Transcripts For CNBC Squawk Alley 20240713

Dow decline. Massive market selloff is where we begin this morning. Kevin koran and keith lewis join us now on todays down swing keith, the pullback were seeing right now, start of a larger correction how are you position organize how would you be suggesting investors position given the steep moves weve seen today first, good morning well, from our perspective, back in late january, we downgraded our nearterm Equity Outlook to neutral, and part of this happened before the coronavirus. Already we had stocks at a cycle high, the sentiment that was stretched and weve gone over six months without a normal correction you lay on the coronavirus, which provides for uncertainty, and we think the risk reward near term remains mixed. From our perspective, that means maybe bringing equity allocat n allocations that have run up a little bit back to target. Some of our more tactical portfolios last year we added a little bit of gold longer term, the bull market trend is intact, but when you shut down the second biggest economy in the world, it will have some impact 2. 5 moves in the major averages were still only a few percent below those records highs that were reached earlier in the month. Yeah, so theres a lot of good things going on beyond the immediate news and that is the improvement in tone in terms of the overall Global Economy there was a lot of pump priming from Central Banks over the last year or so there has been a drawdown in inventories around the world that could lead to a more sustained pickup this year unfortunately, right at the moment where you would be looking for that pickup to get a real lift, weve been hit with this coronavirus, which has some real impacts there are significant supply chains in china. When you look at the ihs Market Services survey from last week, it was a very large drop here in the united states. So were weighing the bigger picture, which is one that is we think going to move towards an improved economy later this year, but we have the nearterm challenge and uncertainty surrounding coronavirus and the spread of that virus, which has significant impacts as we see today in the near term keith, i want your thoughts on coronavirus concerns running into the political cycle in eight days well have super tuesday, two weeks after that well get michigan and florida, ohio, missouri, illinois, or at least well have results from all of those important states. At what point does the medium term become uncertain . Were not sure what other developments will be good question we always work in an area of uncertainty. Its the degree and whats priced into the market i think you make a valid point the election side, i think the markets perception is that trump is very likely to get reelected. As we move towards the democratic nomination and who that is, i think that thesis will be tested as far as if its going to be sanders or someone else and that will inject volatility into the market and probably periods of pullbacks, which will be an opportunity but if you look at the s p trade, were still trading above where we were december 31st. Valuations havent corrected that much. Sentiment is just starting to correct right now. We would look for a deeper pullback, sentiment getting more extreme before its time to step in and maybe the political side will help that, but so far right now we still think were in a mixed nearterm risk reward situation. Kevin, dramatic moves in equities today but also in treasuries you have the 10year breaking well below, and the 30year treasury yields, record low, 1. 82 . How much lower can rates go right now . I guess overall, what is the bond market signalling we just wrote about this at Washington Crossing advisers that is a sign that youve got pressure around the world more recently as it relates to this global slowdown and its being manifested in lower yields the very significant number that you just cited was that offensive board low is at the longest end of the treasury curve. So 30 years out, the yield below 1. 90 i think, the last time i looked at it, is significant because it has also accompanied a version of the yield curve in the earlier parts of the curve if you look at a threemonth, 10year spread for example, that has reinverted and many people look at that as a harbinger of a potential recession. It doesnt mean that recession must happening, but the flattening version of the curve again is something that is going to be an arrow in the quiver of the bears who want to push back against the more bullish thee situation as we go through the year keith, i want to go back to what you were talking about with politics right now some would argue that the markets interpreting Bernie Sanders strength as resulting in a likely trump win i imagine that if somebody like bloomberg were to really gain and sustain any kind of strength, the market might not have as much of a problem with that either. So what do you see as being the potential potholes or dangers of things that could develop in the democratic primary side that would give the market pause, whether its a sense that sanders popularity is growing stronger among moderates or Something Else is that question for me as weve seen Bernie Sanders nomination go up, trumps reelection odds have also gone up i think what could go wrong is, again, that at some point you will need a shift saying on the democratic side as far as to gain votes or look at more likely of a gain to the white house and also about congress as a whole. I just think were not at a 60 40 country, closer to 51 49 and the confidence in the reelection of trump will be tested in our view again, not from a political standpoint, from a market standpoint thats one of the things as we get closer, youll see that really move the headlines from day to day jemgentlemen, thanks for join us out the dow down 850 points. Lets check on mortgage rates. Diana olickthe has that from washington take a look the average rate on the 30year fixed hit 3. 42 on friday and could fall to 3. 375 today, that according to mortgage news daily. It was at over 4. 5 one year ago, and the expectation was that rates would move slowly higher this year no surprise the refinance market is suddenly booming. Applications to refi up around 165 compared with a year ago. Mortgage applications to purchase a home and home sales so far are not reacting as well. Thats due in part to the severe shortage of homes for sale but also due to still tight lending. The ceo of Amherst Holding said as much at a recent real estate conference unless you have a large down payment, unless you have a very solid amount of Free Cash Flow, thats underwritable and we forget about this because the uber driver might not have income thats fungible from a mortgage lenders perspective or the people working two, three, four jobs or the contributors to cnbc who contribute to two or three places they may have a hard time applying for mortgage. Mortgage rates could be even lower but lenders are pricing in the risk of what will happen to fannie mae and freddie mac, which seems to be moving to an exit on conservatorship. Obviously, the virus fears contributing to the downturn the who whov w. H. Oorld health on says the status in china has peaked its not witnessing an uncontrollable global spread they say its too early to speak of a pandemic. Blackstone joins us with this take, byron wien would you grade the action as being methodical and rational . Well, i dont know about that i think its a very strong reaction to a change in the outlook. I think people were expecting that the coronavirus would be brought under control by the end of the Second Quarter and now thats being called into doubt the Central Banks were moving to ameliorate the economic effects of the coronavirus and now the feeling is that what theyre doing may not be enough. And there may be recessions in europe and elsewhere the final thing, in the opposite direction, it looks like Bernie Sanders is going to be the democratic candidate and the popular perception is that donald trump will beat him and donald trump is favorable viewed favorably by the market so we had an overbought condition. The sentiment was optimistic and verging on euphoria. The market was very vulnerable to a decline and the shift in thinking that the coronavirus could be a pandemic spread across continents beyond china and the factor thats driving the market down so severely today so what is what does that mean to you, byron 4. 5 below alltime highs below. Is this a five to tener no. I think the market was vulnerable to a 5 to 10 correction at any time maybe were getting it now i dont think its the end of the world. I think the virus will be brought under control. The u. S. Was doing very well in spite of the virus i think the virus is brought under control, the World Economy will continue to expand. Byron, po tuto put a finer pt on it, what does the relative optimism youre exhibiting, i guess the market is exhibiting, if this is 3 down in major indices at least so far on a day like this, what does that say about the state of the market when faced with this kind of an issue . I think it says more about the state of the world economies. The world expansion was projected to be in excess of 3 before the coronavirus hit its below 3 , but were still predicting world growth, not world recession. So if the virus is brought under control and the overbought conditions are corrected during the market decline, the market will speed up again. Valuations were not crazy at the current Interest Rate level. Byron, the fact weve seen this flight to safety, whether its the move in treasuries, 30year record low, gold at a 7year high, even though every sector in the s p right now is lower, Real Estate Holding up to the Broader Markets right now, these moves when we talk about valuations and sustainability, a, do they make sense, and b, do they continue to play out or do we potentially see a return to the rotation that we had been seeing at the end of twibt. I think what were seeing is a correction in an ongoing positive market. I think thats where we are right now. The question implicit in what youre saying is, is this the beginning of a bear market and my answer is no. Its a serious correction related to a fundamental development. The fundamental development will be corrected ultimately in the correct and it will resume its previous direction, which was positive finally bishgs ron, did i detect some uncertainty as to whether or not you think sanders is easily beatable yeah, i do. I mean, you know, i remember back in 1992 when bill clinton became the nominee the republicans thought, oh, my god, heres this nobody from a small state, were going to easily beat him. That didnt turn out to be the case sanders is a formidable competitor, big campaigner, he has the popular support. He may be harder to beat than the republicans think. And if we got to october and sanders was polling ahead with a healthy margin ahead of trump, would that be worth a bear market it might be i dont think sanders would be viewed favorably by the market, but well have to see how that develops we have time to work on that. Yeah. Coronavirus is more in the short term byron, thank you see you seen okay. Great. Bye. Speaking of covid19, coronavirus concerns sending markets here and abroad steeply into the red take a look at the biggest laggards on the dow this morning, including unitedhealth, disney, apple, american express, and dow chemical squawk alley returns in two. I dont know how many of those declines ive had in my lifetime but there have been a lot of them. And i cant think of one that you shouldnt have bought, basically. soft music when i see obstacles, i create opportunities. When i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. Warren Buffetts Berkshire hathaway owns more than 5. 5 of apple. We asked him whether hes concerned about the companys warnings on revenue. I dont think ive placed a phone call to tim cook in two or three years. No, all kinds of things are going to happen with apple in the next ten years real question is what is the degree of pervasiveness and strength of that product five or ten years from now i dont think of apple as a stock. I think its our Third Largest Business Apple is one of the dows biggest laggards this morning. Take a look at it, down more than 4 . Chris drexler and Larry Haverty join us now on where the stock and maybe some others go from here guys, good morning good to have you at post 9 hi, carl. Hi, jon carls next to you. Larry, apple is one of your top holdings so is disney, another one of the dows biggest laggards you probably dont have ne jerk reactions on a day like this, but what kind of data points are you looking at where coronavirus is concerned when it has to be with those stocks . Well, i think, jon, the most important thing is to get yourself out into the real world, so when im in new york, i will confess, i read the subway or i ride the subways and when you look at the people sitting across from you, probably 60 , 70 of them are on cell phones. I was also wondering around sojo, doing some shopping on saturday, and there was this store that was really much, much busier than any of the others. Turned out to be an apple store. So i look at apple and you have the numbers and the numbers are very, very persuasive. The Free Cash Flow generating ability is just unprecedented. But you also have this consumer franchise that i think is not appreciated. Apple is basically a part of peoples lives its going to continue to be a part of peoples lives youll have this hopefully very significant technological innovation with regard to 5g coming up eight, nine months from now will there be some hiccups theyve already warned in the First Quarter. I think it will go longer than the First Quarter because i think the market is currently underestimating the impact on supply chains. But once the dust settles, and i think the dust will settle, looks like its settling in china right now with regard to the number of cases and the virus, it has to be the first stock ha you buy at the margin, not this afternoon but sometime seen chris, i remember when china was a weakness for apple, no firstparty stores, trouble getting the wireless carriers they needed. Now its strategically so important as an Assembly Manufacturing hub and as a market for them. Is there a chance that coronavirus is exposing any kind of strategic error that they might have made, or has everything youve seen so far suggested that theyve actually done well in how theyve structured their presence in that location . Well, look, i would fully agree that this is a hiccup, and i think what theyve done strategically on a global scale is correct and i think were going to probably be looking through to probably a couple quarters here. A lot of the smallcap names we invest in are the suppliers in that supply chain, the assembly, the testing of it. We are seeing weakness there were hearing from companies who arent yet able to give us guidance i think well hear a lot of that in march i think the preannouncement season could be pretty bad in march for a lot of those companies. But this is temporary. Were out there today with a lot of buy limits, kind of below the market, but were a buyer out there. We think this is a great opportunity. Weve been cautious for the last six weeks or so, so this is the opportunity to really pick up some good value names. I dont think its over this afternoon. I was going to say, buying now or wait till the guidance comes out and some of these bottlenecks are more obvious as i say, were below the market trading with limits, so you cant just get taken along and filled were strategically below, and its only a portion of what we would want to own. If i want to own 100,000 shares, that would be a trading strategy for those who want to inch in and put money to work. Along the same lines, larry, you mentioned apple would probably be the first stock you would buy but not on a di like today. What do you mean will the pullback get deeper i think you have to be respectful of the markets technicals, morgan, and at 2 30 margin calls go out. There could be some forced selling of the stock later in the afternoon. I think theres time to wait and you look at these things and theyre not going to go away the other stock i think you have to look at here is google. They dont have any exposure in china. I was at toy fair last week and p peppa the pig, 42 million views on facebook. People are underestimating the power of youtube to say nothing of googles monopoly position in search thats going along as all the funds are trading like individual companies thats a great place alongside apple. Apple, you mentioned google, in general were seeing big tech, but relative to the Broader Market maybe it holds up a little better. Minimum exposure to china for any of these names are they buying opportunities . I think the thing that works in favor of the market right here, morgan, is this is a deflationary problem its not like the price of oil going up and squeezing consumer incomes. Consumer incomes are going up right now because the price of oil is going down. The ability to spend is going up because employment so far hasnt been hurt and there may be some shortages in goods temporarily were going to see a very, very fine bounceback in the u. S. Consumer sector and that will more or less drag the rest of the world along with it. The lower the market gets, the more optimist you can you have to be. But i think we have a couple more percentages to go down. The idea you can get 1. 37 in government bonds is the biggest commercial for equities ive seen in my 45 years in the investment business. Challenging days for many around the world with this virus, particularly. Chris, larry, thanks as we go to break, look at the selloff across europe where shares have been down, well, almost 4 for most of the morning. Take a look at the biggest laggards on the s p as well. You like to own american businesses youre getting a chance to buy it 3 cheaper. I dont consider that a lot cheaper, but how can it be bad news unless you have to sell stocks hey there people eligible for medicare. Gimme two minutes. And ill tell you some important things to know about medicare. First, it doesnt pay for everything. Say this pizza. [mmm pizza. ] is your part b medical expenses. This much about 80 percent. Medicare will pay for. Whats left. This slice here. Well. Thats on you. And thats where an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company comes in. This type of plan helps pay some of what medicare doesnt. And these are the only plans to carry the aarp endorsement. Thats because they meet their high standards of quality and service. Wanna learn more . Its easy. Call Unitedhealthcare Insurance Company now and ask. For this free decision guide. Inside youll find the range of aarp Medicare Supplement plans and their rates. Apply any time, too. Oh. Speaking of time. 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Europe is closing in a moment mold mo seema mody has the action. The virus spread, hitting european stocks, lower by as much as 3 to 4 , on track for their worst day since summer of 2016 for the european averages a number of european economists relaying their concern here. The Research Team at ing running this drop in tourism from china could add to a weakening of domestic demand, adding to the existing problems stemming from the Manufacturing Sector and delaying the timing of a oour zone rebound to the second half of this year analysts were hoping as the virus was contained the Chinese Traveler would return in full force, specifically in europe, long benefitting from chinas tourism, accounting for half of germanys annual dutyfree sales. Tourism spending makes up about 1. 5 of germanys gdp and over 2. 5 in france and italy one key sector to watch, the european luxury names, specifically the italian brands, prada, gucci, and tods. Goldman sachs on friday had lowered estimates for the sector, 11 on average for 2020. Well see how the outbreak in italy changes things seema mody, thank you time for a news update with sue herera back at hq. Good morning, everyone. Trump and First Lady Melania Trump visiting the real taj mahal. He toured the iconic structure just before sunset you may remember the president once owned the trump taj mahal casino in atlantic city, new jersey Israeli Forces firing back at militant sites in the gaza strip this in response to a rocket attack on southern israel. Benjamin netanyahu threatening gazas hamas rulers with a war if the attacks continue. The search continues for the cause of a deadly bus accident in Southern California the bus was traveling to mexico when it overturned three people were killed, another 18 were injured. And katherine johnson, a mathematician who worked on nasas early space missions, has died she was one of the pioneering black female mathematicians portrayed in the awardwinning movie hidden figures. She was 101 years old. You are up to date thats the news update this hour back downtown to you n morgan best known for work that contributed to the First American orbital space flight piloted by john glenn. Absolutely. And the anniversary of that flight just passed a couple days ago. May she rest in peace. Absolutely. Still to come, the opportunities for value amid todays drop as stocks continue to sell off. The biggest laggards this morning on the nasdaq. American airlines, tesla, booking, a number of others. The ohm oracle of omaha. Anything we were buying friday we would be buying today. And feeling better about buying. Wasted time is wasted opportunity. Exactly. Thats why Td Ameritrade designed a firstofitskind, personalized education center. See, you just oh, this is easy. 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Some of the lofty valuations in tech getting tested as stocks continue their selloff in dramatic fashion who better to talk t draper from Draper Associates. Good morning thanks for the time. Thanks so much for having me on the show. So talk to me about the degree to which ult there was froth in valuations and the degree to which its being unwound today, rightly so or not. Actually, i got to admit, i have been out of the market for about six months it felt pretty lofty for me. And i kind of moved most of my stuff to crypto and bitcoin. I think thats kind of a safe haven now. And i think this correction, it may end up being more than that, but i think were in for a kind of an interesting ride all right lets go back. What pushed you out six months ago . And what went through your mind as we saw tesla approach 1,000 well, it just got very frothy the market got too excited, and uber drivers were doing daytrading and, you know, all the signs were there so i think it was time its a good time to be in the private markets. Thats what i do and so at Draper Associates were very happy that were continuing to be in the private markets. But i think in the Public Markets it just got frothy and then theres the fear of socialism. I mean, nobody wants socialism capitalism may only work 70 of the time, but socialism mass never worked in the history of man. So i dont understand why theres this move. But i think theres some fear there. And i think theres some interesting things coming. Tim, i want to go back to the point you just made about shifting your investments to bitcoin. Earlier this month we saw the price break above 10,000, trading below that right now theres been a lot of talk about this flight to safety move, this idea of digital gold how do you see it and where do you see the price going from here well, Im Still Holding to my prediction i think bitcoin in 2022 or at the beginning of 2023 will hit 250,000. And that is a big move from where it is here i think the rceason is bitcoin will be the currency of choice right now you have this choice and bitcoin is not as easy to move around, but eventually it will be, and then youll have a choice and youll say, hey, do i want to pay the banks 2. 5 to 4 every time i swipe my credit card or do i want a currency thats frictionless, open, transparent, global, and not tied to any Political Force . I mean, at some point, people are going to make that switch of and bitcoin is going to be the big winner tim, 250,000 is 25x plus from where it is right now. If you really think its going to be there in two to three years, what percentage of your net worth do you have in it today . I never tell anybody that kind of thing but a lot of it. If youre telling viewers 250,000, if youre putting that number out there, you have to at least give me a ballpark is it half, a third . Its a lot. It is a lot, a lot for you, 1 is a lot for most people i look and say, hey, this is just better. Long term people move to things that are better. What merchant is going to want to pay their 2. 5 to 4 to the banks and the Credit Card Companies . Theyre not going to want to do that forever at some point theyll say this bitcoin, why dont we accept bitcoin because we can now use open note and the transaction happens instantly and its faster than a visa network and we dont have to pay these guys 2. 5 to 4 this is kind of an interesting time its an obvious thing for me i think the world is going to be much better off because of this decentralized movement and its not just bitcoin. Bitcoin is decentralized currency, but its decentralized everything and i think that the some of the politicians are clinging to their to the past and clinging to their tribalism, but most of the best politicians are moving toward this new world thats global and open and transparent. I think thats going to be the new world. I think it will be a more beautiful, more loving and more peaceful world, but youre going to see a lot of tension on the way to getting to that world speaking of that, tim, buffett was asked about crypto at large this morning on squawk by our becky quick heres what he said. Cryptocurrencies basically have no value and dont produce anything so you can look at your ledger item for the next 20 year rs and it says you have x of this cryptocurrency or that. It doesnt reproduce it cant mail you a check or do anything what you hope is that somebody else comes along and pays you more money for it. Ill never own any crypto i assume thats what you mean by tension. That is hilarious 50 of his holdings are banks and Insurance Companies. They are not going to do well in this new decentralized economy of course hes not going to like it he sees a huge threat to his holdings his holdings are more than 50 in banks and Insurance Companies in berkshire hathaway. So clearly hes not going to want this new currency that is completely everyone knows, everyone who has studied it knows is so much better than what we have out there and these currencies that are tied to fiat government are i think theyre just going to be a relic of the past. It will be like holding drachmas and francs what kind of risks are endemic to his holdings if we reach this new world you foresee by 2023 . Enormous risk existential risk. I wouldnt hold a fwabank ifo paid me to own the bank. I wouldnt hold an Insurance Company right now. They are not in good shape for the next ten years things are going to change very big you go to anyone whos 35 and younger, and you say, do you want 10,000 or a bitcoin, theyll all take the bitcoin if theyre older theyll usually take the dollars but the ones who are younger are saying, hey, this is just better currency so lets hold that tim, just to shift gears here, i want your thoughts on another conversation weve been having and certainly given it is a down day for the markets more on focus, and that is do you feel like theres a reckoning setting in within the Startup Community right now, given the fact that ipos for the most part in the past year maybe havent performed as well as had been anticipated versus valuations in the private market, the fact we are seeing cost cuts, seeing many startups right now cut jobs as well, more focus on profitability . Do you think theres a sentiment in the Startup Community . Well, i look at there are Companies Like forge and equit zen Trading Companies in the private market now its changed the whole nature of what we really want. The Reason Companies are worth more in the private market than in the Public Market, theyre worth more in the private market than the Public Market it costs 5 million a year just to comply with all the stupid regulations they have for public company, and that never was the case Sarbanes Oxley led a huge change in regulation, and so no company wanted to go public until i mean, nobody wants to go public now. Why would you ever want to go public it will take a lot of the value out of your company. If youre paying 5 million a year just to be compliant with all the stupid regulations, it makes no sense so nobody wants to go public if they do, its kicking and screaming. Then when they go public, everybody is surprised it drops. Thats just because had to just pay 5 million a year to comply with all the regulations of being public if im nasdaq or the New York Stock Exchange right now, i am panicking. Tim, you always speak plainly and colorfully its good to get both points of view see you seen tim draper still didnt tell us how much bitcoin. Luxury names getting crushed this morning as a part of todays selloff robert frank has more on that sector back at headquarters. Good morning, jon luxury has two problems today. The first is a slowdown with chinese consumers. They account for more than a third of all luxury spending now you have this outbreak in northern italy near milan, one of the Global Fashion capitals which is hosting fashion week. Fashion week attracts tens of thousands of clients and designers to milan that was cut short sunday night when authorities restricted all Public Access to events. Georgio armani holding his show to an empty the theater. Bella hadid wearing protective masks. Dolce gabbana, prada, versace all among milans Famous Brands facing questions about how theyre going to staff and keep up production with all theelz closures you also have ferrari based just south of milan issuing a same today that its closing its two museums there, banning access to employees from affected towns, suspending factory tours it will consider new measures as necessary. That stock rationed down over 5 today. Shares of lvmh, tapestry, coach and kate spade, theyre down almost 8 . The fashion world now moves to paris for fashion week chinese designers there already deciding to drop out along with many buyers and retailers. Some designers moving to Live Streaming or Virtual Events since there wont be any crowds. Back to you. Robert, thank you want to get to sue herera now back at hq with a news update. Sue . Yes, jon we have a verdict now in the Harvey Weinstein case. The jury had been deliberating for five days, was deadlocked on friday they have come to a decision count one, predatory Sexual Assault, not guilty. That was the charge if he had been found guilty would likely have sent him to prison for life not guilty on that charge. Count two, criminal sexual act in the first degree, guilty. Count three, predatory Sexual Assault, not guilty. Count four, rape in the first degree, not guilty and count five, rape in the third degree, guilty so basically he has been found guilty on two of the five charges, but importantly, the predatory Sexual Assault charges, both of those charges he was found not guilty. Jon, back to you sue herera, thank you that is one that many people will continue to comment on as we wait for sentencing absolutely. We expect some comments from both sides probably in about a half an hour or so. Well keep you posted on that. Thank you, sue herera well have more on todays dramatic selloff for stocks straight ahead for now, take a look at the fang stocks all significantly lower in todays trade. Facebook down most of all almost 5 netflix down 3. 5 . Well be back in just a minute the real question is has the 10year or 20year outlook for american businesses changed in the last 24 hours or 48 hours . You nt dobuy or sell your business based on todays headlines. Liking the now platform . Every time it takes care of something for us, we celebrate. How often does that. Got it. Servicenow the smarter way to workflow. We segetting to patientscines in record time. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Taking a look at the dow right now, slipping back further into the red flirting with session lows reached tz earlier in the morning that session low was 997, currently trading around 924 similar for the s p, down 3 right now. With coronavirus concerns sending stocks plummeting our eric chemmy is looking a the demand for infrared therm meters and why they may be causing more harm than good. Many striking images to come out of the Deadly Health crisis in asia. A masked official aimingan infrared thermometer at travelers. All in an effort to curtail the deadly virus that has now killed more than 2,000 People Experts say the devices may not be so accurate i think the greatest harm or danger comes in missing a person who might be feverish and could be actually sick. Reporter he says officials are using industrial grade therm meters meant for testing machines not people. They are not appropriate for human body temperature measurement because they can be off by seven fair height degrees. Reporter we visited the institute where they do training and certification with therm meters to see how they can deliver inaccurate results. This says i am 98. 4, this medical grade infrared thermometer says i was 9. 9. Now lets see what the industrial grade thermometer says, the way they have been doing the measurements in asia. 94. 6. Not even close. It has been consistently off by four or five degrees. Correct doesnt surprise me it is not made for this application. Not made for it. It is not something i would suggest anyone ever use. Reporter he says the lack of education and training is the reason now, despite these warnings manufacturers reported the demand for thermometer guns has grown so big it has caused shortages across the world back to you. Startling discrepancies, eric chemmy, thank you. Todays massive selloff sparked by continued coronavirus fears. The World Health Organization saying in the last hour that the epidemic in china peaked earlier this monday and has been the he hadly declining since there and they are not witnessing at the moment an uncontrollable global spread of the disease. For more on todays market move we are join by greg battle and kenny pokari when you see a 900plus point move in the dow, major averages down , if you are not a trader or watching your 401k or other funds on a dilyis aboutis it seems startling and skiry. How would you put this into context . It does seem a little bit startling considering when we have been doing over the last three or four weeks marching to new highs in the peace of all of this i would say to people this is the last moment you should start to panic or get drawn into the chaos. Down 3 . Yeah it is a big move in one day. If it stays down here by the end of the day we will have lost 5 off the highs of last week, which is still relatively within the tading band. I wouldnt overthink it. I would also recognize that the automated trading and algorithms take it just as fast on the way up as they do on the way down. Sit back and relax especially when you get a shock like this in one day you have to let the market settle down before you have reaction the worst thing you can do is have an emotional reaction. Greg, pullback . Start of a deeper correction what do you think is accounted for within the markets currently at these levels . I certainly feel a little bit less relaxed i think that 3525 on the s p is good level to watch. That was the january lows. I think if the market breaks lower through there, we could to see a pickup in volatility and more selling coming into todays correction there is leverage in the market. We look at thing like open super in the futures, Asset Managers of holdings of futures are close to record key. Quantitative strategies are levered. If they accelerates f we see another down day together it could spark further settle and more volatility. Right go ahead, kenny. I was going to say, europe just closed and the u. S. Markets got weaker after they closed because they closed more on the loesz of the day than not. Greg is right, if we see our market fail into the end of the day and close close to the lows it makes it another down day tomorrow thats why i said dont jump in right now, let it play out for a day or two. We will leave it there. Greg and kenny, thank you for joining us and giving us your thoughts on the selloff today. On that point europes close did not help us. We are back within a stones throw of session lows, the dow at least down 997. Yields of course continue to be an ongoing story, the 30 year bond, another record low tens, fives, twos, deepest curve inversion since october. Back in a moment. 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One area that seems to be is the stay at home, stay inside play zoom video another 52week highs. Pell on the which hasnt been doing so well also higher. Chewy, maybe you are home with your dog and verizon, what you need broadbandwise i suppose to do video calls. Yield is lower, gold, seven year high, silver higher, crude lower. Transports breaking below their 200 Day Moving Average manufacturing freezes the impact that has on goods. Not a good wegs. Lets get to the judge back at post nine. Thank or breaking News Coverage of the market selloff continuing now i am scott wapner, this is the halftime report. Our Investment Committee here today at post nine josh worn, steve weiss, bryn talking ton, and also with us today is a very special guest, howard marks, oak tree capitals cochairman. We will get right into the selloff. Mr. Marks, nice to see you thanks for being here on an important day. Have we reached howard