good afternoon, everyone and welcome. our breaking news coverage of the markets in turmoil and the global coronavirus pandemic continues right now on "power lunch. i'm tyler mathisen, glad you could be with us the market's getting a reality check at this hour, after bouncing back earlier in the week and last week, as well. we are off the lows, but the dow is down roughly 500 points on a flood of weak economic data. would you expect anything different from manufacturing to housing to retail sales. all of those areas showing just what one might expect in a shuttered economy. best buy, meanwhile, announcing it will furlough more than 50,000 workers and jcpenney exploring bankruptcy the company now worth only about $70 million. at its peak, it was worth just under $20 billion. plus, small business owner alan rosen of junior's cheesecake

will be back he ignited a bit of a controversy and a heck of a lot of curiosity yesterday on this show when he said he is not using the $5 million he will ultimately get, he expects, from the government, to pay workers he will be back here to explain why he's doing that and why and how that is helping him, kelly, keep his business afloat >> yeah, looking forward to that, tyler, thanks. and we're about to get a closer look at the economy. the federal reserve releasing its beige book report just this minute steve liesman digging through it for us bob pisani and rick santelli are standing by for instant action before we dig into that, let's dig into this sell-off what are you seeing? >> we're down, kelly we're well off of the lows and you can think andrew cuomo, once again, market mover we rose about 20 points off the lows as cuomo was talking about hospitalizations down, intubations down but if you look at the sectors that are down, these are the sectors that are down on general worries about the economy and things are not going to get better soon. energy, banks, the russell 2,000

are getting clobbered. this is what always happens when you get coronavirus worries that are out there. stay-at-home stuff is doing well new highs. we've got netflix, new highs amazon at a new high walmart's at a new high, and even eli lilly at a new high where are we right now i'm describing the three stages we've been going through first is the panic stage thaended on march 23rd we were down 21% but today, we got the reality phase coming in. just look at what we've got here we've got bank loan losses with very high reserve. we're hearing from the banks march retail sales are the worst on record. oil prices are at 18-year lows the builder conference is the worst on record. can you get much worse news than this and i think the market has just got to digest the fact it will be a rough few months. back to you. >> robert, thank you very much let's go out to chick and check in with rick santelli. yields collapsing today on all kinds of economic data the yields, rick, had been

stable, at least on the ten-year for much of the past few days, but not so today >> yeah, no, it's been unbelievable as a matter of fact, i guess what sticks in my mind is industrial production had the biggest monthly drop since january of 1946. that pretty much says it all beigebook, steve will get to but their big headline, you know, sharp contraction. we kind of knew that not a reaction now but huge movement all day. look at a who have year note yield and realize we haven't seen these yields, should they close under 19 1/2, which we were briefly, since september of 2011 call it 81 1/2 years this chart goes back to the eisenhower administration on ten-year notes with hovering around 64 basis points ten basis points above the all-time forever-low yield close. and that isn't a good thing as these rates come down. finally, let's look at the dollar index breaking news, i think >> exactly this is a different kind of breaking news, rick. we're just going to interrupt you to get the beige book

headlines. and steve, everybody knows, we don't get the embargo anymore. we're all doing this on thefly what can you tell us >> i can tell you that it's a different kind of beige book, kelly. activity contracted sharply and abruptly, the beige book says, about economic activity in the united states. this is the collection of economic anecdotes from around the 12 districts i want says the hardest-hit industries were leisure, hospitality and retail most districts reported declines in manufacturing there was strong production, however, of food and medical products those were hampered, though, however, there were delays across manufacturing, because of virus prevention measures and supply chain disruptions the energy sector, obviously, suffered from high production and low demand and obviously, decreased output. loan demand, something the fed follows very carefully, was high throughout the country, as businesses sought to borrow money to stay afloat and stay alive. employment declined throughout

all districts. and one more headline i want to give you is the idea that employment is expected to, the near-term outlook for more job cuts in coming months. so this is a beige book, kelly, that for month after month after month told us that economic activity was modest to moderate throughout the country very little variation throughout the past 13, 14, 15 months actually, even longer than that. and then it turned sharply last month when it started to include the effects of the coronavirus and now it's fully taken over the picture of the economy right now, as we know it >> yeah, well said, steve. let's bring in rick santelli, rick, to resume what you were saying, but maybe first to react to what we've just heard from the beige book >> yeah, there is virtually no reaction in the fixed income space, because the reaction has been all day as tyler referred to, ten-year note yields here at 64 basis points haven't moved a lot since those headlines. but that's down 11 basis points on the day if you look at a 30-year bond,

it's down 13 basis points on the day. the yield curve has moved nine basis points, because two-year notes really aren't moving, so it's flattened they're only down two basis points and let me get back to the dollar the dollar index has over a 1% range in the last 24 hours and the hyg gap lower, that's not a good thing credit markets were doing pretty good on the spread, especially high yield and investment grade. and the hyg now, kelly, is giving up some of those gains that it's had that really started on march 23rd with the fed announcement of the program for investment grade and of course, then it really escalated the junk and hyg etfs when the fed said, let's include some junk etfs in there. but the beige book summarized what investors have intrinsically been feeling, the last 24 hours, especially. >> rick -- >> all right, rick, thank you very much.

and let's get some more reaction to that beige book and what it means for the markets going forward. gabriella santos is global market strategist with jpmorgan asset management mike ryan is america's ceo with global wealth management welcome to both of you gabriella, let me start with you, your reaction to the beige book which really turned a bright red crimson color >> so i think the beige book is confirming what investors have known for the past few weeks, which is that the economy is really sharply contracting here, in the month of march. and in the month of april, as well and today we also got the first hard data confirmation of that, with retail sales and with industrial production. so i think it's pretty clear at this point that we've begun a pretty deep recession here in the u.s. and around the world. i think the action for this week is a little bit away from the short-term economic data and a little bit more into, number one, how is this impacting the

micro, how is it impacting companies and what are they doing to position themselves and number two, where do we go from here? and that's really the most important question right now it's that next phase of reopening. and we hope that there's more of a realization that this is going to be a slow process, a gradual process, one that has fits and starts and that's really dominated still by the health care issue and i think that's what you're seeing the markets today, is you're seeing the realization that we're not quite past the storm. it's not smooth sailing from here quite yet >> it really is, gabriellela, as you say, where do we go from here and mike, how quickly do we get there? so what, mike, is the cautious, prudent thing to do with my money right now? where should i -- if i have incremental money left, where should i be overweight where should i be underweight? >> so, first of all, let me go back to something that gabriele said i think the beige book report gives us kind of this grim

confirmation of what we already knew in terms of this, this is going to be a pretty steep economic deceleration. there's a couple of things we will look through the beige book to get a best sense of first of all, in terms of labor market conditions, what do companies see going forward. those who haven't already laid off workers, what are they plans? and what will this do for investment spending. while the beige book gives us confirmation of what we see, we have to look through that in terms of what do we see happening next and going back to gabriella's point, when do we see this economic recovery process begin to take hold obviously, there are a lot of prep conditions that have to be met there first. first of all, we see the containment of the public health threat that's the most immediate issue. and then secondly, we need to see that the initiatives that are put in place by both fed as well as the federal government from both monetary and fiscal policy channels are going to help us work through that transition period and allow the economy to restart once we work through that so going back to where we're

recommending, right now, we're looking in three places. one, where we think there's some opportunities that have been -- where we've seen some dislocations in companies where we still think the long-term fundamentals in tact we call these our discriminating buyers list. secondly, sellers or asset classes that reflect an overly pessimistic scenario one example there is what we see right now in high yield. and lastly, where we see some long-term trends that are still in tact, for example, in areas like health care, secondly, in digital transformation but also in this last thing that we talked about in terms of the move towards deglobalization >> all right let's move back to steve liesman, who's had some time now to pour over some of the pages of the beige book. are you finding any nuggets in there, steve >> you know, just an answer to the labor question that was just asked, the beige book suggests that more layoffs are to come, and we'll get that jobless claims number tomorrow, where another 4 million americans are expected to have applied for

unemployment insurance i was going to say that raphael boss bosto bo bosstich that solvency problems become issues that will be with us for a longer period of time, than just liquidity problems, which the federal reserve and back up. i was also going to point out, when ric was on, that's what's happened to the 210 spread is it's taken a turn to being flatter or narrower than it had been in the past if you'll remember, tyler, the bond market was well ahead of the stock market in seeing problems out there and now with the kind of closing of the spread here, i'm wondering if once again, the bond market is seeing trouble that goes on further than the stock market might be seeing and it's been an interesting process to watch the outlook embedded in prices now, the fed is so heavily in the market here that maybe one should be careful taking any signals at all, but i will tell

you that that spread has begun to narrow again, suggesting that there's maybe more concern about the outlook in the future embedded in the bond market pricing right now. >> i guess, gabrielle, i would ask you to react to that as steve pointed out, the bond market last summer/fall was flashing some signals of concern. but it wasn't flashing signals of concern about a global economic shutdown and a global pandemic it was looking at other things now you can make the case that the bond market is expressing its concerns about the global economy in reaction to what's happened with the pandemic >> that's right, tyler i think just looking at the yields we have on treasuries, we thought we had low yields last year, right, when they were a little bit below 2%. well, turns out you can go significantly lower than that, when we do have a shock hit the economy, when we do have a lot of risk aversion one interesting point that steve was making, i think, is really important, around fixed income

and credit, specifically so this idea that this shock is not just a month or two, it's really going to be a difficult 2 2020, and the idea that the fed and congress can help with liquidity but not solvency is really important so for us what that means the credit that we hold or the companies that we own in the equity market needs to be ones that we're comfortable holding for the next year and beyond ones that have solid balance sheet and can survive this moment and for us in credit, that means a preference still for quality so investment grade over high yield at the moment. >> all right, folks. we've got to leave it there. gabriella santos and steve liesman, as always, great to see you. kelly? >> coming up, we're all over this big sell-off on wall street after a slew of negative economic data this morning, showing the real impact of coronavirus, of course, just reiterated by the beige book, as well take a look at energy, by far and away the biggest loser today, down another nearly 6% as crude broke below $20 a barrel

before rebounding. financials also lagging after the big banks report weak earnings and a mixed bag for the airlines after reaching a deal for billions of dollars from the government will it be enough to keep the biggest players in business. we got a special report. much more "power lunch" right after this

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welcome back, everyone, to "power lunch." retail sales suffering a record decline in march it plunged -- they plunged about 8.7%, as the coronavirus continues to hobble the economy and hit the consumer hard. retail stocks continue to take a beating. the xrt, that's the etf that tracks the group, is down another 5% today let's check in with courtney reagan now for more. hi, courtney >> reporter: hi, there, tyler. the consumer was really the strongest part of the economy before the coronavirus hits, but once it hit, the consumer went down, so did the retail industry, and it may be what holds us back from a full recovery remember, 70% of gross domestic

product comes from consumer spending that's 3.9 trillion. and the national retail federation estimates that 1.3 trillion in sales will be lost over just three months during this pandemic. surveys show a lot of consumer reluctance to spend beyond essentials right now, and when stores reopen, will consumers feel comfortable or will they continue the social distancing measures look, retail is the largest private sector employer in the country. 32 million americans are directly employed by retailers 52 million, when you add in those ancillary connected workers. that's one in four americans we've got hundreds of thousands of retail workers that are furloughed right now, thousands more that are taking reduced salaries those corporate workers. best buy just today sort of announcing additional measures in that regard and right now, the national retail federation is estimating that 6.1 million retail jobs will be lost entirely. this is more than a furlough, in the first three months of this

crisis, more than 12 million over the course of a year. we know that retailers have borrowed billions of dollars in revolving lines of credit. they're suspending dividends and buybacks, they're doing what they can but they still have expenses that they have to fund, even if those stores are closed. and then we've got names that were already on the brink of trouble anyway i'm talking about bankruptcy, the b-word maybe names like jcpenney, neiman marcus among others this could be what finally pushes them over the edge. and there's a big ripple effect, especially if you've got a lot of names that go under at the same time. think about the retail rents, all of that real estate, the vendors that are owed money. this could be a big problem for a very important industry. back over to you guys. >> courtney, thank you, courtney reagan for more on the challenging times for the retail industry, let's bring in steve sedov, the former chairman and ceo of saks. steve, you just heard courtney lay it out there, there's a lot of concerns swirling about whether these retailers are going to emerge from

coronavirus. >> i think that courtney described the situation extremely well you've got a very difficult time for retailers. they're just going through the first phase of this, which is survival what do they need to do in terms of managing liquidity? they furloughed people, they've cut orders, they're not paying rent and they're saying -- and they're looking for loans. and they're trying to survive. now we've got to go to the question of, how are they going to open? because these are high fixed cost businesses that just can't operate without revenue. now, recognize it's not all of retailers. you've got the walmarts and targets that are doing extremely well >> right >> it's the apparel retailers that are down 50% in the month of march, and that was only for half of the month. so we've got a very difficult economy for a number of the retailers. and what's really going on is the ones that were strong going in are continuing to be strong the trends that were strong are continuing and the ones that are weak, some of the ones that courtney mentioned, may or may not survive through this

>> so let's talk about jcpenney and whether you think filing for bankruptcy protection is an attractive option for them >> well, it may or may not be. they've got to negotiatewith their lenders. their equity value is only about $70 million. they've got debt coming due. they've got a lot of inventory that's in the system, and the real question is, what's the longer-term growth strategy for that brand or other brands that are on the edge? if they have a game plan that says, we can close half of our store base or some number, that is far better by getting out of the leases than bankruptcy may make a better option right now, nobody is putting anyone in bankruptcy, because stores aren't open and you couldn't even liquidate the inventory if you wanted to liquidate it so for some companies, bankruptcy may be a reality. others, not. it's going to be the highly leveraged companies that are most at risk and jcpenney is one. you've lost 90% of the value already, roughly in the last year and a half. so bankruptcy -- certainly,

restructuring is an alternative for -- of some form of the debt or their leases is something jcpenneys has to look at, but so do many other retailers. they're just not alone in this boat >> steve, tyler here what happens to the inventory that these retailers already have >> it's a massive issue. i lived through the recession, the '08/'09 period, and that was when volume was down 25%, and there was enormous amount of discounting. now you're talking about volumes down 75% or some number like that so you're going to have billions of dollars of inventory in the system, there's going to be product for the outlets, for the off-price players, but there's so much product, there are going to be new formats. guild and players like that came out of the last recession. i think you'll creatively say new ways of trying to clear products but this is -- by the way, the amount of product in inventory that you have sitting there is limiting the amount of cash available to buy new product so the product is going to be clogging the system for some

period of time, and it's a major problem, because you've got price credibility issues in terms of how much full price will you be selling coming out of it? the real issue to me is what is consumer demand going to be, as we go forward? right now, we're trying to figure out, how do you open a store? what are the safety measures what are the testing that has to go on so the consumer will feel comfortable? the reality is, we don't know what their shopping behavior is going to be coming out of it and i personally think it's going to be a lot slower than some people think. >> in that case, steve, what does it mean for society if we just don't have the level of stores, at all, in 6 or 12 months that we thought we were going to have. we know store closures are picking up already, but this is a very different phenomenon. it's going to have huge ripple effects, i would imagine, on the labor market, on the shopping malls, on towns and budgets. >> well, clearly, you're going to see a lot more store closures we have three times the square

footage as the number of stores in europe. you'll accelerate the trend of the poorermalls, the "c" and "d" malls closing. you'll see a closing of a lot of stores but you're also going to see some other things going on some of the early stage companies aren't going to be able to survive this, because they don't have the financing capabilities and it's not just getting a bridge loan, it's really able to get the consumer demand coming back i think you have another problem, and courtney referred to it, a lot of these retailers are going to use that line from the last recession, which is, don't let a good recession go to waste. and they're going to fundamentally restructure and have a lot less people coming back on stream, so the unemployment rate getting back to the kinds of level that we're -- that we were at pre-this isn't going to happen that quickly so that we've got to factor in a much slower demand structurein the fourth -- in the third and fourth quarter >> yeah, no, it's going to be a challenge. and it's just incredible to see that jcpenney equity at 26 centsper share

steve, thanks, appreciate it steve sadoff >> kelly, still ahead on this edition of "power lunch," crude dipping below $20 a barrel earlier today as the coronavirus drives demand way down and inventories go way up. we are all over that move, as the oil market gets set to close for the day. plus, airbnb was supposed to be an ipo darling well, now the rental company has taken on billions in debt just to stay afloat amid the virus fallout. we will bring you those tas,deil after this short break have you heard?

what's up? for the first time ever you can watch the brand new trolls world tour movie... wait for it. at home. what, what, what? oh! what a troll. the world premiere is now in your home. welcome back to "power lunch. let's get to eric chemi for the latest on the coronavirus at this hour. eric >> kelly, good afternoon

new jersey is reporting a nearly 40% drop in daily new cases, only 2,625 since yesterday, but there are 351 new deaths, taking the state's toll above 3,100 he's urging residents to remain vigilant >> don't take your foot off the gas, folks stay on this i know you're itching to get out and back to normal so am i. who could blame you? we can't we just can't yet. i promise you, the second we think we can, we will let you know that. you have my word >> honda is furloughing most salaried workers in the united states for two weeks it began shutting its north american operations on march 23rd, and since u.s. and canada facilities will stay closed through may 1st. volkswagen will resume some production in germany next monday, and in the united states on april 27th. plants in spain, portugal, and russia will also restart on the 27th vw says plants in other

countries will ramp up production in may. as always, for more coronavirus coverage, head to cnbc.com tyler, back to you >> all right, eric, thank you very much. u.s. airlines, including american, southwest, delta, among others have reached apparently a preliminary agreement with the treasury department for payroll assistance phil lebeau spoke with doug parker, the ceo of american about this and he has the details now. hi, phil >> hi, tyler clearly a much-needed lifeline, not only for american, but all the airlines as they want to keep their payrolls locked in at least through september 30th here's what american will be receiving through the payroll grant. now, we call ate payroll grant actually, 70% of sit a grant of the 5.8 billion americans getting, 4.1 will be getting a grant they don't need to repay the remaining $1.7 billion will be a low-interest loan all of this comes as we're seeing record-low numbers in terms of people who were

screened by the tsa at airports around the country yesterday, dropping down to 87,000. so it looks like it can't go any lower. and doug parker is not going to call the bottom here, but he did give us some sense that there are some signs to be cautiously optimistic about when it comes to future bookings >> just in the last week, we started to see bookings outside of 90 days, starting to tick up a little bit again, those can be changed in the future, that doesn't seem to be the case. that seems to be a little bit of an indication that maybe our country is starting to get moving again we have our sales team that tells me we're being asked to work on conventions in the fourth quarter >> so a little bit of cautious optimism certainly, nobody in the airline industry is ready to say that they're out of the woods yet the airline stocks are mixed and remember, tyler, this is $25 billion from the grant program the other $25 billion in the federal aid package for airlines comes in the form of loans american will be applying for a loan from the treasury and other airlines, as well.

look for that over the next couple of days >> i was going over some notes there, phil, and forgive me if you said it and i didn't hear it is part of this program, does part of this program involve warrants or the ability of the u.s. government to buy shares in these airlines >> it does involve warrants. all of the companies that are getting a payroll grant essentially 3% of the value of the grant, it's basically 10% of the loan component, comes out to about 3% will come in the form -- will be warrants -- the value equal in warrants that the treasury department will receive. unclear yet when the treasury department plans to cash those warrants in. so, that is one form of how the federal government is going to be getting compensated, as part of setting this program up >> phil, thanks very much. phil lebeau reporting from chicago. still ahead, alan rosen, the ceo of junior's cheesecake joined us on "power lunch" yesterday to explain how he was using his ppe moneys

and he's now facing some blowback for it. but he, like so many other businesses, is not only trying to navigate the current environment, but also how to survive past that june 30 or eight-week deadline for dispersing the moneys he received we'll talk to him again along with a small business expert and get further clarity. and remember, you can always watch or listen to us live on the cnbc app we'll be right back. our special breaking news coverage returns after this.

welcome back coming off the lows of the session right now. the dow is still down about 1.5%, the, b russell 2000 falli worse, it's down about 3.4%, and oil, really brutal lately. today, falling below $20 a barrel, before trying to recover somewhat just closed up, let's go to eric chemi at the commodity desk with more eric >> wti closing below $20 a barrel after briefly rising more than 1% earlier today. brent under pressure, down more than 6% today. an hour ago, the texas railroad commission chair told cnbc that the commission agrees, quote, it

has to do something as many texas producers face serious challenges during this crisis. a production cut in texas would be the first in nearly 50 years. meanwhile, the eia today projecting a 29 million barrel production in april oil demand that would put it at levels not seen in 25 years the eai also warning there is no amount of output cut big enough to fully offset the near-term decline demands. >> eric, for one, i know i haven't put gas in my tank for about three weeks. eric chemi, thanks very much small business loans from the government starting to hit bank accounts this week, mercifully, and junior's cheesecake is one of those receiving $1 million so far out of the $5 plus million that its owner has applied for but eric rosen said he's not passing on that money to its 650 employees just yet >> we're not even paying them

right now. we can't if we were to pay them now and didn't get the green light to open until the end of june, the money would be wasted until after we used up that money. restaurants don't typically have a ton of working capital sitting around they're month-to-month businesses, so this capital will carry us through our grand reopening, for lack of a better term >> so rosen's comments sparked such curiosity and even controversy among our viewers, like you, that we decided to have him back today, to explain why he thinks his approach to handling the cash is not merely permissible under the law, but is the responsible thing to do for his business and his workers. he'll join us in a minute. but first, let's go to kate rogers for more details on how the sba and the treasury think this program is intended to function kate >> reporter: hi, tyler well, for many small business owners out there, there are a lot of questions remaining on the ppe front, like when they should start using their cash once they receive it, if they do want this loan to be forgiven.

now, remember, these are loans of up to $10 million, based on 2.5 times average monthly payroll. they have 1% interest rates and max terms of two years they are meant to be used on payroll, mortgage, interest, utilities, and rent, even while the business is closed, in order to be forgiven the funds must be used over an eight-week period that begins at the time of dispersement treasury advises that 75% of the forgiven amounts should be used for payroll. now, a senior administration official tells us, the covered eight-week period does begin at the time of loan disbursement. rehiring must happen within that period in order to have the loan forgiven the purpose of the funds is to make payroll and benefits even if employees are not able to work the whole idea here really is to keep people off of unemployment during this time, but many small business owners do have questions that remain about what happens after that eight-week period if stay-at-home orders, for example, remain in effect, what winds up happening to their business one thing is for sure, the money is going quickly

as of this afternoon, more than 1.3 million loans have been assigned for a total of $296 billion. the program, as well all know, is funded for about $350 billion. lawmakers and advocacy groups have been warning that the funding could run out as soon as this week. a source familiar with the program did confirm with me that funding could run out by end of day today, based on current lending projections. back over to you >> that's fascinating, the money is going fast. there's such demand for it so one question i have, indicate, is just how rigorously will the sba, treasury, irs, anybody be tracking the disbursements of these misunderstand amoneys and how the money is being put to use >> so that is a great question per guidance, it is actually on the bank to determine if the loan was appropriately used and how much should be forgiven. you submit, you know, things like payroll and other items, that the money was used for. the bank would have 60 days to

determine whether or not it should be forgiven and at what level it should wind up being forgiven but the banks are also lacking guidance, for example, the consumer banker's association, just yesterday, asked both treasury and sba for more guidance on forgiveness provisions here, because they have questions, too. i think that's going to be the next wave of questions that we're going to need to get answers. but, you know, i think the owner of junior's does have a great question here and a big problem, what happens if stay-at-home orders are in place. what happens when the business opens back up and you potentially run out of money it's a real conundrum for small business owners. >> or doesn't open back up, which is certainly one of alan rosen's concerns kate, thanks very much and i want to welcome back junior's cheesecake ceo, alan rosen, who was with us yesterday. and i want to have him explain a little bit more, what he's doing with his ppp money and also with us, small business and entrepreneurship council ceo karen carrigan, welcome to both of you alan, i'm going to start with you. alan, it's clear that this money was intended, both to do two

things either to keep people on payroll or to bring them back afterwards you also heard kate say there that one of the intended uses of this money was to keep workers from having to file and go on unemployment but that is exactly what, by furloughing your workers, you -- they are doing they are going on unemployment so by conserving the cash now and saving it, thus, for the moment when you bring them back, do you feel that you're really in line with the spirit of this program and if so, why >> well, i'm going to tell you why. so first of all, i want to clear something up from yesterday, because i think you, tyler, no offense, and some of your viewers, misunderstood so we are clearly going to use these funds as it is intended for payroll, for utilities, and for rent we also are clearly that we have eight weeks to use it from the time we get funded the problem is, as you just recognized in your previous

report recognized, we have a stay-at-home order issue here in new york, we have restaurants in manhattan and it's unsafe for people to go to work right now our intentions are to employ 650 people for the balance of their lives. not for eight weeks and then put them back on unemployment. but to -- as our company has existed for 70 years, we now have to make a decision, do we pay people to stay home for eight weeks and then potentially never get open again, which is counter to what this small business administration wants. they want small businesses like mine and millions of others. and by the way, there was a lot of positive reach out yesterday. people said, now people are starting to understand the dilemma we have as small businesses when do we reopen, how do we use the funds. and if we don't use it within the dlins, guidelines, it becoma loan and that's a risk that we all take but i also believe that as this

virus lessens and becomes on the time frame, some of these timetables may have to get pushed back a bit. >> so you're quite correct i was -- let's say, a little bit confused by how you were using the moneys, because as i understand it, and i think a lot of people understood it, the idea is that this money was intended to keep people on payroll or to bring them back imminently, immediately, so that they didn't have to go on unemployment, and were tided over to the point at which the business would reopen. so let me -- let me come back to -- come back to something in effect, is your -- is your move here the idea that workers can go on unemployment now, or if the business doesn't reopen, they are going to be back on unemployment later >> right >> listen -- >> so you can take your pick as to when. >> listen, we have employed people gainfully for 70 years, okay offering medical benefits, et

cetera, et cetera. if we take this money and don't treat it like the precious capital that it is, and we waste it over eight weeks, because that's the only part that has deductibility, and then we have to unemploy people in eight weeks, because our businesses are operating or not even operating yet, depending on how this virus plays out, then we've done a disservice to everyone. the people who lent us the money, to our employees. and listen, more so than anything, tiyler, i think you ge this from talking to me over the last 24 hours. my employees and their well-being is paramount and on top of my mind that's part of the reason -- >> i totally -- i totally believe that i totally believe that and i just think it's -- it's a question of when you're going to deploy the capital, which seems like if you do it within the eight-week window, then the deployment of that capital, if it goes to the stipulated expenses, is then forgiven

if you don't deploy it, let's say you bring workers back in a trickle and some of those workers don't come back during the eight-week period, you still will have the loan, it will convert to a loan at a very favorable interest rate of 1% and you can use that as part -- to defray some of the payroll expense. am i understanding >> you are 100% correct. it will convert to a two-year note that will have to be paid back but keep in mind, that's a lot of money to have to pay back on a business that we don't even know, clearly, how it's going to be performing over the next two years. you know, if dining out goes to seating every third table and people wearing gloves and masks, i don't know everyone in new york's tolerance for that just yet. and it remains to be seen. so as the steward of our business and our employees, you know, i'm looking to take care of them. i've got to make sure that we have the most, you know, success possible not for eight weeks, but for another 70 years and i take that job very

seriously. >> and as i said a moment ago, i totally appreciate your sincerity in saying that you don't last for 70 years if you don't take good care of your employees. i want to come back to how quickly you might bring those employees back on in a trickle or a torrent and we'll get to that in a moment first, let me bring in karen carrigan of the entrepreneurship council to get her reaction to not just what alan is doing and his tactical approach here of how he's using the ppp money, but what you're hearing from other business owners. do you have any problem with what alan is doing >> no, no, i don't in fact, businesses of all sizes and kinds across industries, you know, from two employees to ten to a hundred are grappling with these same issues. you know, when the legislation was drafted and when it passed, the economic conditions, the impact, cascading effect of the

coronavirus has really been very severe, obviously, for the economy, and first of all, businesses so, you know, what they want and what we're arguing, as a small business group, is that there does need to be more flexibility, but in the rules. and like alan said, this is not a grant, this is a loan. and in order for those -- in order for those moneys to be forgiven, it does have to be used precisely the way the law and the rules are written in terms of payroll expenses during that eight-week window so it just doesn't make sense if there's no demand. i mean, if you're going to disrupt employees' lives who have maybe already been laid off two or four or eight weeks ago, do not have that certainty you know, coming back to the business and then having to lay them off again and i do -- >> so karen, are you hearing -- go ahead finish i'm sorry. i beg your pardon. >> in terms of, this is the best

news for the taxpayer, because that eight-week window started for him and if you're -- you know, if you're going to bring people back just for it to be forgiven, as opposed to, if it's not used for those purposes, you do have to pay that money back >> okay. i'm going to switch back to alan and you heard what karen just said she said she has no problem with your approach here but let me come at you -- and i don't mean to say, come at you >> that's okay, i'm used to it >> that's all right! you know, we're going to have some good cheesecake after this. >> you're not kidding. >> but can you understand why some people who were in contact with us overnight, and i think probably with you, would feel that you're sort of double dipping. in other words, your company and your workers are benefiting from, on the front end here right now, federal and state unemployment benefits, which by the way, you as a taxpayer and an employer are paying into, so

let's just stipulate that. >> and as an employer -- >> and then you would benefit at the other end -- then you would benefit at the other end from the ppp loans. can you see why people would think, that's kind of a double dip? >> yeah, but there's a misconception out there. so if i -- and i'll say it again. if we -- and i think karen alluded to it. if we take people off unemployment today, and use up all of that grant money, and in eight weeks, we're not operating efficiently because of this virus and no fault of our own. listen, we don't want to be in this spot. nobody does. my employees want to be at work today. waiters don't want to be working in empty restaurants, okay, tyler? it's just not the way we operate. if we're operating at a third capacity, we've used up the money, we then have to put people on unemployment, we have -- we haven't only singularly dipped, we've in and out put them back on unemployment and we got a free loan i think i'm actually taking the honorable approach and saying i'll use the money either before the eight weeks or after,

depending on how business allows and if it's after, and i have to pay back the loan, i pay back the loan i think this is the honorable way to handle it >> we've had a fascinating conversation here this afternoon and yesterday and offline over the past couple of days. let me just turn very days final question if i might. if you get some sort of green light from the state, from the governor, or the mayor to reopen your locations, how quickly do you think you will be bringing workers on and what kind of trickle or flurry or flood -- >> i think it's going -- >> -- if you anticipate doing that i think the business is going to dictate how many people we need based on how comfortable people are in dining out again. as i sit here today, it looks like a skrcary environment for people in general. the next 12 months unless there's a vaccine, will be horrifying for small businesses in this country. the sba loans were intended to

save those businesses and that's the way we are trying to use it. >> i agree >> it's going to be payroll. sorry. >> right so my final question is, the money that you've already received, the one-plus million, and you have other loans pending totaling something above five, that money that you have received, you have put into a segregated account that you're not touching am i right on that >> correct i recommended this to everyone trying to get a small business loan set up a separate checking account so when the bank has to come see how you use the funds in two years you can show them you used it for payroll and the associated taxes, you used it for utilities, which is allowed, and you used it for rent you show them those three items and the use of the proceeds and the timing of it, and it's eer in a grant or it's a loan. simple as that as i said, the only other wild card is how this changes over the next several weeks and months >> alan, thank you for your

involvement these past couple of days, and good luck to you and your workers karen kerrigan, thank you as well kelly? >> all right moving on to airbnb, the company has raised $2 billion in debt in just a week as the coronavirus pandemic continues to ravage its business the former unicorn was on track to go public this year it's a different story deirdra bosa has the details >> quite the turnaround, raising a billion dollars, and each of those fund-raisers, $2 billion in the last week alone the portion of last week's raise slashed the company's value a wigs by nearly half. the most recent debt offering carries a steep interest rate of about 9% it tells us the company, once the most anticipated ipo of this year, has seen its business just pummeled by the global pandemic and now turning to pad its balance sheet to get ready for what is likely to be more pain to come. other companies are affected by the outbreak and raising debt at

similarly steep terms. a few of them, there's nordstrom and wynn earlier this month, slack on the other hand at the other end of that spectrum its debt offering, while this isn't apples to apples, carried a coupon of half a percent you can see the different positions companies are in in the current situation. airbnb is right in the middle of the global travel industry that is getting absolutely killed also interesting is who is buying into airbnb at this moment amid so much certainty. they're some of the biggest institutional, private equity and hedge funds. fidelity, t. rowe price, sixth street partners, they put money in the deal prior, and apollo and oak tree capital they're essentially betting that air bshbnb will get through thin could emerge even stronger >> deirdre, thanks deirdra bosa with the latest for us tyler? >> all right shares of tesla up 34% over the

past month wow. climbing again today after its factories were shut down because of the coronavirus goldman sachs saying the stock is a buy we'll talk agent whether there's even more room to run. that's next. issues facing our world, what do you see? we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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and until this fight is over, we...will...never...quit. because they never quit. welcome back stocks are selling off on the back of bleak corporate economic data today illustrating the extent of the coronavirus damage and that it might be worse than investors expected dow moderating losses, down about 363 points right now we were down more than 700 at the lows the nasdaq only down 0.8% and coming off its best winning streak since december. tech stocks have held steady in the face of this volatility.

steven grassi is here. would you be betting on the nasdaq >> these large cap tech companies have run this market in the last couple of years. those are the ones that if you have to look at this, what are investors going to put the most confidence in and validity in going forward? which of the companies going forward are as close to a guarantee to last when we get out of this coronavirus environment is the large cap the ek that people are putting that credibility in >> do you buy there will be a lot of divergence? right now it's the nasdaq outperforming but ultimately, will all of the indices rise and fall together? >> yeah. you know, it's funny, if you asked me that a week ago i would have said yes. when you start to look at the energy complex and the small-cap complex, they've sort of uncorrelated themselves literally in a matter of days to

hours. so if you look at your screens, yesterday you had oil fall and you saw the market rise. today everything falls together. so i think ultimately, if there's a blanket, if we're going to survive or fail, yes, we'll do that all as one but if you're going to start to see this unversely or uncorrelated market, i think there's room for there to be winners and losers but if you look at what the fed's doing, the government's doing, kelly, they're not allowing anyone to fail. so back in the financial crisis, it was too big to fail i've said it before, it looks like no one will fail this time around there are going to be companies dragged over the finish line so i think we will survive all together if that makes sense >> in a word, sort of as an aside, what do you make of the tesla rebound lately

>> so tesla has defied all laws of probability everyone knew about its short interests and people were voting against it the shanghai plant opening was the first surge higher in tesla. the shorts and have been run over so many times, but when you look at the stock chart now it's defying the laws of probability yet again. so if i had to tell you in a word, i would say sell it at these levels you have the 735 level, which we're right around, but remember where they raised money. that raise of money was 767. so if you think about where resistance is going to be on the charts, it's between now and then so the risk/reward definitely stacked in the bear's hands right now as far as tesla goes >> all right steve, thanks. good to check in with you again. steve grasso tyler? >> you know, kelly, there aren't many stocks that are up 75% year to date like tesla, i would have to say

>> maybe zoom. >> maybe zoom p. we'll see you back here tomorrow in the kitchen, kelly, all right? >> great stuff appreciate it. >> 2:00. our breaking news coverage continues now with the last hour of the trading day it begins with bell be with "th" right now. >> thank you, tyler and kelly. i'm sara eisen with wilford frost. markets sinking today but major averages are staging a late-day comeback let's look at what's driving the action at this hour. shocking new data painting a dire picture of economic activity in this country, retail sales, manufacturing activity both plummeting. corporate earnings also weighing on ventilator sentiment today with banks saying they are bracing for large losses ahead another ugly day for the energy market brent crude partly sunny nling wti trading below $20 a barrel >> the dow is down 700