to the store with produce, it depends on where it's grown and what part of the country it's being shipped to a new survey from the national grocers association finds things like sanitizer, toilet paper and bleach, those are the most bought items, coinciding with the images we're seeing on

social media and on tv sales of sanitizer, they actually spiked more than 300% in the last week of february that trend seems very likely to continue after the president declared a national emergency on friday keep in mind, sales of sanitizers have been flat and many components used to make the bottles are sourced in china two kamexamples of the shock ths coronavirus outbreak is putting on manufacturers and the supply chain. that's something that walmart ceo doug mcmillan emphasized on friday >> specifically the areas where we're seeing pressure in the supply chain are surf cleaners, cleaning supplies, paper goods, hand sanitizers will be difficult to have 100% in stock on time. as soon as we get it, it's going. all the retailers will be working hand in hand with the suppliers to bring that to the market as fast as we can >> reporter: and as this outbreak continues, we've seen

the sales explode for shelf-stable items, usually canned goods and easy to store and ship to store. oatmeal has exploded 300% year over year. this coronavirusou outbreak, a third of household goods are sourced in china back to you. >> thank you for that report coronavirus tests may by roche were granted emergency approval by the fda, which can provide results in 3 1/2 hours joining us by phone is the ceo severin schwan this is a huge move forward because testing has been such a problem. why are you able to do this test so much more quickly >> if you look at the diagnostic

tests, actually, it's a lot about automation and through-put. roche has a highly automated platform at our labs, but we had to develop an assay, a test for the coronavirus. that's what we started to do in january and very happy that after record development time, we could bring this test on this highly automated platform last week >> where is the test available when -- when will it be rolled out and where would people be able to get access to it >> we got approval, be emergeem approval on friday the tests already left our warehouses over the weekend, so it is already available and in labs as we speak >> how many tests? we heard from the administration last night that i think they hoped to have something like 1.9 million tests by the end of this

week available what do you see in terms of how many tests will be able to process? >> as far as roche is concerned and the contribution we make, it's initially 400 tests per week we are, of course, ramping up supply as much as we can to provide relief to the system but for the first week, we shipped now more than 400 tests per week. >> where did they go are they going to places in the country that have particular hot spots? >> absolutely. it's all driven by medical need. for that purpose, we are closely working together with the authorities, the cdc in particular, to allocate tests to those labs and those regions where we can make the biggest impact during this crisis. >> there are a lot of questions because tests have been so hard to come by about who should be guesting tests right now i think the cdc and

w.h.o. guidelines say it should be the biggest risk or those in contact with people who have tested positive for this how quickly do you think we'll get to a point where tests are available for everyone >> at this point i think it's absolutely necessary that the tests are prioritized to patients who have signs and symptoms like fever, shortage of breath, et cetera, because there's a capacity constraint. there is simply not enough testing for everybody at this stage. for the time being, it should prioritize to the patients with the highest medical need. >> there are sometimes the tests come back negative but a few days later they'll come back positive is that the situation with this that you are just rolling out, too? >> the test is such, it's very reliable, but, of course, what happens is the situation is evolving very quickly.

infection rates are skyrocketing and as a result, a patient who tested negative one day might test positively the next day but as far as the test results, the reliability of the tests is very high. they are very high tests. >> thank you for your time we appreciate it we look forward to talking to you again soon. >> thank you. meantime, apple announcing all its retail stores outside the greater china region are closing now until at least march 27th take a look at shares of apple let's show you where things stand right now. $245.85, off right now about 11%, almost 12%. let's bring in an investor, peter krause we can talk about apple but i want to talk about the broader market let's talk about apple first to the extent that's a barometer or indicator or signal of

something, what is it? >> well, andrew, i think that apple is probably a microcosm for what we're seeing in terms of demand impact around the world as a result of the coronavirus. that demand impact is likely to be in evidence for the next few months and i think you see the markets reacting to that if you take the human element out of this, which is, of course, impossible, because we're all affected by this and you look at this octavebeing one probably have a three month to six month where demand will be impacted on travel, leisure, consumption, which is a major part of the u.s. economy, restaurants, hotels, all the things we've talked about, stores, and that's likely to have and is having a significant effect on the market so, i think apple is just a

microcosm of that demand impact that we are seeing >> peter, what are you telling your clients and i remember all too well, unfortunately, 2008 and that infamous weekend that you worked so hard on behalf of merrill lynch after having just gone over there but as you see this playing itself out, you're telling your clients what >> yeah, that's a great question, andrew i've been through about five crises or five market crashes starting in '87. '87, it was the russian debt default in '98 and long-term xapt, as you remember i was sort of in the middle of that as well, and then 2000 and 2008 and maybe even 2011. this market crash reminds me much more of 1987. sharp, emotional you know, '87 markets were actually very -- had a very hard time catching up they dropped precipitously in a very short period of time.

the '98 crisis, it was actually similar in that sense in that there was very little liquidity in the bond market you see that now 2008 was a different issue because 2008 you had in the center of the financial institutions in the world, you had serious, serious questions of viability, that banks were not going to survive, that large financial institutions were going to collapse, that funding was going to dry up and banks would not be able to survive that that was an existential threat to the financial system. we do not have that. we are not at that point. >> so, you feel confident in the strength of most of the large american businesses today? >> i feel confident that the strength of the u.s. and global financial system you can see that in the reaction that the central banks around the world have taken and, indeed, even some fiscal response that's already starting as to all of the corporate balance sheets, i think that's -- i'm not saying i'm not

confident in that, but i think that's a much more dispirit and harder to understand - >> a lot of investors are trying to do, and i was talking to ceos and major investors over the weekend and they were trying to map out if, in fact, because of the social distancing efforts to try to end the spread of this virus continue for many months, what that ultimately looks like, what the balance sheets of these companies look like. can they withstand it. what happens to the auto industry what happens to the airline industry we've talked about the impact, therefore, on boeing, therefore, on suppliers you can down the chain this is unlike 2008 or some other crises you're talking about, this is very much a main street crisis. >> absolutely. but you've got to think about what's the duration of this? take the human piece out for a second because we're - >> let's say it's a -- let's say it's three months. >> well, okay, three months. i think most businesses, most

large businesses will survive. of course, the small businesses are going to be in a very difficult position which is why fiscal policy has got to be focused on the main street economy and it's got to be focused on those people who will not have jobs and will not have incomes and will not have paychecks because consumption is going to be at the heart of maintaining some degree of stability in the economy but large businesses will be able to maintain a demand shock of that magnitude for three months that's not out of the question lenders are not going to collapse onto these companies. they may have defaults -- they may have technical defaults and some companies will declare bankruptcy, for sure but three months is achievable the system is not going to fall apart in three months. >> if you're right, if you're an investor today, you look at what's happening, you see where markets are, limit down right now, the etf suggesting it's going to be worse than that. you're looking at the dow off --

pretty much everything off 10% at this moment that's giving up the gains of last friday. >> which was effectively making up for the gains of last thursday. >> last thursday. >> up and down. >> what do you do, do you put money to work right now? do you say there's more to go here how do you think about it? >> look, i like to think about these markets as to -- what their implied risk premiums are. if you go back to 2009 the implied risk premium in the market was 900 basis points, almost 1,000, which applied a multiple of 8 1/2 times. now, that's with interest rates at 3 plus. interest rates are at 1 or less than one you could easily have a risk premium here of 6% or 7% i don't think it requires the kind of risk premium you saw in 2008 that would imply a 14, 14 1/2 multiple if you think $160, which is what the s&p earned in '19 which is what it's going to earn in 2021,

i think that's reasonable. that's a market in the 2300 at the bottom we're 2250 on the futures. obviously they're going to go lower. if i had cash today, i would be buying the market in this in some regimented and disciplined way. you'll never get the bottom. the market will recover. we've been through this before i'm not telling you that it's going to be easy it's not a walk in the park. this is a challenging market there's not much liquidity there's a lot of fear. markets are going up and down 10%. it's not the first time it's happened it won't be the last but, you know, the global equity markets will survive and there -- there are interesting investment opportunities here. >> okay. peter, always good to see you. wish i could see you on a better day. i imagine we'll be talking a lot more with you. thanks. >> thanks so much, andrew. the pandemic disrupting travel throughout the world. over the weekend the trump administration extended the european travel ban to include

the united kingdom and ireland steve sedgwick joins us from heathrow airport what's it look like on the ground there >> reporter: well, it's business as usual for the moment. of course, we're talking about 12:00 midnight eastern time, local time in london, 4:00 a.m. tuesday, and that's it for transatlantic travel in the other direction, the uk government said all but essential government to the u.s. should not be carried out as well traveling out of terminal two at heat row, you have united airlines, american airlines, delta and they have all come up with some pretty drastic cuts in the last 48 hours. delta cutting 40% of flights, grounding 300 planes american airlines cutting 75% of international flights. united cutting 50% of flights for the next two months. in march they already carried 1 million passengers less in the first two weeks. it's a blood bath on the airline industry as well the global airline travel group as well reckons already it's

$113 billion of lost revenues for the airline industry this year that's a figure i think that's even out of date already heathrow, as you know, is one of the biggest airports in the world. it's the second biggest international airport in the world. normally carries 88 million passengers we had a look at february numbers. february passenger travel was down around 5% the apac, asia pacific was down 30%. i guess now when we see the march figures it's going to be far more devastating in terms of what the airlines are saying, british airways the biggest carrier out of heathrow. they dominate one of the terminals here, terminal five. they have said this is an existential crisis they will be grounding flights like never before. virgin atlantic, the ceo has been talking when the need for governments to get involved and this could be very contentious

over the median term short term it's about keeping these carriers alive the ceo is saying for the british airline industry, they need 7.5 billion pounds worth of support straightaway that is trying to keep these carriers going we've just heard from ryan air's michael o'leary. he's like the southwest of europe as well they've just come out for april and may they will cut, becky, 80% of their capacity. 80% of their capacity for april and may. back to you. >> steve sedgwick, thank you very much. airlines making big changes as demand falls as we've been talking about. falling sharply and new travel restrictions in place. phil lebeau joins us now with more hello again, phil. >> hey, joe. you heard what steve was talking about, about the capacity cuts happening in europe. we saw over the weekend dramatic cuts by the u.s. carriers premarket. they're all looking to open 14 to 20% lower

american culting 75% of the international schedule united cutting 50% of the capacity for the entire system and delta 40% system wide capacity being cut in regards to united, this was a sobering piece of news from the company last night think about this, the revenue they're receiving is down $1.5 billion. $1.5 billion less than it was in march of last year they're hemorrhaging cash. they are simply having more cancellations than bookings at this point when you look at american, 90% of its long haul planes are going to be parked that's because they have nothing going over to asia very little. very little trans atlantic so they only have a fraction of their planes that they're going to need there. in terms of what steve was talking about, about the trans atlantic travel here, this was the scene over the weekend look, at o'hare it was unbelievable six hour waits now department of homeland security services says they've

increased staffing that should help finally as you take a look at the airline index, keep in mind this is only going to get worse. it is not getting better when you talk to airline executives, almost all say the same thing day by days worse news more cancellations than reservations and they do not see a bottom yet that's why we see these stocks going to be opening up anywhere from 14 to 20% lower guys, back to you. >> phil, what does this mean for the employees? i mean, we had heard from some pilots last week that if the doors don't close, they don't get paid what happens to the flight attendants what happens to the gate agents all the way down >> reporter: we're now into the phase, becky, where united said they've begun discussions with the unions, we're talking about the flight attendants, pilots, attendants about some type of pay cut. the corporate officers are taking a 50% cut at united management will be taking a pay cut as well. you will see this across the board. this very to do this as they cut their capacity, a,

they won't need as many people working these flights as they were in the past and at the same time, these guys are in a cash conservation mode. they don't have the revenue coming in. they have to do this so you will see either furloughs, some type of a discussion happening with all of the airlines and some tough negotiations that are going to have to be had between the unions and the airlines. >> phil, can you speak to the implications for boeing? i mean, boeing has been its own story for the past several months now. >> yeah. >> or almost year, but given what feels like the perilous state the airlines will be in, what that ultimately is going to mean when, for example, these max planes become available. >> reporter: right well, the only good news, if there is good news, is that this is happening at a time when they are not delivering 737 maxes, which are the bread and butter, the majority of deliveries for boeing having said that, andrew, when this plane is ungrounded and

when deliveries are supposed to begin again, let's say in the third quarter, if everything goes as planned, early in the fourth quarter, you're looking at a number of airlines who might be saying, you no he what, we don't have the cash that we used to have so we're going to have to rework the terms here either in terms of pushing out our delivery or we're going to have to work out something else in terms of coming up with the money that you're expecting for us to pay you when we take delivery of these planes that's a fluid situation at this point but, again, the only good news, if there is good news here, is that boeing is only delivering wide bodies and not a lot. what were their deliveries last month, 17, 18, something like that but far fewer than what they will deliver when it's the 737 max and those deliveries begin again. >> phil, the other thing i was going to ask you, can you speak to the conversations that the industry is having with the white house and others in the treasury i've been on the phone with several of them, and as you

said, there is no travel stoppage right now but obviously there is concerns that there may be you know, bad news may be good news from a health perspective in terms of this social distancing and trying to stop the spread of this but the economic damage is clear >> reporter: i have to wonder, andrew, when you have governors in illinois, california, washington, new york saying we don't want people in a restaurant where there's 50, 60, 70 people in there, why would you want 100 or 150 in a steel tube flying across the country i'm not advocating for the airlines to have a domestic shutdown, but you have to wonder since the train is heading down the track in that direction in terms of social distancing now i should point out, i've talked with eamon javers over the weekend. when he has brought this up to the administration they say emphatically, no, we are not going to advocate for a domestic travel ban having said that, we're seeing what's going on with social

distancing you have to wonder if that conversation will change. >> the other question, i think we've got music, can states declare an emergency where they would limit air travel >> reporter: interesting question. >> to and from their own state >> reporter: you would wonder. if a state of washington says, we don't want anybody flying in here, can they do that i don't know that becomes a question of regulation and what -- who has control in terms of air service. >> let's do some work and figure that one out because i think that could be coming soon. >> phil, thank you. when we come back, we're watching the futures limit down this morning down by 5% that's as far as they are allowed to trade down until trading opens, but if you take a look at the tracking etfs, you are going to see much bigger declines dow etf down by 9.8% the s&p etf off by 9.7%. we'll have more on the global coronavirus pandemic take a look at the biggest pre-market decliners in the dow.

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>> breaking news futures are limit down this morning. even as the fed ral reserve cuts the rates. the market moves straight ahead. plus, state of emergency federal government, states and cities across the country take unprecedented steps shutting schools, stores and much more. i'm andrew ross sorkin along with joe kernen and becky quick. banks taking coordinated action to ensure money keeps flowing as the coronavirus outbreak sparks a rush for the u.s. dollar the fed, bank of japan, ecb, boe, bank of canada and swiss national bank will tap swap lines used during a financial crisis boj is also expanding.

corporate bonds, this in an effort to stabilize markets. looks like the market would open down on the order of 9 to 10%. you're looking at red arrows there. the cac off 8.5% dax off a little over 7% ftse 100 off 10% the ten-year note stands a at .783. we've got team coverage this morning on all the issues affecting your money the fed, the federal government's response to the coronavirus and more want to get to steve liesman and eamon javers they join us let's start with eamon in washington

eamon? >> reporter: yeah, good morning, andrew that action by the fed that you were talking about last night was exactly what president trump has been calling for for a couple of weeks now. he came to praise the fed, a rare turn around from the harsh criticism for what he said with the institution. here's what he said last night. >> it makes me very happy and i want to congratulate the federal reserve. they've lowered the fed rate from 1 to 1.25 and it's been lowered to 0 or .25 so it's 0 to .25 >> reporter: we are expecting the fed to take additional action and the national security council issuing a tweet overnight to stem some of those rumors that we've been seeing

online national security council saying text message rumors of a national quarantine are fake they say there is no national lockdown cdc.gov has and will continue to post the latest guidance so the administration for now saying no national quarantine. no national lockdown let's get to steve liesman for the latest from the fed. >> reporter: i've been on the phone talking to senior executives at investment banks on the effect of what the fed did last night it's very modest it's really light. we can't get any indication. the bullet points, there has been some improvement in some of the derivatives markets that were dislocated. something that was trading 225

basis points, 250 over the overnight index swap spreads is now down to 150. it was down to 175 last night. should normally be 25 over so it gives you an idea of just how much there is to go here finally, they're waiting for the fed to come in and make the purchases. we'll go through what the fed said in a second the fed is going to come in with $40 billion of treasury purchases. it will be throughout the day. some people said the effects won't be seen until these purchases are actually made. commercial paper market, however, is closed and they are looking for the federal reserve to team up with the treasury to come in and backstop the commercial paper market. part of that is because money markets are withdrawing from the commercial paper market. they're concerned about draws on their funds from corporations who provide some of that cash into the money market. these are ways that the financial system is kind of gummed up. let me go through what the federal reserve did. a, cut rates from 0 to 25 basis points $700 billion of asset purchases.

slashed research requirements to zero and eased discount rates. a lot of talk about whether the japanese banks have withdrawn or need to come back in at some point in time. that's one area i'm hearing. really, they're in a wait and see mode i think there's general agreement for approval of what the federal reserve did so far, but also kind of agreement, guys, that the fed may need to do more here and especially teaming up with the treasury to unclog some of these markets. >> steve, again, the concern is how the markets are reacting to this the internals of the market at this point what do you see? what are the technicals that you've been hearing about? >> get to the floor. >> i'm sorry to report, becky -- sorry, was that you? >> no. i think they're having trouble hearing you. go ahead >> oh, okay. several people i've talked to this morning say it's just too early. we have flows from asia. they're relatively light i'm going to be checking back with folks in 45 minutes or so i'm watching the screens i have here i don't know how indicative they

are of actual real trades, but we're not expecting any improvement in the commercial paper market that cannot remain closed as it's been over the last several days that needs to open up eventually but the question is whether or not we have better performance in off the run treasuries. again, these are financial system plumbing things i am not looking to the stock market itself. >> that's what i was going to say. these boards that we're watching aren't necessarily telling us any of the things that are happening or what the fed's actions were designed to kind of address. >> reporter: i imagine they could improve if you get a signal or some sort of message from these other markets that things are better there, but i think the stock market is dealing with a very, very different phenomenon, and that is to me the dramatic change in the economic outlook last night powell on the conference call said he expects a second quarter decline in output you'll remember, becky, you and i have had conversations over a very long period of time as

we've tried to process this virus and the impact on the economy and that it was going to be a first quarter weakness, second quarter readout that has pushed off three weeks, maybe longer. >> i'm glad to have you running this stuff down and making the calls. we'll check back with you. >> reporter: doing the best i can. >> joining us on the phone is mohamed el erian mohamed, you send t me a note a you said the technicals are flashing red why don't you explain your thought process here >> absolutely, becky thank you for having me on. >> thanks for being here. >> the fundamentals went from flashing red to constant red over the weekend we're having now a critical mass in terms of the economic sudden stop on the policy side, we were going from flashing yellow to green on friday and we're now

back to flashing red there's a problem with what the fed did and what the fed did not do as a result of that, you saw that very clearly in how the futures traded after the fed announcement and during the media call by chairman powell, because of that we are going to see enormous pressure on technicals i disagree with steve, which i don't like to do the equity market is actually telling us a lot what it's telling us is we will have a disorderly open and what's going to happen is contagion. when people cannot sell what they cannot sell, they sell whatever they cannot sell. be careful we are getting signal of market malfunction. hopefully it can get sorted out, but i really see red lights across the board people should be really careful out there. >> mohamed, we've had a guest earlier and i've heard it circulated in other places too, the idea of closing the markets. in your opinion would that be a

good idea or bad idea? generally you want the markets to flush things out. >> i wouldn't close the markets unless i absolutely have to and i absolutely have to if one is a health issue or -- health for people there or alternatively it is because the market imperfections have been so deep but if you close these markets, the reset is really complicated. >> so in your opinion, your advice is you absolutely have to see this through >> yeah. my advice has been what i have said over and over, do not waste your general policies. we've cut interest rates by 150 basis points it's the active inertia. it doesn't help. you end up doing the same thing over it's the terrorist who said something in english, the french person doesn't understand and the american tourist says it in english but louder, it doesn't

work this is active inertia. >> you think the fed and the other banks should not have done what they did? >> i don't think we should have cut rates. i think we should have been more laser focused upon areas of market failures, used much better policies. we have a range of policies that they haven't deployed yet. i would have gone with a laser like focus and then followed up with the more general interest rate cut when that can have an impact you know, allowing people to refinance and have more cash in their pocket, allowing people to have cheaper loans, that's not going to change the way they behave >> mohamed, can we talk about that i've been literally emailing all morning and on the phone all over the weekend with a number of ceos, government officials, big investors all whom are frankly as concerned as you are about the duration and depths of this crisis. what may be bad news economically may be good news

medically, which is to say social distancing may keep people and this virus from spreading or at least limiting it but the damage may be real. the question is when you start to look at industries that could get hurt if this gets extended out for any meaningful amount of time, what that means. how you look at this, we've been talking about this really unlike 2008 is a main street crisis not yet a wall street crisis but if it becomes a meaningful main street crisis it could also become a wall street crisis. >> yes, to all, andrew from the very beginning, was it the end of january, beginning of february i warrant you, this is different. economic sudden stops are different. the reason why they're different is because they destroy supply and demand at the same time. then we had an inherent inconsistency that you just mentioned. health policy at this stage is about separation isolation. social distancing. economy is wired for integration, interconnectedness. of course we're going to

sacrifice the economy for the good of the health issues. >> the question becomes if you're an investor looking at this situation, in large part you're betting on the policy response the question is, what is the right policy response? you keep talking about targeting the policy response, whether that's the fed or i imagine from the treasury department. the question is, what does that look like? >> so i told you what it looked like three elements one is sequencing. any crisis manager will tell you sequencing is critical in the fog of war environment that you're operating, you have to sequence your policy. be careful how much ammunition you use when phase one is first and foremost, protecting the vulnerable segments of society. protecting the most crucial sectors, health in the economy and ensuring the functioning of markets. then phase two is you deploy the general policies, massive

monetary stimulus, massive fiscal stimulus. then the second element of crisis management is proper communications tell people you have a plan. tell people what the first step, second step, third step is and indicate that we will learn as we go along. >> where are we then, mohamed, along that spectrum that you're talking about? >> we've gotten the sequencing wrong. we have deployed the general policies when they will not have an impact and therefore we have used valuable ammunition, andrew, valuable ammunition. i tweeted last night that i was both baffled and upset by what the fed did. baffled because it's clear to me that it's not going to address the market failures. they're going to have to rush with another set of policies that are much more targeted. >> mohamed, steve mnuchin's talked about going to congress this week for the ability to bail out companies, rules

effectively that limited his ability to do that post 2008 what does that look like and how, to the extent you can get ahead of it, even though we're behind it, how would you imagine that would work? >> so first i think it's important for the treasury to realize that the line asking for bailouts is going to be very long the airlines are leading indicator, but what they're going through is what others are going to go through. restaurants are going to go through the same thing cruise lines have already gone through the same thing industry after industry is going to go through the same thing so you have to have a basic understanding of what your principles for bailing is. not just who you bail out, sorry, but importantly how you bail out you don't want to protect everybody that's invested in companies. you've got to be very careful as to how you bail out. before you go ask for authority, please have principles as to who you're going to bail out, why and how. >> all right, mohamed. we are going to talk to you a little later this morning because that's kind of the stage

we've reached. we need to check in with people routinely every hour we'll check in with you before the opening bell you can go back and monitor things and bring us an update with this, but we really appreciate your time today. >> i will. thank you, becky. meantime, u.s. futures as we mentioned earlier triggering limit down joining us right now on the phone is the sec chairman, jay clayton. chairman, we appreciate you joining us on this morning what are you seeing in the markets? and the functioning of those markets right now. >> good morning, andrew. yeah, look, thank you to you, be becky and joe of doing a really nice job of framing the issues that we're facing. look, we have futures limit down this is something we experienced a couple of times last week. we will be monitoring that we had the circuit breakers.

there have been some speculation. contingency plan i think your previous guest. they're the critical

>> emphasize that. we ensure our business continuity the health and safety measures >> that's an interesting question and we all agree with it we're there for people to be there. what have you heard back home. a very skilled staff >> the exchanges it's all electronic and the coe. we've been in contact with it.

updating it. we've been in contact with them. that's what they need to keep those things going >> chairman, robin hood. which is one of the many trading services and got a cold. what do you tell investors.

>> the reporters. >> we should expect it as a treasury secretary, we're in the early innings. >> you view this situation >> we can look at that

with the business interruption it's at the heart of it. >> much stronger position. what i'm looking at here and i think we're seeing a coordinated action is our credit markets and making sure that our industries have access to the credit they need during what -- you know, for the next period of time as we get a better handle on how long this is going to be is an uncertain time. >> that was my -- i think part of the question, therefore, becomes when you look at the balance sheets of these companies, we talked about the airlines, hotels, et cetera, how long -- maybe even automobile industry, how long if there really is a demand shock and a

shock that lasts not just weeks but perhaps months, what that ultimately means to the health of those institutions. >> yeah. we talked -- let's just go over what we talked about already today. we talked about systems and operating today. we talked about credit markets generally and normalizing the treasury market. now you're moving into each company, and i can tell you, andrew, each company in america and probably across the world has been doing a cash flow analysis over the last few days. how much cash do they have how much do they expect will be coming in in light of the supply and demand shocks and trying to plan out and as your prior guests have noted that, becomes an idiosyncratic and targeted. you can target it by industry and firm to provide them with the resources that they need to get through what will be an uncertain period that's the way i look at it. >> investors invariably are looking at what the policy response may or may not be treasury secretary said this

weekend that he was going to congress to get some of those bailout powers that the treasury had in 2008 back what does that look like to you? >> well, i know that over at the treasury and the white house and in coordination with the banking regulators, they are working on the tool kit and, you know, as i said, i don't think that this is the same as 2008, but to the extent that those tools can be deployed in a way that makes sense today, i am sure that they will be asking for them. i was heartened as a citizen by the bipartisan support for the bill that went through last week and, you know, look, i agree with your prior guest, that we should be using the tools that we have at our disposal to get through this unprecedented period. >> treasury secretary said that there would not be recession, is that right >> look, andrew, you've known me a long time. i don't pick prices. i don't pick anything. my job's about function and i'm

going to stick with that. >> mr. chairman, we appreciate you calling in and we hope to talk to you again throughout this process thank you again. >> thank you for the time. >> thanks very much. the nasdaq telling investors that its systems remain fully operational and new listings and ipos will be going on. joining us is dena freedman. normally we'd have adena on set with us and we're being responsible and practicing social distancing. you notice we haven't had any reporters or guests on set with us today we have limited production crew around us and that extends to everyone, including even the boss here at the nasdaq. adena, it is good to see you nonetheless. >> thank you for having me on. >> you're very welcome what is the -- what has the nasdaq -- you and the nasdaq, how have you decided in terms of continuity in terms of however long this takes? >> sure. last night we made an announcement that tomorrow, effective tomorrow we will be

closing the phil ex floor. we are doing that to play our role in social distancing and to protect not only the people on the floor and the communities they operate in more we as an electronic market, we can operate our markets remotely we do have -- for the last couple of weeks we've been encouraging split teams and encouraging people to work home. we have split team environment for the markets themselves they can operate the markets remotely we are operating in a split team environment with certain people coming into the office and certain people staying home. that is the benefit of the electronic markets that allow us to manage our markets in a social distancing environment. >> we have been talking a lot about the different infrastructure and both fixed income and in the equity markets.

in terms of dislocations or things that aren't orderly or problem areas, what are you seeing at the nasdaq >> well, i think that in terms of the equities markets and the options markets because they're so transparent and electronic, they're so connected and every trade gets reported in real time, i do believe that we have seen certain momentary dislocations but also relatively orders derlly process of managing investor sentiment. the issue is there is a supply and demand imbalance and we are seeing that reflected in the markets real time. i think some of the other markets and credit markets and rates markets, the market structure is different the level of liquidity is different. the fed is taking action to manage the liquidity in the markets to make sure that they continue to function with the liquidity that's needed. >> we've been asking various people, we just asked the sec commissioner about possibility of ever closing the markets or a hiatus in trading. what would your feeling be on that

if there's a health issue, maybe you'd do it but it would have to be a last resort. >> right in our view it is critically important that the markets continue to operate. that investors continue to express themselves in the markets but also even last thursday during the very challenging markets we experienced we did have a small health care company go public. it is important, therefore, to remember that the markets are there too give companies access to capital particularly companies who are working with this virus and managing through this situation. having access to capital and a ready basis is critically important to fund their operations we do believe that the capital markets should remain open throughout this process. we will be here to make sure we do our part to keep our markets open. >> you had an issue. in general how much has activity been hampered and how badly will the nasdaq business be affected? what type of -- i guess you're going to have lower numbers than

last year at the same time in the quarter. what type of decline are you looking at >> well, in terms of ipos, we've had 27 ipos so far this year because we had a very fast start to the year. we certainly are seeing companies putting their ipos on pause. they are still filed we have the same numbers, a little bit more filings ready to go and waiting than we had last year however, i do think that they obviously will be working with their underwriters and we'll be talking with investors to understand how receptive are they to coming out to market in the coming weeks and months. we do hope with the social distancing to manage through the crisis early that we have an opportunity to continue to see if we have -- we can kind of restart things as the year progresses in terms of nasdaq, we have a very resilient business model. we have a lot of annual and recurring revenues the annual fees are paid in the beginning of the year so for the

listings that are on nasdaq and trading volume does impact our revenue. our business model is quite resilient in times like this. >> adena, i want to ask you as a ceo. some of the ceos i've been talking to, this is a complicated thing to manage. how do you continue to manage operations while you don't have people coming in how do you do everything remotely how has that played out in your shop >> we're a global business so we use video conferencing and remote management on a regular basis. it's of course to have people together and working collaboratively in the same location however, we have managed through mow the management in certain circumstances of the past. it is complicated. we start every day talking through our employees and making sure we keep our employees safe. we then move into the markets and manage through the market open and the markets in these very volatile times.

we finish the day planning for the next day it is definitely a complicated period we do believe we're prepared and we've had to manage through other shocks in the past that have made us much more prepared for this one >> we exit the set very quickly at 9 a.m. because we turn it back to the nasdaq and usually there's a big to do in here. there's confetti, there's lots of people around there's none of that right now i wonder how long you see this situation last i know nobody knows, but when will we be -- when will we see someone enter -- we're not thrilled to have anyone come at this point we leerk thatno one's been in here whmpt do you see that loosening up, do you think >> i think right now we're making sure that we manage to a new environment for marking the market open and marking the market close with an event of some sort. we are working towards a remote event so i think we can try to continue to make sure that we

mark the opening and close of the market in terms of returning to any sort of sense of gathering, i think that that's anyone's guess at the moment. i think right now the goal is to try to create social distancing, to flatten the curve and manage through this situation so we can actually come back into a more normal environment as quickly as possible. >> adena, you talked to a lot of other ceos because of your unique business line, being in contact with so many of them i've been, i guess, surprised at how quickly this is developing, changing not on a day-to-day basis but basically an hour-by-hour basis what do you hear from those ceos without giving away any conversations you've had with them what's the overall sense you've gotten >> it depends on the industry. i have spoken with a lot of ceos and depending on the industry, they can be just completely impacted in every part of their business or they're yet to really see the impact to their business so if you're in a b to b

software business and you have a stable and steady revenue stream, you're likely to feel pretty good about the recurring revenue you have in your model but you might not be able to get new clients to focus on that part right now whereas, if you're in obviously the hospitality or travel industry, you are materially impacted in every element of your business. it does depend on the industry the other thing i have heard is supply chain issues are starting to manifest themselves depending on the industry and depending on how much they're relying on other parts of the world to manage their supply chains but we are going to start to see that filter into the economy in the coming weeks. >> adena, thank you. very good having you on as always and we look forward to the point in the future you're back on set. >> i look forward to it, too. >> when we come back, retailers closing their doors amid the coronavirus outbreak brian nagel will join us next.

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as much as watching the etfs

the dow etf down by 10%. the staff, we've been watching all of these that area of time. they join us >> the bigger frame. the s&p 500 five >> the 2018. >> in other words, we had a huge

ramp in the last 25 minutes of trading. we're giving that back and more. hearing a lot of folks in terms of looking at target areas for where this might settle out is certainly people are now thinking it's a pure liquidation. we're getting december 2018 lows this was a 20% decline this is close to 30% decline over three weeks this is crashing this is not typical correction or bear market behavior. it's where you can act on your uncertainty over the outlook here's a comparison. the s&p 500, the nasdaq 100 and the russell 2000 what you're seeing is not a lot of differentiation except that if you thought the big problem with the market in late january, early february is the big nasdaq stocks were too over valued and that was your bear case, it hasn't hurt you at all it really has taken everybody down in fact, those guys less than the others the rule has been the more global industrials, the more

financials you have and transports in your index, the worse you have done. obviously, guys, what we're looking for now is to gauge just exactly how indiscriminate the selling is, what the intensity is compared to the worst day last week on thursday and just to see if you're seeing any effort of the market to differentiate between things that have been punished too much and not enough it might not be today's business but that's the process much like in october of 2008 that we went through. >> mike, just on that front, being indiscriminate, any signs of that in the futures this morning or in the premarket trading? >> yeah. it's essentially just -- it's a move to cash right now what you're basically seeing is there's a massive loss being built up in the overall economy. the only way you can register that loss or essentially try to get out of the way of it is through the public equities market so i think almost certainly eventually we're going overshoot. maybe we have overshot in terms

of registering exactly how much of this matters for public equities, but that doesn't mean the process stops when you get to that moment so right now it doesn't seem as if there's a lot of picking and choosing at some point, you know, the day's going to come when you are going to say, well, look at these eight dow stocks that have dividend yields and they're safe that kind of process will begin. i'm not sure that's what we're up to today. we have the market reacting to itself, reacting to credit markets and stresses in liquidity in the rest of the system hopefully the fed's actions are going to ease some of that that will be the first thing we're looking for. >> mike, thank you we'll check in in a little bit joining us on the phone is eric knudson. also janelle woodward is the head of fixed income at bmo global asset management. you're watching this, what are you thinking >> we're thinking that what the fed did last night may help heal treasury market liquidity, but

it hasn't addressed credit market liquidity and the real concern here, which is that this is not a financial crisis, this is a gross shock i think that point was made by several of your guests earlier this morning while it's very important for the treasury market to regain normal functioning because investors need hedges, as long as the credit markets are dysfunctional, as long as you see the gap that mike just pointed out between the russell 2000 and the s&p 500 where the real issue, the real concern is around smaller companies around the real economy, around businesses being able to finance their activities over the next several months, we're not going to have clarity on how we get through this episode >> janelle, what are you seeing in the treasury markets this morning? what kind of dislocations or did the fed actually help things what do you think is going to happen today >> certainly a move lowering yield which to us signifies another significant risk off

day. it's a little bit too soon to see how credit spreads move. when we look at the action over the weekend, it was significant. it may not completely alter the tone of the market but it was necessary. i think the fed has been in this case where in a risk management framework it's been responding to exactly what the market needed when we look at some of the liquidity challenges, it had to step in and be ahead of expectations this wasn't just about cutting the target rate but also what it did with our primary credit rate, encouraging banks to really step in as well as restarting asset purchases so it may not fix everything and change the tone, but it was absolutely necessary in our opinion. >> hey, eric, i wanted to go back to what you said and it's very true. based on all of my reporting, this is a main street crisis at this point and that's what people are looking at. my question to you as an investor is so much of this is going to beabout a bet on what the policy response is going to be, which is to say what the

treasury department and/or what you think the federal reserve may or may not do over the next several days and weeks so how do you make that gamble >> well, this is i think gambling is the right term i think that absent a clear view of fundamentals, it's very hard to pick levels and assess more short term trades. i think from a policy standpoint, what will make a difference is not necessarily classical fed policy because, you know, rates -- lower rates aren't going to help small businesses the fed buying corporate debt, credit could that requires some change in regulatory framework or structural framework, but it's already happening in europe and japan and that's been successful but it's really going to have to come from the fiscal side. an example of what germany did

making $600 billion available in credit for the business sector in germany, you know, a similar type of approach in the u.s. or targeted fiscal policy to support small businesses will be helpful. >> erik, if the government came out and said they were going to make the equivalent of a bridge loan, if you will, available to small businesses across the country and, again, the mechanics of how you would do that would invariably be complicated, how much would it add back to the market and how much confidence to the country >> i think those are the kinds of steps that will help people gain a sense of that they can get through what is looking like it should be a temporary situation but which can become a longer term crisis if you see kind of massive stress in the smaller company, small business area >> hey, janelle, in terms of the response that we've seen this coordinated effort coming from

the central banks, does that give you additional faith, the idea that this is being tightly coordinated? >> i think the coordination is important. i think to the earlier comment, it's not just about global central banks continuing to step in it is also about that fiscal piece, and i think what needs to be appreciated and what's different is that this is the first time we've been through a crisis where we have the regulatory constraints on bank balance sheets i think as a first order effect, we need to be able to figure out how we can support banks in lending and extending credit again, the solvency isn't about banks themselves which is what we saw in the financial crisis but the next layer down. so the fed can support that but we need tools to directly reach the businesses that are most at ris zblk janelle, erik, want to thank you both. >> meantime. >> my pleasure. >> meantime, apple, nike, under armour, just a few of the stores announcing store closures to

prevent the spread of coronavirus. joining us is brian nagel. it's good to have you on the program. just map it out for us as you look at these companies. most of them are big i think they can handle it, but if this were to go on for not just weeks but let's say months, let's say two to three months, some people have sent me tweets saying three months is too short so i don't know what your number is going to be, and you look at their balance sheet, how long can this go on and can they handle it, brian >> good morning, andrew. i think it's a great question. i'm obviously like everyone else looking at all of this coming out over the weekend i'm thinking about nike and just focus on them. nike said stores will be closed within the united states and other markets through march 27th look, nike financially is very, very solid so i don't -- there would be a point at which it would be stressful, but i don't foresee that the way i'm looking at this more, i think nike is doing the

right thing. i think they're moving to protect their employees, their customers, really do their part to help this transition of social distancing with our country. big question for me is when that consumer comes back. so these stores are closed for the next ten days or so. again, let's see what happens, but if the consumer comes back, the consumer can come back really fast. that would be a pause for nike a lot of these companies now, i know we talked about this a lot on your show, it's not just stores anymore we have gotten really well built out omni channel on per races. it's not going to cushion the blow. >> i think there's two issues. maybe we're talking to the same executives over the weekend. when people talk about three months, they're not talking about the stores being shut, they're talking about demand we're not just talking about demand in the united states because this is a global issue we're talking about demand across the world frankly the question is, you talked about ecommerce. right now there hasn't been a

genuine supply chain shock, if you will federal express and ups are still delivering things to people's homes the warehouses at amazon and elsewhere are still working. the distribution centers are working. the ceos that i've been talking to, what happens two, three weeks from now when the social distancing forces them to either shut or slow down or limit that activity and what that looks like >> look -- >> i don't know if that's in the market i don't know if the public really appreciates some of that. i don't mean to panic people but these are some of the conversations i'm having with ceos from larger companies. >> talking to our clients, it's difficult to say for certain i would say genuinely speaking, the investment community, people looking at nike from invest am,

they're not thinking three months at this point they're thinking something shorter than that. >> do you think that's appropriate? look, schools -- do it this way. schools in new york right now are closed at least i believe for the next five weeks. the question is whether that's coming to every city and state in the united states we haven't talked to spain, france, italy. these are some of the conversations that policy makers and ceos have been having on conference calls all weekend long >> from my vantage point, it's gift to say. i don't know how long this can last i think these companies like nike are doing the right thing i think they have -- they're financially strong enough to weather this

i think they're doing the right thing. >> okay. brian, we appreciate your time stay safe out there. >> thank you folks, it's not just the equities that are being hit. you want to take a look at what's happening with gold, oil, by the coin. let's start with gold. when you see equities for sale you will see other markets being safe havens. gold's usually considered one of those. gold is down 3.7%. that's a decline of $57 an ounce. oil prices obviously reacting to what the economic shutdown could be around the globe. you are looking at wti below $30 a barrel another 7.9% to $29.23 a barrel. it was down 15%. you're going to see right now, 14.5, a little bit more than that quick headline that just came in from american airlines we had talked with phil lebeau

earlier about what's going to happen to the employees, whether they would get paid. normally they're paid based on the number of flights out there. as these airlines are all shuttering the number of planes that they're going to be taking out, bringing in all of them, american airlines and their pilots say they have agreed to terms for coronavirus sick leave and pay protections. we'll talk with phil lebeau about this that's what's been happening with other markets as well that we've been watching. >> becky, thank you for that. meantime, we'll get the latest on the coronavirus outbreak kate rogers joins us with more. >> reporter: good morning. confirmed cases topping 169,300 worldwide with more than 6500 deaths europe is now the center of the pandemic in italy, hardest hit outside of china. officials reporting the number of deaths jumped 25% over the prior day. that's the biggest uptick. the number of deaths 1,809

the cdc recommending the cancellation of events with more than 50 people for eight weeks state and local officials are issuing new restrictions into cushing the spread of the virus. schools closing in 30 states they're closing bars and restaurants as well. america's top infectious disease official anthony fauci urging people to stay home. new guidelines on curfews and social distancing will come out today. a warning in spike in deaths if the behavior doesn't change. the white house task force is rolling out 1.9 million tests to 2000 signs deaths at 69 for much more check out cn cnbc.com back over to you. >> thank you, kate for more on -- for more on the u.s. fight against the

coronavirus, let's welcome dr. cori a bare, assistant professor with lsu and tulane university he's the ceo of community health tv dr. a bare, thank you for joining us >> good morning. >> from where you're sitting, we've had a lot recently about testing and about social distancing do you think we'll be able to bend that curve? are we going to look more like china or more like italy >> if we do what we're supposed to do, we'll look like china basically what -- your viewer is pretty savvy they're used to watching graphs. they see the flattening the curve graph. i don't know if they understand what we're trying to to. if you look at a curve on a graph, you'll see a speak and then you see a line that kind of goes flat. basically what social distancing

is trying to do is to decrease the amount of people ip effected at one time under the curve. so bear with me here understand what's going to happen is if you had 150,000 people, that's the spike that would be infected instead of having 150,000 people infected, weighed' rather have 10 people sick or 10,000 people sick rather over a longer amount of time so 15 days making sense so we don't over burden the system that is already over burdened so a single amount of area under that curve, whether it's flat or spiked, still 150,000 people, we want them very stratified. that's what social distancing does it makes it so everybody will be exposed -- who will get exposed over a longer teerd of time as opposed to one period in time

that makes the system able to handle it. >> one of our great fears again and again is we're unable to really effect the same type of actions like a country like china, a communist country can effect these we have so much social liberty that we can't do it. do you agree with it some of the things we're doing seem pretty close to what's happening there. it will take more voluntary initiatives here in the united states i think you're seeing some of that, too, just out of pure fear we might be able to replicate a better case scenario than what we're seeing in europe. >> yeah. the reason why, public health is a four-legged stool. public outcry, politics, economics then science most of the time those top three rule the day and science is probably at the bottom because

people get upset and they get nervous an panicked. just to let you know, increasing panic increases cortisol which makes your immune system worse science will state because of the infectivity, the amount will be decreased if we quarantine and keep people from having big zblaergs doctor, a lot of investors have looked at the charts on when this peaks, will we be able to flatten the peak governor cuomo is calling for basically the national guard and army to build hospital beds and hospitals. this state we have 3100 icu beds in the entire state. do you think we have a handle on this >> i do. i do i think it's probably going to get worse as far as what the

public thinks and the infectivity. that's because of testing, and the lateness of it, we don't have to go there people will feel comfortable the cases will go up as the tests come, the tests will be positive we're only testing people that have been exposed at this point. the testing numbers will go up people are feeling like okay my cousin was exposed, my cousin has it, my girlfriend has it, nobody's getting really sick because we have to remember that about 50% of people won't even have a symptom when they have a positive test. >> dr. abare, we keep hearing about -- jim stewart, who's a friend of this show, put out a tweet last night about a friend of his i believe in spain who's 40 years old who's in coma i'm just trying to understand how you see this -- without an

underlying condition i don't mean to panic people they're trying to understand what this means from a medical perspective. >> right when we have this, my friend had this, my friend had that, as a physician we can't look at things like that we have to look at how many global deaths are there? less than 10,000 global deaths there's 1.5 billion people in china. think about that when you look at 5,000 deaths, 6,000 deaths, 7,000 deaths don't get me wrong, everybody's life is important, but when you look at this statistically, that number is extremely low compared to the amount of people that have died in the united states or will die in the united states of influenza every year. i want people to wrap their minds around that number to know that this is going to be okay. we're going to ride this out >> doctor, one of the reasons we're worried about hospitals is because they're still overloaded with people from the flu and we haven't even -- >> exactly. >> -- weren't talking about that at all hospitals were overloaded with current flu season.

>> already >> already, which is bad but also shows that we weren't talking about that now we're talking about -- well, thank you, doctor. dr. abare, we appreciate t. we'd lake to have you on again soon if we could. >> thanks. still to come this morning, more of this special breaking news coverage on cnbc. futures hitting limit down shortly after opening last night but market etfs are pointing to a much sharply lower open. dow etf down by 10.5 s&p down by 9.5% stay tuned, we have more cnbc special market coverage coming driverless cars,

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working to provide an alternative source of power... ...for a cleaner way forward. breaking news. the futures are pinned at the lowest levels they can go. markets stumbling as the coronavirus makes its way through business, finance and everyday life across the globe here in the united states the fed makes another emergency rate cut echos back to the financial crisis and jshutdowns. corporations send employees home as america prepares to ride out the virus.

good morning, you're watching cnbc's breaking news coverage of the historic volatility that we're seeing in worldwide markets due to the spread of the coronavirus. i'm joe kernen along with andrew ross sorkin at the nasdaq market site becky quick is at cnbc headquarters markets have been locked since 6 p.m. they're at the lowest level that they're allowed to go pre-market we're watching the etfs that track the majors if we opened down this much it would trip a market circuit breaker. the dow is indicated down 10%. that would pause trading for 15 minutes virtually at the opening bell we saw that twice last week. treasury yields even after all of that extraordinary action that we saw are about where they've been, at least on the ten year you can see we're just under .8% at .78.

>> this hour we have team coverage from the fallout from the white house's response to the mashrkets to the emergency d move and what it all means for your money we're going to begin with eamon javers in washington on the latest from the trump administration eamon? >> reporter: good morning, andrew president trump came to the white house breefk room last night that he had been in touch with the grocery industry and major retailers around the industry on a conference call yesterday. he urged americans to stop some of that panic buying we've been seeing as people load up on supplies for an unknown period in home quarantine or self-isolation here's what the president had to say yesterday. >> you don't have to buy so much take it easy relax. people are going in and they're buying more. i remember during the conversation doug of walmart said that they're buying more than they buy at christmas relax. we're doing great. it all will pass

>> reporter: now here's what we're expecting on capitol hill. treasury secretary steven mnuchin said they will have to pass a technical correction to the house bill that passed on friday they say they'll be doing that through the afternoon in the house. mitch mcconnell said they want to focus on the next bill in the senate, that that is expected to include some broad economic stimulus the senate is back for a vote tonight on the fisa bill, as early as 5:30 this evening we are expecting later on this morning at 10:30, new update from the coronavirus tags being force that the white house officials not saying exactly what's on tap for that, although ultimately here i talked to a white house official this morning who said that the announcement for 10:30 is still tbd. very fluid situation here in washington, guys. >> eamon, thanks joining us to talk about the trump administration's response to the coronavirus and what's at stake for the economy, joined by

peter navarro, director of the white house office of trade and manufacturing policy. >> good morning, joe. >> how are you, peter. >> i'm doing good. >> two different ways to look at it let's talk about the response to the actual threat of the virus itself. >> sure. >> then we'll talk about trying to help the economy out. how do you think we are now in terms of testing with the latest initiatives that we've seen and maybe ramping up beds and gathering ventilators from dod and wherever they happened to be you saw all the people last week gathered behind the president and ceos as well are we on our way to test to the extent we need to? >> joe, let me tell you about what i've been doing which will answer that question directly. as we ramp up the testing this coming week, on friday i got the word that we may have some issues with enough swabs, so the

problem is because of our globalized supply chain, a lot of them were over in europe that needed to be here so what i did was call up the pentagon and i got a unit there to dispatch a mil air plane and got wheels up 48 hours over the weekend. we're working hard on this we had a problem once we got the plane from europe over the u.s. soil, then we had to get it to four different cities. athens, ohio, cranberry, new jersey, a couple in california, including la what i did there is i called up the ceo of fedex, he picked up on the first ring. i said, fred, i've got a problem. can you get me a couple planes to get these things to the people where we need them in trump time he said, sure. he called his son who runs logistics for him. we talked and as we speak, we

have the plane in the air that's going to land at 2 a.m. tonight. it's going to be met by a fedex planes and we're going o have 1 million swabs on 59 pallets that will go to the american people so we can get tested thech that's one of a series of flights we're going to be running over the next ten days this is the kind of thing that we're doing. it's not just a full force of government, joe, that we're throwing at this it's the full force of the private sector and fed ex has been instrumental last week honey well said they can get up to mass production within 30 days with a little help from the government in terms of moving some paperwork through and so on friday night i got them to submit their proposal i got assurance through hhs they're going to flip that within a couple of days and as we speak, honeywell is getting

ready to set up a mass factory in smithfield, rhode sland so, joe, to your point, these are the kinds of things that we're working on 24/7 here at the white house. >> that's one example of what needs -- >> two. >> two examples. on friday we saw the markets did rebound during that meeting with the ceos and the president highlighting some of these efforts to get the testing done. we're headed back into the soup today giving back those gains. in your view, what we heard about the ability to ramp up testing to the point where people that want a test can get a test, that's going to be offline today, tomorrow, next week to the point where we're knowing where we're going to stand. >> i'm going to let the task force answer that big question i'm doing everything possible and we've got a lot of people doing everything possible to make sure the supply chain's intact to get where we need.

i mean, the big issue for me now, and i was listening to andrew earlier, i think what he said was right you know, the market response is going to be dependent on the policy response. i see, joe, four points of the compass we have to hit one of them certainly was what the fed did. that will help with liquidity issues one is what the house did passing that bill and the senate might pass, which is simply it's a relief package, zwrojoe. it's not a stimulus package. it's great that people won't have the choice of going to work sick or staying home and going broke. that is such an important policy so we can mitigate the virus there's two other points to that compass, joe i was heartened by the tease you had there about how senator mcconnell wants to move now to a broad stimulus package we know what the president wants. he wants a payroll tax cut until the end of the year. in my judgment, that's the best

possible fiscal stimulus because it's simultaneously a pay raise for american workers of 7.5% it's an extra paycheck every three months it's also going to help our small and medium-sized businesses with their cash flow problems the fourth point of that compass, joe, is going to be targeted industry assistance for the most heavily impacted. my view is that if we make those four policy responses and we do it in trump time, which is to say this week and a matter of days bring the house back, get them into session, we're going to be just fine. this is the time where america's going to ban together and we have to work together and we have to do things quickly. we can't fiddle around >> peter, i agree with you let's talk about the last two pieces of that targeting stimulus effectively or bailouts to specific industries we heard the treasury secretary over the weekend say he wants to

go to congress to ask for the ability to do that how do you think that plays itself out >> we'll let the treasury secretary work with the hill on that, the industry assistance portion. there are a lot of different ways that can be done. my big focus now, andrew, is making sure people understand how important this payroll tax cut is we take it to zero through the end of the year, it's enough stimulus with everything else going on to offset the coronavirus wuhan virus headwind. >> what do you think if you're not employed, you're not going to be a beneficiary. >> that's why we have the targeted relief. we have the people on sick leave, furloughed for sick or whatever, we have that particular targeted relief there's going to be unemployment benefits what we have to do is all of these things, andrew that's what i say.

look, this is a crisis that tries our souls. we are up to this crisis we just need to do what's obvious on the chess board to do as mitch mcconnell indicated, that's a broad stimulus in addition to the relieve package, industry assistance and what the fed did today. you know, we're going to get through it. >> peter, let me ask you to respond to this. i know the administration is scrambling to get how much help it can to this country "the new york times" saying the u.s. tried to persuade a german firm to move its research work to the united states, according to german officials, raising fear apparently in berlin that president trump was trying to assure that any inoculations will be available first in the united states and perhaps exclusively. can you speak to that? >> what i can speak to is this broader interesting issue of how dependent the united states of

america is on a global supply chain, not just for its medicines but for its medical supplies and medical equipment and as we speak i'm bringing an executive order to the president personally asked me to move quickly on this issue, and the essence of the executive order, which we hope to get to the finish line by the end of the week, is to bring all of that home so that we don't have to worry about foreign dependency 70% of our advanced pharmaceutical ingredients comes from abroad. we have facemask issues, goggle issues, things like that if we get this executive order through, it basically attacks the problem in three ways consistent with what president trump not only has been governing on but campaigned on it's buy american, it's innovate and it's deregulate. and the buy american piece is important because the va, hhs and the department of defense

buy a ton of medicines, medical supplies and equipment we need to have them buy that from american producers on american soil, and what that will do is attract investment. we have a problem with the fda and the epa in terms of sighting and operating facilities here in america. so we're going to deal with that again, what i've been doing, andrew, joe, becky, is i'm working to get a bunch of money that congress appropriated in emergency supplemental to flip a switch in an advanced manufacturing facility in virginia within 30 to 45 days so we can make stuff here and do it more cost efficiently than everybody else around the world. these are the kinds of things that this white house is moving on at full speed and we're going to get through this and everybody is on this. >> so you are -- you've got your ears everywhere, peter

probably a secretary mnuchin question is the treasury and secretary mnuchin satisfied with the orderliness that's happening in the stock market even though it looks like we're down 10% today that puts us down near 30? are they satisfied with that i can't imagine that the notion of actually halting the markets has even been raised at this point. do you know? unless it was for health reasons. >> not my lane my charge here, joe, i'm a soldier out on the front lines making sure we've got enough swabs, masks, making sure we're bringing our supply chain home so that's what i'll focus on i want to assure wall street and the american people that we're tackling this. we're working 24/7 here at the white house, remote if you're telecommuting. it's all hands on deck i've never been more proud of this administration. >> okay, good. >> can i ask one more question

>> go ahead. >> peter, i know a lot of questions particularly for small businesses in this area where things are starting to shut down in seattle too, i would imagine. what happens for the restaurants, the bar owners? what kind of relief can they be expect to be getting when they're told they have to shutter at least for the foreseeable future >> i think that's the relief package the hill is debating on. again, what i'm concerned about, my lane here is the broad fiscal stimul stimulus i can't stress that more there's going to be a lot of -- there's going to be people not working but the majority of people will be working that's where that broad stimulus comes in and we help people. four points of the compass we have to help this from every kind of angle. >> thanks, peter. >> peter, thank you. appreciate it. >> my pleasure >> keep working. >> thanks. >> i'm working. >> all right thanks. as we've been telling you, the futures are pinned at the

lowest level they're allowed to go before the opening bell we're paying close attention to the etfs that interesting the major markets. fair value down 5% for all the futures contracts. if you're looking at the dow etf, it's down by 10%. s&p down by 9.75%. at the opening bell there are additional circuit breakers that would kick in in opening trading. if you do see the major averages down by 7%, that would force a 15-minute halt in trading. the next halt would come at 13% down these are numbers we'll be watching very closely today. joining us right now to talk more about what's going on, steve liesman, mike santoli and on the news line anastasia a.m. amarosa and greg ik from the wall street journal. mike, why don't we start with you to talk about the markets moves. what we're seeing and what that

could indicate as we get close to the opening bell. >> yeah, obviously, the market would -- i've got you, mike. >> what's essentially going on is the market is placing everything in the too hard pile. it always rushes to price in the future right now what we're pricing in is an indefinite intentional overreaction of the economy. what i see in terms of levels doesn't matter in the indexes. it really is a very much indiscriminate liquidation type of move. we'll get to further extreme extremes last thursday you could compare it to periods of '87 and 2008. now we'll have something more consequential in terms of the intensity of this down draft in a short period of time i'm much more focused on non-equity issues like the credit markets, like how they trade, whether we see signs of stress building or stress easing after what the fed did last night. that really would be the exacerbating factor beyond simply the market basically

deciding it cannot handicap what's going on in the near term economics. >> steve liesman, you're looking at that too. what have you seen and what have you heard about calls you're making >> i've been on the phone most of the morning for different people and on the internet everybody says it's too soon to tell, becky. there's two basic themes one is, this is not something that the market is going to reprice on the come. essentially waiting for the fed -- expecting the fed to act. they're going to wait to see how the actual actions by the federal reserve have an impact on the market. the timetable is the fed is in the market doing repo right now. there are a series of purchases where it's going to buy $40 billion of treasuries and i think mbs, they may be treasuries throughout the day. if it's going to have an impact or positive impact, that's where it's going to be that's on the one hand on the other hand, i hear people talking about what the fed is

not doing and that the commercial paper market is not trading well at all. the federal market said nothing about commercial paper that's where i'm hearing a lot of discussion that the fed has to come in here and be a buyer to are that i believe it needs the treasury back stop. >> greg, let's talk as to what you're thinking about. the actions you've seen from the fed and what you're hearing about the market, potential problems at this point >> well, i think what the market is basically telling you is that they know that the fed is out of bullets, at least traditional monetary bullets the market responded very badly to the first half rate cut and they responded badly to the full rate cut the fed has used up whatever conventional ammunition it has it's not sure that the ammunition wasn't well calibrated that said, in terms of what they did with the liquidity stuff and the buyer of last resort on treasury will make things stop

getting worse. it's the lender of last resort fund like steve said, i think we have to see how the markets behave and the way the fed implements this plan to see how quickly it will have the desired effect. >> go ahead, becky >> no, go ahead. >> i was going to ask greg you covered the financial crisis we've been talking about all of the measures that the fed has been taking and may be able to take in the future one of the things we talked to peter navarro about and one of the issues cropping up is what you think the treasury may ultimately need to do when it comes to industry, big industry, small businesses to the extent there's an opportunity to provide a bridge loan which may be a complicated thing to do but conceptually is what is necessary. >> i think there's a lot of things they can do they have to make a tough decision

those that are i williquid. they're overcoming the reluctance of the market to provide funding. the bigger problem is companies are potentially insolvent. the business is going down because they're getting no revenue for the foreseeable future the model you want to look for there is the airline bailout we had after 9/11 congress passed $5 billion of cash assistance and $10 billion of loan guarantee which are administered through a board by the fed chairman there needs to be a mechanism that makes that distinction. one of the problems you're deeg wi dealing with, those things take time the fed can move relatively quickly to create something like a bailout facility there will be a lot of criticism and second guessing whether you're throwing good money after bad and whether you're bailing out wall street and corporate america instead of working family. >> anastasia, what are you thinking this morning? >> absolutely spot on.

the missing piece of the puzzle is the fiscal response and providing assistance maybe with credit facilities to the businesses that are going to be impacted by the containment measures, but the reality is it is going to take time. maybe it's a few days, maybe it's a few weeks but it's going to be negotiations to get there. from a market perspective the reaction we're getting is we could see more of the plus or minus 5%, 10% down days because it's going to take time for the policy makers to come up with the adequate response. having said that, i think they will ultimately get there and testing helps. the fed stimulus package absolutely helps, but we really need to see something closer to the $500 billion overall fiscal package who provides the offsets to this company. definitely some patience will be

required in the markets in the meantime >> steve, again, this is moving pretty quickly we're not talking day by day, we're talking hour by hour and maybe more quickly than that what should we be watching as we get closer to the opening bell what are you hearing back from all of the market participants you're talking to? >> reporter: i think we have to see how some of these spreads trade. there is some consternation about the bank of japan. some japanese banks have withdrawn from the dollar funding markets. they were hoping for better guidance to use the dollar swap wise that did not come. we'll have to watch how commercial paper trades. we'll have to watch how the different treasuries trade versus derivatives, on the run versus off the run i will say one thing i don't want to be too optimistic here. andrew and i have had running discussions about the difference of what's happening versus the

financial crisis as far as what i can tell, maybe one good sign here that we do not have bank solvency problems. that was a huge issue in the financial crisis as far as we know, the banks are well capitalized indeed, one of the issues out there right now is the federal reserve trying to get the banks to use what liquidity and capital they have. it's a very interesting statement last night that the fed put out, as you get closer to your liquidity coverage ratios, banks are very concerned if they get close to the ratios they will be penalized by the fed. there is capacity on the part of the banks because there are not solvency issues and we'll see if the fed is effective in getting banks to step up. >> steve, i think you're right one of the things that happened in dodd-frank, big battle over

hqla. >> absolutely. >> high quality lick witt assets. >> love it. >> if every client called and said they wanted to draw down, they would have the alliance available for 30 days. >> right. >> the test given the demand issue, social distancing that may be required to minimize the spread of the coronavirus is what happens after 30 days that's the hard part to figure out. >> fair enough andrew, can i give you -- >> my question from a policy perspective, whether what they need to do, in terms of giving confidence to the market and the banks -- >> yes. >> -- whether they can actually extend that out? >> right there's a variety of things the federal reserve can do to give banks more to step up. i'll give you one that i suggested last night to a top investment banker. cancel the upcoming stress tests. why? because the banks are being tested rate now under stress what would be the point of doing an actual stress test?

this could also potentially free up some fire power on the part of the banks other issues -- >> those are good ideas. those are good ideas greg, what do you think about it >> yeah, i think that any sort of like comfort the fed can give the banks that they're not going to essentially come down like a hammer if there are marginal breaches here's the thing i worry about after the t.a.r.p., after all the measures the fed took out to help the banking industry, there was a nasty year's long political backlash last week we saw some of the people saying if the fed is going to lend $1.5 trillion to wall street surely there's $2 trillion for medicare for all. if you're a banker you're worrying that any effort to comply with the fed's pleas,

they're asking do i get crucified in congress? >> i think the answer is yes and there's no way to be through it. they've been through t. >> exactly i do worry about that. we'll pay the price to risk the stigma of being a victim -- >> greg, don't you think this is considered -- this is being considered, i think, a natural disaster we may have made mistakes along the way as opposed to a manmade mistake which was the 2008 crisis. >> that's a good point that's an important distinction. i would say though if you're a banker, i haven't spoken to enough to have a good feel for this, the question you're asking yourself, is the problem that my customers are i will liquid and need temporary help or are they going down your typical banker is making a

tough decision i can go to the fed and borrow for the customer >> that depends on the fiscal stimulus, too. >> right right. so then you get back to the point that i think there are other parts of the government, not the fed but other parts of the government that can help potentially dissolve the firms and pump cash into the economy to give degree of comfort and confidence that at the end of the shutdowns and social distancing that they will have viable businesses and demand from customers. >> steve, anastasia, greg, mike, want to thank you all. we'll be checking with each of you soon. >> and if you are just waking up, the futures are pinned at their lowest possible level that they could trade since about 6 p.m. last night. because of that we're watching the etfs as we do, closely track the major indexes so we can get a better idea of the damage this morning down 10% now indicated if suddenly the futures were

able to trade where they wanted to, that's where the dow would be take a look at how some of the biggest dow components are trading in the free market jpmorgan down 13%. take a look, you saw boeing. there's jpmorgan sorry. and then apple and microsoft, some significant double digit losses point out that we did -- it was a vol la teal week that's good. looks like 10% this morning so far. meanwhile, some of the workers that could be hit hardest are the gig economy workers. uber will offer assistance to drivers if they are placed in quarantine uber eats is going to help

restaurants. joining us to talk about this and more, nelson giatti. good morning, nelson thank you for joining us this morning. tell us anecdotally or statistically given you have the data and the numbers, what the falloff in drives and businesses look like in the past couple of days. >> so first of all, andrew, the most important thing for our company right now is to make sure that we are working with the local health authorities to help flatten the curve we have a team in con stand contacts and we're doing with a number of different things some things we're doing, as you know, they want people to work from home so we've initiateds that we did announce that we will be helping compensate drivers for 14 days if they are guaranteed or affected by the coronavirus we are making sure that we pass on to our drivers all the

information that we received from the health authorities. we are working on disinfecting for the drivers to help them feel safer in their cars as you mentioned this morning with uber eats, what we're doing is actually eliminating the delivery fees in many of our markets for independent analysis we'll deliver over 3,000 free meals to health officials and first responders on the lines helping with this. we're doing what we can. in terms of our business, we're -- everything this morning talks about liquidity. we've done a good job in terms of making sure we have ample liquidity. we have over $10 million of cash in our balance sheet long-term debt has no triggers or covenants first maturity is in 2023.

while we have a revolver, we don't plan on accessing any of it because of my experience, we are doing a fair amount of stress testing. we believe we have ample liquidity to make sure we can make it through. as you know and as your guests are talking about, during these times it's not about profits and losses, it is about liquidity. >> nelson, let me ask you this i'm less worried right now about the liquidity of uber. i think the company itself will get through this the question is so many of these gig workers are effectively their own small business and demand is falling off a cliff and for got reason and many ways you may want demand to fall off a cliff. what from a policy or corporate perspective can be done for those drivers and, therefore, by the way long term for the economy and then the demand picture on the other end. >> sure. so first of all for the drivers, in this country today if you're

an employee, you get benefits. if you're a contractor, you don't. so we actually think there's a third and a better path. so today in the u.k. and france we actually are able to provide our drivers with benefits, including health insurance if you look at our ballot initiative, andrew, one of the things we're promoting besides minimum driver earnings is also benefits so we actually think there are ways we can in the private sector have worked -- >> what keeps you from offering benefits in the united states? >> there are laws we're working through, becky today in the u.k. and france, we do >> what are the laws that are preventing you from offering benefits to your employees or contractors? >> no, no, to employees you can. to contractors you can't >> nelson, in truth, you've been fighting the contractor issue in california throughout the country. >> you don't want to say they're employees. >> they're not employees most drive part time

only 10% of the drivers drive what you consider full time. what they like is the flexibility on our system and they've told us this what they would like are some benefits to the extent we can get the rules changed -- >> starbucks offers benefits to the part-time employees. >> they're employees, becky. >> sounds like you could -- >> the question is about global demand what i would tell you is this. as you know, we are a large global company we're diversified. what we've seen to date is our uber eats business is about 25% of our gross bookings today. that business continues to manage through the crisis. on the ride side of the business we are starting to see over probably the past week and a half more impact in certain key cities, particularly as the crisis has spread towards western europe and in the united states so in a city like seattle, where many -- most of the residents now are working from home and they are curtailing going out,

you are seeing some significant impact in the 40 to 50%, you know, it terms of what we're seeing today but, again, this has been over the past week and a half we do expect over time that it will be a city-by-city thing the one thing about our business is we do see some recovery in hong kong that was dealing with the virus earlier, peak to trough we saw rides decline 45%. that was in the last week of january. we're starting to see those rides come back. our uber eats business has done better than we anticipated we do expect it would have impact we're doing what we can do to manage the containment. >> final question because the hong kong experience is perhaps the model we should all think about. you're saying it went down -- just so we're clear, down to --

40 to 50% down and is now where in terms of the return >> i would say it's probably come back -- so, again, peak to trough the maximum was 45. it's still probably about 30% off i would say today but we're starting to see a steady decline. it's actually flattened out. we do expect in our business, as you know, we are largely variable cost business we do not have large expenditures, we do not pay for slotting fees. we do not have cars that run empty. we do believe our business can recover. we know that we're an important part of how people get around, including you, andrew, as we know. >> as you know. >> so when people start going back to work, we know that our recovery should be aligned with people going back and moving through the city. >> nelson, we really appreciate you joining us and helping us through this you lived through the financial crisis. overnight we got numbers out

of china their first look at what's been happening with their economy retail sales down 20%. record low consumption numbers now we got a terrible print on the latest empire state manufacturing data here in the united states. rick santelli is standing by in chicago. rick, walk us through it >> reporter: well, obviously it's an old number in so many ways, we all know that, but minus 21.5 is the worst level in 11 years for empire which takes you back to maybe minus 33.7 in march of '09 there's only one number worse which is the 20-year low of minus 34 we have our gps. the issue of whether we're looking at chinese data or japanese data or german data or any of the car data, we know it's going to be impaired and impaired in a strong way the bank of japan and the ecb

did not lower rates. i find that interesting. as for how this is going to affect the markets, right now our yield is 34 on the two-year note the low interday was one week ago on the 9th which was 24 for a two year, 31 for a ten year, 69 for a 30 year we need to keep these in mind. we can't garner much information. the curve's flattening a little bit. we're down a few basis points more on a ten year than -- but in the end whether the fed is going to buy, going to tweet, keeping it going is all that matters. i can't tell you with rates. it's not a financial crisis. no money coming in how will they differentiate between the zombies that shouldn't get money and how they deal with it, there are complicated questions. >> what are you hearing about the stresses on the treasury market today >> reporter: you know, i think the stresses are going to be

around it's impossible for them not to be, but i don't think the stresses are beyond any expectations for many who have been observing these markets for many decades the fed has two big cans of degrees for the gears. probably more than we need the whole notion of quantitative easing, there will be plenty of buyers it's just that there's not plenty of buyers and sellers at every moment i think the fed is there to address those in the big picture. >> rick, thank you major u.s. air lines are taking some pretty drastic steps to try to confront a sharp dropoff in demand all because of the spread of the coronavirus. phil lebeau joins us with more this is a quick changing story this morning. >> reporter: yeah, becky, we'll talk about the u.s. air lines in a bit. we've sign wire flashes regarding virgin atlantic. eight weeks of leave the staff are going to be asked to take over the next three months it will be grounding 80% of its

flights. here in the u.s. regarding united airlines. last night it announced it will be cutting 50% or its capacity by 50 perfection percent and demand is getting downgraded to a hold let's move on to delta they said last week they were going to cut by 40%. because of the travel restrictions with the u.k. and ireland, we're seeing flights whether from jfk, detroit, other hubs, they'll be cutting them back, eliminating them then you have american cutting the international capacity by 75%. it was downgraded to neutral finally, ryan air. another taste of what we're seeing especially over in europe ceo mike o'leary a lot of this in europe with the airlines, countries are saying no flights from outside, whether it's poland, the ukraine, et

cetera they're saying we don't want any flights coming in. that's why the european airlines are reacting grounding their fleets here in the u.s. the focus is what does d.c. do to, a, help the airlines, b, are there further travel restrictions. >> virgin airlines, the eight weeks of leave they're asking staff to take, is that paid or unpaid >> little unclear. unpaid is what i'm being told. unpaid this is what you mentioned about american pilots. you'll see this increasingly happen with the unions and all of the carriers working on new agreements in terms of what happens with pay cuts, furloughs, et cetera because they all have to do this the airlines are now in a cash conservation mode and they have to work out something with their unions at least in the near term. >> all right phil, thank you. we'll see you very soon. the number of coronavirus cases in the united states has officially topped 3700 with 69

deaths as government officials close schools and mandate closures of bars and restaurants, the cente centers for disease control is suggesting closing events of 50 people or more joining us is dr. scott gottleib he is the former fda commissioner and he serves on boards of lumina and pfizer. scott, you've been sort of guiding us through this almost every day. where do you think we stand right now? >> i think right now we're about six weeks -- we're about two weeks into the process i think the difference for us is we identified our community spread much earlier than china i think we're starting to take mitigation steps much sooner than they did. china did just about everything wrong during those six weeks i think we're doing a lot of things right currently notwithstanding the challenges

we had getting the diagnostic steps deployed which will be fully deployed i think by the end of the week there will be much more diagnostic screening the steps that the government is taking which are very aggressive are going to absolutely impact the trajectory of this epidemic. i think we need to continue to do that. we need to have a difficult march so it will peak out. if you talk to folks modeling this, there is a sense it will peak in mid to late april and heading into may we'll be coming down the epidemic curve. the goal is to keep the infectious rate. >> i think we need to emphasize what you just said you expect us to peak in late april to mid may that's longer than probably a lot of people in the american public are expecting at this point. lots of us are being told our schools are closed for two

weeks. that doesn't sound like a realistic goal if that's what you're saying is right >> i think schools will announce two weeks at a time. schools might make a decision to restart if there isn't transmission although i think it's unlikely that's a good case scenario. this is going to be a six to ten-week procession. i think if we can get through this in six to eight weeks and keep the peak of the epidemic below where the health care system gets exhausted, if you look at what happened in south korea, italy, china, that's what it took for them to keep down. italy is losing control of their infections right now and their epidemic i think what we need to do is focus on how do we blunt the mitigation steps that reduce the community transmission, things like closing schools, closing

restaurants, closing bars, places where people go to basically slow down activity. >> doctor, what you're saying, this is what we've been trying to raise the issue of all morning, ceos across the country are trying to put some timetable on this and looking at their balance sheet trying to figure out what their run rate is going to look like, can they withstand this, whether it's a small business or big business it sounds like you're saying this is at minimum a two-month situation. when you think about it potentially a three. >> well, look -- >> in terms of the social distancing that you're talking about. >> yeah, it's march 16th right now. i think if we continue to be very aggressive like we're doing right now and we mitigate a very severe epidemic and we don't see several cities that are large in multiple cities, seattle and new york look pretty well seated right now, by mid april we're starting to see this maybe peak

out towards the end of april that's what the modeling shows. >> doctor, you sound better today. you say we needed to do more things we're not doing it yet you sound like some of the stuff that's happening in the last three or four days has gotten you to the point where we're doing more than we were? >> i think that's right. we can't take our foot off the brake. >> would you shut down domestic air travel >> no, but i would pull the volume out of the system i would stop government officials, federal and state if you pull enough volume down, you effectively are reducing travel i think we need to keep our foot on the gas here and not pull back i think the governors are doing the right thing. they're taking strong action i would say if i can, we need to focus on trying to blunt the impact of this on people congress needs to to something to help get relief to lower income middle class workers who are out of paychecks right now individually we need to think about vulnerable americans,

older people who are home without services and how we can support them because that's where the real vulnerability is. that's where you can see adverse outcomes we all need to think of what we can do to blunt the impacts. >> doctor, there are emails going around among investors all weekend about the idea that there is a cure in the form of chlorotene phosphate mixed with zinc it's a malaria drug. it has or has not been used in south korea and italy. there are some names looking into this. >> yes it showed in vitro activity in test tubes you know, it needs to be studied clinically i wouldn't -- i wouldn't put too much confidence on it based on the data we have right now just to pick up on the point i was talking about with becky what this looks like in a good case scenario, we manage to keep

the scope of it contained. into may it's coming down. july and august it's clear summer camps get canceled. it's clear then we're back in the fall and there's outbreaks. hopefully we'll have a different toolbox to deal with that. point of care diagnosticdiagnos, antibo antibodies like what regeneron is working on. it can help mitigate the impacts. >> dr. gottleib, you said new york city and seattle is well seated not well situated what does that mean? >> well seated that there are outbreaks in the cities and hopefully not a proportion that you saw in wuhan and hubei province but fairly sizeable outbreaks at this point. i think that's why you're seeing those cities be so aggressive. new york has been far more aggressive and new york state has been far more aggressive

than seattle has cuomo is doing an admirable job leaning into this. we're earlier than the chinese were discovering our transmission we're taking aggressive steps. we have limitations. we can't lock down a city or we shouldn't be a city but the good news is that we're taking aggressive steps. i'm not sure these mass quarantines and lockdowns are effective. >> areas not as hard hit as new york city and seattle, should they be doing social distancing there, too >> absolutely. they want to prevent more widespread propagation in their citie cities if you look at ohio, maryland, new york where the governors are being aggressive, it will have an impact. other states there seems to be community transmission that is not as aggressive like new jersey they're further behind but i'm hopeful all the governors will catch up and be working off the same playbook soon >> dr. gottlieb, great talking

to you >> some of america's biggest banks announcing they're suspending stock buybacks in the second quarter because of the coronavirus. wilfred frost joins us now >> the eight u.s. globally systemic important banks, jpmorgan, bank of america, wells fargo, citi, goldman sachs, state treat and bny melon took the steps for suspending buybacks for q1 and q2 together. it was announced via the financial services forum of which they are the eight members. u.s. bancorp also took the same action others may now follow the main reason for this is the banks want to make clear they aim to be part of the solution, not the problem. continuing buybacks risks painting the rock wrong image. they also said they did not need to take this action, they had plenty of liquid and the fed action has made that more certain. this did not stem from the white house meeting with bank ceos

last week but rather the last 48 hours it became clear to the banks that the fed was going to act in a large way last night. this was their show of good faith, if you will, to the fed, rather than the fed demanding they take this action. bearish bank investors may ask why this collective approach why via the financial services forum. and ask whether there's a weak member of the group who needed to be protected. the messaging from all the banks and the data absolutely the opposite removing these buybacks will hurt earnings per share, it will remove a potential hurdle for short sellers of the bank stocks and rates are collapsing again today. so we're expecting a sharply negative open for the bank stocks >> thank you for that, wilf. want to get over to jim cramer, he's back at cnbc headquarters to get his thoughts on this morning and the conversation we've all been having.

jim? >> yeah. i just got off the phone with secretary mnuchin. i would tell you that they're uniquely understanding of the situation. my judgment as someone who has been on wall street for a long time is that they see most of the pit falls we've seen before, they're not worried about the banking system after what fed chief did, they actually thought the fed chief got ahead of the issues they're uniquely focused on the working person much less on what big industry will do because they're concerned about people having food on the table. i think that's something that when you focus on the working person, you're less focused on the notion of the abstract concept of the recession itself. >> jim, what kind of programs do you think we'll be seeing over the next several days then >> targeted fiscal programs, i believe. targeted towards working people. i know that they can get that through congress i don't think that they're unaware of the issues involving the banking system, the common stocks obviously common stocks, their

view is that there's going to be opportunity. they're not putting a timeframe on it, which is whiise but reminding people that this will eventually run its course. this is a dr. fauci situation, it's not their own view, they're not epidemiologists and not sanguine they are at the ready. but i would emphasize, these guys understand what happened in 2007 and 2009. and it's not just they're using that paradigm and someone comes back and says this is far more serious than that. i'm saying they understand the mechanics. >> jim >> yes >> i want to read you ray dalio is coming out with a note which i think will be distributed shortly. he -- his fund got hammered, about 20% down he said he made some mistakes in things he said i'm seriously concerned by what i see, a number of companies will have debt problems that will likely lead to restructurings.

this could be debilitating and would have undesirable knock-on effects because monetary policy will be ineffective and the political fragmentation will be large and potentially volatile do you think that this administration will be able to mitigate what he's talking about? >> don't think any administration -- the federal government is big enough to do some things and not other things ray dalio's view, i think, is one that has to be respected i could tell you the commercial paper market is not ready for this i could say the mutual funds are not ready for this i don't know how helpful that is i think that people are trying to get up to speed as fast as possible i think that the treasury market is going to be working because of what the fed said i just want to caution people, i don't see a lot of opportunities. i also think the notion that there's going to be a wholesale destruction of the capital system or that -- i'm sure anyone can say that's not what ray dalio said i'm saying if we want to think about the idea that there's going to be a wholesale

destruction of many companies and their balance sheets, i think that's probably extreme. i know that they're trying to figure out what to target. i know their hope is to keep it -- people stay on the payroll. it's not to bail out mcdonald's. they could say listen we'll help the franchisees. the idea of focusing on the stock market seems an tract other than to say there's a lot of companies that have a lot of good credit. i think what they took off the table this weekend was the bank runs, which given what we know from 2007 and 2008 were what the fed was not aware about. and the treasury secretary was trying to do something they kept coming up with reasons why they couldn't do things. this is not what i'm hearing i think that they're flexible. i think they'll be able to come up with a plan again -- ray dalio's view is va dalio ray dalio's view

there's situations that are interesting. i'm trying to be -- words like destruction i don't think help there will be companies like the cruise industry which are clearly hobbled. i don't know why the banks should necessarily be hobbled if they can get through this. it's almost like what david faber tweeted earlier this morning, if you could look further -- they're not considering a holiday. the treasury secretary is not going there. if you look further out, maybe buffe buffett-like, then you would be saying, you know what? there may be destruction but also opportunity >> we'll check back in with el-erian quickly thank you. we'll watch it at 9:00 allianz chief economic adviser, mohamed el-erian we'll be down today at the open, 10%. that brings us back down to the lower end of what you initially talked about at 20% to 30% you said at 30% you would re-evaluate. are you re-evaluating?

what are you coming up with? >> i'm coming up with at least 35% fall from the highs. so we have more to come down here even after you reflect what's in futures. but i can tell you one thing, there are very selective opportunities because we are seeing indiscriminate selling. understand that the private sector is front running a lot of this stuff the good news is on the health issue. the private sector is social distancing much faster the bad news is people run on grocery stores and people are not taking -- >> i could see it fall more, but the question is you don't want to be caught out when and if you believe steven mnuchin or others in the administration are going to injekt some kind of massive policy into this >> yes, absolutely but respect the technicals i can't stress that enough remember, when people cannot sell what they want to sell,

they'll sell whatever they want to sell. this is going to be very indiscriminate that's where the opportunity comes from but it comes from relative value at this stage, outright longs will come later on >> okay. as far as -- you had three, four different things you were watching the fed action there, you think that they -- the disorderliness and the fixed income market are in the cash -- the money markets, you think that's not as worrisome as it was for you? they got that under control. that takes away one risk you were worried about, doesn't it >> i'm not worried about the payments and settlementment sy or u.s. banks. but people have to understand this is a fundamental shock. when we emerge from this, we are going to see a very different landscape. i'll talk about this wilater wih

you. we will turn upside down longstanding assumptions that got us where we are today. so the landscape, when we emerge from this, will be very different. >> all right thanks saw you a couple times today appreciate it. we will be back again tomorrow >> yes >> do this all over again. >> cnbc's special coverage continues right now. good monday morning. welcome to cnbc's special coverage, markets in turmoil i'm carl quintanilla cramer is at cnbc global headquarters faber has the morning off. there's the emergency steps by the fed and other central banks. futures limit down europe down 7 to 10. crude oil south of 28. as you know by now, the fed slashes rates, announcing 700 billion in asset purchases to aid the economy. last night chair powell held an emergency news conference and says h