uus on what has been several weeks now of difficult and challenging days becky and joe, back at casa kernen and casa quick. we'll see you tomorrow >> do it again tomrow. get your wifi under on trolcont. >> thanks to our viewers as well, who send us great notes. it's a heck of a moment. cnbc's special coverage continues right now. ♪ >> this is cnbc breaking news, market selloff good wednesday morning i'm carl quintanilla with jim cramer, david faber all coming live from separate locations as we take caution with social distancing and the coronavirus the fiscal, the monetary response, the progress of test kits, travel restrictions,

therapeutics, the whole thing. europe is down 5, oil below 25, that will take you back to 2002. so, yesterday's gains are obviously in jeopardy, since february 24th, the first big day of the virus selloff, the average daily move of the s&p, up or down, 4.9% jim, don't need to tell that you is unprecedented >> the market is trying to figure out how to deal with these uncertain times when you have financial health on the line and, of course, what we were talking about with separation, actual health. it's not processing it very well in part because the liquidity is not there, but also because weather in a highly emotional moment yesterday it looked like the market was up. the indices lie. what was really up were things like hormel. when we put shutters across the country, one of the first things to do was put in spam. yesterday it was chef boyardee

the wrong stocks are going up. the companies we invoked during thermonuclear war time that is what was up in the index, that and drug stocks a half-hearted rally in the semis. don't forget, yesterday may have been a bottom for some of the more johnson & johnson like stocks the aaa's, they can trade lower. that's something you want to buy if there's a snap back otherwise we have to do triage you always hate to use that word, because what it reminds us is that some have to live, some have to die. i want to be constructive. that's what's necessary for the country. i also want to be realistic. can't cost people money who are watching i think that number one on the agenda now is something big. much bigger than 1.2 trillion. we need a new entity we need an nra to make sure we don't wipe out the little guy

and a giant credit entity. not the ones we have now we need congo over with the treasury secretary, federal reserve and maybe do a trillion dollar treasury offering >> that's why we're going to rely on you, jim, not just for your market knowledge but your experience as a small businessman who has employees and has to make decisions that 30 million other small business owners have to do. >> made those yesterday. we're going to pay people 50% of their salary for the 25-some employees over the course of the next two weeks look, i'm a person of means. i won't let these people have a -- i'm very lucky and very blessed. so we will do something more than that, but at the same time i recognize these conversations are happening all over the country. the one we don't want to have it with is boeing i listened to phil this morning. they need 60, it's not 60 billion for them, it's 60 billion for the supply chain there's 17,000 little supply guys it's a national defense issue

also if you have to prioritize, i'm going with boeing this morning as a way for the federal government, steve mnuchin and prum tesident trump to say we he an entity, we'll talk about really 2 million people who are involved with aerospace. we use that as a template. david, you know, it's one of those moments where it's the credit side, not the equity side we talk equities, we always forget -- you remind us -- it's the credit side we're most worried about. >> yeah. what's interesting, of course, guys, that companies that can raise money are being advised to do so. yesterday in the investment grade market you saw verizon raise 3.5 billion. you saw exxonmobil raise 8.5 billion, pepsi raise 6.5 billion. exxon did it ten years at 240 basis points over the corresponding treasury boeing can't do that boeing cannot raise money right now in the investment grade

market to your point, jim, boeing needs the u.s. government to come to its support or indicate some sort of support before it will be in position to go out and raise the money it needs that points to where things are right now. it is interesting to note those companies at least, exxon, verizon, pepsi were able to raise significant amounts of money. again, many companies can't. high yield is closed right now the average yield is 10% you can imagine it's trading at 940 basis points over. and there's no issuance going on there now. credit is certainly a focus. and it will be from here in terms of companies able to raise additional funds for what they know is going to be potentially weeks and months of tumult >> yeah. carl, i think that we need to think bigger we put a price tag, 1.2 trillion here's the price tag, it's whatever it takes to keep the

100 million people at work who are losing their jobs. the number of people, 309 billion in payroll, restaurant and bar, 87 billion in hotel 63 billion in performing arts. 59 million in transports 56 billion in amusement. you can advance all the loans you want to. buy small business, all these others we don't want loans, we want you to pay these people while we wait for the virus to be defeated there it's a question of manhattan project. every single one of the scientists i've spoken to and little ones are all working on something of great consequence we need to wait until they find it we can't afford to shut down the whole country without having the country with something to crass >> this is going to be part of the new thing we work out. >> it is >> what conditions are there going to be on industries that are bailed out

we have suggestions from cuban promise no more buybacks ever. elizabeth warren has a more expansive look of how it will change the way companies manage balance sheets forever >> these are two people whose principles i admire. i had senator warren on a week ago. a lot of equity issues need to be brought up. i tweeted that i agree with mark cuban. my problem is that -- all these people are brilliant we need a team a working cluster of people. can't just be the treasury secretary or vice president pence or the president we need an entity. an entity that, let's say, gets permission from congress for a trillion dollar 30-year, which we could use we used to worry about the chinese selling the 30-year. we need the 30-year, have some entity decide who lives and who dies we have to say who lives then all the equity issues a ceo who borrowed too much money. you know, we have to figure out

whether that ceo should remain rather than punish i want to be constructive there are entities that we can deal with later. we have to get the money to aerospace. we have to get the money to the 100 million people who work in the service economy. we have to get the money to the working person let the rich people worry about themselves it's funny, i found myself reading lennon last night. we need to have the means of production to continue and we need the government to be thinking bigger than it ever has since 1932 i hope they do that. look, the president is uniquely focused on what's big. this is the moment no one will come back to him and say you know what? you took too much and gave too much to the working person no one in history in the next 50 years will say president trump thought too big. this is the time to think big.

>> right you know, jim, in listening to you, what you're offering is a similar conversation that i've had with a number of people in our financial system with great financial responsibility how you get the money to the companies so they can guarantee the employment of the people that they otherwise would be and are beginning to furlough, beginning to lay off now remains somewhat unclear what's the mechanism by which you can do that? i think it's something that has to be thought through. there's not a lot of time. >> hearing from secretary mnuchin during this hour, i think you're right one thing, again, congress, treasury secretary, president, everyone has to get together with the fed and say listen, let's get the money, then we'll deal with how to administer it let's get a working team, a

working team that decides we'll keep certain industries and deal with it later. no one will make money we just want to make sure people can continue with their jobs david and carl, the service industry, the restaurant industry, it's taken a huge hit from the coronavirus probably one of the most exposed because we're telling people, listen, we don't want you being in business but we want you to keep paying your people. we need to hold -- we need to speak to one of the people whom i regard as being a young deacon we need to speak to david gibbs, ceo of yum brands, who employs tens of thousands of people and is trying to keep them on the payroll. thank you for joining "squawk on the street." first, could you give us the scope of the situation for your company and then for the industry and what you need and what you can do? >> sure, thanks for having me. my number one message is we are open for business.

our restaurants have means to access us with safe food, safe environments drive-th drive-thru, delivery, carry-out. we have more restaurants than anybody else we know a thing or two about those channels and how to provide the food in a safe manner what guides us during times like these is what has always guided us, our customers, employees and franchi franchisees. you said tens of thousands of employees, in the united states we have over 400,000 employees that's got to be the number one priority now you need customers, safe food, and a return to normalcy with our comfort food and great value for them during tough times. >> how do we assure health and the health of your patrons i, for one, was possessed with my -- are we going to serve fresh food is it clean?

do we have to worry? what are the positions -- i know you're in contact with yum china, different company what did they do today -- even federal express today is back to normal with china. i want to know what they did to transition from this to now to where they're almost back to work give us the yum china blueprint. >> we're learning from them. yum china has been a leader, and their great ceo has done a fantastic job of reacting to the situation. you've seep some of the things they've done in terms of safety and hygiene. rolling out, you know, this idea of contactless delivery. they invented that concept you're seeing a lot of companies now in the u.s. playing with it. we rolled that out in our u.s. restaurants. in times like these, you need to be quick, agile, you need to double down on what we have at

yum, which is already very strict food safety and hygiene procedures for cleaning and santition. we view our food safety as above and beyond we're the largest restaurant company in the world, we built trust with consumers we need to lean in on that and leave. we did a lot of things before this situation developed to ensure the safety of the food supply to our customers. if you show up to one of our restaurants to work, the first thing you do is go through food safety training. the extra step of sanitizing is not in every restaurant, it has been with us for years we do food safety audits beyond the health requirements because it's right for our customers and employees. and we recertify those employees every year but in times like this you have to go further. now our employees are wearing gloves at the drive-thru, leaning in on this idea of contactless delivery you can place an order online

and avoid contact with somebody else and get that food delivered to your door or pick it up in the restaurant >> david, credit suisse today says they see a quarter of households shifting 50% of their meals spent to home for the next you to months. this massive shift of share from restaurants to grocery to the degree you're trying to protect it, can delivery and drive-thrus and contactless delivery, how much throughput can it offer >> this will have different impacts on different restaurant companies. we're well positioned in terms of the impact it's going to have because our brands tend to have more off-premise consumption taco bell, for example, in a drive through, 75% of their business was already in the drive through. we were not relying on the dining room. pizza hut with delivery and carry out and kfc, there's nothing better than taking a bucket of chicken home for your

family during times like this. i think we're well positioned to deal with that but it will be a headwind for the entire industry and us that's why we're going the extra mile to make sure we're set up to serve america people think of us as large companies, but these are small businesses all around the country. those 18,000 restaurants, they're all run by franchisees small business people. they're one of my highest priorities now to make sure we protect them and they can come out of this on the other end whole. our brands have been around for 60 years a big part of the fabric of the country. the best thing we can do now, those operators of 10, 15 units in your community, visit those restaurants. help them, help their business, have some great food >> are you forgiving rent for those franchisees that do pay you for rent. >> the model you're talking about is one that some competitors use where they own the real estate and the rent is paid to the parent company we don't have that model

our franchisees are small businesses, they have a landlord situation, sometimes they own the real estate, they deal with that on a case by case basis we will provide them with guidance on how they think about that with their lenders, landlords and other obligations that they have >> david, what are you and your franchisees seeing now in terms of the supply chain? are you seeing hiccups or significant dislocations in that supply chain are you concerned about what may be coming? what are you doing to deal with that >> yeah. we're lucky. as the largest restaurant company in the united states, we have a massive supply chain co-op that services all three brands we have a lot of professionals working on that challenge. now, what i will say is obviously some of the demand has dried up in the restaurant industry so we don't really see supply as a big challenge now because we

have the great professionals working against it because there are restaurants closing. there's going to be some excess supply out there it's also another reason that customers need to be frequenting our restaurants. it's not just the 400,000 employees in the restaurants, it's all the people that work on the supply chain the farmers, the people in the factory. it's keeping all of them employed by giving your business to the local businesses in your community. >> david, i appreciate everything you're saying we have 3$309 billion employee compensation for 2018 in payroll. the this is not big enough you're not speaking big enough you're talking about people going to restaurants what -- how much money do you need from the federal government to pay your people without a loan, to pay everyone involved in your chain? let's be realistic, no one will be able to get through to the other side you're facing a jordan river here i think it's great that we might want to get a bucket of kfc,

love it myself but if you were secretary mnuchin now, and you created a trillion dollar fund, how much would david gibbs and his team need and how much would the restaurant need? you won't be able to make it up with patrons >> look, as you say, i'm focused on our part of the industry. i recognize these problems are bigger and broader than just the restaurant industry. i was fortunate enough to participate in the call with secretary mnuchin and president trump yesterday. i was pleased with the message i heard. they understand that keeping restaurants open for business is important for our economy and important for safe food supply for everybody that lives in this great country. so, you know, there will be challenges certainly financially if sales soften and the people that need the money is not yum brands the people that need the money are our great franchisees spread throughout the country this is more of a small business

problem than a big corporate problem. the administration understands that >> david, as we're talking, starbucks authorization of $40 million repurchase what is the buyback playbook from here? >> the prudent thing for us to be doing now is to make sure we have as much available for our franchisees and helping them in any way that we can. so, you know, we'll talk more about this when we get to our earnings call. we're taking all the necessary actions that you can imagine that's not necessarily in our playbook >> finally, at least for me, how long do you anticipate that we're going to be dealing with this situation >> i think that is an open-ended question we've seen this play out in other markets. we've seen some of them get to the other side it just depends on how cautious we are and the actions that we take as a country now. that's why i think we all should

be very vigilant and follow the protocols and all the guidance that we're getting that includes not eating in restaurants but accessing them through drive through, delivery and carry-out. >> in the end we are a business channel. we want to talk about shareholders is it possible to have a situation where we bail out the workers which ultimately is better for the shareholders than bailing out the shareholders themselves and the entities and executives in we're dealing with issues of equity that mark cuban is addressing. i want the workers to be protected, which ultimately will make it so the entities get saved. can you save the workers can you worry about health care and also save the entity itself? >> look, i think anything is possible it's just about how much money we spend i totally get the point that our focus should be on employees, small businesses, the people on the front lines of this.

then the entire chain benefits we also obviously need to be careful. we can't let large corporations tip over the impact on unemployment would be huge. it's a balancing act >> yes that's well said i want to thank you for coming on given the fact you are the largest on probably the front line of what we need to do for the country right now. david gibbs, ceo of yum brands carl, back to you. >> let's get the latest coronavirus headlines. this morning worldwide cases crossed 200,000 with 8,200 dead. in the u.s. cases are soaring as the virus spreads and more people get tested. there are more than 6,400 confirmed cases and 114 people have died. the virus is now in all 50 states, west virginia reported its first case tuesday afternoon. around the globe, nations are fighting the virus through tight

restrictions on movement while committing trillions of dollars to combat the economic crisis. the european union will close borders and close off at least 26 countries to all visitors for nearly 30 days the world health organization declaring europe the epicenter of the outbreak. athomestate and local official trying to enforce social distancing are implementing a patchwork of measures. some going well beyond the administration's efforts of not going to bars, restaurants and having a gathering of more ten people and bay area residents are instructed to stay home until april 7th. new york city is embracing for the possibility of such rules. this morning, the largest public transportation system in north america, the mta announced it is seeking a $4 billion federal bailout. the mta saying he has seen ridership plunge more than 50%

on subways and buses tom paircot the same time last year. >> jim, mad dash action? >> obviously you start thinking about public transit, everyone is on the line there's a stock that was at $439 last year. that was boeing. now boeing is at 100 i think boeing is front and center why? boeing will run out of money they have -- they managed to smartly bring down the revolver. they have about $10 billion. but there are 2 million jobs on the line i think that when the -- when we figure out who to triage, we must save boeing from the side that the airlines need to get money, but if you don't have one of the -- if not the most important company in the country solvent, a lot of things will go wrong. if we find out that maybe the government takes a stake in boeing, maybe boeing gets a lifeline for the workers, i think today goes better. if we just decide that boeing is

thrown to the wolves of the market, carl, you and i -- david, we will all have a different day along with 317 other million americans. my mad dash is that boeing and the suppliers need the 60 billion. it's not a plea for me, it's a employee for the 2 million workers in the supply chain. >> jim, you know the answer to that listening to you ask the question, there's no way the u.s. government can let that happen >> no. we can go back a few months and talk about the problems boeing created for itself a story we were following every day with the 737 max. it doesn't matter now. those numbers you're citing, it seems impossible to imagine the u.s. government can let this company go, dare i say, bankrupt if they don't come to its aid, it won't be able to hit the cap palmar kets. capital markets

>> this is a business basically, the business of the trillion dollar or $2 trillion -- whatever it takes. i feel like it absolutely has to be addressed what is the priority it can probably wait until 11:30, 12:30 >> timeline, i don't know. i'll leave that to you >> you want to make it 4:00? >> no, it seems to be an hour by hour story >> how long does 9 million last in a business where you have to pay suppliers? as long as you have money. i hope the president is watching, whatever i know that boeing is the one you settle first, not jcpenney >> jim, yesterday when we were getting reports floated of 50, $60 billion for airlines, you saw airline shares down, how much of that is related to the fear that if bailouts happen,

common gets sacrificed >> i think that -- this is great question, carl i think that the way you can get congress to budge and put trillion, 2 trillion, whatever it takes, is to have it go for the employees. i myself feel that if you pay the employees, you're not necessarily going to do well if you own the common stocks. that's something again we have to settle out. i was hoping for a situation where if you have an entity that was once saved, we know if the government were to take a stake, 10% american air, 10% united, 10% delta, 10% southwest, 10% jetblue, 25% boeing, whoever else needs it, these companies, when we solve this -- i think we seem to forget that we will solve it -- it will be the greatest investment the government ever made the companies will stay in business then we don't have to think about who lives and who dies scenario as long as we ring-fence the industries that need it. we all get personal about these things do we want to save a company

whose clothes end up in a landfill that's not high on my list what happens here is that we need to make decisions i prefer investments, if not investments than payments to the employees and then let the shareholders kind of scramble. i don't like that. we're a shareholder friendly network, but it's the credit side david, we look at the equity side, we think where is it in the pecking order? we know from bankruptcy law, it's not that high we don't want all these companies going bankrupt but you know the credit side has to be protected first. >> yes and it's the credit side that will dictate terms conceivably in these situations or fairly soon when you talk about bailouts or the likes that we may be dealing with, you may be personalizing or pushing down hard on that equity there's still 70 billion in equity at boeing, so how any bailout of that company would

work is unclear. you would not want to be in position of rewarding the equity holde holders. creditors are the key here they take the primary role when we get to that point if we get to that point with any company. there will be a number of them where that's the key to the point you've been making all morning long, the focus is how do you get money to these businesses that will guarantee they keep employment where it is once we get through this, we know it will be money good >> right that's what's so important it will be money good if we do it in a creative way i think we're all stuck with these didn't letters that came from the previous go-around. those were about saving the banks. i want to go back to aaa, ccc, nra, and we do our part.

we have to go back to fdr. if we think will jay powell get in a room with secretary mnuchin? we can't be hoover we have to be fdr. >> you're talking about industry-wide triage do we need to save aerospace, airlines moor than more than r, to tourism -- >> i have my own view. i'm a person on tv i would like to think that there's some national security companies that must be save. the next part of the pecking order is a base of the country that we know is needed under that i want to protect the employees. for instance, mr. gibbs and yum. do i want shareholders of yum to be made whole? absolutely more importantly i want the people who work for yum to put dinner on the table next week. i know again it sounds like what i'm saying is i'm advocating

capitalism it's the opposite. as david said, we'll win when it comes back, we'll have a healthy work force and we'll make these companies come back here we go with the market the market is saying let's do something big. >> right on cue. there is the opening bell. the s&p 500. at the big board, chris taylor, vice president of nyse listings. at the nasdaq, the new york foundation for the arts. so, circut breakers, first one down 7%. you're all familiar by now that would be 2,352.15 not quite there. >> no, you're talking about december 24th of 2018 when we believed there would be some sort of a recession because we had raised rates quickly chairman powell was talking about three more rate hikes, and vice president pence made kind of an illusion to a containment

policy against china then we had fed chief powell talking on ellen about raising rates. that is where we got to. i believe we have to slice through that 2,391 systems almost idealistic given what we know there's two groups of companies. there's what i call the hunters and the gathers. the hurnt nters have the good balance sheet, the gathers are shut down. go back to yesterday at the low and look at where the companies that have the aaa balance sheets that are self-funding, they may bottom today but then there's everyone else. i'm talking about 15% of the s&p that's interesting to me 85% that will be interesting to the president and the treasury secretary. >> 2,346 would be the december 18th low that's not breached yet. i wonder what you make of two

things bill ackman telling the president to essentially shut down the country for 30 days, calling it an extended spring break. stay home with your families mark cuban who talked about not just sports, but his view that we're getting into more of -- i don't want to say normal, but at least net rational trading range, at least in the last couple of sessions >> there's a lot of companies. i look at general mills -- it's funny. general mills quarter was a miss can we come up with something better than new normal general mills was a miss and it is only down 91 cents. you can miss and still not repeal the gain. i like what mark cuban is thinking i respect mark ackman very much. i sound likel larry kudlow. the problem with shutting down the country is the working people my wife advanced her hairdresser $500 this morning.

i said why 500 she's a colorist national emergency there is humor here, but these are the people trying to figure out how to put food on the table. when they hear hiatus, they think end of days. we want to be more in the cuban trading range than the end of days apocalyptic >> yeah. >> we have to get that off the table. that's scary even to me. >> yeah. david, one of the heartening things was gottlieb on squaukz s "squawk" saying the actions we've taken already will change the trajectory of the spread he said he is hardened and these are aggressive measures. >> we've been talking about flattening the curve there are positives to be gained from the actions that have taken place. a reminder of what's going on,

it's going to have a debilitating effect as we all know in economic activity, which is what we're spending our time talking about. the good news is, at least that we can imagine that the spread of the disease or of the virus, i should say, will be slowing. we don't know the numbers. we don't know -- we're only really now getting to the point where we're able to test people quickly and efficiently. that is something to see you're right to point that out, car carl >> carl, are you ever right. brie carara, chief marketing officer of fedex, last night on a call, hard to find solace in companies when you are talking about something bigger, they're talking about how things came back in china. they're talking about that there are basically full business -- business as usual. the excellent coo talked about

how there were 246 flights in and out of china last week, in line with our normal flight schedule it's a reminder of what happens if we keep cool and carry on >> exactly there's a big debate about the voracity of china data and it kicked out the "journal" and times journalists in ten days. what data can we test? starbucks this morning again, a few moments ago, 90% of china stores are, in fact, open. >> yeah. we have to -- we have to look at the data disney is most conscious about helicopter, wa health, wants it to work what's feeling good? if we keep the fabric of the country alive through this period, we're going to get to where fedex was yesterday when they did their call. i think we'd be damn foolish to

think, okay, let's think small 1.2 trillion, then we get to that, two days later we actually solve the problem. that would be disastrous let's keep everything in place that's not a hiatus, let everyone take a spring break, particularly the 20-year-olds who think they're invincible and immortal and come back and infect the rest of us. just hold on, between the science and the fact we're doing what dr. fauci wants i don't want us to find that just when we got to the promise land it's only aaron that gets there. it's really important that everybody get there. the way to do that is to tide people over. that money will come back. i'm conscious of what david said it's going to come right back. we've got to let the scientists like regeneron that was on last night, very positive for anti-viral, very positive for a summer vaccine and what we're doing with containment because how did fedex get full strength? how did starbucks come back?

they followed a protocol we're following a protocol i hate the negativity about what we're doing and what we're knot not in weather we've seen from starbucks and fedex there is a promise land. let's get there and then deal with the issues of equity. >> something else that would be a story we'd be focused on very much would be the drop in the price of oil obviously it is related to a large extent to the drop in demand as we also know there's a separate story in terms of the saudis and the russians of a week and a half or so ago. we have wti trading around 25. i don't have a monitor here. i can't see it, but what about that side of things, jim, in terms of oil and gas similar expectations that we'll see these companies -- >> this is bad i shouldn't characterize bad it's complicated nuanced.

rusty brazill points out here there's parts of the permian, which is in texas that can still eke out positive returns below 30, especially with drilling surfaces getting so cheap. the scoop in stack of omaha dead eag eagleford. very small parts of the backian can survive below 30 big companies can cut capex and there's chapter 11s ahead. to not focus on that, it's a little ridiculous. i don't understand why our president doesn't pick up the phone and call the saudis and say this is a two-way street if you want protection, stop making it so hard for our unindustry don't join the russians. think about what's important here we like to have energy independence we don't want the saudis to take it away from us. how many people do we have -- how many men and women in service do we have to make sure

the saudis can keep pumping in they are trying to put us out of business i think a phone call from the president ends that, not just to fill up the spr. i would have made that phone call about seven minutes ago >> jim, briefly here, below 20,000 >> right 19,999 vix is down 6 points >> that's very interesting isn't that interesting >> yep jim, so much conversation this week about sector correlation, stock correlation. you want to see that start to break apart to inform you that there is some underlying repair. >> totally we want to see the vix go down and the stocks go up we have to go again -- i want to emphasize super huge let's not say 1.2 trillion say we'll use the number that makes it so 100 million people are not thrown out of work that's our number. when we figure out how much after it costs to do that, we'll

rea1e reassemble think about china, if gilead's drug works, regeneron's drug works, the j & j project works there's lots of retired people who will have their savings in the stock market destroyed unless we throw trillions at this think about the retired people think about the people on fixed income where they're getting no income and recognize this is -- this is no different from 1933, except please don't confiscate our gold as the president did then >> yeah. one day we'll be talking deals again, i hope. there's an expectation at the end of this that we'll see a lot of consolidation of those who are the winners and not winners. i did want to mention a couple pieces of news we had so many dislocations in so many markets, obviously in the takeover market, spreads have blown out as you might expect money has been withdrawn so many hedge funds are dealing

with so many different areas that they're pulling out the spreads have blown out one that we've been focused on is abbvie and allergan an s the ftc did grant primaeliminar approval, and the spread that closed so by may you could realize almost that much in this market that's saying something. whether anybody would move into it was another question. we won't see deals right now but i wanted to mention that the only deals that we will see are ones done out of desperation. >> abbvie yields 7 i thought the pill they have for

migraine, an acute pill to get rid of a migraine in an hour and a half is so good. the market doesn't care now. stock is down 4. 7% yield don't feel mr. gonzalez is doing his thing. that's ridiculous. there's a time when i would say i will drill down on abbvie, right now i'm trying to drill down on 100 million people trying to figure out what they're having next week maybe they can go to kfc, maybe they can't >> the president's tweeted we will be by mutual consent temporarily closing our northern border with canada to non-essential canada trade will not be effected details to follow. let's get to eamon javers in washington with more on that and perhaps other things good morning >> good morning. as you say, the president tweeting he will be shutting the northern border with canada. trade will not be affected this has been under discussion for the past couple of days. they had not wanted to do that, but the president deciding this morning that's the right step to

take right now let's review the bidding in terms of where we are, in terms of all of the different federal aid that's been proposed and disposed as of right now starting with this multibillion dollar package that passed the house of representatives and was signed into law last week. we had the 8.5 billion for vaccines and r & d that's done. the phase two effort about 1$105 billion, just in sik leave and unemployment that passed the house, still under way in the senate. there's some objections in the senate senators are working through that they hope to have a vote on that one today. the phase three, this is up to 1 trillion, or 1$1.2 trillion. that's the ask that secretary mnuchin made yesterday up on capitol hill the senate will be working on that next. that's tbd and what we can call a phase four here, last night the white house asked congress for additional resources for federal

agencies, that's 45$45.8 billio in that request. a lot of money going out the door already a lot of money on the way. that's where things stand now. we've been talking about this all through the morning, that's different from all of the actions that the federal reserve has been taking. >> thank you interesting. hard to keep track with the policies, jim, which as eamon suggested don't change by the day. they change by the hour. >> patchwork, miniscule. not thinking big enough. thinking the way this country thought before world war ii. not scolding anyone, this is bigger but you want to feed, house and clothe 100 million people. you don't talk about taft, commercial paper we want to make sure nothing freezes up make sure the banks are solvent. the credit lines are available the federal reserve issues a

statement -- i want some statements how about something at 11:00, the federal reserve says with the president or 11:30, they say here are the things that won't happen the banking system, ala ben bernanke said it won't go down ben bernanke saying the federal reserve has to buy corporates. there's a fantastic by the "new york times" talking about the size of the corporate market so the federal reserve should say we will buy any and all corporates they'll make a bargain once they buy them, they'll go up in value. the federal reserve will do what ber thananke and yellen said. we'll buy all the corporate. 52 bid for something that's 90, maybe 100 million size, maybe 1 billion size then mnuchin says 1.2 trillion we didn't mean to be that granular we'll give you what the people need to live on a paycheck with

money from the federal governmenten until we solve this the president says manhattan project, we will solve this disease. in the meantime we will continue with the hiatus of business. then we're fine. we're fine in the sense that the center holds and that's what we want, the center to hold >> right rhetorically that's where we've been headed the last 24 hours. mnuchin saying now is not the time to worry about the deficit. a spokesman for speaker pelosi yesterday said powell told her congress is enabled to think fiscally big so it doesn't seem like there are -- there are roadblocks at this point >> no. only mental roadblocks only people who don't want to think big enough i'll say it to mr. president and secretary treasury mnuchin and fed chairman -- all of them i know we have to look back no one will say what i can't believe how much money they took down for the 100 million workers. what were they thinking?

no one is going to say that. no one this is their time. we'll look back and say they either thought big or they went home >> right i mean, jim, if somebody were to say to you, you have the chance to avoid 20% or more unemployment, you would do anything -- >> right >> it doesn't matter >> if you want to put it in a way -- we can appease every constituenc constituency we spend that in order to make it so the fabric of america is saved. we spend that in order to make sure our country is unified and there is no sort of insurrection that could occur put it any way you want. come back and i say, david and carl, this is your chance to say you know what? the center will hold because we're big thinkers, we won't let the unthinkable happen because we are one nation, one nation. i would read the darn pledge of

allegiance if i had to just to be able to be sure there's enough money for everybody. next week, our individual charitable contributions, the workers we like because we're well off is going to be like okay when does the federal government take over for the hairstylist and the waitress, the drive-thru person at yum when does the federal government say that person is entitled to a meal until we solve this that's what has to go on shareholders, we want to make the credit work. we can always talk about whatever facilities are necessary. we need to think fdr, not t.a.f. >> jim, holding on to 20,000 let's get to bob pisani. good morning, bob. >> most important thing is no circuit breakers this morning. 7%, didn't get near there right now. it's down about -- as you saw,

roughly 6% that level one halt, 7%. not there yet. let's show you the main thing everyone was concerned about this morning everything was down. if you look at corporate bonds, lqd, down. corporate bonds down s&p 500, the spdr etf, that's down crude oil is down. gold is down everything is down, that implies people are moving to the sidelines and 2k3wgathering cash sectors, we are continuing to see small bifurcation health care down, utilities down more industrials down 7.5%. a bit differentiation. let's not get too crazy about it the overall market is down 2%, 3% between the highest and the lowest ones. boeing here, big kecconcern ovei the dow. broke 100 briefly. bowing is talking about seeking access to $60 billion in public

and private liquidity for the aerospace industry boeing's market cap is below $6 billion. maybe 57 billion, $58 billion. rather remarkable to see what boeing has been doing. s&p 500, just want to everybody from our cash in a little while ago, 2351 that was the old december 24th, 2018, low we've seen we've not touched that there's not much technicals. that's the main one everybody is looking at curio curiously, a lot of analysts are in the upgrade and downgrade they're still out there. walmart got an upgrade kroger got an up grade talking about a surge in demand for food o'reilly upgraded. ralph lauren got an upgrade.

dunkin' brands upgraded. you saw the good strength in coke coca recently monster beverage downgraded at morgan stanley mandated restrictions a problem for these. what are we still in is this a u-shape, l-shape recovery most people are not big on using v-shaped anymore the l-shape seems to be in control of the narrative right now here and of course, there's question about whether or not we're going to need bigger baa zu kas to put it mildly. the l-shape recovery jeffries is a good example quoting what we saw in jaws. we're going to need a bigger boat a lot of questions even about with the current programs if we'll see additional ones. it's encouraging and somewhat quieter response to the market not just at the moment, not hitting the circuit breakers

markets did open a little more orderly as well. there were much less delays in some of the openings here. up and running a lot quicker here back to you. >> bob, yeah, hey, it's david. you know, you spend your days a lot of times obviously talking to trading desks what are you hearing in terms of a situation we've never encountered before where we have people either working from remote locations or many working from home? what are you hearing about the ability to trade, settlements, fails and things of that nature? is this going okay or is it encountering some issues >> the thing i've been watching is the market plumbing, market structure. is everyone able to get their trades through are we able to get the settlement the system has worked remarkably well there have been some flash points but remember, they made big changes several years ago in response to the flash crash. for example, they upgraded the sec required systems upgrades,

regular testing. the system overall is more robust than it was ten years ago. and i think that is showing through. there was a regulation called regular sci, the sec implemented. you have to stress test the systems. this happened in the last ten years. i think it's made a difference there has been some modest dislocations in the etfs, some of the corporate bond and bond etfs there's been some differences in the net asset value toward what people are willing to pay and what are being priced. but that's simply because the etf business allows people to trade without trading the underlying securities. so for example, the sdpr, the largest etf. individuals can trade without actually trading the underlies

sometimes you get some dispricings in the last few days but that tends to narrow as things calm down in terms of the trading desk, people are worried about the fact that a lot of people aren't in at the nyc, this has been an issue. in terms of the market structure, most of it seems to still be working pretty well >> all right bob, i'll take it. thank you. dollar index, above 100. let's get to rick santelli good morning >> wow we are going in reverse. i was going to get to the dollar index, but we haven't closed above 100 since about tax day, mid april of 2016 -- 2017. let's look at 15-year charts some of the best numbers in 13 years. they've turned down a bit, but they've turned down from upward numbers. those are pretty looking charts. let's look at the treasury market

obviously curve steepening is chil wild if you're going to have a lot of defini defici deficits, maybe the treasury market is waking up to that, especially the long end. sales came in pushing yields up. we have initial jobless claims we extended them in the 200 7, 2008 crisis. market is going to get nervous didn't work out well for japan and europe let's see how it goes. look at march 9th. i picked it because monday march 9th is when we made the intraday lows on every fixed income product that has to do with coverage. look at two year, you can see they have traded not through the high yields which are around 55. we haven't done that as you go down the curve, look at a ten-year. we've traded above it. right before time zone started officially, we traded up close to 122 and a ten in 30 years we've traded up a bit. the long end steepening and it

happens both with prices going up and down lately because the long end is starting to power ahead. let's look at what's going on with regard to tens minus twos here it sits at 62 and change. it's the steepest in basically two years in fact let's see what's going on overseas yesterday i put a chart up bunds versus italian tens. i even put up the french ones. the line on the right, pay attention. bund yields are starting to go down they're narrowing with regard to the spread to the u.s. with other governments in europe, it is definitely widening that is a credit issue to pay attention to quickly, dollar index, three-year chart we haven't been at these levels since march, april of 2017 carl, jim, david, back to you. >> rick, we'll talk to you in a bit. facebook has gone from 200 to 143 in about three weeks.

they talked about how they're changing the business. >> we're close to small businesses 140 million use our platforms all over the world and we work with them every day. and we heard directly from them that they were in need, very nervous, not able to pay a lot of their employees and worried their doors were shut. we're working around the clock to help as much as we an >> jim, that's the kind of corporate behavior you're applauding today >> we're looking for public and private. we want to rally private and private citizens the federal government is so much bigger than everybody sheryl sandberg trying to invest in companies and give them a lifeline i think that what we need as much as we need the canadian border sealed, whatever, but we need to hear what will we do for the working people to make sure the center holds and i think in terms of weapons, we have to

think about little boy because that's what dropped on hiroshima, and that's what we needed let's keep that in mind. >> yeah. surgeon general on the "today show" this morning i think we're starting to turn a corn er and people are getting the message. it's starting to effect people they see and know. that's the kind of behavior change we are looking for. >> you know, every incremental piece of news we hear that speaks to the virus being slowed in the spread is good news we have to wait for the numbers themselves everything is going to be wacky given testing is increasing and we're going to find cases that have not been in the current count. but yeah, that is something we can look at at least with the hope that we can get to the other side more quickly without. as we've been saying, we want t avoid overwhelming the health care system. we don't want the tragedy going

on in italy. >> jim, stop trading >> boy, coca-cola. a safe haven but they're talking act how at this time at this point, it isn't. maybe the bottlers need money, the convenience stores not doing the business they thought. we know it's going to come out on the other side. the question is do you bet on science and say i'm going to buy coca-cola with a 4 % yield or do you bet on the grim reaper and say i don't want to own that i'm going to go with the scientists first in stephen king >> what's on mad tonight >> this is important for david david knows my sister nan. she says david has a nice apartment, much better than most who come on remotely where does he live >> everybody wants to know that. >> i mean, obviously, david -- >> yeah. well -- >> you look great. >> i'm very lucky. i'm at my remote location, and i did wear a tie for you, jim. i only have one here you guys may start to see this tie more regularly

or perhaps tomorrow i have one jacket i'll put that on, but thank you. >> i may have to dual you. i have a great looking office. >> you may have to >> tonight competitor to zoom. people are using their home office i don't know whether david has zoom or web ex and then starbucks, let's find out what they are doing, and i think it will be interesting to talk about the bayback there's a rebellion against buybacks unless you're a shareholder. >> we'll see you tonight >> thank you >> thanks as always. good wednesday morning welcome back to "squawk on the street." we're coming to you live from separate locations as we take precautions with social distances. dow is down 1,000 points 22 we were down 1339 at the early lows no circuit breakers. u.s./canada border closed to nonessential trade

we'll get details later from the president. i'll check with n with mike to check your radar on this early wednesday morning. >> carl, i guess you take it as a small net positive that the cash indexes did not go down that 5% for long that the futures indicated. we're still so close to the december 2018 lows i don't think that specific levels are what this is about. it's about whether we see new waves of selling intensity based on what's going on in the nonequity markets. still unsettled in if i canned income land. i think there's hope that some of these fed measures, just backstopping primary dealers and things like that might grease the gears a little bit i think we're still on that treadmill watching those things. >> david, are you as hopeful >> you know, there seems to be at least some stability right now in terms of the s&p, and as you guys know, i'm keeping an eye on the credit markets where so much activity could take

place. companies in a position to raise cash are being advised to do so. and yesterday we saw exxon and verizon and pepsi. not sure we're going to see many hit the investment grade market today. but there is at least a sense of some i don't want to call it stability. let's wait for the next headline at this point. but that something big may be coming like what jim was talking about the last hour. >> all right guys, let's bring in mark zandy this morning, a chief economist on the cnbc phone, and david lebovitz good to see you. what do we do with the continued calls from macro desks reaffirming their view a mid year low but you end the year at 32 00. how valuable are these pieces of

the forecast >> when we think about putting a level on the end of the year, i think it's anybody's best guess at this juncture one of the things we've tried to figure out where the low may be and where the elusive fair value may lie is thinking about what's the right multiple to put on equities and importantly, what's the right earnings number. i think that's something very different from december of 2018 when earnings estimates didn't really move around all that much you're finally beginning to see earnings come under pressure here and there are questions around how low earnings investments for the year will go i think the key thing for investors is to look through, understand eventually at some point the market will start to look through what's happening with the virus and price in a virus free run rate. that's what we need to see for the markets to find stability. >> that's cased on a second derivative of case load? any doubt about that >> i think it's closely tied to

the growth rate we see and the exponential growth we're seeing suggests to me that markets probably have some downside from current levels but at some point and the middle of the year, if you think about the pace at which this virus has grown, it's everybody in the world to get it, they would have it by the month of july. kind of that worse case scenario plays out by the middle of the year hopefully by that point you start to see normal activities get priced in. >> mark, interim solutions, that's going to be the topic of discussion for weeks to come and with time obviously of the essence. what are you making of some of the reports about worst case forecasts for unemployment starting in q 2? >> you're referring to the 20 % unemployment rate? >> i think the reporting around that has been messy, but yes >> i think that's an overstatement. the unemployment rate peaked at

10% on the nose in the financial crisis i don't know that it makes much difference it's really bad. if that's what it takes. if it's that kind of conversation that it takes to get congress to move and the administration to move toward a package of stimulus in terms of getting cash into the hands of households and small business, and also helping to make sure that credit continues to flow in the fixed income markets, that's fine i do think they need to be on high alert and get moving and if it takes that kind of number to get it moving, i'm all for it. >> mark, the general sense out there has been that whatever fiscal measures we get are intended to a bridge to when we can get back to something closer to a normal economy and the thinking is look, the economy was in pretty good shape out significant imbalances or acute vulnerabilities going into this crisis does that change can we have wear and tear on the fundamentals of the economy? what would you look for in that

regard >> i never agreed with that narrative. the economy wasn't strong coming into this. it was on its back heels the trade war did a lot of damage manufacturing, transportation, distribution, agriculture, were all in recession we were barely growing enough to maintain the low unemployment rate the fed cut interest rates three times last year. that's not consistent with a well-functioning healthy economy, and as long as the economy and the financial markets remain under this kind of stress, the odds of something else happening, something else breaking in the credit markets, for example, rises, it's very important, critical, that congress and the administration at this point come together, big stimulus package they have to come up with something with regard to making sure that there's still credit flowing into the economy i think that's going to require some support from treasury in combination with the federal

reserve. they have to do it quickly so the stresses don't undermine things and something else breaks >> yeah. mark, we've been talking about that in the last hour, the need to get the money to businesses who will then guarantee employment for their workers in businesses in particular that are being hard hit though many are. and conceivably would be laying those people off it's a fairly complex problem. is it your sense that we will be able to get there given the input you need from treasury, from our political leaders, from congress and everybody else? >> yeah. i think so i think what we need is a much larger credit facility seeded by the treasury the treasure puts up the equity, gets the fed to participate, and it backstops the banking system so the banks have a way to continue to lend to their business borrowers they can continue to extend those lines of credit and other loans and hopefully reach down and help some of the smaller businesses that are going to

have a great deal of difficulty. it's going to take more than this, the fed. it's going to take the treasury, and we need a more creative credit facility. and i suspect there are -- i know they're working on that, and i think that's something that will come to fruition >> david, given such a wide gap between what we might call best and worst case scenarios, even over the next few months in terms of the macro economic story, i wonder as you look at various capital markets as an investor, are we waiting for that moment when we find some bedrock levels of value that you don't necessarily have to have a view for a rapid recovery or even a recovery much this year i wonder where you would place that along the lines of what you would tell an investor to do long-term. s&p down almost 30%. does that reflect anything like long-term value surfacing? >> so i do think we are getting to a point where long-term value is going to start to show up

and i think the important thing to recognize and kind of launch mark's comments about what needs to be done by the fed and the treasury and so on, i think we are undoubtedly now looking at a period of interest rates that are going to be lower for longer that is going to make high quality fixed income less attractive and risk assets over time more attractive and i think what is so interesting about the virus situation and everything with covid-19 is that this is transitory there is light at the end of the tunnel there are just questions about how long the tunnel is we believe that value is being created. even some of the higher quality sectors, technology is beginning to look attractive, and importantly when things begin to bounce back, and i do believe things will bounce back sometime this year, it's going to be led by things like financials, cyclical things of the economy which are looking cheap at the current juncture

i think value is being created in absolute terms. >> i wonder, speaking of value being created, i mean, i have started to see some technicians at least looking at charts trying to argue the damage in small caps argues for a bounce let's say relative to what the ndx might do in the coming weeks. how much faith do you put in that >> you know, i think the small caps situation is complicated. if you look at the russell 2000, a third of the companies have negative earnings. i think we're in a period where we haven't seen peak virus in places like the united states. that means investors are going to lean into quality markets are forward looking. likely before things get their worst here in the u.s. and the western world more broadly, i think you will see things like small cap begin to accelerate. but a little bit early from where i sit at the current number >> i see finally, mark, let's be honest and talk about what kinds of

numbers we might be seeing on the next nfp print >> well, it's not going to -- it's going to show up a little bit on that print. that is based on a -- we're talk act the nonforeign payrolls. that's surveys based on last week last week we were only getting -- people were getting their minds around the implications of this and i think what happened last week is businesses stopped hiring but they had not started to lay off workers the number we're going to get is going to be a soft number, but i don't think it's going to be it may not even be a negative number since then, obviously, we're now in full blown layoff mode. the next number a month from now will show the full force of this i think it's going to be obviously big negative number. >> yep and as we get reports of state-wide claims, what kind of -- when would we expect jobless claims to start reflecting some of the high frequency pain now >> not this week tomorrow we're going to get a

initial claims for employment number that's from two weeks ago. i don't think businesses were laying off until this week it won't be really into next week and the week after when we're going to start to see that jump >> okay. guys, thank you for helping our viewers understand where we are in this process. we'll see you soon >> thanks. shares of boeing continuing to plunge on pace for the worst month ever the company now seeking billions in aid phil has the latest on the company. >> a fair numb er of questions about what boeing is asking for the federal government let me give you a rundown in terms of where things stood at the end of yesterday these are fluid conversations in washington at least $60 billion in aid. that would not go strictly to boeing and be boeing's alone it basically is boeing's request for itself as well as the entire aviation industry. all of the suppliers and this is separate from the airline request. the airlines are asking for

anywhere between 50 and $58 billion. boeing has drawn down the $13.8 billion term loan they took out just a month ago. that gives you an indication of how quickly this company is burning through the cash as we talked with analysts, it's not the money they're burning through. it's what they might burn through over the next couple months especially as they see airlines either deferring deliveries or just simply saying no, we don't want a delivery at all. by the way, boeing has access t other credit lines and they're on pace for the worst month ever down more than 65% this month. but again, this is a fluid situation in washington in terms of the discussions between boeing and the people on capitol hill as well as the trump administration >> phil, it feels like the moment you talk to gary kelly, where was that was that in d.c. about a week or two ago? >> it was a week ago >> he said it had a 9/11 feel. sounded jarring at the moment.

ended up on the front page of the times the next morning now you have executives saying the writing is on the wall that travel will not return soon. >> yeah. the letter from robin hayes spelled it out clearly on an average day in march last year they were bringing in 22 million. the average so far every day this month, less than 4 million. the cancellations are soaring. people are not flying. something has to be done to help the airline industry one way or the other, or else you're going to see these guys quickly slide closer and closer toward bankruptcy. >> phil? >> it's funny. >> go ahead, mike. david. >> during the financial crisis i focussed oh lot of my time on aig. it became crucially important and the government came to its aid after it lost about $100 billion in a quarter it seems similar to this

situation with boeing. i don't know how quickly this is going to move. i mean, timing would seem to be of the essence do you have any sense in terms of both management and government in terms of how focussed they are in getting something done near-term >> yes from my discussions with executives at boeing, they want it done very quickly not simply because people say well, of course they want it done quickly every company wants their money. that's not the situation here. this is a case where they are burning through cash not only right now but when you look at the next couple months, they're burning through a lot of cash. then the question becomes they've already committed to keeping the 10,000 workers at the plant. they committed when they shut down production to continue paying them. they'll find other work within the company. they'll make sure those people are not laid off now you're getting to the point where boeing is going to say we have a choice to make. do we continue paying people or lay them off as you were talking with jim earlier, they are the largest

employer in terms of companies in this country. and so you look at the prospect if you're boeing of at some point very quickly, the call is going to have to be made either we get this aid lined up, or we're going to have to start making choices that nobody is going to want to see starting with layoffs and the conversation will shift toward does boeing start considering things like a bankruptcy >> thanks. >> thank you, phil as we're talking mcconnell on the tape says we will not adjourn the senate until a far bolder coronavirus bill is passed the senate will vote on the house virus bill, he thinks today. the nih with a new study on the potential airborne spread of the virus. meg has more >> good morning, carl. this is a study that was published last night in the new england journal of medicine. and what it did was essentially

look at the sars virus that causes covid-19. it compared it to how it looks to the original sars virus they found it's similar in terms of how long it can live or survive in various circumstances. they said it appears to be stable for several hours todays in aerosols and on surfaces. to really put that into context for people, this is not scientists now saying this is airborne like a virus like measles where you cough in a hallway and somebody walks through hours later and can catch the virus. this is not what they're talking about. they're finding in terms of aerosols, the virus can survive or is stable for up to three hours. in the circumstances in the study, these were experimentally generated aerosols scientists saying sars viruses don't normally form aerosols on their own. only in hospital procedures. this is not something you're

talking about being a widespread thing. in terms of copper up to four hours, cardboard up to 24 hours. plastic and stainless steel up to two or three days the take aways, for us in the general public, wipe down surfaces wash your hands. don't touch your face. when we think about the aerosol, crowded surfaces what researchers are saying is the take away in terms of the aerosols is probably mostly for health care workers. and already we've heard from the cdc and increasingly the w.h.o. health care workers should be taking precautions to avoid the spread through the air guys, i'm sure this can be sort of disturbing news thinking about this being airborne, but they are saying this is similar to the original sars virus the difference in the way these viruses are spreading is probably explained by other factors including the potential for this virus to be spread before people recognize symptoms >> meg, as you're talking, axios

with a piece quoting an hhs official and another source that pharma company buyer will make a donation of a drug that has shown some promise in helping patients suffering from the novel virus. as you're watching some of the others in terms of therapeutics, who are you watching the most? >> well, watching all of them, because it's all shots on gold that are important i've heard the same thing that donation that's a drug which is a malaria drug there have been some studies saying that it could potentially be helpful we don't know yet, because there haven't been broader studies done we'll see the data in a few weeks in april

we're really looking forward to it regeneron saying they have started their study in new york already of their existing rheumatoid arthritis drug. it could be helpful for the most severe patients with the lung reaction that could be helpful if it works. and the new drug they're developing, they hope to be in human clinical trials by the beginning of summer. things moving quickly. you have to hope the nearer term things work. >> certainly do. thank you very much. we'll talk to you soon the bay area one of the hardest hit in the country in terms of the coronavirus impact. looking for ways to cob stantai spread they opened up a drive through testing for patients who were referred from their medical can providers. the patients remain in their vehicles while a physician attends to them. joining us with more is the president and ceo at stanford health care. good to have you with us

obviously a huge concern with the entire crisis has been trying to make sure we have health care capacity to treat and test everybody who needs it. what are you doing at your facility specifically, and i guess what volumes are you prepared for at this point >> glad to be with you hear today, and great questions as we think about the up take of the virus, and there's a lot of concern. there's a lot of anxious people. the health care systems, here locally, and sant clara has been one of the areas we've seen more up take than other parts of the country. we've been working closely with local county officials to make sure we're doing the right things to be able to be prepared not only does that mean internally as you talked about, we have been able to develop a novel test here at stanford that's allowed us to test covid-19 patients and get

results back in 12 to 24 hours that's allowed us as you shared to stand up these driver through clinics. and patients can be screened with their primary care provider online so they don't have to come in and if their car, they receive the swab for the test. there's a lot of things being done we're planning locally certainly concerns with how quickly will this up take? a lot of planning taking place with what we're doing from the general acute care capacity but and also icu as the disease progresses, that's one of the areas we're looking at the modelling suggests of the positive co-vid patients, 10 to 12 could need an icu bed we want to make sure the capacity is here and there's a lot of planning and effort there's a steady up take, and we're not saying some of the vast uptakes we've seen in some

of the other areas impacted by the virus. >> you've run other large hospital systems do you think there's the ability to add icu capacity and stay ahead of this or do we not know yet because testing is in such an early phase >> a lot of folks are angst, can i get get the test we want to caution folks to follow the cdc guidelines in getting the test making sure the viral loads are at a point where we can tell and it can be accurate i also sit on the board for the american hospital association. i know there's a lot of tremendous health care organizations around the country that are planning and prepping for just that piece. we do have the opportunity to flex, and when we look at what we need to be able to meet the needs, we want to make sure they are online as a county of santa clara, there's a lot of prep work being done about how do we spread that

potentially across the whole system so we're not just looking at some of the centers like sanford medicine to respond. there's a great network of hospitals and health care organizations around the country that are doing similar planning. >> i wonder, you know, the public is being showered with headlines about the unavailability of tests. but there's other supplies you need in order to conduct those tests. what is the supply chain looking like on that front, swabs and so forth? >> sure. that's a great question. one of the hot topics you've had on your show already is to talk about personal protective equipment. one of our highest priorities is to make sure the health care workers that are needed to be able to respond to the patients coming in are protected from that we're seeing across the country shortages in some of that ppe equipment and the viability. whether you're looking at a mask or gowns and other things,

certainly there's a high utilization of that and we're taking all opportunities some of the areas that were whereforing those around the world have not been able to produce some of that a lot of great sources out there. as you mentioned, even nasal swabs. some of those that we were using are coming out of italy being challenged as well but we're looking at other sources and other manufacturing and we've seen companies that are stepping up their production in other areas that we haven't seen before. while we continue to receive shipments that are coming in, we certainly are cautiously optimistic that we're going to be able to have the supplies we need >> we've heard plenty about various across the health care system, people essentially deferring elective procedures and things like that to try to preserve the ability to treat those who need it right now. in terms of your hospital there, are you able to handle other more urgent needs along with doing what we need to do in

terms of testing an treating of the co-vid victims >> great question. one of the things we do have is some of the best resources in the koichcountry. people continue to have accidents and heart disease and cancer we have to create the capacity for that we have and if you look at the county here, delayed elective procedures if those things without causing harm to the patient can wait 30 days or more, we've asked the patients to postpone the procedures that's going to be important impact to be able to have the capacity that we need for potential coronavirus patients but making sure we're treating the diseases that are progressing and need to be cared for. unfortunately, the health care in many cases won't stop and if all of those things are delayed, then you are creating a buildup in the system and it's going to be difficult to manage.

we want to make sure that as a community resource, we feel more obligation to be there for our patients and make sure we're providing services they need and being able to respond to issues like covid-19. >> david, thank you very much for your thoughts this morning >> thank you for the time. i want to bring in tom from kpw to talk bank stocks. tom, looking at the bank sectors, it's similar to the rest of the market, even perhaps worse today. we know interest rates being low for an extended period of time may not be the best for banks but is there also a concern in terms of the credit quality of their assets, given the declining financial fortunes of so many tomorrow rations in the united states? >> david,there is a lot of concern. we're getting reports back, really, i think of unprecedented

slowdown and shutdown of businesses so i think it is of a concern. our approach to how we think about this is that we don't think we have enough information to figure out exactly what's going to happen, so what we've been doing is we've been stres testing it we've been looking at scenarios, and our opinion is that what happens over the next couple of months is going to be very manageable for the banking industry we think we're looking at somewhat of an earnings crisis, not a balance sheet crisis for the banking industry banks have shut off buybacks we think their dividends are still going to be paid this may cost them a good portion of their year's earnings, but we think broadly speaking to the banking industry, they've got the capital and balance sheet to be able to handle what's going to be coming at us over the next couple months. >> well, if that is the case, then one would expect that you

would think you need to be brave and by the stocks. is that the case when i look at a wells fargo down 47% or a citi down 54 %? these are year to date numbers or jpmorgan down 37% is it time in your opinion given what you just shared to actually buy some of these stocks >> i do believe that and by the way, what i've been telling clients and colleagues is cheap stocks can get cheaper. and the technicals aren't good for the banks. if you even look at monday, it was the biggest etf flow day of the year in the broad-based etfs, but financials had an outflow. the technicals are terrible, and that could continue, but my opinion is that if you're an investor and look out beyond this, and we keep comparing this to the global financial crisis we think that buying -- we say the trophies on sale or the

better companies at these prices if you can withstand the volatility that our view is the banking industry is in good shape, and we're going to be figuring out in the coming week what our earnings estimates are going to change to, but we think that most of the dividends, almost all the dividends will probably be good, and we think the balance sheets will remain intact so the answer to your question is yes we would, but also, you know, there are companies that may have more than average exposure to certain areas of energy or others those will probably not do as well as those that are a little more national or broad in scope. we think some of the stocks are highly attractive. >> tom, there is a broad expectation that the treasury and the government is going to come up with some sort of way to aid so many companies and encourage them to keep their workers. but if that doesn't happen, and if we get to this idea of let's call it a 15% or 20%

unemployment rate as apparently the treasury secretary expressed to some gop senators, have you stress tested for that can the banks withstand that kind of unemployment rate? >> well, look, my opinion is that i don't think you're going to see a banking crisis like you did again back in the '08 to 2010 we haven't stress tested 20% unemployment but the banks are in a very good position and i think this may be a situation where we're seeing unprecedented government -- not unprecedented. we had a lot of government support in the prior crisis, but that crisis almost started with a banking crisis that's not the case right here and we think if these government support programs keep rolling out like they're talked about, i think that's going to come to the aid of the economy which

will help the banks. >> tom, i'm wondering what you make of the sort of collective action among some of the very large financial sthuinstitutions to make the gesture of going to the discount window at the fed and making use of that now we have other facilities, the fed is announcing allowing primary dealers in government bonds to pledge almost any type of securities and get very inexpensive loans from the fed off of that. do you see banks using that to the fullest or is there some reduck answer the for them to free up their balance sheets >> i think banks are going to use it, and i think some of the best performing banks are going too use it quickly and tell other people about it to make sure it's destigmatized. most people believe this is temporary in nature if it's held appropriately. we need to get this virus behind

us, and think about where interest rates are interest rates are zero or near zero if we can -- so the interest expense is not great we need to have the banks and we need to have the regulatory flexibility to give the banks the opportunity to delay principal payments so we can get beyond this period it could be manageable if all the forces come together between government and i like the fact that you talked about a collective nature, because in my conversations with ceos, that's how they're thinking they would like to do that >> tom, always appreciate you taking time for us thank you. >> thank you good luck. thank you. be well. >> david, mike as you've been talking, two things. narrowest intraday range in about a week for the s&p 5.1% and walmart all-time high, 12605. dow is down 967.

let's get a coronavirus update at hq. hi, sue. >> hello, everyone here's the latest numbers. the number of global coronavirus cases has surged once again. it is now at more than 204,000 the death toll has risen above 82 00. iran alone is reporting 14 new deaths since yesterday raising its total to 11 35 dead. in the u.s. there are nearly 6500 confirmed cases with the virus now in all 50 states after west virginia reported the first case yesterday afternoon the european central bank president reportedly telling european leaders, lockdowns being imposed to fight the coronavirus could easily shrink the eu's economy by 5 %. the german newspaper says that's based on each month of lockdown reducing economic growth by 2 .1% and the lockdowns are estimated to last three months at home the virus outbreak has

caused an estimated 3600 job cuts counting layoffs announced by big employers challenger gray and christmas says slowing demand is shrinking employment own that does not include numbers from bars and restaurants which have been shut down and challenger grave says the cuts are affecting millions of workers. so we're monitoring the numbers for you, carl, and i'll have it for you next hour. back to you. >> all right sue, thank you medical scientists all around the world are racing to develop a vaccine for covid-19 with worldwide cases crossing 2 00,000 pharma comes co pharma companies coming to scale. with us is the chairman and ceo of merck what is at the front lines of, along with bill george gentlemen, it's great to see you. ken, it's been a while >> good to be here >> we saw the note earlier in

the week from you and bio tech teaming up to develop this vaccine. can you bring viewers up to speed on what you're doing >> so i think actually you're thinking about another arrangement, but i think what we are doing inside merck is bringing to bear all of our experience and expertise in developing vaccines. you mentioned ebola. we were able to get an ebola virus vaccine across the finish line in terms of demonstrating it, it was safe and effective. and getting the regulatory approvals and being able to scale up we know what it takes to get a vaccine across the finish line in a public health emergency >> you're right. it is pfizer my apologies more broadly, ken, how much good wood has already been chopped in developing some of these things given the past episodes we've been through >> well, i think that we have a lot of expertise, but let's remember that this is a novel coronavirus that we hadn't heard about until last december.

so a lot of work has to be done to understand the virus. the good thing for a company like america is we have a lot of expertise with, for example, anti-virals, hiv, hep-c. other areas. we have a vast library we're going to continue to test those assets to see if any of them have effectiveness against this particular coronavirus. but if i could just take a moment i think while that's an important thing, and the industry all across the industry, you have many, many bio medical researchers trying to look for therapeutics as well as vaccines. i think it's important to reiterate with the unprecedented spread of this particular virus, a doubling around the world in the last two weeks, we are the first line of defense with respect to our own hygiene, washing our hands, in terms of social distances the second line of defense is doctors and community volunteers helping affected people and then the industry has swung into action with a lot of bio medical

researchers dropping what they were doing to ensure that we actually are focusing on this issue. >> indeed. i saw a picture of a health care worker today with a sign saying i stayed at work so you can stay at home. that's really where we are bill, i want to bring you in, given your expertise and ask you what you think is important and have you asked ken what you guys together think is important in. >> well, i think we're working very hard to get a vaccine, but i think we need to be realistic here we're looking at at least a year, could be 12, could be 15 to 18 months mode moderna had the first human trial, but we don't know we don't know how it's going to work in healthy patients informal we've see i think we have an amazing medical capacity in companies like merck, the greatest pharmaceutical company in the world be their science, but i think we've got to -- people are

working together to try to develop something, but i think we have a little note of caution about getting something too quickly, and meanwhile, we have to defend -- as ken said, we have to depend upon our health care workers my son and daughter-in-law are both doctors at ucfs they're being called in for emergency work things are changing rapidly. i talked to a ceo at may oo. they've shut down except for emergency situations meanwhile, as ken was indicating, we as citizens have to separate and go into social distancing it's going to hurt the economy, but i think that's the right thing to do while we're working hard to get a vaccine. i was on a board when we have had swine flu. there were 60 million people infeki

infected it took a year to get the vaccine. we need to not be too overly optimistic that everything is going to bounce back in a couple months >> we want to keep viewers honest ken, were you going to jump? >> i was going to make another point we haven't talked about. i haven't seen talked about. with these kinds of viral outbreaks, often the severe infections are accompanied by bacterial infections, sometimes super bacterial infections go back to h-1-n-1 half the people, nearly half the people, the 300,000 people who lost their lives, died because of bacterial in a mopneumonia. it's important we develop powerful antibiotics so in future outbreaks we have those things in our arsenal. >> ken, can i ask you a question because you've raised a very important point. antibiotics are key to keeping -- as i understand it, keep are really dying of

pneumonia. that's what they contract with covid-19, and so your company has been one of the few majors that stayed in the antibiotic business and can you give us a little update an how that's going i really admire you. basically there's no money being made in this business, so you're doing it for the human and health reasons maybe you could update us on that >> yes you know, last year we were fortunate enough to have two novel antibiotics, two new ones. they have to be essentially used in those patients for whom there is resistance to the commonly used antibiotics and the challenge is while we continue to do this work, it's important for us to have a policy environment that rewards companies for coming up with these novel antibiotics, knowing that, in fact, many times they won't be used unless other ones failed just this week we had another antibiotic company go out of business, go bankrupt. and it's not an area of medicine

where there are marketplace rewards. and we want to make sure that we understand that this is an evolutionary fight between us and the bacteria, between us and the viruses, and we have to stay ahead. we have to be prepared we have to have an environment where people can put capital work in terms of developing new antibiotics? >> bill, people are coming up with all kinds of suggestions. does a legacy manufacturer, are they able to completely reinvent their manufacturing process to create masks or build ventilators? i mean, almost on a wartime footing, how much can we look to that as a solution in the interim where companies who have -- maybe had nothing to do with medical supplies start building the kinds of hardware we're going to need? >> well, we should start with the ones that have the capabilities like 3m they can ramp up the big companies have tremendous resources don't expect it overnight, but i think they will ramp up, and

yes, it is like a wartime footing. remember when ford shipped from automobiles to tanks in medical manufacturers, the product manufacturers need to do that with ventilators to get them out there everyone is crying about a need for ventilators. they're not getting them i think we need to do that while we're in this period of trying to find a solution, and that's the very best thing. i'm confident our manufacturers will step up to that that's where i think a lot of the efforts from the president's task force need to be focussed on working with these people to help them ramp up and get the supplies out to hospitals, because there is going to be a large influx of patients coming into these hospitals and they need to have the supplies and equipment to protect themselves and to protect the patients >> ken, i want to come to you as the leader of a large organization given these completely unique times. how are you doing work at merck these days how many people are staying

home how is that being managed? how is it being implemented and executed right now >> well, as a guest you had from stanford said, it's important to recognize the essential medicines and vaccines need to get to people. people still have cancer people still have heart conditions so we have two object ives in this company number one is to keep our people safe and what we're doing with respect to keeping our people safe is those nonessential people, we've asked them to work from home until at least the end of march it's important to recognize the people in our labs, our scientists, the people in our manufacturing facilities, have to continue to supply the medicines to patient who need them that becomes the secretary objective. to make sure we have the right kinds of systems in place for our manufacturing employees, fur our clinical and research employees to continue to do their important work to search for solutions to coronavirus, infection, as well as the other conditions we have to deal with.

>> ken, can i ask you a followup question you know -- >> absolutely. >> there's been a lot of free floating criticisms of the pharmaceutical industry, but merck has taken a different approach a lot of people got substitute of the vaccine business. you stayed in. it's not profitable because it goes in spurts a vaccine works and then it's gone that's what happened with h-1-n-1. you stayed in and stayed with the antibiotic what is your philosophy about that, because this is not strictly a mercenary activity. how do you feel about that, and how does that relate to the mission of merck >> well, thank you for the question, bill i think at merck we try to follow the science we have to ask ourselves where there's unmet medical need and, of course, it's important for us to make a return that's fair and adequate for our shareholders, but we have found by and large for 130 years if we continue to work in those areas

where there's need like, again, antibiotic research, vaccine research, that if we take the long view, that we will be rewarded in the long view, because. these continue -- infections continue to happen, and we know we have to be prepared for them long before. for example, in the vaccine business, it took us ten years of research and tens of thousands of people in clinical trials for guard sill, but it's now one of our largest products, and we're now in a position to really think about being able to eliminate cervical cancer as a cause of death >> bill, finally, we talked about faang for so long on this show facebook, amazon, netflix goo e google i wonder your take on our ability to get to that day where you can test maybe not everybody but certainly in hot spots most people, isolate the true positives and let the other

people get back to work and get this economy fired up again. >> absolutely. but let me be candid we lost four or five weeks i have great respect for the cdc, but they made some mistakes not working with w.h.o. who had testing capabilities and not getting private labs involved. it's changed and now two great companies are gearing up for tests. they've got sites all over the country that they can turn on. i'm optimistic about that. mayo clinic developed a test there are going to be up to 1,000 a day. that will help out we have to get testing to everyone who needs it, and not just have the whole country be tested but we don't know and with the capacity of this virus to infect people who are asymptomatic before, that's why we need to get the tests out to know who has the disease so they can be

quarantined. so i do think american industry will turn on i'm optimistic about that, now that we've unleashed them. and i'm optimistic about ken's industry and optimistic about the medical supplies and equipment industry and the testing industry we should turn to industry i think the government is going the right thing at looking to private industry to turn on. there has to be a higher calling as you heard from ken that merck has, every company has to step up, not just as a profit opportunity but to see it as an opportunity to really save people who have this virus >> ken, we've been focussed rightly so on the idea of a vaccine which as you guys pointed out, could still be time away but the anti-virals that may be available in the nearer term that could conceivably reduce the fatality rate would seem to be important, particularly in terms of how they might effect psychology as well what can you tell us in terms of

your expectations for those kind of anti-virals that may be worked on that could prove effective in making sure the virus is not as fatal? >> yes so as i said earlier, we're encouraged that some of our research-based industry colleagues are bringing some of those anti-viral opportunities into early stage trials. as i said, companies like merck and other companies are testing their existing anti-viral drugs and candidates to see if they have activity against this novel coronavirus. so i think the timeframe in which that could happen either single drugs or combination drugs is a much shorter time, and the point is not to discourage people. because i think this industry will do everything in its power to come forward with those therapies but to make sure we're realistic and remind people that right now we have the power as citizens to stop the spread or at least slow the spread of this

virus and that's what we can do in the next week, month, et cetera to ensure that we actually don't have the kind of situation that we see in italy >> something you can literally do starting today if you haven't already. ken, please come back soon we appreciate it so it so much and bill george, as always we'll talk to you later. >> thanks for having me. be safe. >> all right with stocks sinking one place getting attention is the corporate credit market. dom chu is taking a look at that area for us. good morning. >> good morning. one of the places we're seeing the stresses play out more even so today with the market going the way it is is on the corporate credit side of things. we have a seen a big divergence that is maybe turning to a wholesale sell off of the market but there are points investors are looking to we've seen some of the hardest

hit industries within the coronavirus whole market dynamic play out there in the bond insurance markets. these are credit default swaps on places like travel and tourism, say the cruise line operators. carnival, it costs about $650,000 a year to insure $10 million of debt from carnival and hess is a large size producer integrated oil company. some of those burglar bond insurance pieces are charging about half a million dollars a year to insure $10 million of bond on the other side, clorox has seen their rates fall, it costs less to insure against a possible default on a company like clorox than a few months ago. now it's 50,000 a year to

inshoinsure the debt if you are a highly rated bond issuer or company, jim crammer mentions johnson & johnson their costs have been coming down in terms of their interest rates. meanwhile, some of the highly risky issuers, rated triple c, they're yielding a lot more, investors are claiming and we're seeing a yield on those. that could be a key place to watch for stresses on the market i would note here that as the volatility plays out in the stock market we have not yet really seen a lot of the stuff that would happen in very, very stressed out credit markets. so it's certainly a flash point, guys, a focal point to watch. >> for sure. obviously a lot of attention on the investment grade credits that might be subject to downgrade and chain reactions that sometimes kick in

>> absolutely. >> dom, thanks very much we'll talk to you soon. a stimulus plan awaiting a congressional vote now speaking yesterday treasury secretary steve mnuchin emphasized needing to send money to those in crisis our next case in an op-ed said the government should send you $1,000 and another $500 for each child as soon as possible. the author is with us right now. jason, great to have you here. you've, as we've said, often been advocating this type of policy what's your characterization right now in terms of the magnitude, speed and whether it's sufficient to buffer this economy? >> i can say a week ago i was very nervous about the state of the economy. now, even though we've taken more steps to shut the economy

down, i'm less nervous i'm less nervous because of the vigor of the health response and because economic policy makers are really pulling out the stops and using, you know, all the tools they have in their arsenal. and they're going to start inventing new tools soon, and i'm happy to see that. >> so obviously direct cash to households, however quickly it might get there is a cushion obviously it can help people cover bills. what about the rest of the scope of what we're facing here, in terms of business shutdown how would you set policy when there's such an indefinite nature to the shutdown to parts of the economy >> we're operating under a situation of extreme uncertainty right now. that's why i thought some of the tools that we know how to do that we've done before, we should deploy them right away. and that's cash for people but that's only part of the response part of what we need to do is make sure that a lot of

businesses don't go interrupban lot of workers don't get laid off. that's much, much more complicated. there's a lot of creativity going into that, loan facilities, andrew had a nice column on that some economists are talking about grants there's a lot of affected industries, a lot of small businesses i'm not sure right now which of the ideas are best but we need to figure that part out really quick. >> and then, on the kind of larger scale side, in terms of whole industries that have had the sudden stop affect them, now we've been reporting about boeing and the rest of the aerospace industry does the principle of get cash quickly and worry about the details later apply here there's been a debate that's raged against what stipulations might be placed on that, whether or not to dilute shareholders or

penalize companies for having bought back stock. >> i think large companies are different. with individuals we can't sit down and figure out an individualized plan with each one of 300 million americans the immediate problem is liquidity. there are mechanisms used, gm, chrysler, others in the past that assure some socializing of the losses, not all the taxpayers but also equity and potentially debt holders as well >> and just quickly, in terms of the cash to households, there have been proposals about a provision to keep it going based on certain economic positions or labor market conditions, where do you come down on that >> critical. one of the lessons of last time was a bunch of the support ended sooner than it should. i would not leave it to congress next year to figure out if it's

still needed they can get tired of things after the most acute phase passes so put in triggers now if the employment rate is too low next year, the checks go out again. at the same time, aid to state, other aid to individuals, and continue to work on the business side this needs to be comprehensive, this is one important part of it, though >> jason furman, thanks very much we'll talk to you again as this all moves along. >> thanks for having me. meantime, dow down 1200. not too far from session lows, 1339 virus fears in new york driving those who can afford it to look for vacations. >> rental prices in the hamptons, hudson valley and other places tripling as new yorkers leave the city in the hamptons one property rented for $100,000, that's just the month of april march and april are usually the

off season but brokers say homes that would rent for $5,000 a month going for $25,000 a month. some renters asking to start their scheduled renters now. others taking home for an entire year just to know they will have a place. in the hudson valley there's a shortage of rental homes since most of the homes up there on airbnb and air bro are owned by city residents that want them for their own. one saying, one that rented for $4,000 a month now rented for $18,000 for the month of april some willing to give up their homes and staying with family in lieu of the crisis this home is now renting for $600 a night good wednesday morning

morgan brennan is with us from the headquarters, john ford our coverage from the floor. obviously we lost all of yesterday's gains, dow is down 1,400 points boeing taking the dow down elk mark select funds' jim murray joins us. we know that oak mark is hunting for value, but the question is how much value is being created in this your eyes? >> you're right. we're bottom up investors, we're thinking of companies what they're going to be worth over the lifetime of their existence. we think the current stock price declines are well in excess of the actual economic loss that's likely to be experienced by these companies looking out over the next five to ten years >> all right why do you say that? what leads you to that point of view >> well, if you think about how

much cash flow these companies produce in a given year, it's maybe 5, 6% of their market cap. if you think about if it was your private business, if you owned it as a family and you lost a year's worth of cash flow, you'd say okay the value of this business is down 5 or 6% if you think that's somewhat permanently impaired you can say the value may be down 10 or 15%. but assuming that your business can survive until the next upturn, and we think this will be a fairly sharp but relatively brief downturn, then you'd say, my business is not worth half of what it was trading at three months ago but that's where the stock prices are -- what they're currently pricing in >> certainly we'll have to see how all of this plays out over the medium to long term. we have exties selling off, treasuries selling off, we have gold selling off it w