good afternoon, everyone welcome back to our breaking news coverage of the coronavirus pandemic and the big market sell-off that we are experiencing at this hour. welcome, everyone, again, i'm tyler mathisen the dow near the lows of the day, down about 800 points right now, to kick off this second quarter. this, of course, after the dow and the s&p 500 both had their worst first quarter ever the worst first ever, as fears about the impact of the virus spread gloom and doom about the market and the economy we begin with breaking news. the boston fed president, eric rosengren speaking right now, and steve liesman has those details. hi, steve. >> good afternoon, tyler eric rosengren, the boss and fed president speaking in boston over some form of teleconference says he expects the rate of unemployment to rise dramatically he also says that central banks can and most do a lot in crisis. for the record, rosengren was very early in saying the federal reserve may have to go out and do things that it never done

before, and indeed is doing right now with the boston fed itself, running a special fund to back up money markets he says that regulatory changes will allow restructured loans from the banks can be brought to the federal reserve and be funded that way, and won't be frowned upon by supervisors, so kind of an encourage from the bank survivors to get to the -- to work with their customers and restructure loans. finally, says it's the need to support essential workers and it's the best of times here for the public spirit here let me just talk about this rising unemployment rise dramatically we're only looking for 0.2 of an increase in the friday jobs report, but that's not going to pick up whatwear seeing in the more frequent data we had north of 3 million claims last week. expectation for tomorrow is north of 3 million as well both of those together would raise the unemployment rate quite a bit by itself.

so we're looking beyond the data, tyler and kelly, because it's not necessarily going to pick up this monthly data is going to pick up what's really happening in the economy i've seen estimates today from oxford economics that as many as 20 million people could be unemployed in april. that compares to 15 million at the height of the 2009 crisis. guys >> and to further illustrate that, steve, bank of america thinks the jobless claims figure this week, remember, it was already 3.3 million this week, will be 5.5 million. that's a pretty staggering increas increase >> i've estimates as high as that i haven't seen the b of a one. there are some people who say they may have to go back and revise last week during the financial crisis in 2009, we never had as many continuing claims as 7 million and that took about 20 months to get there. we're going to get there in a week or two weeks of time. it's one of the things that's going to keep that number down,

i believe, is that the state offices just can't process it. so we may be going back and revising data. it's going to take the official data a time to catch up and then hopefully, the rep bound will outpace the official data as well, so that's why we're looking and we've been talking on this show quite a bit about alternative data, ways of measuring the economy in realtime in a better way >> steve, one quick question, where does rosengren fall in the spectrum of fed presidents >> well, he was hawkish for a bit there. he wanted the fed to go a little bit easier last year in terms of reducing rates he was very concerned about the corporate debt market. and by the way, that's proving to be a sort of prescient warning, if we had gone into this crisis here with less leverage and less corporate debt, we might be in a better

place where the fed might have had to doless. he was very concerned about low rates increasing the level of corporate debt that's out there. once it turned and once the fed got down to zero, rosengren is a fullout dove here. >> do i coo? i mean, a full-out -- is anybody not on board with this at the fed at this point? >> no, there was one person, we had a loretta mester on yesterday. she initially didn't want to raise -- lower down to zero, because stheflt the transmission mechanism was gummed up and it wouldn't do good she wanted to save that, but nobody from the fed, in fact, kelly, you remember the '08, '09 crisis there was a lot of debate and hand wringing about the fed going too far. a lot of political, a lot of ideological economic debate. everybody's onboard with this. everybody, i guess you could say, is a keynesian or even, dare i say, an mmter in that

nobody seems concerned about deficits the only thing i worry about with this latest bill is, will we have the firepower to do more later. it's possible, if this were to go on, that we're going to need another round of stimulus here >> that's quite a way to set us up to talk to mr. santelli steve, thanks so much. steve liesman. rick, we've talked about the differences this time -- and you've said it yourself. you've got no problem with this. last time around, you had the housing bubble it was like, why would we try to get back on that path. this time, it's a pandemic it's different >> it is different, but i'm not sure everybody has the differences really outlined clearly. first of all, if you have a baseball team and you take all of their bats away, what happens to their batting average, kelly? pretty much goes to zero i think this parlor game of initial jobless claims and 30% unemployment is absolutely useless and ridiculous and, i think this everybody, conventional wisdom, that we're going to shut down quick because

we've turned off the economy, but we're not necessarily going to come back quick, i don't believe that either. and i'm certainly no keynesian and i don't believe in modern monetary policy or any of the new wave, forget the deficit to me, the biggest issue i compare potentially what we're going through to '08, '09, is on the backside, okay because i think on the backside, they need to mop this up a little bit quicker than ben bernanke and janet yellen did on the '07/'08 crisis, but i don't have a problem with mr. rosengren, i don't have a problem to moving rates to where they moved them, and i certainly do have a problem with some of the regulatory issues or the re repo, liquidity, or the dollar swap programs, or the commercial paper programs i think all of those are great but i really think that a 30% unemployment rate is absolutely meaningless, because it isn't coming from weakness within business it's coming from a shutdown from the outside.

>> absolutely true, rick it's a self-inflicted shutdown rick santelli, thanks very much. for more now on what we can only describe as the kind of ugly action on wall street, at least as far as equities are concerned, as we kick off the second quarter, let's go to bob pisani hi, bob. >> hello there rosengren didn't have a big impact on the markets, but we've had a nice little rally on the market since cuomo stopped talking. 2489 right now and the s&p 500 so a rally going in the middle of the day the fed, mr. rosen was talking about buying mortgage-backed securities they could certainly use it in the reit space they're getting clobbered again. office reits are down big. shopping mall like simon, the usual suspects, they're getting hit rather notably big drops in the reits today the regional bank, they're going to be stuck with nonpayment of mortgages. and those things have not

performed even on days when the markets are rallying all moving to the downside retailers are hitting new lows, as well below 2 billion market cap. and hanes, nordstrom, gap, they're a 2 billion market cap you'll see other companies kicked out into the small cap spaces now that these numbers are down the one company that best reflects the way the market performing is coca-cola. it tracks the market better than anything else and has a good exposure to the overall global economy as well as the u.s. consumer economy and coke versus the s&p year-to-date, it's pretty darned good, almost tick by tick. guys, back to you. >> bob, thank you, sir bob pisani we've got some breaking news the biggest energy ceos are headed to the white house. let's bring in brian sullivan, who has more for us. bri? >> thank you very much, kelly. this all breaking right now and sources telling me that on friday, in person, i might add,

ceos from at least seven companies will be meeting with the president at the white house to discuss energy policy a source tells me they are not looking for a bailout of any kind they want markets to work, but the ceos we have learned here at cnbc who will be attending at the white house, and again, in person, including the ceos from pretty much all the big names. exxonmobil, chevron, occidental, devon energy, phillips 66, energy transfer partners, run by kelsey warren, probably the richest man in texas, if not number two, and the former ceo of continental resources, harold hamm seven, at least, ceos will be going to the white house on friday, kelly and tyler, in person to discuss energy policy. >> brian sullivan, thank you very much. and from energy policy to automobile sales, toyota out with its numbers for march and they are pretty bleak. let's go to phil lebeau with the numbers. hi, phil >> tyler, they are bleak in the first quarter, toyota

sales here in the united states falling 8.8%, just a little bit weaker than the edmonds estimate of a decline of 8.6% but forget about the first quarter, because we knew that january and february were relatively strong. what happened in march gm and fiat chrysler have not told us what happened in march they only give us q1 sales but toyota gave us the month of march. this is a glimpse of how bad it is for the auto industry a decline of 36.9% for auto sales in the month of march here in the united states for toyota. guys, you combine that with hyundai saying they were down 43% last month and a few other automakers that we're expecting to hear today. bottom line is this. the auto industry in march has pretty much shut down. you can expect that to continue into april the question is whether or not the incentive offers that are going to be coming through, maybe in april, in may, and they're out there already now, when do they start to get people to come back into the showroom >> all right, phil, thank you very much. phil lebeau on the numbers out of toyota.

from those brutal car sale numbers to the ugly start to the second quarter on wall street, let's welcome in jeff mills. what an introduction, jeff i'm sorry to be such a downer there. he's the chief investment officer for bryn mawr trust. good to have you with us what do you think about what we're seeing today a lot of people are saying, what's really taking place this afternoon is that the quarter end rebalancing is over. now we're off on a new foot and it isn't too surprising to see that we would give back a little bi bit. >> i think that's true if you think about market action in the context of historical bear markets, what we're seeing right now is not unusual if you go back to 2008 from september to december, we saw six rallies between 9 and 19%. the fact that we rallied last week as much as we did, it's typical of how oversold we were prior to that. and we ended up with the second best five-day stretch in history. and i went back just to see how markets typically respond after

stretches like that over the next three months, just to get an idea of where we might be headed so looking at the ten best five-day stretches over history, the news is not great over the next three months. the markets are only positive 50% of the time. the average return is actually negative 1% versus positive 2.2% for all three-month periods. so what we're seeing right now is not all that unusual in the context of a bear market and to the point that we were just making about auto skpaels the issues with energy and just general economic data overall, i think we're going to have to continue to digest numbers like that, and that's going to make it really hard for the market to rally sustainably over the next couple of months >> that's sort of the thing that's been on my mind as these numbers come out, rick santelli can dismiss them, but they're going to be there nonetheless. how accurate they are and lasting they are is a matter for debate, and rick is right to

raise it we're going to also start seeing an awful lot of corporate numbers just like toyota's that paint a very, very bleak picture. so it wouldn't surprise you, would it, if we test the lows from last monday >> it wouldn't, at all and i think investors understand that economic data is going to contract, but i don't know that we fully understand the magnitude of that contraction. to rick's point, i think we're going to need to dive into the data a little bit more i look at the manufacturing pmi number that we got this morning. on face value, it actually didn't look that bad it was actually slightly above expectations, in contraction, but not awful. if you look under the surface, there are some knnuances there that are important to understand that's the sign of high demand in a growing economy supply deliveries have slowed down dramatically, but it's because of the issues with the virus nap reading was 65 that actually propped up the index, but actually for a bad reason

if you look at new orders, that fell eight points to 42. the largest decline that we've seen in over ten years that's more indicative of the type of environment that we're looking at not only is the data important, but trying to parse exactly what's going on under the surface is going to give us a better idea of the true magnitude of the slowdown we're facing >> so let's go into the living room of the typical american investor i hope they have a living room as beautiful as yours. it's a lovely shot that you have right there. but a lot of people are just plain afraid of what they're seeing in the news, the photos they're seeing, the pictures, the numbers, they're worried, they're anxious. the older they are, the closer they are, maybe, to relying on their portfolios the more anxious they are. is this a good time, then, to be making investment decisions one way or another or are you better off just sitting tight and letting the whole thing ride through? >> it's a great question and we've been getting it more and more and a lot of the questions sound

like, hey, should we get out of the market and wait for the dust to settle and get back in? what i will say and what i'll warn people against is that really doesn't work. if you get the timing right getting out of the market, you might feel vindicated over a couple of week period if the market continues to go down. but that second decision, that buying back into the market is extremely difficult. think about what we just went through. folks that sold at 2,600 on the s&p 500 probably felt pretty good as we trended down below 2,200. but all of a sudden in the blink of an eye, we were back to 2,600. what do you do at that point do you buy back in in anticipation of the market continuing to go up? do you hope that the market rolls over and buy back in lower. it's really difficult to continue to make those really smart decisions and time things properly in the midst of all of this what i would suggest is to be patient, be careful, and not make investment decisions that are predicated upon the broad market moving up or down pick your spots. look for areas that you believe are going to outperform, once we move past all of this. so i think about areas that have

gotten really beat up, lately. small caps, mid-caps, value. there may be more pain in the interim, but if you look off of typical market bottoms going back to the tech bubble, those are areas of the market that tend to do well over the next ten months be selective, pick your spots, but certainly all in, all out is not a good strategy here >> jeff mills, as always, thank you very much. >> the united states has tested more than a million people for covid-19, but states are still reporting a dire shortage of tests. meg terrell joins us now with a look at where testing stands in america. meg. >> hi, tyler well, it really depends on what state you're in. we have a map here showing you the variability across states by 100,000 people so new york, obviously, has done the most tests and that stands up when you look at its population, as well but washington and louisiana also testing the most.

you can see here, we did finally surpass that 1 million test market it is the commercial lapse that are providing most of these test more than 800,000. but still, so many backlogs, quest and lab corps among those processing the most tests. quest saying it can do 30,000 a day, and returns results in four to five days for lab corps, it's 20,000 also four to five days for the results. but they both say that could be longer or shorter depending on the circumstances. if you compare the u.s. with other countries doing a lot of testing, it is true the u.s. has done more testing than those other countries, south korea and italy. however, when you look at that on a per capita basis, we're way behind south korea has done double the number and italy, even more than that joining us now to discuss the u.s. response more and some creative ways we could use to understand the direction of the epidemic is dr. eric topol of scripps research thanks for being with us on the phone. you wrote an op-ed for medscape just a couple of days ago saying

this could go down as the worst health crisis and the worst handling of a health crisis in u.s. history tell us about that >> right, meg, i don't think there's any question about that. the problem is 45 days, the critical lack of response. the first patient in the united states was diagnosed in washington state january 21st. the same day as that in korea. and we didn't have, essentially, any testing for 45 days. and that allowed for this massive spread throughout the country. and so now even though there's a surge of testing, it's so late and there's been so much infect activity in the u.s. and hot zones across the u.s. and in many cities, so as you point out, there is a lot of testing right now, but the critical period was missed and that difference is south korea contained the outbreak they flattened the curve very,

very quickly they had a very limited number of deaths. they had extensive testing whereas we are going to see of course, a big toll in deaths and we're the epicenter of this pandemi pandemic >> what more do you think the u.s. needs to be doing now, even after that missed time, can we be doing better on the response currently? >> there are many things we can do, of course. we can't have a defeatist attitude and i think the main thing is, we can't just rely on testing, because it's so late and such a high rate of people who are either asymptomatic carriers or have been hit with covid-19. one of the most important things that we're not doing is digital tracking and tracing and that is to use the things that people wear, like their smart watches or their phones or taking body temperature.

these digital tracking tools can tell us where the next cluster of people are starting to have either abnormal resting heart rate, like the study we just launched last week or body temperature increasing or other signs before we have another hot zone and that's something if we got a large number of americans involved, we could stay ahead of this and know where and when something was erupting >> dr. topol, tyler mathisen here my question is, what accounts for the fact that we were so slow to get moving on the tests? do you lay it at the feet of the federal government do you lay it that when the w.h.o was using a specific kind of test, we rejected that test and decided to go our own way. and the second question, if i might, why has the incidence in china been as low as it has?

is it because they're not testing as many or as well or what >> hi, tyler, i think the first point is we were the only country in the world that rejected the w.h.o tests as i mentioned, in south korea, they used that, at least initially until they got a quicker turnaround test and every other country used that test but we rejected it and never had a test in place that could be done accurately and at scale until right around 45-day point, after the first patient here so that was a terrible breach and that will account for a lot of unnecessary deaths going forward, because we didn't get ahead of this. as far as china, the main point there is they contained their outbreak largely to the province where wuhan is and so instead of the broad geographic spread we're experiencing in the u.s., they went into draconian

measures of anti-mobility. and of course, they have ability to do that better than we do in the u.s. but that led to the containment. there was a big death toll in china and there were a large number of cases. but we are going to exceed all of that. perhaps even orders of magnitude, because we didn't take the steps by testing, by containing the outbreak in the early days, and even the social distancing the other point i want to make about china, it did practice the w.h.o guidelines as quickly as was possible not as quickly as south korea, but so, they did get into massive testing. they did get into tracing contacts and isolating them and quarantines and social physical distancing these are things that we have not done

there hasn't been contact tracing. tlnt been, only in recent days and weeks, physical distancing so these are differences between the countries in augusta, not just china, not just south korea, but taiwan and hong kong and singapore. so there are pretty striking differences. perhaps because there was sars in asia, but there are other factors involved, as well. >> dr. topol, we really appreciate your time and we would love to stay in touch can you to hear more about that study on wearables that you're doing. thanks for joining us today. >> thanks for having me. >> lost that days of testing, just it's amazing. it's too bad meg, thanks so much. let's check in on the airlines, which are sinking again today, and look at the size of these moves. american, delta, jetblue, they're down more than 60% now from their 52-week highs we have an analyst who says we're near the worst-case scenario playing out he'll join us on that, next.

and there's some big news in the media world today. at&t replacing warner media ceo john stankey with jason kilar. we'll speak to both of them in a few minutes on the show. we'll be back after a short break. (soft music) - [female vo] restaurants are facing a crisis. and they're counting on your takeout and delivery orders to make it through. grubhub. together we can help save the restaurants we love.

where people go to learn about their medicare options before they're on medicare. come on in. you're turning 65 soon? yep. and you're retiring at 67? that's the plan! it's also a great time to learn about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. here's why...medicare part b doesn't pay for everything. this part is up to you. a medicare supplement plan helps pay for some of what medicare doesn't. call unitedhealthcare insurance company today to request this free decision guide. and learn about the only medicare supplement plans endorsed by aarp. selected for meeting their high standards of quality and service. this type of plan lets you say "yes" to any doctor or hospital that accepts medicare patients. do you accept medicare patients? i sure do! so call unitedhealthcare today and ask for your free decision guide. oh, and happy birthday... or retirement... in advance.

have you heard? for the first time ever. you can watch the brand new "trolls world tour" movie... wait for it. at home. what? -what? ooh! [ gasping ] what a troll. let's go to rahel solman for the very latest on the coronavirus. >> florida's governor ron desantis is now explaining why he has finally issued a stay-at-home order for his state, something he had resisted despite criticism. >> it makes sense to make this move now and, you know, i did consult with folks in the white

house. i did speak with the president about it he agreed with the approach of focusing on the hot spots. but at the same time, you know, he understand that this is another 30-day situation and you've got to just do what makes the most sense >> florida and also pennsylvania issuing their stay-at-home orders, just hours after south carolina senator lindsey graham says that it's time to consider national shelter in place restrictions and also limiting or even banning domestic and international air travel for the next 30 days as always, for more coronavirus coverage, you can head to our website, cnbc.com. kelly, back to you >> rahel, thank you so much. rahel solomon there. some new numbers from the tsa show the coronavirus taking its toll on air travel just about 146,000 people traveled on a plane yesterday. 146,000. that's down from more than 2 million a year ago on the same day. earlier on "squawk on the street," treasury secretary steve mnuchin weighed in on what the white house is doing to help airlines >> time is of the essence.

we will be doing this very quickly. these are going to be optional programs we're not forcing airlines to do these deals. we'll make these available to the airlines, if they want to take them, they'll take them i think, as you know, different airlines are different credits we've been very clear that taxpayers will be compensated for anything we do >> now, stifel isdowngrading two major airlines, american and jet pblue to hold from buy toda in a new note saying a worst-case scenario is playing out for the airlines american isdown nearly 12% today. jetblue down 9.5%. joe denardi is the manager who made these calls and a managing director at stifel good to have you and i guess to begin with, the funding aspect of this will come from the government. what's your expectation now as to what airline will receive and what happens next in terms of staying power for them to stay afloat here? >> yes and thanks for having us i think the financing from the government is going to come in

two primary buckets. one will be essentially payroll support or wage and labor costs, reimbursement. that will be a function of how much airlines spend on wages and benefits over a several-month period that, i think, every airline is likely to apply for that and is in the process of applying for it now. should know more details on that by the end of the week or early next week, but expect the terms on that financing from the government to be relatively friendly, and then the second bucket would be access to credit and as the treasury secretary indicated, not every airline is going to need that funding equally. and so, i think, airlines are still trying to figure out, you know, to what extent they want to apply for that. but i think most will and try to get a sense for what the financial terms would be that the government would look for. i think that still remains a little bit of an unknown >> what strings do you expect to be attached to both parts of

this support and how will that affect whether the airlines accept it? >> yeah, i think my understanding of the first part and i think this is still in the process of being figured out, to be honest, but my understanding is that the industry wants to try and make this a team effort from a labor standpoint, so everyone would take that money to protect payroll and so, again, i think the terms of that, whether it involves equity or not, would be relatively benign. but the terms of accessing credit would certainly include equity the legislation says that equity must be a component of the government's compensation. and so this all comes down to the duration of the impact on revenue from the outbreak. the longer this goes on for, the more capital that certain

airlines are going to need the less leverage they're going to have in negotiating the terms of that. and the more costly and dilutive for equity holders it's going to be and that was really the core of our downgrade on american is that there were too many unknowns at this point to recommend it i think there is a scenario once the industry gets through this that's bullish capacity is most likely going to be very constrained on the other end of this, just given all the capex deferrals that you've seen in early retirements of ur aircraft that's most likely going to be a good setup, but from now until then, there are too many returns. >> thanks for joining us we appreciate t. >> thank you >> that's joe denardi. >> all right, kelly. i'm -- we're going to have an energy report here in just a minute i'm going to get a little energy my wife has given me a nice little espresso here the oil market -- >> you guys just have those tiny little tea sets just setting

around, ty >> we have these these are from concadamarini on the amalfi coast >> that's right, tyler, a little jolt of energy is what the energy markets need right here you see all of this red, brent down 6%, wti down 4% a wild ride for wti in the last few minutes, jumping more than 2%, as news broke of a meeting between big oil ceos and the white house before quickly shedding those gains but crude still down more than 60% this year. and we can already see the price plunge starting to impact companies. today, we saw whiting petroleum file for bankruptcy and analysts are expecting whiting to be just the first of many. this was once a multi-billion-dollar stock, just last year. its market cap now sits at $34 million. we'll be keeping an eye on that meeting between president trump and the oil industry ceos like exxon and chevron on friday,

especially as we could see a loosening of restrictions on crude around the united states guys, back to you. >> all right, eric chemi, thank you very much. and still ahead, at&t making some big, big c-suite changes, naming jason kilar ceo of warner media. he'll report to the outgoing ceo of warner media, john stankey. and the federal government encouraging social distancing measures until the end of april. why that might be good for both people and the economy that's coming up and remember, you can always watch or listen to cnbc live on the cnbc app we will be right back. our special breaking news coverage resumes after thi s.

s. there are times when our need to connect really matters. to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed, reliability, and security you need. tools to manage your business from any device, anywhere. and a team of experts - here for you 24/7. we've always believed in the power of working together. that's why, when every connection counts... you can count on us.

welcome back markets have been sitting down about 4% for the last hour or two. the dow jones industrial average down about 880 points. the s&p down 4.3%. the nasdaq in between those two. and the russell 2000s are down almost 7%. here's a look at the sectors of the s&p 500. pretty much all of them are in the red, led by real estate to the downside by 7.5% today

utilities and financials also hit big. within the dow, boeing, american express, those are the two big laggards today you do have two names in the green. procter s& gamble up about 1% and big news in the media world today. at&t is replacing warner media ceo john stankey with hulu cofounder, jay connson kilar efv may 1st. both stankey and kilar join us now along with our very own julia boorstin joel >> kelly, thank you so much. thank you both so much for talking to us today after this big news jason, i want to start off with you. congratulations on this new role, but you are taking the helm of warner media at an unprecedented time in health and economic crisis. because of coronavirus are you still planning to launch hbo max in may

and are you concerns that consumers won't have the resources to pay for yet another streaming service? >> well, thanks for the congratulations, julia, first and foremost and the plan absolutely is to launch hbo max, as is planned. and to your last question about the interest in it, i've been a big believer all my life that, you know, people all over the world care deeply about well-told stories. it's just always been the case i saw it at hulu and amazon, and certainly, throughout my whole life and i just believe that that's going to be the case going forward. now, it holds the bar very high for us as a team, to be able to deliver a great service. but, gosh, when you get to know the people inside warner media, i have every confidence that that will happen >> now, jason, coronavirus is impacting so many different parts of warner media's business, but when cyou look at the studio in particular, warner brothers has been entirely shut down how long do you think it will be

shut down for and how much do you think it will impact your film slate and ability to produce tv shows for the fall season >> there's no doubt what's happening is unprecedented i don't think there's ever been a period in history where you've seen an entire industry basically shut down production across television and film i strongly believe, obviously, those productions are going to get back up and running, but not just for warner media, but across the whole industry. and i think there's going to be a lot of interest of people around the world that are going to be as rep s rrespite from the challenging times. i don't see this as in any way a longer-term thing. i definitely think that it's unprecedented, but i do believe that what we're going to see is people are going to get back to work and productions are going to get back and going. now, when that happens, to your other question, i'm certainly not the subject matter expert. i would have to defer to others on following the data sources of dr. fauci, but i'm certainly not

the subject matter expert to be able to opine on that. >> thanks, jason now, john, i want to bring you in here. as you look at these different parts of your business, many which of have been shut down, do you expect to have to do layoffs either at warner media or at the parent at&t? >> i don't know that anybody has a good handle on exactly what's going to happen in the economy over the next couple of months i expect we're going to be in for some more difficult flooding, and, you know, we're a large business and we have operations in a lot of different product segments and we're going to have to respond to the markets and what happens. and if we see volumes dropping off or interest levels dropping off and particularly product sets, are we going to have to adjust our resources around them it's possible. i think everybody in this economy right now is looking at those issues, but the good news is, we have some very strong businesses that are indispensable in what people will do in their lives every day. and those are important.

they're important moving forward. we're seeing how important they are right now. and we'll continue to make sure we have the focus on growing those businesses and carrying them forward >> now, john, at&t is about $115 billion in debt. i know you have already taken steps to reduce your debt, but are you concerned that a debt crisis around the impact of coronavirus will be problematic for your business. >> no, we're comfortable, julia. i can tell you, even before we did the time warner transaction, one of the things that the board was really diligent about is looking at what we referred to as a black swan event in our planning, which is, what would happen if we got into another repeat of 2008 or worse and if the debt markets were seized up and locked up for any period of time or we saw dramatic downturn in the economy, were we comfortable that we had all the resources around us to be able to manage liquidity and carry the business forward and do what we typically do in downturns,

which is find those strategic areas to invest and come out stronger and we were very confident prior to the transaction that we could keep ourselves in that position, and i would tell you, as we've gone through the last several weeks, all of those things that we planned for and thought about, we've had great responses to and feel very capable of working our way through this >> mr. kilar, it's kelly back here at cnbc headquarters. i just want to ask, you know, our alex sherman has a story today about how media networks have paid billions of dollars for sports that they won't receive this year, saying, for now, you know, everyone's just trying to figure out what to do, but that this could turn into a pretty nasty fight and have consumers decide to cut the cord for the time being what are the plans to try to make up, to try to recoup some of that money spent, if there are any plans like that, and what's kind of the bigger way you think of maintaining live sports as a destination viewing opportunity for the months

ahead, now that they're talking about making delaying the nfl season >> yeah, it's a great question on both accounts the first one, i'm going to defer to john, because i'm obviously not in the building yet. but will be may 1st. on the second one, you know, i have certainly read, as a bunch of other sports fans have novel ideas about getting sports going, in certain ways that are safe and responsible and i think will be interesting to see what happens with that. nobody knows the answer to the macro question, which is, at what point do things start to get back to normal on the other side of this curve but i do believe that when that date happens, we're going to see sports, movies, television, and a whole host of things that as john said earlier, an indispensable part of people's lives. but what i can't answer is what date that will be. >> john, do you want to add any context to that, for what's going to happen to the time being? >> i would further offer that it's unfortunate that folks can't get themselves exposed to what they love most right now,

which is competition and sports. but i'm sure once we can get back to it safely, audiences will reengage and be there to enjoy what they go doing before corona and will like to do after it the good news is, i think, in our relationships with the different leagues that we're participating with, we had very strong relationships and i think we have really good business constructs around what we do i feel very comfortable that while there's no question there's going to be some end-quarter impacts and we're going to see some disruption in the near-term as we work our way through this, i think we're all going to come through this in a place where it's a win-win construct for the leave us and, we all want the same thing, we want people back on the field doing their things, we want them competing, we want ratings to be strong and i think we're going to find the right approaches to make sure that that occurs >> now, john, when you look at what this company looks like, when we do come out of this, i

guess the question is, when you look at at&t more broadly, how different does at&t and warner media within it need to look do you think business models will be fundamentally changed by some of the things that are happening now during this coronavirus shutdown, such as your movies going direct to consumer without that traditional three-month window and how does at&t's other parts of its business, whether it's the mobility or offering tv and broadband play into this, as well how different will at&t look at the end of this. >> first of all, at the core of our company, as i mentioned earlier, i think we're in great shape. connectivity has gotten no less important going through this dynamic and if anything, the networked world and the versatility of it has demonstrated just how strong and powerful an engine it can be to maintaining some degree of normalcy, and it's nice to be in the heart of that as a core part of our business. as jason said, i think the other thing is, you know, we're clearly seeing the people resonating with an opportunity to spend their time looking for

great stories and emotional attachment and distraction, you know, during some very difficult circumstances. and we're in the core of that on our creative and content side. and with hbo max getting ready to come out to market, i can think of no better place for us to be than have an opportunity to bring some new library and fresh content out to the end user but we are going to see, not just at&t, every company is going to see consumer behavior changes coming out of this event. and i don't expect that we're going to return to, quote, normal we're going to return to a different economic environment we're going to return to different business model and so, yes, i would expect we're going to have to do things to adjust some of our business models to meet the customer where they want to be. and is there going to be as much retail space back in service and attached retail spaces, theater screens, you know, chances are, probably not and does that mean that we're going to be looking to tell

stories and maybe deliver them in different ways to compliment what we already do so well on the big screen and cinema? i would expect that to be the case, especially if that's what the consumer expresses as their preference and desires the good news is core of the business is very stable and very strong we have some tweaks we can make around the edges with other parts of our business that i think play into some of the very strengths we have, which is connectivity with customers. >> i want to thank you both so much for joining us. we look forward hearing more from you around that launch of hbo max coming up in may john stankey, ceo of at&t, as well as jason kilar, incoming ceo of warner media. guys, back over to you >> thanks, julia >> julia, fascinating conversation i couldn't agree more with what john closed with there we will get back to normal, but it is going to be, i believe, in many, many ways a very different kind of normal and it will take a while to get

there. meantime, still ahead, stocks are near the session lows, roughly, the dow down about 800 points or thereabouts, down about 900 recently as the coronavirus puts many states at a standstill florida joining them now, but could social distancing actually be good r e ony?fothecom we'll explain that one, next

you may be learning about, medicare and supplemental insurance. medicare is great, but it doesn't cover everything ...only about 80% of your part b medicare costs. a medicare supplement insurance plan may help cover some of the rest. learn how an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company might be the right choice for you. a free decision guide is a great place to start. call today to request yours. so what makes an aarp medicare supplement plan unique? these are the only medicare supplement plans endorsed by aarp because they meet aarp's high standards of quality and service. you're also getting the great features that any medicare supplement plan provides.

you may choose any doctor that accepts medicare patients. you can even visit a specialist. with this type of plan there are no networks or referrals needed. also, a medicare supplement plan... ...goes with you when you travel anywhere in the u.s. call today for a free guide. the private payroll count has contracted for the first time in this country in a decade data from adk and moody's indicated payrolls dropped by 27,000 >> that drop of 2,000 is just from the beginning of the freeze

that we saw in the economy over coronavirus. it's sparked a fierce debate over how long social distancing measures should remain in place. if the governor opens up the economy too soon, the state could be more catastrophic than the current shutdown we're joined by christian weller people are already concerned about, you know, different waves of this, whether it's, you know, late summer or in the fall and saying why aren't more measures being taken to keep people from kind of traveling around and restarting the spread. but how long can you keep the economy effectively shut down? months >> well, i think we have the resources to counter any shutdown effects from the economy. we need to understand that shutting down, social distancing, versus seeding the economy is a false choice. the question is how much economic gain will there be and the faster we open without

having the virus under control, the higher the costs will be we have to understand there are two parts, two costs that come from the virus the first one is the obvious ones, people getting sick and dying from it, and people who want to travel have certain effects on the economy and industries the second one often overlooked is if we open up and let everybody roam around and the virus would spread wildly and kill million lgs of peops of pee would be inkreensed eincreased with a panic movement. what we're doing with the coronavirus management, the social distancing, the nonpharmaceutical conventions is we're reducing the uncertainty, the second cost to that spread of the pandemic and we're allowing the government to intervene, to minimize the costs. how long is that will last is unclear, but we have to understand, the government does have the resources to steer against that and the government has to measure through social

distancing and guidelines to minimize the health costs as well >> so christian, tyler mathison here at some point, some sort of risk/reward analysis either by category of worker or geography of worker or age of worker is inevitably going to come into play here. how do you think that through? >> well, i think the stage we're at is right now what are the necessary services to minimize the uncertainty, minimize the health outcome so we can get back to an operating economy i don't like the term normal because i think there's going to be a complete different world we'll come out of this but we'll get that gradually what we know is we need measures, testing, protective equipment, and so on to make that happen. so as people go back to work, they need to feel safe in their own lives and their family lives. again, it's not just about

saving lives it's not just about protecting people's health. it's also reassuring everybody the things, if they go back to work, will be all right. so that's why testing in all its forms, why protective equipment in all its forms, will be necessary as an accompanying measure to make sure we can get back to the economy. >> i think you're really right about that, christian. i think of not so much big businesses, home depot or big retail like that, though that is certainly something that could change i think of the nail salon, the eight or nine of them in my town or the hair salon. are people going to forego those little pleasures that involve inevitably close contact with an individual who's been in contact with dozens of other individuals? and that could be a real change in the way we live and the way we socialize

>> some of these will change obviously, we can't get the virtual haircut. i don't really need a haircut, but for most people that won't change what will change is sort of things within the restaurant industry and other industries. but again, those changes will take time and they will happen, but we need to get people back to work. there is essential services abstracting from haircuts and nail salons, there is large parts of the health care economy, right, health aides who go into people's homes who take care of the elderly and those with disabilities, that we want to come back but in order for them to feel safe about coming back into their jobs, we need to make sure that we have the proper equipment and the testing to make sure that people feel safe again, there's two parts to this the first one is we want to minimize the direct costs of the virus. that is people getting sick and dying from it. but we also want to minimize the uncertainty, and part of that is the testing, the equipment, but

the other part is also for the government at this point to write big checks to make sure people don't feel like they have a false choice of risking their own health, risking their businesses, versus paying their bills. >> yeah. very interesting christian, always good to see you. if my son never has to have a haircut again, he'll be just fine with it kelly? >> all right, tyler. thanks a quick programming note morgan stanley chairman and ceo james gorman will be joining us next hour. they'll talk loans to small business, the state of banking during this crisis, and a heck of a lot more. stocks selling off again today, heading toward the lows of the session, this after finishing the worst first quarter ever my next guest says the markets likely have not seen the lows for the year yet she's head of u.s. equity

strategy for rsbc. good to not see you but good to hear you i see your face on the screen there. nice picture why do you say there is more downside to come here? is it based on historicals predentd, the action you've seen in the market the past few days, what tells you we have more downside to go >> a combination of both plus work we've done on ventilator sentiment in the conversations we've had as well as some of the day the we look at let's start out with how the market is acting one of the things we've been talking about a lot these last few weeks is how the market has an eerie resemblance to the trading that took place in september and october of 2008. we seem to be following down that same path on a database -- day-to-day basis we had plenty of upswings then with the down swings we looked at the rally this week and said this is keeping in mind with that late '08 playbook, don't be fooled.

when we think about sentiment, i've done this a long time, and you have as well, when we get to bottoms in the market, and think back to december 2018, people aren't talking about their shopping lists you hear panic in people's voice. while i applaud the investment community for being calm, i'm talking to too many people who want to buy. this is not what bottoms smell like in the market let's think about data look at retail ventilator sentiment. it's been tracking about 52% bearish if you look at the latest aaii survey it's been around 50% the last couple weeks in the financial crisis, bearishness got up to 70% in march '09, regularly hit 60% we see similar things looking at gauges of institutional ventilator positioning i don't think people have gotten concerned enough yet >> you know, the late and the great jack vogel used to say, just don't do something, sit there at times like this often that's the best thing to do

it's a time of high fear and high anxiety, ands as i think yo were driving at, it may not be the time you feel pressured into buying on a down day, which is maybe what the professional investors have do because they're being graded every single day, every single quarter. the individual can take a somewhat more nuanced or laid-back approach, i suppose, laurie >> i think that's fair look, we're not recommending that people try and trade these day-to-day moves i want to be clear about that. i think there is going to be a buying opportunity somewhere in here our target on the s&p for the year is 2,750. i watch this show and other shows, you know, the investors i talk to, my traders, frankly, there's this big discussion going on about whether or not we've soon the lows, can we call the all-clear. i think it would be misrepresentative to say that we have >> well, laurie, thank you very much when you get the all-clear, call us first forget those other shows all right? >> will do >> all right thank you.

it's been an interesting day yet again. another big down day, kelly. >> i learned it's called a d demitasse. >> it is it's a little cup. it's a very pretty one we'll try something different tomorrow, maybe a macchiatto >> they make us feel so comfortable. see you tomorrow thanks for tuning in "closing bell" starts right now. >> they are prominent in my mom's home as well, tyler. thank you for an epic show i'm wilfred frost with sara eisen. stocks kicking off the second quarter the same way they closed the first with more losses a right near the session lows on the dow, the major averages on pace for their third decline in four sessions. as you can see, we're down 4.3%, 59 minutes left. here's what's driving that selling. president trump warning meshes to prepare for a very, very painful two weeks due to the