inspiration, there's nothing better than right there pray that's it for us this week, for the luggage show updates be sure to follow me on twitter, facebook an instagram part i will be back here next week with more in-depth news with wall large. thank you for joining us. ♪ ♪. jack: i am jack otter. coming up the panel tells you what our sources have been buying during the wall street selloff. that we begin with what we think are the most important things investors should be thinking about right now. as corona virus rolls the market put stress on the financial system. what to expect next. airlines and energy companies are really feeling the pain, which companies can weather the storm and how to determine what stocks can stand up to the coronavirus crisis on the barron's roundtable tonight my colleagues have been levinson, jack how common carleton

english. the dow is down on the week despite a furious 1000-point rally. dow jones market group shared a wonderful statistic, the last time we had a back to back 9% move two days in a row was october 1, 9209. >> this is a wacky market. finding comparisons for is almost impossible. when you put together a virus like this, you put the oil crisis we have the oil prices drop like this ship but the facts were in a presidential year this is all just wacky. and it almost feels like a big relief we got this 2000-point rally out of the dow on friday. because coming and said friday was just awful. some of the worst trading we've seen since 2008 and yesterday, thursday, the drop was the biggest since 1987. these are crazy moves.

jack: so clearly the oil is a problem here. but i think it's mainly coronavirus. think there's this old cliché that insert is what the market hates. i think you put a finer point on it does make sense. the market hates known unknowns. we know this a problem but we have no input improbability on it because that will have 13000 people tested in this country in south korea's during 20000 a day. >> when you kick the probability go to the worst-case scenario and the worst case scenario as everything stops. and we become italy. literally. >> we know sports leagues are down, everything stops, and everyone loses their job without government stepping in and helping us get through the. >> and there's a problem we were not treating it as a health crisis for a while. the policy workers were talked about testing need to get done in hospitals are rated to be equipped. were hearing a lot about financial statements but happy plan for financial stimulus money done with the health

crisis is going to be. we are finally starting to get some signs of that coming. that's part of the rally was on friday. >> i trading has been nuts, but i would not characterizes as any kind of panic. we are not sitting at depressed levels right now the stock market. we started the year to elevated evaluation spread when you have that you get a lot of volatility. i think the scramble by investors saying were not going to get not nearly the growth we hope for this year, or probably can get a downturn to price that in. reluctantly let's get rid of the bull market and price it in. jack: bensman saying it's going to happen but what's the callous to me got the catalyst. two this was the fastest drop from an all-time high of a bear market in history for the s&p 500. it has never happen this fast. and yes, we knew was overvalued, but we did not know what it was going to be. it has forced a massive repricing and not just in stocks and bonds as well and even treasury what usually gain in value when the stock

market drops. their days this week were treasury also lost value when stocks were down that was crazy. jack: what was going on their customer. >> people are having to go to cash their selling what they had. >> if you assume zero grosser this year from last year i think we go back to serving a square deal. we might get a recession, if you get a recession there hasn't been one since world war ii you saw a decline of 13% because he shares go down another ten to 15%. think we're in a situation now where fourth-quarter numbers come out every company gets a pass. as long as we can see the light at the end of the tunnel. >> second quarter could be ugly too. >> it could be ugly but were waiting to see when the virus turns. >> we also have to worry about that weak links in the country, the companies that have a lot of debt under going to have to pay that debt and not able to. or the restaurants that are not going to be able to open and not be able to pay their workers.

those are some the things that are going be side effects of this. jack: there's talk of washington try to solve that problem. >> doing a little bit with student loans, federal student loans are not have to pay interest on. >> and sick pay is important is we don't those people in that officer serving food in that restaurant. we talk about a deep dive barron's did in the balance sheet as of the worst hit companies. airlines and energy countries would refine customer. >> we want to stress test these companies. look how they perform under weak conditions and how their balance sheets are protected now. no question, still a ton of uncertainty going ahead around the airline sign with the delta and southwest. jack: jack, you and broughton look to the entire market and said when you're shopping for bargains in that crazy market, what should we take customer. >> were always looking for earnings growth, with the price relative to the

earnings. i think right now, even if you're buying stocks change and think about a bond buyer or lender. salmon to look at the balance sheet i would look at the cash flow statement, i want to know this is a company is going to be able to endure a sharp collapse in commerce if we haven't for a quarter to. time by cash companies like apple, amazon, brookshire recently did some financing or they had a billion euros at a 0% coupon. cc people waving free money that the company that can hang around. and maybe buy some things on the cheap if we have a sharp downturn. jack: what is that look like, by that bond and nothing happens in tears later get my money back. >> your five years old here's your money. >> it's like a whole the story. kennedy: coming up is whether or not the financial systems ready to take on the coronavirus, we'll be right back.

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jack: coronavirus reeking have it not only sparking a brutal self in stocks but also creating behind-the-scenes problem in the market. stocks in particular been battered and federal reserve promising a massive $1.5 trillion injection into the system. here to explain how they can help or not is whalen global advisors at chris whalen. to this $1.5 trillion injection that's not going to cure coronavirus? it's knocking to make mark madness happen to get importantly. what will happen customer. >> they're adding back liquidity they had taken out. remember call back but 2018 we thought we are raising

interest rates and their shrinking the balance sheet. this cause a problem and it continued to happen. in fact in september you remember we had a lot of problems the short-term money markets. the repo is basically when they have paper they want to finance overnight or 30 days just a short-term money market to make the economy go, it's very important. when that stops functioning and what it spreads, he put the bid widen, you have a problem. much like high-yield debt today when you look at the spread on 70800 over the curve, tells of a problem. jack: 's or just to translate that over the bull market, the distance and interest rates on high-yield junk debt to treasury bonds got smaller and smaller and smaller. and in the past few weeks is blown out. >> it's like 2008 with 1500 basis points above the curve but it's bad. what's really happening here is you have a structural problem. if certain number of banks in new dealers that face the fed

they are primary dealers. jack: gives a couple of examples. >> j.p. morgan, wells fargo, all the big universal banks. they have a couple for nays bmp, it's an interesting group. they get access to the fed so when the fed provides liquidity there only doing it with these banks. eight well, everybody else, includes banks, finance companies, the rest of the economy friday man freddie. >> , we all function outside of the special marketplace and the execution is often inferior. twenty to 30 basis points inferior. that's a problem because both the price that makes sense and all the sudden there is no volume of liquidity available. you could not get an offer. that's a problem. so the fed responded with a big bucket and they are talking trillions of dollars, not just of short-term addition to liquidity, but they are going to start buying longer dated treasury again. jack: that's a big change. >> that as deposits of the system.

when deposits were growing in 15, 16, 17 it was because of easement they were adding massive amounts of cash. when they stopped though, and people redeem to those treasury, the treasury immediately had to go out and offer another t-bill that took cash out of the system. that's all we have a problem. jack: 's with all this intervention and some people, including yourself up in critics of the fed getting deeper and deeper involved in the market. the market is not allowed to find its true place. so explain the potential problem with financial repression. >> what's happened is is the fed has gradually manipulated the cost of funds. first to help banks after the crisis, back in 2012 i think it was, the whole financing costs for $15 trillion of bank assets was $11 billion. that's how far they pushed her down. all of the net interest income inside these banks is going to equity. >> it wasn't going to

depositors or debtholders it's the opposite of where was 30 or 40 years ago. in the old days, the interest holders if you will got most of the income. and the equity did not get much at all. totally reversed now because the only way to keep these banks illini was to force a downplayed that's financial repression of the banking sector. it was worth hundreds of billions of dollars a quarter. jack: a couple quick points is bank make a lot of money and the difference in what they're getting at income when they lend money versus what they're paying on it. that is tough right now the very low rates. >> banks are an increasingly problematic investment. i own them, i own the income producing firms particularly. jack: they preferred have a higher interest rate cement guested like bonds in most respects for the yield bond earning assets for banks is trending down. it's hard for them to make money on loans. and then they have to buy securities every time a fannie

mae four or three prepays they buy it too. they're making less money on that as well. so across-the-board, most of the assets don't really have much upside in returns. jack: that expands or the stocks have been bad. >> there at the fed has to realize that targeting fed funds and using that as the instrument of policy, is kind of run its course. we can't do this anymore. they really need to think about how to manage monetary policy without manipulating this very important rate. we are getting rid so fed funds is going to be the defective rates for all consumer finance, all wholesale finance the united states. it would be nice if it was a market rate instead of a manipulated rate. jack: chris thank you so much for your insights are really appreciated. up next our panel tells us what our sources are buying during this period and sonal

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jack: stocks are one of the few things that people want to pay higher prices for. the real pros plunging market is a great opportunity to buy cheap. so now the cheap investment officer of franklin templeton joins us now. so this week we decided at barron's we are going to take sort of an emergency run to all of you guys who are members of the long running roundtable and see what you are doing as the market sell. lets talk with your macro view. you have a fairly optimistic view about what the u.s. market and economy can do this

year. >> actually let's separate out the market and the economy. i started the year thinking that markets were actually pretty fragile because we were looking at a situation where essentially we had a turbocharged market on the back of fed action. the issue of having a lot of fed liquidity being bumped into the system especially since the last quarter of last year end the fed rate cuts. and we come to today and we see an unwinding of most of last year's gains, over 22% of the equity market depending which market you're looking at, against the background of zero earnings growth. so i have a differentiated view of what the outlook is this year for the real economy and for markets at the end of the year.

right now, we seem to be pricing in a fairly catastrophic scenario if i'm lucky and bond markets. as i look at bond markets today we have interest rates and leave touch 30 to 40 basis points. it's pretty correct catastrophic view. that hasn't happened. jack: 's i'm going to ask about your growth projections around 2% which is high above consensus right now. >> it is, i'm saying about 2% and i admit, as i go forward, depending on how long this last is it going to be a couple of months or are we looking at a couple of quarters? right now i stand to believe the experts i am listening to which is especially in light of all the place today that we might be looking at a month or a couple months. in that case we will see quite dramatic decline in growth,

undoubtedly over these couple of months. all the social distancing there's no doubt about it. the lack of meeting it's all going to have an impact. some sectors are going to be massively negatively impacted. i would say if we look at a baseline of one to two months of a sharp decline that's going to massive level decline. but then i do see the possibility of a very sharp reversion. i don't think it has to last for the rest of the year. jack: how short would you have to be talking met with the last couple quarters of the year if we are getting to 2%. if we expect a sharp downturn in the spring, how fast with that growth have to be by the end of the year to get the 2% and were to separate us on bond yields? >> on bond yields, i would say again out of consensus but i have been for a while on that, i would see them as potentially being higher. we are going to be looking, how high does growth have to be? let's stop and think for a moment we have a fed that's

part intentionally going to have interest rates to zero. they are going to see probably real q. week coming along. they're going to have, from the fiscal perspective a lot of fiscal easing. if the baseline of having a couple of months of very sharp drawdown and then a gradual pickup i'm sorry not a pickup but a sharp reversion, you're not going to get back in level terms of where you were. but in growth terms, you are actually not going to look at a bad look. i think oil prices will be under pressure for longer periods of time. as far as consumers are stern, you have very accommodative monetary policy very accommodative fiscal policy and then you put it together with a low oil price, the consumer is not in terrible place. >> . jack: we need to quickly lightning round it went into real off some of their pics and i will start with you ben. >> versus schwab that is a

pick because robin hood had issues and people need good advice and schwab can provide that this is from scott black is going to d all these people stuck at home there get a shop on amazon and amazon's are to deliver. >> henry allen bogan likes west pharmaceutical. they may containers for liquid drugs, strong balance sheet visibility and have about 70% of the market. >> all the stocks of been sold off. jack what you have first question for. >> biotech, they are older drugs that are in decline but newer ones taking over for folks at applied materials, that's in equipment company for chipmakers. she want to make more powerful chips that usable (you to have more equipment to make them. kennedy: thanks very much and sonal desai thank you. coming up on what you can do

first thing monday morning to improve your portfolio. improve your portfolio. stay right there. hi, i'm bob harper,

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jack: subject, funny thing about managing investments as you always have to do what feels worse. >> yep, weak like this whether you shift money to shocks, i did, it was not especially brave of me. i did kind of an asset allocation calculator online it said i had a great mix for 70-year-old. my driver's license tells man 47, so something's not right. in the bull market i started tinkering with my mix. it's getting a low skittish.

i think i've turned into a financial benjamin button. i seem to prematurely aging. i'm trying to get back to age-appropriate investing i moved more money into stocks this past week. you try to keep doing that. jack: when times are really good you got to go the other way. >> i've got at least 15 years of hard work and front of me in five years of lazy work. kennedy: you want one actionable idea from each year. student let's look at apple here. it fell into a bear market tons of cash in the balance sheet, they're going to use products throughout this whole thing. >> you're going the other that way? >> i'm saying cash is king. a lot of parts are moving away, why would join to over allocate the situation that can turn on a dime? hold on to your cash nibble but don't go big into anyone. >> cash is queen carlton. and, crazy buddy think we may have opportunity to put some cash to work in the coming

weeks. ben, jack, carlton thank you very much check out this week's edition of barron's.com, don't forget to wash her hands, stay healthy, follow us on twitter barron's online, that's all for us. see you next week on barren happy weekend, what a week. welcome to the program that analyzes the week that was and how position over the weekend. happy weekend everyone, coming up mount sinai hospital as our special guest to discuss the ramifications around coronavirus and what it will do to our communities and how prepared we are in the healthcare system. join us for the special to be coming up. but first we'll look at your money, the coronavirus also having serious ramifications on your money and throughout wall street all three majors entering a bear market