Vice chairman and theyll share what to do with your money amid this massive selloff. Lets have a look at whats driving the action the major averages falling into correction territory as the global brought yaoutbreak grows Goldman Sachs is warning that u. S. Companies may generate no Earnings Growth in 2020 based on the elevated uncertainty from the virus and oil prices are plunging on the fears with crude dipping below 46 per barrel at the moment the s p is down 2. 9 , dow almost 800 points. Joining us today is cnbc contributor stephanie link and senior markets commentator mike santoli. Ste steph, youre always looking for the bright side, the growth and optimistic picture we were talking earlier, both of us were talking earlier that this feels like december 24th, 2018, when we got the big swish down and it was really hard to buy then its really hard to buy now. But i can understand where we were selling off we were coming off of a much higher level now than we were in 2018, but it doesnt feel good 10 is a big move for an overall average and the icing on the cake is you have some stocks down 15 , 20 . We have no idea about earnings right now. I get that im just looking for some companies that are number one or two in their industries, have great Balance Sheets and management teams that have proven execution that are starting to yield 3. 5 , 4 , names like cisco, con co phillips and im trying to find good Blue Chip Quality Companies im not trying to reach for the stars and go after some of the high flyers. I think technology and some of the high flyers are still high theyre vulnerable so im trying to find quality names at this point but going slow. We did see a massive 700 point nearly recovery today. We were down 960 at the open, down only 182 about two hours ago. Back down over 800 points. How significant is it that weve made the big attempt, successful attempt to rally back and now were back near the lows i dont know now significant its going to prove in terms of whether that was a real low. But i do think what it does tell you is just how intensely oversold and deeply stretched to the downside the market had become in a short period of time you had this very intense concentration of selling lek by dagz type behavior in the morning, 95 of all stocks down. You saw massive hedging and a huge surge in the volatility so you had everything working together to say this is a greater extreme. Is s p gets almost to 3,000. Its an obvious place to say if i was already betting against it, let me make some of those back so i think it shows you the way that bottoms are attempted to be made, which is in violent relief rallies. And then a headline comes along to test whether we are prepared and have built up the calluses to this news. We are down 3 on the s p and dow with 56 minutes left of the session. Weve got full coverage of the selling for you. Meg terrell has the latest on the spread of the coronavirus and bob pisani has a look at the market and bob leaseman lets begin with meg. For the numbers around the globe, they continue to climb, now topping 82,500 with more than 2,800 dead. Italy reported three additional deaths and more than 100 cases today, bringing the totals to 65 infected and 17 dead in japan, with almost 190 cases, plans to close schools through march. In the u. S. , the first patient thought to have caught the virus in the community is being treated in sacramento at Uc Davis Medical Center despite requests to the cdc, to test for covid19, the hospital says it was days before they could. California Public Health officials saying the cdc has assured them testing protocols will be broadened. The hospital says due to an abundance of caution its asked a small number of employees to stay home and monitor their temperature. So meg, is the feeling that the number of cases here in the u. S. Is actually much higher because of that case that was discovered in california and the restrictions around testing . There are a large number of people in the Public Health community who thought the case numbers here in the u. S. Were larger even before this case was detected because were simply not testing people the guidelines are just if you have traveled to china and you have symptoms. So this person of course popped up not meeting either of those criteria and she wasnt tested for days so a lot of folks think there are probably a lot more cases and were not testing for them. Keep us posted. The dow has lost well over 2,000 points just this week. Lets bring in bob pisani with the damage thats been done to the market. The price swings in the last couple of days, even preopen, lets take a look at the dow were down almost 10 for the week thats in the last three and a half to four days. Weve had much bigger moves than that in some of the big names. American express down 16 . Were talking about four days, folks. Exxon, visa, United Technology down why did we have the modest little rally off of the lows this morning because a lot of people felt we had priced in a lot of bad news. Weve got oversold readings in the vix at this point. And gold man talking about 0 Earnings Growth, that got a lot of attention we are at twoyear lows. Remember what happened back in february 2018 when some of the vix blew up. None of that happening right now but extreme readings in the volatility index. Well talk more about the markets with newton paul markham, well weigh in on Global Markets and if you should buy this dip were in the middle of tech stocks are getting hit as well microsoft is latest company to warn about the impact of the virus. Josh lipton has more in san francisco. What mfrts is saying is that it wont meet quarterly guidance for the more personal computing segment, which includes windows and surface accounted about 36 of revenue in fiscal q2. The company says the problem is not demand, but the supply chain which is returning to normal operations slower than anticipated. The rest of the business does appear to remain on track for now. This news might not come as a complete shock for investors remember what hp told us this week, that the outbreak would impact results, and the cfo told me the impact he thinks would be temporary. Then of course there was apples recent comments on its supply chain as well. 90 of its products are assembled in china apple in the red, as well as some of the suppliers. Back to you. Josh, thank you what do you do with some of these names, stephanie its still up 3 on the year and 92 of the sale side has buys its a veryowned name and very well liked and for good reason theyve done a great job transitioning into the cloud a company that had good results last quarter but it has to come down. You have to get more panic in a name like that. Youre talking about microsoft . Microsoft. Tech more broadly, weve talked about some of the things that have come back. These guys have very steep valuations coming into this. Theyre surrendering the premium right now. Apple has only gone back to where it was in december there was a big overshoot. We talked a lot about how the mega cap Growth Stocks were supporting and carrying the market it was a rational response by the market, but itprobably got overdone, obviously given the news. And you could say theyre in a safer position because they can deal with these kind of problems in a much better way than a lot of their smaller competitors. Its all about what you pay for it. And they have strong Balance Sheets and thats exactly my point earlier. Those companies that have great market share and good Balance Sheets, when the yield starts to go up, you actually buy on that. Thats actually a good time to be buying those kinds of names it shows that its getting a little bit extreme. Weve got some breaking news to tell you about United Airlines phil lebeau with the details. Matching what weve seen already from delta, waiving ticket change fees for those people who are flying in northern italy between now and april 30th so people who are going to milan, venice, who want to change their flight because of the coronavirus, united will be waiving those ticket change fees weve already seen this from delta. Not surprising weve seen it from united. Back to you. Phil, thank you market turmoil has fed watchers upping the probability of rate cuts this year, maybe even next month. Steve liesman back at headquarters with more. Maybe not a maybe there pressure is growing on the fed chairman to react to the mounting threat of the coronavirus from former fed officials. Of course from the president especially now from markets. 68 probability now of a cut next month i can tell you that was down below 30 or down below 40 yesterday. 66 of a second cut in june, 53 of a third cut in september. Yesterday formerfed chair suggested she was concerned about a possible recession but that was not her base case former fed governor in the wall street journal calling for immediate coordinated rate cuts. And Charles Evans expressing the view of the fed saying the coronavirus it would be premature for the fed to give guidance on Monetary Policy until the fed has more data. But he added if the fed sees something that requires adjustment, im confident we will give it all the consideration it needs so now we get into this debate, steve, of when the fed should move. Should it preempt the data and get ahead of the curve and do sort of an insurance cut, or should it wait to see whether this is a longer lasting shock i dont know the answer, but i do know that stephanie remembers december 2018 and one of the big reasons for the freakout in the markets was that the fed was seen as behind the curve. Im going to throw something out here, which is an idea that ive been having, which is what is the data the fed needs to see . Is it the Economic Data, production, consumer demand, or is it the data that meg terrell is coming on with, which is the infection numbers . I think that may be something that if its shown that this virus is widespread and its in the United States in a big way, i think that may be something that the fed will have to incorporate as part of its data set that will cause it or prompt it to move i also think the idea of coordinated Global Central Bank movements is something that investors should think might happen. Well, that said, steve, we did see Christine Lagarde push back against that today. But just to go back to your point on the data without trying to be critical, weve seen in the last year or two they dont necessarily need any data to cut. They just get spooked by the market or spooked by whatever the president is tweeting or whatever it might be but they have shown in the last couple of years an inclination to cut just because, as opposed to the data having to be so much worse. You know, wilf, i think i would push back on that a little bit. I think the fed when it decided to reverse course, it was in response to a pretty big policy change, which was the trade war with china and a change in expectations, which was a reversal from the thought that they were going to resolve this problem without new tariffs, so suddenly those tariffs were on and i think it also showed up in the data you did have a decline, a pretty good decline from 3 to 2 gdp growth you did have a move in the market so i dont think it was sort of thrown around necessarily by markets, perhaps it maybe moved earlier than it otherwise would have but the trade war was a pretty big deal and i think its going to look for something here to make a move thats going to be based either on infection data or perhaps by the early data that might show some impact on the virus on the economy steve, can i just ask a question its stephanie whats the downside of them just coming out next week and cutting rates 25 basis points, saying were on it. We can always reverse if things get better whats the downside . I think theres two pieces of downside and im not saying they outweigh the upside. One piece is that you dont have if this thing goes away, you dont have at least for that moment the extra quarter point cut, remember you dont have very many of them if there would be a real shocker or lasting shock to the system. They can take that back. The other thing is this idea that any move 2 , 3 , 4 on the stock market, the fed is putting a floor underneath it, that may already we may be past that point where its already built in, but im pretty sure that powell when he first came in wanted to disabuse the market of that reaction. Steve, thanks so much for that lets switch focus mike santoli is at the dashboard with his first dashboard of the day. This does resemble some previous episodes during the last couple of years most particularly, this is the january of 2018 peak a rush to an alltime high accelerating to the new year and then really almost vertical to the downside it was down Something Like 11. 8 or 12 within 14 trading days. What happened after that big relief al ree. It chopped around for a while. But the meaty part of the decline was in the books after that first whoosh down the problem is the market can keep going down even after Something Like that because we saw it in october of that year because you had the chopping around, everyone thought it was going to be something similar and then you fell to a new low and there was a trap door. So obviously theres no script, but the first rally is probably not going to be the one that we catch. But i do think theres a decent chance as we get oversold theres so many ways of trying to characterize exactly how stretched the market is to the downside this is the index that sort of says how the market has traded over the last 14 trading days relative to its own trend. And its in the low 20s right here now, you have gotten more deep that was a 20 decline right there. But its toward the low end of the range and it tends to oscillate. You cant use it to pick an absolute low all of this means a ton of selling in a short period of time, discounting a lot of bad news to come. So what kind of credence would you give to Technical Analysis right now in this era of very heightened uncertainty fundamentally . I look at the chart and i say im glad i bought in december of 2018 because it went up a whole heck of a lot. That chart is goodlooking if you have a longtime time horizon. 25 is really low and i know were already you know, the sentiment is already negative, so its like valuations, yields, looking at those charts, you put it altogether. And you can kind of come up with a case that have a longterm horizon you should be picking away. And not selling if someone came up to you at a party and said what do i do with my money, this is looking really scary . I did sell a couple of things that maybe werent as high quality or maybe more on the risk spectrum, like chinese auto exposure, i dont really need a lot of that. I have enough chinese exposure with my caterpillar buy, but i am upgrading the quality in the portfolio and this is a good chance to do that. 43 minutes left of trade. Lets check in on some individual Market Movers for you. The beer company says profit could decline by 10 as it expects a significant hit to demand for its products in china. Credit swiss downgrading shares of Virgin Galactic to neutral, citing limited scaleability of the Business Model Morgan Stanley also downgraded today and the stock is down 18 . It had run up massively into the last week or so. And one bright spot is etsy. That stock beat on earnings and revenue. It gave strong guidance for 2020 saying it could see revenue grow 27 to 30 and i would imagine one of those internet stocks, it doesnt get as affected by declining Consumer Sentiment if you can buy online. You dont have to go to the store. The only store i would go to, cost co because you could buy in bulk and i own the stock, yes, in full disclosure. Coming up, were going to talk more about recent ipos with our closing bell closer. Well talk about whether we could see a drop in ipos this year because of the threat of coronavirus and the fear in the markets. The dow falling into correction territory during the session, down more than 2,500 points this week it was down some 960 at the lows of todays session, currently down 721 lets bring in Global Equities Portfolio Manager at Newton Management paul, good to see you, thanks for joining us good to see you. What are you thinking in terms of the likely impact to Global Growth, and particularly china from the coronavirus outbreak the First Quarter earnings are a writeoff i think the market last year, particularly the s p really priced in growth this year and 30 return on the market and Earnings Growth in 2019. And i think from that point the market has to do four quarters work in threequarters and thats going to be hard work. What about Europe Clearly the number of cases is elevating there and the growth environment there was more precarious to start with. Thats absolutely right and i think from that perspective, the valuation between u. S. And europe was you justified its a valueoriented market relative to the u. S. Certainly but you cant imagine europe outperforming the u. S. You said that the First Quarter would be a writeoff for earnings you have Goldman Sachs today talking about no growth for earnings forthe entire year. Thats entirely true. I guess the question is whether or not we can ascertain what the incubation period of the virus is i think we can do that, the number of cases will be a signal to the market to buy and in that case the Economic Confidence we lost would return. But clearly as you go further on supply chain it could be another issue as well. So there is quite a lot of contingency of the things we need to see to get confidence back i wont see the whole year being a writeoff but its going to be a challenge. So Something Like 2 to 3 in Earnings Growth . I would say, yeah i dont think we can look for more than that because the second half of the year will have to take all the heavy lifting. When you look outside of the u. S. Are there any countries that have sold off in lou of all of the markets selling off you dont think are so affected and look particularly attractive i think you can look at some of the emerging world which seems count intuitive, but you may want to look like areas like india which could benefit. They still have growth but i think that youre going to see this outbreak everywhere and i think well resetback to zero as a result of that. And sectors in europe in particular that stand out . Well, i think the story if we get Monetary Policy support, which is what the market has hinted to, could well lead to a situation of sell the news so from that perspective, treasuries are pricing in fed action what could happen when that occurs is they could go up, so maybe things like automobile parts, those kind of things could do better. I was just going to ask you what you make of the tenyear yield trading below 130 and what that spells, besides just more fed, what else is that telling us thats telling us the chances that inflation have come back onto the table again and i think the fed will be considering at this stage is whether or not cutting rates aggressively leads to the cul de sac that theyve found themselves in. And i think if we go there, there may not be any coming back i can tell you the market is getting worried about the disinflationary also slow growth environment. On your global funds, overweigh or underweigh. Overweigh having said that, 58 of the world index is in the u. S. So we do have a significant aspect of the portfolio in u. S. Equities, but we do feel that valuations are a little bit stretched. What about gold clearly its worked fantastically as a hedge have you got exposure there . We dont. Weve not been comfortable in recent years with gold stocks. If you combine the physical or the etf, thats a more successful place to be. Are you saying this whole notion where the u. S. Outperforms because its got better Growth Prospects and higher Interest Rates kind of gets flipped on its head, where the valuations are cheaper now that the coronavirus is a big threat you see the bull markets get ahead of themselves and you see a little bit of bonds selling off once action comes in, that should benefit the sectors and it should benefit the more cyclical parts of the market. Is it just valuation while youre underweight u. S. . Yes how much more of a correction would you like to see for you to feel comfortable to increase that weighting i think we were just talking about the market looking oversold on an rsi basis and that is starting to look attractive i think you only nibble from here i think diving in, its probably too soon we had a bigger selloff than this in 2018 and that wasnt based on anything as widespread as this. Thanks for joining us. And coming up later, Blackrocks Rick Rieder will talk about when he thinks the fed could step in. Coming up in the next hour. If youre just joining us at the moment, another sea of red on wall street stocks having their worst week since october 2018, the heart of the financial crisis were monitoring all angles of the market for you and what it means for your money bob pisani is here on the exchange and Bertha Coombs is on the in. We are off the lows, but thats not much of a consolation because thats been happening is we keep dropping every day, the new lows list keeps expanding. We were at new highs a little more than a week ago lets take a look at some of the new lows transports, debris all over the place. United airlines and delta, robinson, ups, fedex it doesnt matter. Across the board weve got new lows not a lot of dow components hit new lows but theyre still there. Boeing, for example, exxon mobil perpetually at new lows these days and dow as well retailers are again appearing on the new low list they were there earlier several months ago, theyre back up with gap, kohls macy and under armour the good news overall is that in the early part of the day there was less selling pressure and some attempts to buy the bad news is we dont have the full story and thats why we drifted lower. We got Additional Details late in the day and the bottom line is very hard to pick any kind of bottom here. We just do not know the full story. Guys, back to you. Bob, thanks so much for that. Lets turn to Bertha Coombs. Microsofts warning facebook is canceling their developer meeting. Apple and microsoft have provided much of the fuel to rally the record highs just a week ago and now both are down 15 of their records thats more than the overall markets. Tesla, the biggest momentum mover of the year, down 24 . The stay at home play is sending teloc to alltime highs and zoom as meetings continue to get canceled were seeing a little bit of a lift for travel stocks, but its not really much conviction behind that oversold bounce, back to you. Bertha, thanks. Lets get word on the street on some individual Market Movers Airline Stocks get downgraded to hold Deutsche Bank saying Coronavirus Spread will disrupt patterns behind china Buckingham Research has another 15 to 20 downside is likely for this group as delta announces it will cut flights to and from south korea melius upgrating 3m to buy, as one of suppliers of respiratory masks, it is one of thefew names. Adding that 3m was a meaningful outperformer during sars in 2002 upgrading square saying the companys 2020 guidance proves that it is immune to coronavirus. The firm also noting that 95 of squares revenue is generated in the u. S. And has little reliance on crossborder travel stephanie, is that one of the companies you would include in the kind of list that youre comfortable to buy in this environment . 33 total revenue growth, 60 user growth, the numbers are great. And they are under index to the tourism part of the business and market so i get why its up its actually lagged a bit this year i prefer pay pal just because i can get my arms around the valuation a little bit but they definitely have crossborder risk and im amazed looking at master card and visa and how much theyve been down but guys, those stocks are still at 34 times even on the new revised estimate so youve got to pick the spots careful. Marriott was a pretty reputable firm. Hes a longterm wall street analyst. But it wasnt about theyre going to sell a lot of masks this is deeply out of favor industrial that was on the outs way before any of this started the valuation is way down and nobody likes it. So i do think it was an opportunistic call to say this is a high Quality Company over many years, maybe they can pull it together. But for good reason because they actually had to lower numbers five quarters in a row. We know how big of a business is its 10 of the 34 . Thats a subset of a subset of a company i would also say its a net positive on a very small measure that the market can respond to an upgrade of a blue chip name on a day like this and do some buying. Only dow stock higher right now. In terms of airlines, do you want that at all we talk about this all the time and i cant no, i dont buy them what i worry not only in the consumer side, now i worry about Corporate Travel so those four to eight times earnings, the e is not right and theyre very trading oriented and you know i owe boeing and that one i feel longerterm is a good opportunity. And the big three here in the u. S. , american was the one that popped up on our five times or less american basically made a most ipo low its obviously not the one that people think is you just have to wonder what is already baked into the stock. This is a group thats down 20 in the last three months and now firms are out there saying 15 or 20 to go. The whole story was they have cap and capacity discipline and the planes are full and now operating leverage really works against you in a time like this when people are just deciding not to take trips. So i think thats what makes it difficult to get a handle on the valuation. International Airlines Group which owns the likes of British Airlines down the most today on the news that the extra runway at heathrow is not going to be built. So thats a double whammy for them down sharply. Still to come, vice chairman krishna guha is coming up in a few moments time we are down 800 points again on the dow, 3 in percentage terms pretty much for the dow and the s p. Nasdaq down 2. 3 . 33 minutes left to go here are the three things driving the action the major averages falling into correction territory as the global outbreak of coronavirus gross. Goldman sachs warning that Companies May generate zero and oil prices and treasury prices falling sharply on all of those fears. Lets send it over to mike. Were going to pick up on the point about Goldman Sachss call it really would be the second flat year in a row this is gold mans chart on its previous expectation for the path of earnings, 174 for s p 500 earnings for this year was the previous estimate. Now downgrading that to 165. What does that mean for valuation . Well, down here, we actually met the earnings estimates and were trading right now at 17. 4. But if this is all we earn, its Something Like 18. 3. So its hard to say that even after that, if this is the earnings response, that were really necessarily getting to be a level of cheapness unless we want to say cheap relative to very low bond yields so this is going to be a little bit of the friction in this market we can say tactically it looks super oversold, very much prime for some kind of rebound rally but its not clear that Companies First of all, its very difficult to estimate whether in fact earnings are going to come in this way or were talking about one or two quarters of difficult. What would be a p ratio that would start to show significant support . The average for five years is 17 on a forward basis. Thats not too far down from here obviously if earnings hold up its okay. But when we got to late 2018, you briefly touched under 15 at a certain point right there. So thats when youre talking about very cheap this cycle, anything at or low 15 has been very cheap, but naturally its a good ways down from here. You know that note out of gold man got a lot of attention today and its not all doom and gloom. He said 7 slide for the market but then 3400 yearend thats a 9 rebound from there. That of course is a call on, hey, were still in this high liquidity world, were not talking about an outright recession. So i do think that thats a way to sort of come at it from different directions. The cdc now confirming the first u. S. Coronavirus case of unknown origin in california meg terrell with the latest. Well, this patient hadnt traveled from a country with the coronavirus or had contact with another case, suggesting she could be the first person to catch the disease in the community in the u. S Health Officials in california are now tracing her contacts to make sure they can detect any additional potential cases her testing was delayed for several days despite the hospital making requests of the cdc because of narrow federal testing guidelines california officials saying this afternoon the cdc has assured them protocols will now be expanded but the state still has only a few hundred testing kids, according to the governor who says the cdc says its now sending more. Meg, stay with us lets bring in dr. Michael minna, assistant professor at Harvard School of Public Health. Hes been critical of the cdcs response or at least their qualifications to test explain what you think has gone wrong here so its a good question the cdc has they initially sent out a number of tests to all of the state labs and that was a couple of weeks ago at the beginning of february. And then they had to retract all of the testing kits that were disseminated to these state laboratories as a part of the u. S. Response to be able to monitor this new epidemic thats really becoming a pandemic pretty quickly and so lately the testing has been inadequate, i think, for the country. And theres been sort of some blunders along the way in terms of the design of the test and what the cdc has distributed but the frustrating thing i think for people who are trying to perform tests for their patients is that we just dont have the capacity in the United States in the local laboratories that would normally be testing for different respiratory viruses have been banned from being able to do that because of the declaration of a Public Health energy by the cdc. To what extent are any countrys ability to test much better than the u. S. s does everyone back capacity, and does anyone have a test that is more definitively administered than perhaps whats available right now here in the u. S. So the technology that we actually use to run this test is pretty basic technology thats been around for decades. And so every country, more or less, has some capacity to actually run a test like this. So if we look at south korea, for example, theyre actually running huge numbers of tests. Nearly overnight they scaled their Testing Capacity up to the tens of thousands. And the United States still is in the hundreds. From what we hear and there was new news just a few minutes ago i havent had a good chance to really digest what it said, is that there is going to be an expansion of who is allowed to run the test. But this isnt its not a super sophisticated test that only a few labs could run. Its been more of a policy issue of which laboratories are allowed to run it. And its been fairly restricted by the centers for disease control. Dr. Mina, can you just explain really quickly, because the declaration of a Public Health emergency, youre saying sort of ironically has made it more difficult to test why is that . So the idea is a good one, and thats that at the beginning of an epidemic, we really want to be sure of the results. And so the cdc wanted to essentially take control and distribute testing kits to trusted laboratories, those of our state laboratories, as well as the laboratory at the cdc, to really be responsible for performing the tests so the idea is very good but at the same time, we want to it ironically sort of limited the amount of testing that could be performed within the country, and really prevents hundreds or thousands of different laboratories with capacity to actually be able to perform the test by really trying to have a little bit of maybe too much oversight over how the test is being performed. And in this case i think its a little bit of allowing the perfect to be the enemy of the good. Are there patients that you think you and your colleagues there in boston should be testing now, and could you be testing them now if you were allowed to and then a third question, if you were allowed then to test them, do you think we would turn up more cases like were seeing in california . Yeah, so i think there are essentially if theres respiratory cases occurring in the United States at the moment and they turn out to be flu negative, so theyre negative for a lot of the respiratory viruses that we test for, we probably should be testing them at this point for this coronavirus. And thats because we dont know where the virus is circulating and i think that the patient in california is a good example of how unless were testing and checking, we just dont know whats circulating in the community. And so there are patients throughout the whole country that probably should be being tested, and i actually think to take that a step further, we should actually be extending testing maybe not only to just patients coming in, but maybe even testing hospital staff and employees and maybe going to you know, doing more of a surveillance effort to also be looking for this virus would be optimal from a Public Health and a clinical perspective dr. Mina, i wanted to ask you about a story that i saw this morning that i thought was particularly scary, that in japan there was a first case of a woman getting reinfected with coronavirus, in other words, she had been discharged from the hospital and cleared, and now is back and it has spread into her lungs, leading doctors, i guess, to worry about whether this could lay dormant and could make it very hard to tackle is that possible so i think thats really exposing just the huge number of unknowns that still remain for this virus and these kinds of unknowns remain any time a novel viruses comes about, we have lots of questions about the basic biology, as well as the Public Health implications. This particular situation raises the question of if you get infected once, does the normal dog ma that you develop immunity and cant be infected a second time still hold. And is it possible maybe that you maybe harbor the virus in you in an undetectable way and then it sort of emerges again. Its not usually a feature of coronaviruses, but this particular case suggests that maybe the immunity to the virus might not be sufficiently strong to prevent a second infection in some people. But it really these are all very unknown questions this individual might be an aberration we just dont know yet. Dr. Mina and meg terrell, thank you both very much for joining us we have 20 minutes left of the session. We are down 875 points on the dow. Heres a check on the closing bell we have the laggards today, which are down 5 plus microsoft suffering sharply. But even the best performers of those worst performers still down 3. 7 or so. The Broader Markets all own, the major indices, more than 3 with 20 minutes left dont miss tonight cnbcs special report markets in turmoil 7 00 p. M. Eastern time. The market is in turmoil will be tonight at 7 00 p. M. Eastern time there we go. Lets keep going and discuss with krishna guha whats going on at the moment you put out a note earlier today. You and your company now think the fed will act quite significantly, though they havent come around to accept that reality yet thats exactly right. We think that the fed will ease policy and theyll ease policy sooner rather than later, latest april, quite probably things will move fast enough that theyll have to act before then. Base case, 50 basis point rate reduction. Were down now more than 900 points on the dow, krishna the markets are pricing in a rate cut as soon as much that doesnt seem to be giving comfort to equity investors. Do you think it will have much of an impact as you pointed out a minute ago, i dont think the feds head is there yet. I think it wont be long before they pivot, but i dont think they have pivoted yet, so theres no direct support to market confidence. And i think its important to recognize, too, that the fed is at pains not to look like its responding to equity markets selloffs from market highs, which would in my mind definitely should be responding to is obviously the developments in the virus itself and the prospect of a very persistent and serious hit to activity globally now, does the fed monetary easing in this environment, is this a reason to pile into risky assets well, it has to help but whether it is enough to make you want to pile into cyclical stocks, i dont know i just mentioned for those listening, were down more than 900 points again on the dow. If we do see significant easing, even if it was unified, would that offset the Economic Impact . And the followup question, would it offside the declines weve seen in the equity markets . So ive written that i would rather have a vaccine than a rate cut and i think its important to understand that the first best response, the thing that would really turn markets around is if there was either some positive inflection in terms of the path of this disease itself, or some early and credible serious deliverable break through in terms of therapies or vaccinations here so an sinterest rate cut is not optimized to deal with this kind of shock that doesnt mean that is an excuse to sit on your hands, if it is clear, which i think it is clear today, that we are looking at a ushape case, not a vshape recovery how does it help to the extent that the fed reduces rates more broadly validates that big move down in market rates, youre cushioning the tightening of financial conditions you are lowering Mortgage Rates, allowing for refinancing and supporting the housing industry in the u. S you are taking some of the heat off the dollar, thats helping the emerging markets that are under strain its giving the peoples bank of china and others more room to cut rates in their economies and shore up activity. As far as the market is concerned, what you know is that the fed can lower the discount rate, at which youre discounting your cash flows. Is a rate cut against a pandemic something that is going to massively strengthen the Growth Outlook . I would say it improves, but its not a total gamechanger by any means on the growth utlook how do you even begin to formulate a Growth Outlook for the u. S. Without knowing the number of cases in this country and what its going to look like i think its incredibly difficult and i totally respect those at the fed who say, look, theres so many unknowns here, we cant jump to a decision at this point but i think we know enough, i think we know enough to already justify more than justify rate reductions from the fed in terms of our own views of how the economy is going to evolve here, youre absolutely right. Theres huge variance here and its still possible that, given solid consumer fundamentals, good labor market, that the u. S. Could prove surprisingly resilient here but let me tell you what worries me it is the fact that through screwing around on trade policy and other geopolitical type issues in 2018, 2019, we already reduced the other drivers of growth weve been flying the plane on one engine, no Business Investment, no net trade its all been consumer, consumer what has helped the u. S. Economy kept the Global Economy out of recession, has been the next is of consumers the Service Sector and the labor market the shock we have now in terms of the virus threatens that Iron Triangle of the consumer, the servic Services Sector and the labor market that means, i think, that we should expect certainly some weakening in growth. But the Downside Risk here is quite dangerous. Thank you for jumping on the phone for us stephanie, a quick lastchance trade here with the dow down more than 900 points. Im going to give you a basket of stocks that benefit from lower Interest Rates, mainly housing five quick ones. Home depot, 5. 3 comp, 2. 5 dividend yield high quality, good Balance Sheet. This is the kind of name i was talking about. Stanley black and decker, i think theres momentum there theyve had price increases. Weve done restructuring over the last couple of years ppg, quite cyclical but i do like the story because its down 19 year to date, but they also have taken price increases and they have easier comps and theyll benefit from lower commodity costs. D. R. Horton, i think that at 11 times trading below its peers, its attractive. And wells fargo yielding 4. 75 maybe mortgages help them a little bit but the bigger story is the new ceo and the transition there 13 minutes left in the trading day. We are going to go straight into the closing bell market zone commercialfree coverage of all the action. Commentator mike santoli and contributor stephanie link still with us to break down the crucial moments of the trading day. Lets kick things off with the Broader Market stocks continuing their decline. Major archlverages now in correo territory, meaning 10 off record intraday highs the dow is down more than 10 just this week so far, the worst week at the moment since the financial crisis mike, going back to some of the key points we mentioned here today, youve said that you needed to see yields stop making new lows we havent seen that today and i guess thats why were testing it. We made a new low in the day, but it was tentative that precondition is kind of pending. You have without a doubt indicators that say the market has gone down an incredibly fast rate, a tremendous amount in a concentrated amount of time. That usually means youre due for something of a reflex. Here is whats working against that we came from a high that was high in expectation, we needed to sweep away a lot of complacency. Fridays have been awful this year even before the coronavirus scare. So theres a tactical sense out there that maybe tomorrow is not going to be a bright one and its also this kind of high emotion, low conviction environment that always accompanies a nasty correction and thats what were in right now. Down almost 12 on the highs on the major averages. The dash for safety is on in Global Markets, including currency Something Different is happening today worth noting the dollar is actually weakening. The spotlight has turned to the u. S. And thats why, with the spread of coronavirus. And with that comes weaker u. S. Growth after all the talking about china and europe and the Global Economy, the u. S. Is now the markets worry also, odds are spiking for the fed to cut Interest Rates and expecting it to come by march. Rate cuts also weaken the dollar and then theres the safety play and it is shining today. The japanese yen and the swiss frank, f places to hide, theyre both higher. And the battered euro got some love today so potentially a Silver Lining to stocks and worries about earnings for multi nationals, but the bottom line is the dollar is still higher for the year so that is going to cut into corporate results for anybody that does business abroad. But it is worth watching here. But i dont know how much its going to last in terms of the weakness if we have better growth and look at quality, i dont think theres a lot of downside to the collar and that does worry me about the multi nationals. I think if things get a lot worse, which we hope they dont, the fed has the ability to do two or three rate cuts whatever you can squeeze out, its not going to be the same magnitude of that. It feels like its a sequential move. We were already worried about Global Growth and all the economies, and now were starting to worry about the u. S. Economy, which was thought to be an island of stability we werent that connected on a trade front. Now theres serious questions about u. S. Growth. And the Dollar Strength was largely against the euro back when it was making highs so the tradeweighted dollar was not as dramatic so maybe its not as much of a pressure point. Even if we see 1 gdp growth here, china in the First Quarter could easily have negative growth so a relative basis, it will look better. Down 975 points could this be another 1,000 point today . Down 3. 6 on the s p, 3. 8 on the nasdaq weve got 8 and a half minutes left on the session. Coronavirus concerns continue to weigh on oil. Brent closing 2. 5 lower wti fell nearly 6 today before rebounding and closed 3 lower the energy etf hitting a fresh tenyear low today with all components in correction some of the biggest names falling, exxon down more than 4 the opec meeting next week will be closely watched by investors. Production cuts are expected but its not clear if those cuts can provide a floor for prices as the coronavirus outbreak threatens to slow production and demand globally. Back over to you. Stephanie, we were talking earlier about the sector it has been absolutely hammered and it had a terrible threeyear performance into 2020 as well. When you look at companies that are oversold, do you get attracted to some of these i own a couple of them. Its less than 5 of the s p 500 weighting so its a small weighting in general and theres the esg component, too. I look at Something Like conoco, which is a special situation where theyre doing asset sales and they have good growth. Their Balance Sheet is pretty good i think they need 40 to 45 oil, but they can pull back on their cap x if we get lower than that in the meantime theyre planning on buying a whole bunch of stock. Good Quality Management team its going to keep going down as long as oil prices go down, but it is one that i think is a Quality Company to pick away at. It tells a pretty bleak economic story about the Global Economy, what is happening with the price of oil right now. Without a doubt its still coming out of the ground, its not getting burned. So the supply shock is very profound right now its not the kind of market that people are going to be able to step back and say im going to make a multiyear bet. By the way, its also a credit issue, energy is skewed. Under seven minutes left of trade. The dow is down more than 1,000 points, 1,050 points 4 lower in the nasdaq there as far as the group, all sn 500 groups are lower Energy Stocks down more than 5 . The one holding up the best is health care, down 2. 7 lets turn to technology which is getting hammered today. Josh lipton has a look at some of the damage to the faang stocks. Big tech taking a hard tumble collectively apple, alphabet, amazon, facebook and netflix have lost 551 billion in market cap since their recent highs thats more than disney and walmart combined apple alone has lost 200 billion and its Shareholders Meeting this week, tim cook reiterating from the coronavirus is a challenge for the iphone maker. Netflix holding up better than its faang peers, only about 4 from its recent high, investors betting that it could benefit from more people staying home. Thanks so much for that at the moment as we stand with just 5 and a half minutes left, nasdaq down 4 itself, showing that tech had more to give back. Ultimately you have to see that when weve gotten this far down in this short amount of time, you almost dont want to have places to hide because it shows you that theres sort of panic the way you get the declines in a week is that people were really overpositioned before hand and mostly in Growth Stocks thats unwinding in an accelerated way. We just dont know how much more there is to go and how badly people feel positioned. Youre talking a lot about sentiment. I wonder if the fact that the fundamental reason behind this move is an epidemic, potential pandemic, just fuels the fire even more in terms of the fare trade. Its not just an economic scare. Theres a health scare here. Theres no doubt about it it just makes it impossible to try its not what the market is good at handicapping, and you have a massively wide range of possible outcomes here, from really not all that much lasting economic damage, to a very persistent one and a consumer shock, which i think thats alarmist but its out there on the spectrum down 1,050 on the dow transportation sector down around 10 this week phil lebeau has got more. Wilf, the selloff continues in the transportation sector, especially when it comes to Airline Stocks take a look at the airline index, under pressure again. Down another 4. 5 today. The Airline Stocks, about a half hour ago i said the selloff is slowing down a little bit when you take a look at united, delta, american, southwest but today thats accelerated here within the last 15, 20 minutes. Ryan air versus easy jet, the reason were showing you this is because the European Airlines are feeling pressure from the incident or the cluster of coronavirus outbreaks in northern italy anybody who has exposure to that, ryan yet, easy yet, two examples take a look at shares of boeing. Trading down over 300 a share lets see where theyre at right now. All the way down to 289 that is the lowest price since back in late 2017. That shows you how much boeing has sold off phil, thank you weve gotthree minutes to go what are you watching inside the market its ugly, as you would expect take a look at up versus down volume this has been something noteworthy all week. You had two days earlier this week where you were down 90 youre there again so a third in a row. Real liquidation going on and people feeling stressed and trapped in certain strategies. Thats being unwound in a hurry. Take a look at mega cap growth versus small caps. These are basically the same chart. Thats basically the big guys are coming down to meet the small guys, so its a comprehensive washout. Again, you want to see it even if you dont know how or when it ends and the volatility index not really giving you comfort. Its great that it gets up to high levels and doesnt tend to stay there but now that were making new highs, you want to see it spike down 3 points from the high before you say, okay, fine, the fever has broken and we might have had that earlier today, but now weve rebuilt the premium at almost 37. We are down more than 1,100 points on the dow with just two minutes left of trade. Here is rick santoli. Im surprised that rates arent moving down a bit as we hit these milestones they are holding a bit the lower yield was 1. 03 we havent closed at current levels since 2016. Six years in a low tenyear have moved lower. 124, the lower enterday and were trading a couple of basis points higher. 125 in 10s and 175 in 30s, their low is 174 our psychological milestones dollar index, it dropped six sessions in a row, down 1. 3 a week ago it was at a 33week high todays high is 24 points below yesterdays low. And after yesterdays respite were seeing bigger volume today in some of those momentum sectors like chips and its not just thestrength that is selling. These are stocks that are getting bear market lows the weak stocks are getting weaker as well you cant even hide in the biotech names that really rallied on the coronavirus, like merona that is preparing the test nowhere to hide. This is a general takedown of the whole market 3 to 5 , you can look at Procter Gamble it doesnt matter. Nike, caterpillar, cocacola it doesnt matter if theres china exposure or not. Markets were down 10 across the board and thats exactly whats happening. 3m one of the few stocks today they make a lot of the masks that people are going to be using. This is a twoyear high on the vix right now. Were closing essentially at the lowest for the day the dow down 1,199 s p 500 down 138 a brutal day on wall street. Welcome to the closing bell. Im wilfred frost. And im sara eisen with mike santoli. Just ugly, ugly, all around. More than 4 declines across the board. Almost 1,200 points, 4. 5 , just shy of that the s p, and the dow just more than that for the nasdaq closing at the session lows weve got three sectors down more than 5 , energy, real estate, technology, energy and really sorry, energy and technology have been some of the worst performers this week. Theres the dow and there was actually a brief attempt to recover. 700point recovery. And then we just spilled right into the close it was moving lower all throughout the final hour of trade and into the close and near session lows. Went down 900, down 1,000 and then down more than 1,100 points on the dow coming up, well weigh in on the massive market selloff and whether the fed will take action and later our closer, well talk about how the coronavirus could affect the ipo landscape this year. Joining us to talk about the market selloff, founder and still with us, stephanie link. Mike, ill start with you. This is the worst points drop for the dow and s p 500. Down 4 for all of the major indices and at session lows. Whats your big takeaway. Obviously, just did not stop really along the way despite the intraday rally at any of the levels people thought might be significant. It was almost forced selling, you felt like. Clearly you had this massive very rapid unwind because you went from a position of expensive market, to we have literally no idea what growth is going to look like its the fastest the s p has ever given up four months of gains. So weve gone back to where we were four months ago and i think what were looking at is what were the lows back in august and september in the s p it was in the 2800s. Were below 3,000 right now. The dow is below where it traded january of 2018, so you really have wiped away a fair bit of implicit optimism that was baked into the market. And you have to wonder what is being factored in in terms of the economic picture in the u. S. , globally, earnings as the market is totally rerating this whole picks forward. Its essentially reversing any expectation for Earnings Growth in the first half of this year i would say thats the first place you stop and also its just essentially saying we need a bigger cushion, a margin of safety because we know so little about how this is going to play out. There is a chance that this turns out to be a tremendous head fake and that really the market overshoots what the likely scenario is but theres no way of knowing that right now. Lets bring in john whats your take on the level and pace of selling that we have seen in this past week does it provide amazing buying opportunities if you have a very longterm investment horizon like you have . Well, i do have a longtime investment horizon i think trying to time this is going to be very, very difficult. It does seem to be an overreaction if this is so bad, why did t Chinese Market go up it seems to me a bit of an overreaction and i would just tell investors not to panic out of it. You know, i think the economy is still in good shape. Obviously, this is going to change a lot of things and we have to be selective about how we invest Going Forward in here, but i think its a bit more of a panic. John, just to play devils advocate, two points on why the Chinese Market may not be going up number one, people wonder if you can trust that the statecontrolled stock market buying, and number two, they put in place draconian quarantines which is appearing to help the situation, something that we cannot do in this country. Well, thats true im not trying to defend that. But i do see that in this day and age we do have a lot of scientific and biotech materials that will resolve this issue so i would not be selling into this thinking that this is going to drive the economy into a recession. We dont see that. I think there will be different opportunities and different investment themes that we should be watching in here. And some of the strategies we utilize in our liquid alternative strategies, weve built in some Downside Protection in there. So i think that all makes sense in here. Mike, just wanted to ask what you make of where the volatility close and what thats telling us about how we can possibly know if were going to find a bottom soon. It reflects how wild and dramatic the move has been in a short period of time but it shows unabating demand for downside hedges. The structure of all of these volatility products are upside down in the near term theres a huge demand for shortterm protection, and it shows you that its a little bit of a treacherous market and it feels as if there was a forced aspect to the final late kind of whoosh lower, which sometimes just means that people are either sort of trapped or being forced to sell or unwinding these strategies that are completely offsides thats sometimes what you want, you want something indiscriminate to at least say that the tactical players are going to feel like the riskreward looks better the next day but were not getting to a point where its all of a sudden calm enough we can figure out fundamental value. The Money Managers are having outflows and the indexes have outflows in the last couple of days so thats the vicious cycle that you get into sometimes before you have a low. Stephanie, all the Industry Groups are lower for the s p for the week so far. But the ones that have outperformed with 9 moves lower, consumer staples, utilities and health care not looking as bad as energy, technology and materials so how would you recommend Portfolio Managers, vesters look to get more defensive in this market i dont think you want all group of defensives and one group of cyclicles if we bounce in the coming days, the defensives will underperform and the cyclicles will rally, along the technology at the end of the day i think whats going on here obviously is were trying to figure out what are we modelling . We cant model economic growth, we cant model earnings, so what do you do . And if you go back to mikes chart where if you have zero Earnings Growth, the market is trading at 18. 4 times forward. That is expensive for zero growth now, last year we didnt have Earnings Growth, but multiple expansion because we came from such a low level at 14 times and we actually saw multiple expansion throughout the year as we got through some uncertainties. Now you dont have the Earnings Growth and you have a high multiple, so i can totally understand whats happening here the s p is only down 7 year to date, even though its down a lot from its highs the nasdaq is down 4. 5 year to date, only down a lot from its high so it feels really bad, but we have to get more certainty and understanding about what were going to be doing with earnings to get really aggressive but i would bar bell in the mean time and stick to my strategy of quality, upgrading your portfolio. Were bringing in moham Mohamed Elerian you said after we saw the first coronavirus related pullback that people shouldnt buy that dip. Why did you say that then and now weve had a second dip, a massive dip . Do you start to think that weve overrun to the downside . Thanks for having me. So first i said it because people were underestimating what i call the economic sudden stop. What happens when everything comes to a stop in certain parts of the world there is massive economic contagion that goes on people simply didnt understand that this is a dynamic in play and that things would get a lot worse before we turn a corner. Now, we have phase two of this, which is not just an economic disruption, but a financial dislocation. And that will feed on itself for a while. So as much as theres value in certain names because the selloff becomes very indiscriminate as we saw today, its not yet safe in my opinion to get back into the market as a whole. Youve got to let the economics and Natural Dynamics play out a little bit before the market is attractive enough for the sort of risk thats ahead would you be advising people to get out of the market well, it depends what the conditions are i advised that a long time ago, to be careful. I wouldnt get out of names that have precharacteristics. One is very big Balance Sheets you need a lot of cash and very little debt to navigate whats ahead, because markets will start freezing up, even if the fed cuts rates, which i think it will two, you want to make sure that you are relatively isolated from trading elements, because the movement of goods and services is going to be hit even harder and three, you need management that realizes that theres going to be opportunities. Because theres going to be a ton of opportunities for the Stronger Companies im going to have to just apologize to our viewers for some reason the New York Stock Exchange is allowing to musical performance on the floor. Well try to allow or microphones to be heard. A question to you. John calamos, a question to you in terms of the strong Balance Sheets that mohammed referred to, are there companies or sectors in the u. S. Market that stand out to you that are safe and protected in that regard i think hes correct there. You know, we do focus on individual companies, and obviously in the u. S. Its very positive so i would agree with that you know, strong Balance Sheets are good, and the bond surrogate trade is going to be there as well so you look for stocks with good dividends and things like that so john, just help us understand any stimulative effect, if any, that could come out of the low Interest Rates. Stephanie was saying she was shopping for housing stocks. How do you look at it . Well, it looks like the consumer is still strong here in the u. S. , and with the Mortgage Rates coming down and the housing. So well see some positive factors play into that as well so it does seem like a good opportunity. John, in terms of the yield picture that weve got at the moment, do you feel like equities can find a bottom before yields find a bottom or do we have to see yields bottom first . Yeah, i think the low, the very low sinterest rate environment, as you know this is the lowest sfw rate environment weve ever seen. So its going to be difficult. So obviously looking at part of the equity markets, good dividends and things like that, are important. So i think that plays into this market it seems like this is a bit of a panic in the market, kind of reminds me of 1987 crash and so its not something that i would be selling out of in this market so i would think there will be some opportunities Going Forward in here. Mohammed, what are the key factors youll be looking out for ahead in terms of Economic Data and announcements that could start to make you think that were past the worst of this first, let me just stress its going to take time. I dont think this is a panic if a panic is defined beyond some technical dislocation or forced deleveraging. This is a recognition that we had gone too far in terms of Liquidity Risk and credit risk and that economic fundamentals had deteriorated if youre a company today, youre looking at lower revenues, higher cost, and you have headaches in terms of transport, inventory and if youre in asia, and so this is a fundamental shock. And i think we have to be careful not to dismiss it simply as an overreaction by markets. Because the initial conditions were pretty stretched to begin with what i would look for is on the technical side, an exhaustion, because the Financial Market will turn before the real economy does i had some hope that around 10 30 today we had seen that, however, we got the california news which showed that the u. S. Is now more in play in terms of this medical contagion and in terms of the economy, youre going to have to see a medical solution, or at least prospects for a better medical solution this is not something that the fed can solve for the economy. The fed can help Balance Sheets, but it cannot help the economy. Again, sorry about the music here at the exchange were hoping this wraps up soon. What do you expect the fed to actually do . So i think the fed is under enormous market and political pressure to cut, and it will do so even though, if you look at the longer term, that is not the best policy response but it will so my hope is when it does so, it does it in the context of a coordinated loosening. If it is to have any impact, it has to be done globally, but again, all that thats going to do is help Balance Sheets and give some minor relief to markets. But its not going to encourage people to travel its not going to encourage, you know, people in china to go back to work. And look for the w in china. I think theres an overoptimism in how quickly you can restore norm mal normal s normalcy there. I hope shes not pausing ahead of her second song i think its ended. That was incredibly loud. Our apologies to our viewers for that i think its over. Were not likely to get good news on the economy for quite some time. Do you think this market could rally before that for other technical reasons or central bank easing reasons . It will certainly rally before we have any firm sense that this crisis is over or that the issue is resolved or that we know exactly what the economy is going to do. That doesnt necessarily mean its tomorrow. So its some time between now and resolution yes, the market will try to sniff it out or it will simply overdiscount a bad scenario in the shortterm who knows if what we have is the market in a cycle of bracing for incremental bad news, not being sure if we can handle it and having to get to some critical level of getting used to it and getting saturated in this whole story line and all the scenarios before we can decide that theres actually value here or we can decide to take advantage if we think its an advantage of a very rapid downdraft in the market. If youre just joining us, the dow did close lower by 1,190 points worst day for the s p in years i think going back to 2011 and thats accelerated in the final minutes of trading lets get back to bob pisani on the floor. Ive emphasized this is a takedown of the entire global stock market its not value versus growth or tech versus industrials. Its not the u. S. Versus europe. Everything has come down 10 , 11 , 12 in the last few weeks heres transports sitting at new lows United Airlines, delta, c. H. Robinson, United Parcel service and fedex sitting at new lows. If you take a look at some of the 52week, we had a company, it doesnt matter what youre in, cocacola, nike, cater pillar, walmart. Some of them have china exposure, some have european it doesnt really matter 3m up. They make masks. Heres a good sense of how crazy things are Southwest Airlines was at a 52week high less than two weeks ago, it was 58. Today it closed at a 52week low, 46 52week high to 52week low in less than two weeks. Thats an indication of how volatile things have been. Guys, back to you. Thanks. Also, to mohammed, john and stephanie for joining us and managing to decipher the questions amidst all of that noise. The dow and s p 500 posting their worst interday point decline ever meanwhile, bond yields falling to historic lows the u. S. Twoyear hitting its lowest level since november 2016, tenyear and 30year yields hitting new record lows lets bring in global chief Investment Officer of fixed income at blackrock. What kind of dire scenario is being priced in here to the bond market. Its pretty incredible. We thought the last few days the markets were getting grabby, hedge against assets and equities i must say the equity market now is responding more aggressively than the bond market there was a point in time the bond market came all the way off and one of the things people have to think about, there is a reasonable chance that the fed could cut rates. But the markets have already priced it in theyve already priced in a threetime cut from the federal reserve. So youre starting to see the bond market, while its still performing well, pausing a bit i think the bond market may have been earlier than the equity market in terms of the downterm. Its starting to flip a little. How do you think about the economic fallout of this thing without knowing where it goes and what it looks like in this country . So i think mohamed described it right its hard to anticipate where were going to go. Youre going to get businesses that are going to close for a period of time i will say one thing, when the fed has to operate with that backdrop, when you look at the data coming out, its pretty buoyant in terms of all the data that were getting by the way, even some of the manufacturing data, that is going to slow and that is going to slow precipitously. Youve got to keep an eye on that but the markets are pricing it in aggressively. I think one of the things we talked about on the call today, youve got to protect the downside in the nearterm and keep your positions low, your risk down. But youre starting to see some places where you could put money to work at attractive levels the way bob pisani described it, everything is going down there are structurally good businesses we were doing some things in the Home Builders are interesting. The market is just selling and this is a pretty good time to be an investor to think about where can you find opportunity. But rick, that said, im interested on what youre saying about Central Banks at the top the market has already priced in three rate cuts. Is there not room for disappointment when it comes to the broader equity markets, Good Companies aside . Clearly if investors are expecting three rate cuts, they could be disappointed. Youre exactly right. One of the things that i think, the fed has a couple of tools at their disposal and i think the markets are tending to focus, is the fed going to cut rates i would argue today where Interest Rates are, theres an interest sense to the economy. Housing is in good shape for a variety of fundamental reasons the other tool they have that that is more impactful is the he liquidity. Theyre expected to taper it down in the Second Quarter youre seeing this out of china, theyre putting a tremendous amount of liquidity and obviously the ecb is i think the fed, similar to what happened in september, they need to provide a lot of liquidity in the system it is questionable how much you have to do at Interest Rates when youre at an accommodative stance. The economists were pointing to starbucks with kevin johnson, the ceo came out and said they were reopening hundreds of their stores in china. And in fact in the quote said with the number of chinese cases slowing, were seeing early signs of recovery in the region. It looked like that was going to give some hope and then that sort of fell apart into the close. How do you think about that . So listen, i think theres not going to be any Silver Bullet any time soon maybe, its hard to predict. Its hard to see a scenario where there is the vaccine tomorrow and this improves dramatically, including how long it takes to jess state in terms of infection so this is going to go on for a period of time what mohamed said i thought was interesting and right, is the dynamics around Companies Like a starbucks that are long cash, good Business Models, have a good Balance Sheet and that are, quite frankly, using data efficiently. Thats where were picking up opportunities in the marketplace. This could go longer those companies that have good Business Models that have utilized data simulation and have been thoughtful about how they keep their margins up, those are good businesses and thats where were starting to pick away at opportunities here. Rick, just looking through the Top Ten Holdings in your total return fund, i see that you hold some Chinese Government debt how have you thought about that holding in the last couple of months as things have unfolded we were talking earlier how, this week at least, the Chinese Markets have held up way better than domestic markets have i mean, how do you think about the stimulus theyve injected and how safe that holding is well, its one of my favorite holdings so you think about where china is today theres a couple of things happening with chinese rates one, theyre coming into the indices and theres an inclusion dynamic that requires huge amounts of investment in chinese bonds. One of the tech nichols we like quite a bit. Second is when you think about who in the world or where in the world are we going to see aggressive stimulus come in and rate accommodation, it is china. And so we fooeel good youve got to manage your currency risk. But when you think about where chinese rates are and we can debate are they developed or emerging, its really cheap as a developed market you think where could you get yield in the developed markets pretty hard, emerging markets, not so much. But youve got this incredible technical tailwind and a dynamic around the chinese are going to be super easy Going Forward. So i think youve honed in on something that listen, youve got to manage all your risks appropriately and think about what the downside is, but we think the rates will come down. Where are you guys at blackrock seeing the tenyear treasury yield going it is a tough question. Weve moved a long way real rates, we strip out the inflation and real rates are way too rich today the term structure of Interest Rates is wrong today where were sitting today in the tenyear is too low in yield and i think its going to lose some of his efficacy as a hedge against other assets but can we go another 25 basis points lower absolutely so you hold and the reason why we like Holding Interest rate exposure, particularly in the tenyear and long end of the curve, less so on the front end which we loved for a long time, is you can move. People will grab Interest Rates and will grab the safety asset, so you can get another 25 or so out of this market listen, its hard. And part of why i like keeping your risks low, it is hard when youre buying an asset that is organically way too rich, youre betting on it working as a hedge. And that is a tougher trade than it was a few months ago a few weeks ago, i should say. Rick reider, thank you for joining us. Thank you. And dont miss a cnbc special report, markets in turmoil, tonight 7 00 p. M. Eastern time. A major selloff as coronavirus outbreak fears spread heres a look at how much the dow has fallen each day during this sixday losing streak huge points drops there. More than 1,100 decline there. 4 there. Meg terrell has the latest on the virus. Wilf, the World Health Organization calling on all countries to be prepared as it says the Novel Coronavirus has, quote, pandemic potential. They say its now spread to more than 40 countries. In fact, more than 82,500 and killing more than 2,800. The u. S. State department increasing its travel advisory for south korea to level three reconsider travel because of the outbreak of covid19 cases there now topping 1700 in germany and the u. S. Cases of mysterious origin leading to increasing concerns about Community Transmission the Health Minister saying yesterday the country is at the beginning of an epidemic with chains of transmission that can no longer be tracked and in the u. S. A patient in california has no reported travel history to a country with covid19 or contract with a known case renewed questions based on the case about how much the u. S. Is testing for the Novel Coronavirus. The university of california Davis Medical Center which is treating that patient said it was days before the cdc tested for the coronavirus because of narrow testing guidelines. Governor gavin newsom also saying the state only has a few hundred testing kits, what he called simply inadequate. Thank you so much for that. For more on the outbreak and its potential spread lets bring in former Baltimore Health commissioner. Great to see you again first question is your take on the updates weve had in terms of u. S. Cases and the number of people in the u. S. Who are at least being monitored and what you think that means well, its deeply concerning. We already new earlier this week that in other countries there was evidence of Community Transmission meaning that its not just people traveling to the epicenter who brought back the virus, but that persontoperson transmission was happening in the community. And now it seems like this has happened in the u. S. And im very concerned because we dont have enough testing kits and because coronavirus can be found in people with mild symptoms like a cold, or even no symptoms at all, its very likely that there are a lot more people in the u. S. Who have coronavirus, but were just not testing for it and were spreading it to other people. Why dont we have enough tests . Well, i dont know. Well have to get the answers from our federal government. It seems like there was some problem with a reagent, but the problem is that even if these tests are now being shipped out, we still have to get these tests to be done at point of care, meaning that they have to be done in the hospital at bedside, the results have to be available quickly. Right now the confirmation test takes 48 hours it has to be mailed into the cdc and we dont have that kind of time if somebody is expected to have covid19, we need to find out rightnow so we can start quarantining that person or isolating that person. We can start tracing their contacts and we really need these tests now. Other countries have figured it out. We have to figure it out, too. Dr. Wen, what do you make of the messaging from the administration that weve had so far the last couple of days . Its confusing. And this is the last time for mixed messaging. What the president should have said last night is that the risk for Everyday Americans is very low at this point. But this is quickly evolving, this is a global outbreak. And things are going to get worse in the u. S and heres what we should be doing to prepare for it. We are prepared, our response has been effective so far, but we have to do a lot more i think that kind of messaging would be straightforward, true, and transparent, and its at this time that we need for the administration to come up with truthful, honest answers that are based in evidence and that rely on Public Health officials as the messengers of that information. Dr. Wen, i guess the pushback to that would be you dont want to create panic, particularly when the u. S. By all accounts, and european governments, dont have the same potential draconian tools to use like the chinese did in terms of completely shutting down an entire multimillion population city and in that sense its better to keep people calm than to create panic. We know from studying Public Health Risk Communication that the best way to calm fears and stop panic is to tell the truth, is to say to the people exactly what we know, what we dont know, what were doing about what we know and what were going to do if things change thats what happens for all types of emergencies thats what the public expects from us. And when the president tries to paint a rosy picture thats just not true, thats actually what causes panic and it also seeds distrust in the government because if you cant trust your commander in chief to be telling you the truth, then who can you trust . Dr. Wen, thank you for joining us again thank you. Lets get more on the selloff and what it means for investors at home. We are joined on the phone by Charles Schwab chief investment strategist, liz an sonders what are you telling your clients to do in this market well, not so much different than what we tell them when youre sort of yun directionally heading on the upside, which is be mindful of balancing and do it in a systematic way with some discipline, not try to make all or nothing decisions i also think that part of whats driving this is just the nature of the market, the types of players that have been playing on momentum or algorithm trading and momentum was being played on the upside, and as quickly as it turned, many of those same cohorts are kind of pressing the Downside Momentum and that has the effect of sort of exacerbating these moves in a condensed period of time. Liz ann, so many investors of course watching and so many have been phoning in to Charles Schwab today what is the key message to those people, particularly if they have a longterm investment horizon . We often start on days and weeks like this with reminding investors that panic is not an investing strategy some of the tried and true disciplines around making sure you have diversification and you dont keep your eggs in highrisk baskets and if youve got pockets of the market that have been done extremely well, you want to make sure youre paring those back. I wrote a report in january about sentiment getting frothy, in extreme measures, and that is not an imminent warning that something was going to happen, but it established its vulnerability to the extent theres been a negative catalyst, which there is right now. So were just trying to keep investors informed, talk about the impact this is having on the economy and earnings the problem is we dont know any more than anybody else does in terms of how much longer were going to have to deal with this uncertainty. We know the fed is likely to step in, but thats not really the elect for what als a massive supply shock this is also a demand shock as well 25 basis points by the fed doesnt create a vaccine so i think until we start to get some better news specific to the virus, unfortunately the momentum is on the downside. Liz ann, i guess its also a puzzle to try and figure out just what the market has rushed to price in. Obviously you mentioned that the velocity of this does say that its mostly kind of tactical Systematic Strategies being completely unwound but one would think that unless we start to see Something Like lots of job cuts or the labor market gets hit, i mean the consumer is not flying and not spending a lot on gas would seem like it builds up a cushion over time for some kind of a rebound. But i guess we dont know how that plays through the corporate earnings line. I think definitely corporate earnings, what youre saying is companies have been more inclined to just say were not providing guidance anymore, as opposed to to actually providing guidance thats much weaker than what is built into the consensus. So we went from arguably con convenience is is a bit too high to now no guidance being provided so thats one of the rubs. And then on the momentum piece of this, absolutely, it does tend to feed on itself i dont think that what were seeing yet today did give you a little bit of sense of panic i think some of the days preceding this didnt really wreak of panic but some of the kind of technical stats, you are starting to see a little bit of that whether thats enough to allow for stabilization purely based on technical conditions may be too soon to tell jim cramer just tweeted out i would like to buy hysteria and not sell it. Still less money in and out this week, but that will change tomorrow everyone is trying to figure out whether weve reached any kind of tangible bottom with the extreme sentiment and now 12. 5 away from the record high. You have a lot of the preconditions of the kinds of things that are present at some kind of a low. A trading low or Something Like that but its just not a science. Theres not an algebra equation that says these things equal a low. But in in fact the economy does not really head south from here, usually when the market is down 12 off a high in a few days, it really says something more about financial dislocation and investor panic than it does about some kind of a sober discounting of a known deterioration in the economy. I think what you mentioned is important in that i think what is key to watch and arguably this is going to be key to watch anyway, because weve been in this by fureration in the economy before the virus where we saw Business Investment incredibly weak, threequarters in a row of negative capex, but we had the healthy dividing line now were starting to see it infiltrate into services in the consumer chinese consumption has quadrupled since the 03 sars era. So it matters a lot more than what we make those comparisons to 2003. Were already starting to see it in some of the services data, the consumerbased data. I think keeping an eye on the labor market is really what we need to Pay Attention to to see if those true cracks are forming and in turn whether Recession Risk is going up were certainly not seeing stabilization in manufacturing as a result of this. And if we lose that footing, then i think were going to start a see economists raise their expectation for at least a technical recession. Liz ann, thanks so much for joining us. My pleasure thank you. Dow closing down more than 1100 points today. Weve got a major market selloff covered for you from all angles first up, a check on social media and media stocks jul Julia Boorstin is here with that. Facebook cans lg its annual developer conference which it has held over the last several years. It was set to gather 5,000 developers and entrepreneurs in may in san jose. Most media stocks are down today. But there is a bright spot amc shares shooting higher in afterhours trading, 12 after reporting better than expected Bottom Line Results and announcing a Quarterly Dividend of 3 cents per share, as well as a 200 million Share Repurchase program. Amc shares are down by over half over the past 12 months, most recently hit by coronavirus fears. Amc is the largest Theatre Owner around the world back over to you. Youll ya, thank you so much for that lets get a check in on the health insurance. Health insurance, the sector is on pace for its worst weekly decline in 20 years with double digit losses the jpmorgan analyst gary taylor things the selloff is overdone. When you look at the 2009 swine flu epidemic didnt really have Material Impact on earnings, he says meantime, Piper Sandlers analyst sarah james says if were more children were to be impacted here in the u. S. , we could see a tick up in medical costs from er visits because they have a lot of kids on their roster but both say the underlying condition thats making this selloff worse is political. Bernie sanders has moved higher, thats when youve seen the insurance sell off a victory for him, along with a senate sweep with represent a threat for medicare for all. Back over to you guys. Now for a check on payments kate rooney has been watching those stocks. Payments Companies Taking a hit this week after warning travel and spending could be impacted by the coronavirus. Pay pal and master card both cutting First Quarter guidance mastercard on pace for its worst week since 2008. Palpal has seen its first week in two years square is bucking the trend after an earnings beat yesterday. The cfo telling me they dont expect a Material Impact from the virus. Square gets roughly 95 of its revenue inside the u. S. And is less exposed to tourism and travel back to you. Kate, thanks so much for that and Brian Sullivan has a check in on oil and energy for us. Brian. Well, talking to some of the traders and ceos today all day long and they are amazed at the rapidity of the oil decline. We were down to 47 and change the xop, one of the biggest etfs out there, alltime low. It basically was created in 2006 or thereabouts it fell again today. So this is a more than 20year low for the xop guys keep in mind it traded at 83 back in 2014, today at 14. 83. Two things that may give oil vifters hope down the line, everybody i talked to, and i was on the phone all day long, said expect waves of Capital Spending cuts, companies who said were going to spend this much they are going to start to cut the Capital Spending plans, which means production may slow down in other words, less supply as demand continues to fall also, next week, there is still an opec meeting scheduled in austria with russia, widely expected to cut maybe 600,000 more Barrels Per Day so watch for opec and Capital Spending cuts. But as you talked about earlier in the show, there has been nowhere to hide in energy. It has wiped out the gains of more than 15 years for investors and more pain today. Brian, thanks so much for that and dont miss our cnbc special report, markets in turmoil tonight 7 00 p. M. Eastern time weve got a news alert on bed, bath and beyond. Rising about 3. 5 after the Company Announced as part of its restructure its cutting about 10 of its corporate workforce or 500 jobs. The ceo said this will reset our cost structure allowing us to reinvest where it matters they expect to receive 85 million a year as a result of the Restructuring Plan earlier this month is Company Announced it would spend 400 million on supply chain upgrades and remodeling stores. Shares rising about 4. 5 back over to you. Frank, thanks lets get more on todays historic decline we are joined by phone from Wharton School professor of finance, Jeremy Siegel worst day for the s p since 2011 what would you be telling investors to do right now . Well, first, one should remember and this is through history, that fear is a far greater motivator of changes in stock prices than any fundamentals stocks are longterm assets, and when we say stocks are selling as they were 20 times earnings, that means one years earnings is only 5 of the value and everything beyond that is 95 of the value. So think about that. Even if earnings are ravished down ward this year, if we get the recovery, and history says even from these viruses, we do, the major source of value should be that. Now, that being said, we were in a momentumdriven market from last october upward, i warned about it in january. People were just piling in and was an uptrend it didnt matter what fundamentals were. I think it drove it too high so were washing out all of those momentum players, which is ultimately healthy for the market thats part of the reason. And then certainly the rest of it is fear of whats going to happen to this years earnings i absolutely do think the fed should act and lower Interest Rates. Thats not going to cure the situation. But, you know, i think that they should be proactive in this case i disagree with those that say its only a supply chain problem. Yes, there is some supply chain problems from china. But it is a fear problem and people are stopping doing things, stopping traveling, stopping going on, and this can just snowball. Our economy is dependent on that and we have to lower the cost of capital as much as we can to keep theengines of the economy moving but clearly fear is there. Professor siegel, with this level of selling weve seen, gauge for us what you think the amount of fear is that is out there relative to, you know, massive selloffs like in 2008 and 2009, versus the more mod rift weve seen recently like december 2018. We see the vix, and wow it has been 50, and in the crisis it even got higher. October of 1987 it actually got over 100 i dont want to scare anyone there. But that was a record oneday decline in the market. But 39, wow. That is extreme fear we have the fastest correction in history six days from an alltime high to 10 thats never been seen before. If this is not a temporary oversold position, i dont know what is. Can it still go down sure, as bad news keeps on going down, fear builds on fear. But again, stocks are longterm assets one years earnings, even if harmed significantly, does not significantly lower and trash the value of equities in the world market well, if we are going into a recession, and im not saying we are, but its out there. People are talking about it again. Then we could be looking at a more prolonged decline in earnings potentially, right, and the market well, it is true, actually recessions, but usually caused by something that is wow, a way building overexpansion or a severe oil crisis as we remember in the 70s and 80s its associated with 20 , 30 decline in stock price, and most of the time we will get a bear market if we have a recession. Certainly theyre having one in china. I dont know how they dont have severe negative gdp growth there and several other countries. I dont see that happening here. Professor siegel, talk to us a little bit about the markets valuation. You said that six weeks or so we were a little bit stretched to the upside where are we now and where do we see serious support if we were to fall further . Well, i think were back to those octobers where i think the momentum players just kind of came in and said everything is rosy and it kept on going up even though earnings werent going up at the peak we were selling at 20 times this years earnings, now that were down 10 , were selling at 18. Thats pretty close to historical but one has to remember, that was giving a modest 5 increase in earnings, not the 10 , 12 that many of the analysts were picking. If instead we have, lets say, a 5 decline in earnings or even a 10 decline in earnings, so then were back up to 19, 19. 5 times earnings and if were going to bounce back in 2021, then were back at 17 times earnings. None of these are dirt cheap i mean, the market is certainly not dirt cheap but for a longterm investor, those people who are planning longterm horizons, these are getting to be values that begin to be attractive but clearly a recession, a recession would bring about a decline in earnings of 20 to 30 and in that case youre certainly going to see further declines in stock prices. It sounds like that is not your base case that is not our base case i think we should take a little bit of breath and i remember saying, you know, hey, a bad flu, whatever it is that passes through, weve gone through these periods before with not catastrophic effects professor siegel, thank you for phoning me. Thank you for having me. Remember that this is chinas dominant search engine, to a barometer of spending activity in china delayed the earnings by more than two weeks to give it more time to observe Business Conditions revenue, slight beat, and adjusted epf also beating estimates. Week q1 revenue guidance, so q1e reflecting the uncertainty of the coronvirus outbreak. They are saying its evolving and visibility limited the view is subject to quote substantial uncertainty. Shares were lower. Now looking flat in the after hours. Back to you guys dee, thanks for that. Another one beyond meat kate rogers. That stock following 6 as high as 9 peppers by all measures a good report eps pennsylvania loss of one penny. A big beat on revenue at 98. 5 million. Street looking for 79. 5 million. Ethan brown saying this is a testament to the vitality of the movement raising the fullyear 2020 guide tons a range of 490 to 510 million the highend is 15d Million Dollars higher than previously guided but once again the stock lower, tends to move around a bit and the Conference Call is under way, guys. Back to you. Kate thanks for that. Joining us to discuss how the turmoil will impact the ipo market the sean of Menlo Ventures i wanted to dive in on the coronvirus question in the market we are seeing i know you were an early investor in roku, other content creators as he will. The market sort of treated some of those companies and netflix as well as potential beneficiary from the recent turmoil. Do you think that makes sense to you at all well, i think everybody has suffered some punches this week, you know, investors are fearful of whats happening. And even if the virus is not superwidespread yet, just what may happen, travel fears, people not want being conferences and whatnot. I think as most times the tech economy is a bit more volatile than overall there is a 5 swing in the market and 10 fear of swing in some of the tech stocks. But, you know, its pretty unpredictable in a situation like this. Do you think it has Ripple Effect in the private markets when it comes to raising kbal. No doubt. All of the private investors look at the Public Markets as an indicator of what prices to pay for some of the private assets and there is no doubt as you see some of these things get sold off the revenue multiples by which they are valued go down and therefore when you look at a Small Company at one tenth or one hundredth the revenue it affects the capital we have to deploy and get a recent return for investors. Sean, you are an investor in uber whats your advice to them how to prepare in case things get worse in the u. S. . Do you think they suffer significantly if transport falls . Look, uber a great team dara and crew know what theyre doing. Transportation will be aircrafted by whats happening people are traveling less. We saw facebook cancel a conference there was 5,000 sales people around the world getting together and take ubers. It will have impact. People need to get around. Thats why we love being investors in uber because people have to move no matter what. I think with everybody here the call to action is probably just be prudent with the resources that you have and in anticipation of what may or may not come but there is a lot of medical stocks, gilead pharmaceutical actually born at menlo, many many years ago as as an Antiviral Companies working on treatments the world is rallying to take care of people getting sick and hopeful restore things to normal. Do expand on that a moment. You said gillianiad is one of the great hopes in the drugs they are creating. Menlo helped found the company are you close to them and what they are developing . Are they on the right track do you think. It was a long time ago, i think 1987 when gilead was an incubation project in menlo, the founder of menlo, mike riordan an associate at the Time Starting it. Im not superclose to the Team Obviously a huge admirer of what happened there and the work theyre doing in the world is truly spectacular. Its neat i think to see they have something showing efficacy this quickly they had done the groundwork around ebola and other viral contagions happening in the past they were ready with the research and so far as i understand it there is some efficacy being shown but still in clinical trials. We await more thanks for joining us, sean. Thanks for having me. Lets get more reaction to another historic day on wall street the meltdown for stocks and what it means for your money. The chief Market Strategist at capital welt jeff we turn to you now. You do proprietary models on shortterm and longterm trading and what we see next what is whats your perspective after this sell i dont have day. I was listening to professor siegel the voice of reason subpoena fear is not an Investment Strategy like he and cnbc and other venues we warned that the shortshortterm trading model flashed sell signal and told them to sell in the investment accounts we didnt see it this severe i think mike santoli said it earlier you had three 90 downside days this woke thats historic. The volume comes in on thedownside. Those moves are typically associatewood a nearterm trading bottom i will say that over the 50 years ive been in the business my mantra has been never on a friday whp when you get into a panic move on thedownside you rrl bottom on friday, the investors brood over losses and show up merchandise and tuesday in sell mode if we are making a shortterm bottom and sustainable bottom i think it comes the first part of next week. Jeff, i know you have been somebody who has kept in circulation this old rule about be careful if the dow or s p breaks the december low in the First Quarter. We have done that in both indexes. It has happened in recent years and not immediately negative for the rest of the year what are your thoughts on that indicator. You got the january barometer that turn marginally negative with the stocks down in the month of january and now broken the december low there are cautionary flags up here i think you need to to be cautious here. I dont think you need to panic. If you raised some money in midjanuary we have not put that back to work yet but im looking to put it to work it looks to us like 2,800, 2,900 on the s p looks like good support for equities im going to be very interested to see what happens next week. About what about the correlation cross asset today was interesting because gold did not go up, as it had been doing. The dollar did not go up oil went down, treasury yields went down. We didnt make new lows of the session as stocks were spilling really hard into the close, jeff wondering what it all means. When markets have a heart attack the correlation goes out the window so i dont think you can look at correlations right here. You have to take the temperature of the mechanic, see how stocks react next week. I think it was mike santoli said we are extremely oversold and he is absolutely right. Im running the models tonight and see what they say. The longterm model is constructive still i think were in a secular bull market backup the intermediate term modland confirmed the sell signal on the shortterm proprietary model about a week and a half ago. Jeff quickly if someone wants to put money to work tomorrow whats the top sector pick in the u. S. I like qualcomm i mean g 5 or 5g is coming. You cant put the genie back in the bolts. The stock has been beaten up a lot. There we go g 5. Like it. Not just a sector pick a name. You bet, thank you. Dont miss the cnbc special report markets in turmoil tonight 7 00 p. M. Eastern. We need a final deep thought from michael sanitiy after. Obviously number one go and see lion king. Whether on broadway or disney plus. That was not just any rendition of lion king. Appropriately intense, i think given the wailing we heard. This is indiscriminate liquidation in the market. What does it mean . Does it mean the market sniffed out something specific are they saying i dont know its confusing and hard to discern. We owned too much equity exposure going into the phase and its a radical repositioning. I think its the latter. Credit markets wobbled a bid its not allout stress. You see the indicators of people feelinged trapped and getting out. Thats the precondition for some kind of recover with a sense of no where to hide hard to say if we are there. Ill point out even if you put china to the side which we know has had a lot of easing nikkei, korea only down 5 or 6 . U. S. And europe. Down 9, 10 . That does it for closing bell. Fast money begins right now. Stocks rocked as the koerchds spreads the dow having the worst week begins the dips the of the financial crisis selling widespread pl all three averages in correction what should you be doing with your money following a day like today . Our traders stand by to break it down for you a special edition of fast money starts right now. And welcome, everybody to a very special fast money as always live from the Nasdaq Market site. It was another historymaking day and what has been a historymaking wee