Transcripts For CNBC Squawk Box 20240713

In europe, also watching what has been happening there, you will also see just like yesterday europe is down across the board. The biggest declines coming from france and london. The cac off 1. 6 among the big market themes, momentum stocks outperform, some momentum factor er, etf up on pace for the best ever launch since 2016 we are going to have a technical analysts on. I was distracted i asked the analyst whether it works like this with the outliar. They insist, no matter what, they did bounce off the level. The ones they mention. It hit exactly and bounced off it we have bleakly here lets say this, we manage 6 billion of assets. We want that to go up. It is risk management. We need p emto worry. We have a lot of them around today. Including me burgon county, the first presumptive case of coronavirus. Energy is in a bare market off from its high in april industrials also in correction territory. Gold on pace for its best performance. Looking at prices this morning, youll see they are up to 1,674 an ounce oil is attempting to cut production to stem the market, which has been under pressure. People assume the economy is slowing worldwide because of the virus. Wti is down. As weve been mentioning, cnbc contributor, good morning to you help us with what you think transpired we had the federally monday the fed is panicking, sell up tuesday. Okay, the fed is back stocking up the biden win helping Health Stocks an everythi stocks and everything will be okay until the virus count plateaus it hasnt even picked up at this point we are worried about where it goes from here t of the world matters. South korea has another big number of cases. China, every time we think th r thathaf theyve handled it in italy, we saw a decline when they closed the schools we are close to 30,000. It is just a number but also shows you things are really volatile people are flying blind human nature, you are going to get these emotional swings now sto china, you look at the Johns Hopkins website. We have 1. 4 Million People and we are obsessing about the 80,000 there is hysteria here but has real world impact. It is a run on the bank essentially. Or the grocery store. Exactly the fed tries to believe they can somehow cushion us do you think it is a fiscal package . Occurring the virus, that is the stimulus do you think well get to the point where we are stemming the travel, the Airlines Industry . I had my eye on hong kong and singapore because it is getting warmer if things do get worse, we wont be standing in medicare for all lines like the va. I talked yesterday to lloyd blankfine. Are you name dropping now i am. We were saying yesterday was strictly political day both of you were talking the book no. We werent talking the book. On monday, there wasnt any news and what about hft, what is that but Health Care Stocks led the way. This flipped faster from 70 to 10 it was 70 bernie, 10 biden. That day that will live on. It is faster than the dow this week. Always finds a way. It is funny that medicare for all line do you really want to see the coronavirus outbreak the question is what will we do when we come back from the break . The question is this, the longer this goes on, the bigger it gets, the issue of health care will become in america, no question or no doubt thats wrong, the 170 million provided with private insurance. How many people are not covered . We would like to see the people who arent insured tested for free on this. Thats what we would like to see happen health care is going to be a massive issue. You have no solution, just criticism. When we come back, more on the coronavirus outbreak the best performing today, Johnson Johnson leading the way. Then merck and United Technology you are watching squawk box on cnbc these days you need faster internet that does all you expect and way more. Thats xfinity xfi. Get powerful wifi coverage that leaves no room behind with xfi pods. And now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device thats connected is protected. Thats a 72 a year value. No one else offers this. Faster speed, coverage, and free advanced security at an unbeatable value. Get the xfi gateway and download the xfi app today. Welcome back if you are just waking up right now. Take a look at futures dow would open off 514 points down actually gotten marginally better there s p 500 off 67 points and nasdaq off 203 points want to talk about the latest of coronavirus. California declaring a state of emergency as the number of cases skyrockets to more than 50 the spike is linked to a cruise ship that returned to San Francisco from hawaii. In new jersey, reporting the first presumptive case making it the 17th state the house approved a 8 billion spending bill in response to stem the outbreak. The president has indicated he will sign it into law. More than twice the amount President Trump originally requested. Our guest, he led the u. S. Response to ebola. Thank you for being with us. Can you tell us where things stand now. They are saying it is a 4. 3 mortality rate this virus still seems to be on the upswing in the United States and worldwide i would sound a note of caution. I think the figure was 3. 4 yesterday. We dont know the denominator yet. In general, we do see a decline. We now have indications in multiple metro areas, greater seattle, the bay area, l. A. , new york city and a number of other states we still dont have anywhere near full visibility on total cases in the u. S what we are seeing is probably just the tip of the iceberg. In china, when they first started reporting, they shut down the entire province we are not going to see those shut downs here because of civil liberties, correct i dont think the oous could or would want to do. In seattle, they are doing social distance being measures to keep people from interacting in higher risk ways. Canceling gatherings, advising people not to use transit, microsoft has advised people to work from home for the next three weeks. We are now looking at what china did because it was so extreme, it probably kept it from getting around the globe faflter. It bought us a few weeks if the United States is not going to do those measure res, does that mean it will spread in the the United States. The question is how far, how fast can we keep that spread to a manager rate so it doesnt overload hospitals thats the hope going forward. The challenge, we dont know how best to apply the best from china. China took a sledge hammer approach in other areas theyve taken a exact scalpal approach the u. S. Approach will be somewhere in the middle. We have not heard any clear plan from the government of what p that looks like. Still claiming he think theres is only 100 cases in this country. That was the point made that this is being left up to the local authorities. New york authorities being more reactive frmt. You want to have a consistent approach you dont want some areas stronger and others weaker thats where we are heading right now. I worked on the Ebola Response in 2014. We saw at the outset, we left a vacuum we began to see on things like travel measures, states began to freelance. The government stepped in with guidance and the states got on board and we had a consistent national approach. We are not seen that yet despite the fact that it is posing a far larger threat than ebola evekee level that u. S. Health care can handle what is that level it is not a very high level a few years ago when flu season hit hard, hospitals were treating people on gurnies and in hallways. We are not out of flu season we are already hearing from seattle that just with the 40 to 50 cases identified, that has put a strain on the Health System there thank you for your time today. Hes the former director thank you for your time. Reuters is reporting opec ministers have agreed to an oil cut of 1. 5 million we will have more from vienna just ahead coming up, how much Mike Bloomberg spent on his run and the implay indications did he spend more . I think he sment more hes keeping his staff until november call it the biden staff thats what it is now. Half a billion just on advertising. Dont forget to subscribe to our podcast. You get interviews behind the scenes or muchdown loads stay tuned, well be right back. We cant calculate our total taxes . Do you realize how many otal different taxes we pay . Sales tax, different pos systems in all seven countries. And online sales . Thats a whole other system. And different regulations. Therererealal eate e crits,s,. And we have no way to integrate all that . No. But bdo does. Peopopleho k kno knonow o. When i switched to geico. This is how it made me feel. It was like that feeling when you go to highfive a coworker, and you do a perfect highfive. Everyone is really excited for you because it was such a great highfive. And then. The boss comes in. And she wants one too. Geico. Fifteen minutes could save you fifteen percent or more on car insurance. Fifteen minutes could save you apps except work. Rywhere. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com if you are just waking up, check out the u. S. Equity futures. Yesterday, you saw a gain of more than 1,100. Right now, down about 560 points s p off by 73 and the nasdaq off by 220 the twoyear note sitting at 0. 968 former new york city mayor Mike Bloomberg ending his bid for president. A costly bid adds bought for halfy billion. Robert frank with us he could have bought a couple of really nice sports cars. He spent over 500 million just on tv and radio you add in digital adds and offices. Total likely 600 million making it the most expensive selffinanced campaign ever. He spent twice the total number of trump, biden, buttigieg and sanders. 300,000 an hour what did he get for it he got 24 delegates, over 222 million on super tuesday ads that return was close to 10 billion per delegate compared to biden who spent about 5,000 and Bernie Sanders who spent about 26,000 per delegate he can spend whatever he wants now in support of biden. Local broadcasters have benefits but to his spending. Youll not only get bloomberg wore biden to continue to spend. Biden wasnt spending through this now youve got essentially two candidates in one spending thats the benefit. And he got samoa. It was pointed out, he spent the equivalent of the samoa gdp. He said if he got the nomination, he would try to sell his company. If he became president . Were there any expressions of interest buffett was always the name. He came on air with becky that said absolutely not he knew that someone would pay more that was the big question they dominate. All of the staff that went from bloomberg to the campaign can all return and go back to work you cant win the presidency with independent and ross perot. His point was he didnt want to split the vote and draw away from the democratic vote it was not a miscalculation that a billionaire never gaz going to incur this was two campaigns one to nominate bloomberg. The second is just get rid of trump no matter what it takes. People saying this was a failure, we dont know yet if it gets reversed, and sanders becomes the nominee, i cant imagine the must be that would have been for biden being there. Right were you surprised were you surprised he ended that campaign the reason he ran is because he didnt want to see Bernie Sanders in that. Have you looked at the betting markets . Youve seen where bernie is what is his number now . 18 cents 18 cents is not if bernie comes back, hes not coming back he jo is 75. Everybody said we thought biden was bad Everything Else this is not going to change. Bernie sanders said he would support or bow out if joe biden got a plural backing they changed the rules with the super delegates. They also changed the rules to let bloomberg into the debate this is the grassroots, democrats over 35 that are voting and will put biden in as the nominee. Well see. We have a lot more coming up. When we return, continuing coverage futures hitting session lows the dow now indicated down about 600 points in beijing, companies and workers are trying to return to normal all of that. Take a look at yesterdays s p 500 winners and losers through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Good morning and welcome todays top story, we have another Global Market selloff. Well show you what is going on. We are in the red across the screen looking at the dow down if it would open down about 625. S p down about 81 and the nasdaq down about 237 points. The 10year yield under 1 at. 965. China is attempting to return to work after the outbreak first hit there eunice yoon is live. The commerce has been talking up the resuming of work. Releasing shipping or manufacturing areas that topped 70 or even reached 100 i noticed Walking Around today, business is coming back, sort of im sitting at starbucks, which i couldnt do before today. I had to get a Temperature Check and log in sitting with my colleague who is six feet away. My commute is light. Traffic cops are out foot traffic is more in apple. You have to go through Temperature Checks and wait in line because they wont let in too many customers at lunch time, office staffers are eating out i quarantined myself for 14 days the food at this mall should be clean. What we are really looking for is street food vendors to start serving chinese breakfast. These places are cheap and popular with vendors but still closed we are starting to see more pollution days today, the level was only five times the w. H. O. S recommended amount i watched what you were treating earlier about some cases that people have been cured and left the hospital. One man died a few days and others are being reinfected. It is unclear it looks as though those people werent cured to begin with. There is a lot of caution about people being released. This is the first time someone died after testing negative. There has been a lot of discussion and concern about what this means then for the numbers that china has been releasing. I still think the thinking is if youve had it once and it were to come back that you wont get it again thats the current thinking. You would assume that if your immune system is at full levels. Like if you are a young person or not compromised in a would be bad of course if it mutated eunice, thank you. When you drink the coffee, do you do you take the mask off . Do you drink through the mask then it is no longer sealed and what if the server has it people in the back of the kitchen need to go to work i had kind of a freak out at lunch the other day thinking too much how do you think they watch these . Lets not have the question we are in times square. Coming up, well talk stay at home stocks and companies benefitting as people shun the office and dont miss sam zell on set first, check out the biggest dow losers in premarket trading watch or listen to us live or on the go on the cnbc app the barkins are empty nesters now. Should they downsize . Probably. Will they . Not as long as thanksgiving is a holiday. Planning for the future is about more than just money. Let equitable be your guide. Got a market match hp rejecting xeroxs raised bid. You dont want to miss hps ceo on squawk on the street. In the meantime, Video Conferencing Software Company zoom, reportedly beat on earnings but dropped as much as 10 . Zoom had a massive run up as coronavirus rose fears and had Companies Working from home. More on stay at home stocks. Covering the wireless providers. Did we just get too excited about these stay at home stocks and put zoom on a list still with secular drivers, in terms of zoom this is a stock that would be 70 year to date putting up big numbers that was at most recent count down, probably a win a good outcome how much do you wore yoi about competition. Announcing that google was going to make Google Hangouts free because of coronavirus for the next several months. That would be a clear competitor to zoom. And there are many others out there. This has been a competitive market for some time taking the share from cisco and other providers with just an easy solution. Looking at the those in the institutions that the opportunity and part of the fly wheel effect. You bring them on and over time, they add security and usage, you bring them out as paid users one of the comments made, they are seeing a surge in demand in china. Only one or two weeks, have they started to see the surge in the u. S. Questioning the valuation prospects very bright. Seeing the Company Valued three to five times in revenue a good question no question, this one is at a valuation premium. The way we look at it is, this is a platform. We are talking the Video Conference today also moving to a zoom phone. The interesting thing, this is rare tied air. They go at 80 you cant find profit margins. Theyve still got these new products on the horizon. What do you see there the real opportunity there is to replace your phone systems. They are trying to replace those names like vonnage that we know. Going after the cloud based solution that provides more at home from the field. What other stay at home stocks do you like we like the slack story on line Team Messaging do you think slack stays independent . I think we are assuming it does we are not aware of a buyer. Long term, they could be rolled up ring centrals, the eight by eights, the vonnages another interesting thing i was with an analyst with a Company Called the ucla lab, you can test your speed. They are seeing stresses globally that leads up to names to help speed up Internet Access thank you we appreciate it when we come back, dazed and confused by market swings, you are not a low. Dow indicated down 575, nasdaq off by 220 and s p off by 75 squawk box will be right back. At leaf blowers. You should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Dont get mad get e trade and start trading robinwithout the commission fees. So, you can start investing today wherever you are even hanging with your dog. So, what are you waiting for . Download now and get your first stock on us. Robinhood. Supporting Innovative Companies that will shape tomorrow and Building Workforce development and tuitionfree College Programs to generate the talent companies need. With a 150 billion investment in state of the art, modern infrastructure, and a nationleading commitment to lowcost clean energy, new york is doing more than any other state to build for the future of your business. New york state, the state of the future. Learn more at esd. Ny. Gov. Stocks surging yesterday on the super tuesday results, pushing all three major averages out of correction territory. The s p rose more than 4 . Stocks thumping today after democrats are realizing they might actually have joe biden as their nominee. To decipher whats next for stocks im joking im joking im joking i mean, but yesterday all the news flashes its up 1,000 today its like, wait a second, really now the market is like, uhoh. I dont think thats okay. All right. I get that just to show both sides of the coin. Both sides of the coin just trying to stay fair and balanced. Fair and balanced Kate Stockton is here arguing with me or arguing a point that technicals still matter even with an outlier a black swan, whatever you want to refer to. Now more than ever. If youre a managing partner, now more than ever. Yeah. To some people its like if theres something so unexpected that all bets are off. But youre saying that poor resistance already factors in the sentiment of what people are responding to. It is all about sentiment, right . Corrective phase cannot be explained using fundamental reasoning. Thats where the technicals can come in so handy so at least we have these tools to help us understand and get back in. What is this . This is the spiders the s p 500, eft what does this show you can see the massive corrective phase notice this it has come into a breakout point lets call it 300 for the s p spider and in this region here, as you can imagine, quite oversold. And whats been important about this week is that we saw an Immediate Reaction to that oversold condition which was the greatest oversold condition since december of 2018 by my measures. That horrific december we had. Thats right. Seemed so recent but its already 3018. It increases the likelihood that its a shakeout now, we wont be convinced of that until we get a nice close this friday. So far so good today could be variable. As long as we close 3030 s p 500 i would feel good about that. We keep asking the question and pointed out, so every year the garden variety correction, 10, 12, 13 is a pandemic only good for a garden variety correction and are the lows in . And this is what were trying to figure out here. Thats right. So we have been through viruses before and it has been a buyin opportunity. Not to minimize whats going on in this environment, but were seeing extremes like i said we hadnt seen in some time so this is the percentage of stocks and the s p 500 that are oversold from a shortterm perspective based on one of my measures so very common measure at that notice, of course, the peak is quite impressive usually peaks around 50 thats like the october low, the august low, et cetera. Those sort of minor lows at major lows we tend to get these really extreme readings and associated i know peter is here with very, very bearish, meaning from a contrarian perspective, you could actually have a positive take away from that. Thats a good one and then this is an individual issue that may be ready to break out and one that would be fundamentally tied to what happens with this situation. Good sort of case study, i think, in terms of the correction that we have already seen like the spiders. We have a pullback or corrective phase down to former breakout walmart. Very natural place for walmart to find some support in here it looks like its already happening. We have some signs of down set exhaustion based on the oversold measure. It underperformed in q4. Unlike some of the tech stocks still look relatively over extended to me, this was relatively oversold. I think that positions it better irrespective of how we come out of this. Right katy, thank you. Great to have your analysis today. We appreciate it all right. Andrew thank you, sir. Appreciate that. I have a joke for you but after the break. Okay. All right. Theres a tease legendary investor sam zell will join us live on the set in just a little bit as wall street looks to get ready for another wild trading session futures pointing to a sharply lower openff o of a 500 points right about now on the dow stay tuned youre watching squawk box on cnbc creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Volatility Reigns Supreme with the dow coming off its second 1,000 point gain in less than a week. Futures are telling a different story. Possibly putting wall street gains in jeopardy. Were going to talk markets, real estate and the risko credit markets with guest host and legendary investor sam zell. The number of u. S. States with reported Coronavirus Infections ticking up to 17 with one declaring a state of emergency. The latest on the spread of the coronavirus and the impact on the markets as the second hour of squawk box begins right now. Good morning welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen look at the u. S. Equity futures at this hour i have a smile but i shouldnt look at the red. Dow jones looks like it would open down about 560 points right about now. S p 500 looking to open down 72 points nasdaq looking to open down about 215 points after a big up day yesterday. Now take a quick look at the tenyear note. This has been one of the all important metrics we have been paying a lot of attention to, still under 1 were. 978 i have not called my Mortgage Broker but maybe i should. Lets show you oil because thats been a huge factor here as well. Crude now trading 46. 71 if you want to buy by the barrel. Oil trading in bear market territory. Opec ministers agreed to an oil cut of 1. 5 Million Barrels a day. Russia set to agree in principle but not on the number itself opec will hold a News Conference tomorrow at the opec and socalled opec plus countries meet so, i think the market follows if you think the stock market follows the Energy Market. Everything follows the tenyear but i think its now were sort of just looking at everything. And you know, each day that goes by we become more experienced that its been since 1918 i never i hope that global pandemic. Yeah. We havent bill gates has for years worried. They do simulations about something novel, not a single immune system in the entire world thats seen it you wonder how at this point we still dont know if this is totally different from h1n1 and sars and all the other four. Is it one of those outliers. Were dealing with it everyday and so is the stock market in the past eight days, there have been four more than 1,000 point swings in the dow. The most 3 plus moves since 2018 lets welcome todays guest host sam zell, the reason he likes real estate, chairman of Equity Group Investment and billionaire Real Estate Investor who needs this, right . I mean, walk on your property everyday, looks like its worth about the same, right . Yeah. Unless its now its a restaurant read or Something Like that, there are kind of or a hotel. Or hotel itself what do you make of all this, sam . And you have been around a while. And you understand human nature. Are we gauging this correctly . Or too much or too little . I think its too early to tell i think that so far it seems to be maybe more excitement than reality. I mean, were a country of 330 Million People and were talking about ten deaths and were talking about 100 people having the virus. I think the real question is what will it be three weeks from now . Thats really when well know, i think, whether weve got a really serious problem or just a spike problem. Unfortunately by then it will be too late if we have a serious problem to try to contain it because of the twoweek incubation period. I think we have to do everything we can to contain it. Having said that, i dont have a lot of confidence that we have the ability to contain it. So, im looking at the other way and saying, we cant contain it, you know, whats the reality and the reality is call me in three weeks. Right. And ill tell you whether we got a problem thats limited to iran and china and italy. Italy and south korea, or do we have a problem thats going to be covered throughout the world. So we write off the china, china may be nasen success in dealing with it. We cant take any sauce from that for the first time in history its like wow those communists are good at something. 60 Million People and saying you cant go anywhere. We cant do that here but maybe if it works over there, can we take solace that maybe we can handle it or say we cant handle it because we cant do what they did we take solace at the numbers were getting now are better. The market has looked a little bit at that that china isnt at 1 Million People right now they have 1. 3 billion versus our 330. They have, what, 80,000 total. 80,000 total around the world. Around the world. Thats a smaller number. China is maybe 60,000 again, thats really in a country of 1 billion, 400 Million People, thats not a very big number. Have you done anything differently, a, because of the coronavirus or, b, because of the market volatility thats happened as a result of this i think in terms of the market, i think weve we have been buying some stuff that we thought was ridiculously low and but not a lot. Certainly every travel decision is rethought. Yeah. I mean, talking about a crisis, our yearly motorcycle trip is in two months in italy so what are you going to do have you cancelled we literally are getting everybody to talk about it i dont think we go to italy and when you sat down here, none of us shook hands around the table. But the trouble is, we didnt shake hands. We grab the handle on the door and open the door. Right okay so what did we accomplish by not shaking hands . I dont know. Yeah. And then you push the elevator button with my elbow. You read youre not supposed to touch your face. I know. Son average you touch your face 24 time ss s an hour. The inside of your nose count as touching your face. Yes, it does. Then i have a problem. Did you see President Trump yeah. That didnt i saw that people, like you, were up in arms about that. I wasnt up in arms i thought it was funny. Someone said i saw someone tweeted out this is what our commander in chief, this is how he leads a meeting with ceos by talking about touching his face. Like it was the worst thing the trump haters. Made a joke about how hard it was to not touch your face i thought it was funny, too but it is a very serious thing if you hate trump, youre going to figure out a way any way when is the motorcycle end of may. End of may. British columbia is nice, right . Just riding a motorcycle, what do you need to go to italy for . What about montana . The problem with montana is its long distances. Youre riding your motorcycle, sam. What do you want to do, go 5 miles and get off it. You want to do twists and turns. The measure of a good motorcycle trip is how few miles you go straight interesting everything thats why europe is so good. Thats why ashville is so good go drive around the city of boston actually but then you have traffic. Even better and potholes. Yeah. You dont want traffic. You want pretty views and you want turns and twists and turns all day long. Sam, what have you been buying that you thought was really cheap based on the market well, there have been a couple of companies that we have significant ownership interests in, one in the energy space. And weve been buying that stock because its got on the the point where it doesnt make any sense you dont want to disclose which name. No. Understood. Im not doing that. But i think were looking at Everything Else. Everything else there are a couple of energy space has just gotten killed. I think unjustifiably. Yeah. So i think that we have seen some extraordinary changes in pricing in the energy space, much less so than Everything Else in the recent once again proven that they were really resilient. And in the ones that we control, we went down with first 1,000 points, but theyre almost back to where it all started. Youre really, really liquid, arent you yes yeah why wouldnt you thats why i think the stock market cant go down right. Because theres only goes down when im liquid. Opportunistic. Why arent you all over the energy or have you looked at a way. We have been spending a lot of money in the energy space and think the energy space is very cheap. And theres no money i mean, despite all this conversation about liquidity, theres no money in the energy space. That lets you be really opportunistic. It helps that we werent in the energy space before. See, an awful lot of people would not disagree that the energy space is cheap. But theyre saying im already up to here in energy i dont need anymore how would you do it, sam . What type of thing would you buy debt given a choice, what we want to buy is existing production. In other words, you dont want to drill you dont how riskless can you play the oil business . And i dont think the least riskless way to play in my opinion, is buying production. So are you thinking about this everyday . Do you have people working on this oh, sure. Sure. How long were you watching that beforehand, waiting for Something Like this. We monitor all kinds of different markets and obviously the Energy Market is one were always keeping track of. And, you know, it started getting really dicey about six or eight months ago. All of a sudden you saw that stuff that would normally, you know, get sold very quickly. No bids. We just won a bid on a bankrupt company where we were the stock bid and then they had the auction and nobody came. I think thats more the rule today than the exception. Im speaking with darren woods later today the chairman and ceo of exxonmobil. And i think its interesting what you say about how you want to buy existing production, not guys out there who are drilling. Thats right. You think its a smart play for some of the big players to kind of be reigning in what theyre doing in additional drilling and kind of be waiting or no . Is it different with the big boys i think we look at the oil business, you have to distinguish between the big guys and the rest of the guys. Right. The big guys are running, you know, different ratios and may have billions of barrels of production and hedging off of it and theyre doing all kinds of stuff that Little People cant do so i wouldnt i think the challenge for exxon is very different than it is for the average expiration company, particularly ones that have been created in the last ten years. Sam will be with us for the rest of the show vermont. Im getting notes about vermont is a great place for motorcycle trip good ice cream. But theres police in vermont. Now, this is because what youre doing when you stop the motorcycle oh, no, no, no. Okay. Thats legal most places now oh, okay. So thats one of the beauties colorado. And totally yes im stuck in the middle with you, no one likes to feel stuck, boxed in, or held back. Especially by Something Like your cloud. Its a problem. But the ibm cloud is different. Its the most open and secure public cloud for business. It can manage all your apps and data from anywhere. So it can help take on anything, from rebooking flights, on the fly to restocking shelves on demand. Without getting in your way. Welcome back to squawk box. Real estate is a favorite of th super rich robert frank is back at the table this morning with a look at where the wealthy are buying good morning, andrew. 20 plan to buy real estate this year and the u. S. cois theire favorite niestination the u. S. Is the number one country from wealthy buyers from asia, australia, latin america and canada last year the cbestperforming market in the world for prime real estate was frankfurt f germany, followed by liz bain and jtaipei vancouver was the worst minated by chinese buyers abu dhabi was hit by oversupply of highend homes. New york, london and the hamp n hamptonsl among the ten worst performers last year monaco is the most expensive city in the world on a per 1 million only gets you 162 square feet of space in monaco 1 million buys you 226 square feet innirhong kong and 334 iw york leastw3expensive town, capetow south africa, 1 millionw gets you 1,800 square feet. Why so much cheaper its south africa i love it so much. The favorite city in theq world among the super rich based one the lifestyle, Investment Climate and population of other rich people is new yorkcofollod by london. Now of the top ten cities favoritew among the wealthy, eight of the them, eight of the top 20 are in the u. S. Wow, i didnt know that you look at size for cities, u. S. Doesnt show up anywhere. L. A. , san corancisco, miami, what else . On a per square foot million . What are the top eight. So, chicagoe was up there. Chicago was next closest San Francisco, l. A. Washington, d. C. Miami i dont think was on there, no. Not dallas or houston coith . I dont think so, no. Well, houstono price performance was very high. Was up 7 last year. Howard lorber the president and ceo of the vectorfa group a chairman of douglase1my edelman when you look at around the globe where you want to invest, what jumps out to you . What jumps out to me is vancouver was a good example, up, up, up until they put taxes on it and now its i]down. The readjustment is happening you have to be careful with that but its interesting to me that when you look and you say the worst performing cities price wise were london and new york, ande1 two in the index as to whe people want to be. Thats based on xlivability, obviously government, taxes, culture. So people still want to be there. So i guess what you would look forward to is appreciation in those markets at some time new york specifically was hurt thisw past year because of the mansionqtaxes andthe other taxes that theyre stillte tag about for new york city l t hap hc so taxes obviously have a big ha what about coronavirus, does that change the picture at all we havent seen yet, in fact, we were talking earlier, shocking that our open houses that brokers have on weekends are packed once place you see crowds. Maybe they want to get out and think thats a safe place to go so its pretty busy. There. He reads are hanging in why do you think that is, sam . T i think first of all the rates are underleveraged real estate historically has been al 60,f 75 ltb kind of business you know, Equity Residential is 35 . F equity vice house is 25 i of other companies are all, you know, much, much less leveraged than they have been the past i think from ae trend point of view, it think that no argument about the number one uqas, but i think more and more affordability is more and more of a challenge and i think that, you know, smart Real Estate Investors are going to kind of focus on where do you go if you cantqafford new york or if you cante1 afford london . Nashville . Is that austin is that madison, wisconsin. Those markets are almost overheated you look at the price growth there and theyre quickly becoming less affordable theyre quickly becoming less affordable but they have the one thing necessary too dealok with affordability space. And thats land. Lye and they have lots and lots of land. So almost by definition even though prices in nashville haveq gone up a lot, still anniabili to catch up. Thee1coproblem in california a the homeless problem is thatn u have legislative impediments to creating housing supply. And soj you created perpetual environment ofeo shortage whik creates the highest prices in the country. Aside from affordability, you have the wealthy going to florida because of the salt tid changes and in california going to colorado, texas is your whole business changing to focus on those lower tax states where people want to move first of all you have to change because its happening. If you look at our volume thats what i wonder. What is thatw  Tipping Point no one knows until it l happens. Yeah. Right now with thee1 legislature talking aboute1 pet tear tax. U if dont file state and city tax and have anotheremansion tax except it would be annual. We have to go on all the time because you were a close friend and backer of the president. Any comments, have you. talket him . How is he feeling . Is he excited . Whoe1 does he want to face, bid or bernie . I dont think he cares. Have you ever lobbied him on the salt tax. Yes we had it in the beginning i think it will be looked at again. You think itt will i hope so i mean, i cant imagine he will. Op. I think salt is just the first step in just general, 16 years ago that canada eliminated mortgagee deductions . Everybody said oh my god the end of the world is going to come. Bloomberg were goinglp to be president xdwe would talk about salt, we would need something different. You would have to start to like pepper. Coming up, equity and bonds coronavirus. Could the credit markets be next wellt discuss. O plus, new cases of coronavirus in new york overnight ande1 now new jersey seeing its firste1 confirmed case well speak to ane1 Infectious Disease specialist when we return. Announcer time now for todays aflace1 trivia question. What was the first country in which teslas del mos topped the monthly new car sales ranking. The answer when cnbc squawk the answer when cnbc squawk box continues uh uh. Is it Homeowners Insurance . No. Uhuhuhuh is it duck insurance . Nope. Ahhh do they pay me money directly when i get sick or injured . Yeah. Aflac you got it. You know aflac boom get help with Expenses Health insurance doesnt cover. Get to know us at. Aflac dot com. Its almost like a challenge everyday mywws been an amazing journey. To see how well i can eat and still enjoy myself all day long. I wake up every morning to see how much weight ive lost and how much better i look. Myww join today with the ww triple play our Retirement Plan with voya gives us confidence. We can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Im good at my condo. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Danafarber Cancer Institute discovered the pdl1 pathway. Pdl1. They changed how the world fights cancer. Blocking the pdl1 protein, lets the immune system attack, attack, attack cancer. Pdl1 transformed, revolutionized, immunotherapy. Pdl1 saved my life. Saved my life. Test test test test test test test test test test test test. Announcer now the answer to todays aflac trivia question. What was the first country in which teslas model s topped the monthly new car sales ranking . The answer, norway welcome back to squawk box here on cnbc were live from the Nasdaq Market site in times square. Take a look at the u. S. We canty futures at this hour you can see right now that things are significantly weaker. They have been down all morning. We have seen lower levels than this the dow futures right now indicated down by about 525 points after gaining more than 1,100 points yesterday s p futures down by 67 you saw nasdaq was down by about 200. Were also watching the treasury market where the ten year is yielding 1 . Again, thats a bit of a fear factor, trying to figure out where people are getting their arms around this and we have been watching that closely in asia, overnight, markets closed higher. Gains of 2 for the hang sang and shanghai composite nikkei up 1 europe is following more like our futures are trading, active trading there. See down 2 in spain declines of 1. 6 for many of those other markets. Well have much more from our special guest st tay shoodam zell when squawk box comes right back this morning the coronavirus has affected equity and Government Bond yields but do investors need to worry about underlying debt. Thats a question that persisted these past couple weeks. Steve liesman joins us with perhaps the answer steve. Thanks, andrew. Top executives at all three credit major ratings tell cnbc theyre closely monitoring on corporate, municipal and sovereign debt a handful of rating reactions directly related to the outbreak but that is expected to change over at moodys they told me, something were monitoring very closely. S p said there will be more ratings access and the pace will quickly. S p changed 27 Credit Ratings bauds of it. It placed sampson niet negative on monday and earlier flagged saber and wind thats attracting the most scrutiny other companies in travel and tourism in countries that rely on the revenues to service the debt Commodity Companies also being watched carefully with countries relying on commodity revenues. Concern is not focussed on Investment Grade a lot has been refinanced, turned out at lower rates into the future the main worry is speculative grade debt that should raise the red flag for investors going down the credit ladder hunting for yield. There will be credit risk in there. As the virus spreads to other economies including the u. S. , leveraged corporates may find their production disrupted considerable liquidity in the count country. Some spreads widened, rates have fallen so that eases the burden on Corporate Cash flows and some companies countries could get relief from Government Agency bailouts or imf or the world bank if those programs are passed but its also true the economic effects remain unknown head of analytics and research at s p told me its all hands on deck we need to be proactive. We cant wait until the economic effects already obvious. You know what happened the last time we had a crisis, the rating agencies were widely criticized and behind the curve i get the sense theyre sort of on their game on this one and really trying to stay ahead of it and not avoid that criticism they had in the financial crisis. Downgrades constantly i think youll see the first step is not downgrades its ratings watch negative. Right. I think theyll flag that stuff. You can go, for example, on either the fitch or s p website and theres a lot of research for people to read and figure out. Its difficult to gain but the idea that more and more of this is happening more quickly, but you have lower rates. You also have this liquidity in the system. Right. That liquidity, you need two sides to make this a crisis. The lenders not to lend and the borrowers to borrow. You need people go in with eyes wide open. Theres potential underlying credit issues. Theres no aig on the other side like guaranteeing rift they dont have any reserves. That we know of. Or is there that we know of that was the problem lets bring in our guest host for more perspective on the debt world. Where are you looking right now to the extent you think there will be opportunity with companies that may be hate to use the phrase bk, but on the verge. Well, obviously the whole energy area is one that weve been spending a lot of time on you know, despite all the liquidity youre talking about, theres no money in the oil patch. Theres no liquidity in the oil patch. Oil was the first thing to go, even before the virus, right . There were problems in the oil and they have thrown everything out. I was wondering if there was anybody out there trying to find the nuggets, right that was you. Weve been doing some of it were very selective and were basically focussed on existing flows rather than drilling. Are you doing mlps and trying to clip some of those coupons . Those are big cue pons. Yeah. But some of the Companies First of all, i think bk problem is much more attractive. Bk. Bankruptcy. In other words, come in after bankruptcy and buy assets. In todays world, the bankruptcy sales arent drawing any bidder. Thats interesting. That surprises me that some of the big players wouldnt get involved in some of those situations. As i said before, part of the problem is, almost every big player already has a significant commitment to the energy sector. So, even though it may seem very attractive, question is if youre 25 under water, do you want to add some more 50 under water product . Right would your shareholders be furious if you did it. Shareholders or just as an individual. Sam said maybe you werent watching earlier hes buying producing properties in energy. How do you do that, buy the debt of producing Companies Buy the equity, land all of the above. You do . We just bought a company in bankruptcy so, we got the whole company and they have producing properties. We also did another deal with a major producer where in effect we created a preferred position, kind of economics we had never seen before. Favorable. When you say economics you loaned them money and you got the big preferred yeah. Exactly. You dont care if you lost 46, 47, 45 your economics are at a low rate. Yeah. Or theres adjustments in the economics to reflect the price. Let me just make one more point, sam, which im sure youre aware of which is that Everybody Needs to understand the order of preferred when it comes to a company there is dividends, equity and debt and the debt is the last thing to go. So, when something looks too good to be true on a stock price or a dividend yield, you have to then question the underlying debt structure of the company. So, people are out there saying dividend yields of 6 , right that may be true but that dividend yield may not last well, thats always the risk in any dividend situation. Dividend is, you know, the marginal distribution. They can stop paying their debt payments, too thats what im saying. People need to understand the order of things. I think they do okay. All right sam will be with us for the rest of the show folks, friends, family and Business Leaders are gathering at st. Patricks cathedral this mork to pay their respects to jack welch who oversaw a period of tremendous growth at General Electric he was also a friend and mentor to many of us here. For 30 years. One of a kind, really. The reason why im on this program is because he was a guest host 15 years ago and he selected me as one of his guest host hosts. Guest host hosts, right. Thats how i met him, the first time i was ever on this program. I tried to do the math on how many people you go through until you get a jack welch i didnt get a number. More than 100 million. He was one of a kind. You start thinking of the kevin bacon connection not that. How often does someone like jack come along. Oh, never never. Hundreds of billions. There wont be another one, i dont think. Any way okay. Well be right back. Ks. Com no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. Sending your own clubs ahead with shipsticks. Com makes it fast easy to get to your golf destination. With just a few clicks or a phone call, well pick up and deliver your clubs ontime, guaranteed, for as low as 39. 99. Shipsticks. Com saves you time and money. Make it simple. Make it ship sticks. Shipsticks. Com saves you time and money. Apps except work. Rywhere. Why is that . Is it because people love filling out forms . Maybe they like checking with their supervisor to see how much Vacation Time they have. Or sending corporate their expense reports. Ill let you in on a little secret. They dont. By empowering employees to manage their own tasks, paycom frees you to focus on the business of business. To learn more, visit paycom. Com we were paying an arm and a leg for postage. I remember setting up shipstation. One or two clicks and everything was up and running. I was printing out labels and saving money. Shipstation saves us so much time. It makes it really easy and seamless. Pick an order, print everything you need, slap the label onto the box, and its ready to go. Our costs for shipping were cut in half. Just like that. Shipstation. The 1 choice of online sellers. Go to shipstation. Com tv and get 2 months free. Shipstation. The 1 choice of online sellers. Wewithout the planet cooler getting warmer. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Welcome back, everybody. Were watching oil prices this morning along with every other market dow futures down by 571 points wti has been down about half a percent earlier this morning right now, though, its picking up just slightly wti up by 7 , but that is again a reversal of what we saw earlier this session brent crude up by 4 cents now, too. That had been weaker until a moment ago irans oil minister confirming earlier reports that opec ministers have agreed to an extra 1. 5 Million Barrels a day cut in Oil Production. Opec ministers want nonopec state os contribute reductions of 500,000 barrels a day to hit that cut russia still needs to sign on to this the talks between opec and nonopec countries will continue tomorrow and then we expect opec to hold a News Conference. In the meantime, exxonmobil is holding an Investor Conference today. Ahead of that meeting were going to be hearing from the company, just hearing from it recently saying sit planning Capital Expenditures of somewhere between 30 and 35 billion annually through the year 2025. Well be sitting down with exxon ceo today and bring you that conversation tomorrow. Right now, lets get to dom chu. What are you watching this morning . So becky, you indicated the dow will open down by almost 570 points a in the stage. We have some outperformers premarket in a very negative overall take and analyst calls are helping in some of those causes well start with shares of Johnson Johnson down to the downside hovering unchanged the drug and Consumer Products company as well as dow component gets initiated with a slate of other companies as buy rated at citi thats helping the cause only down quarter of 1 you also have shares of snap which are up around maybe half a percent or so, roughly 85,000 shares of premarket volume green is down. Snap is upgraded to a buy rating they have 19 price target they think the recent stock selloff offers a buying opportunity there. Outperforming. Then well end here on shares of fire eye up nearly percent or so, roughly 9,000 shares of premarket volume the Cyber Security firm also gets upgraded to buy as well a lot of those names getting some of those pickups from analyst calls so becky, some of the names to watch in otherwise down take. When we come back the latest on the coronavirus outbreak. New york seeing more cases and new jersey with its first presumptive case we have the details on that next check out the treasuries this hour, too that may be the key market that people have been watching. The tenyear oncage ain below 1 yielding today 0. 967 . Squawk box will be right back. Our Retirement Plan with voya gives us confidence. They help us with achievable steps along the way. So we can spend a bit today, knowing were prepared for tomorrow. Wow dad, do you think you overdid it maybe . I dont think so. What do you think, peanut . Nope honey, do you think we overdid it . Overdid what . See . We dont think so, son. Technically, grandparents cant overdo it. Its impossible. Well planned, well invested, well protected. Voya. Be confident to and through retirement. We have like 40 years of data thats incredibly valuable voya. Be confident to and through retirement. I. I dont know. When did we introduce siracha . Not soon enough. These are our sales. By product, by region. Set against evolving demographics. You can actually see taste trends. Since when can we do that . Since we started working with bdends. announcer people who know, know bdo. Acan not only recognize finayou in a crowd, but recognize whats important to you in terms of your goals get 1to1 goalbased advice where and when you want and realtime goal tracking online. Ameriprise financial should they downsize . Nesters now. Probably. Will they . Not as long as thanksgiving is a holiday. Planning for the future is about more than just money. Let equitable be your guide. Welcome back to squawk box this morning here is the latest on the coronavirus outbreak california now declaring a state of emergency, this after coronavirus cases shot up to 54, thats the most in the nation and governor Gavin Newsome saying a cruise ship is being held off the coast of San Francisco after being linked to the first u. S. Death outside of Washington State Public Officials will now start to screen everyone on the ces N Santa Clara county and medical screener at l. A. X. Classes were cancelled for 20,000 students in the seattle area the largest u. S. City to close because of the virus the superintendent says it will be shuttered for at least the next two weeks amazon and facebook are also encouraging employees to stay in seattle to stay home after workers for each company tested positive for the virus officials in new jersey announced the states first infection increasing the total to 17 states the patient in new jersey is a man in his 30st. Its unclear how he contracted the disease. New york also confirming five more cases all connected to a West Chester County man bringing the total number there to 11 and the markets looking to open in the red in a very big way this morning in large part because the numbers keep growing. Joe . Andrew, thanks for the latest on efforts in the u. S. To stall the spread of the coronavirus, lets welcome dr. Mark mulligan, director of nyu Vaccine Center and their Infectious Diseases and immunology division. Doctor, thanks for joining us. Focus on the prospect for widespread testing and whether you think that imminently were going to be in a much better position to accurately decide how much of the virus is actually in the United States . Yeah, diagnostics are such an important part of the response to an epidemic and we have to know who is infected in order to properly isolate them and trace their contacts i do think were going to see a major up tick. The fda did a wonderful thing on the past saturday when they made it more rapid for local hospitals to bring their own tests into use and we have more and more state and local health authorities, like the city of new york, the state of new york, now doing testing. So the answer is, yes. I dont know how quickly, but were clearly seeing a ramp up that is a great thing. What was what did the fda change was it prohibited for local hospitals to use their own tests . What they did was to create a streamlined pathway for validation of tests by laboratories that had developed their own tests so they can actually, once they validate, do the initial. I saw that President Trump pointed a finger at the Obama Administration for not having that rule. Is that the rule youre talking about . No. What im talking about is during an epidemic we get special authorizations and guidances to respond. Theyre not needed all the time. In response to this, it was needed and they did it and thats great. So we havent had enough testing so far. Correct. Theres two schools of thought, one is that its the tip of the iceberg that we know about because we havent been testing. The other is that you dont see the anecdotal evidence of Emergency Rooms being flooded with symptomatic people that appear to have the coronavirus would we know if it was much more widespread than we think by seeing people come to the emergency room right now we might. Its a little tricky because were in flu season. Flu is waning. Our positive flu tests, the percentage of all the tests that are positive on people coming in with respiratory infections is lower. That actually might be our signal that were still seeing a lot of people presenting with respiratory illness, but its not so high flu anymore at this point. Flu goes down in the spring. So that could be it. And i do to answer your question, i do think that the detected cases are the tip of the iceberg. I think theres more circulation going on we have some Scientific Evidence to support that in Washington State based on viral sequences okay. So, then the next question is the way that china reportedly handled it, which it looks like theyve gotten a handle on it to some degree, at least thats what theyre telling us. Right. That a nature of the virus itself that it is something we can deal with . Or is it the draconian thing that china is able to do because its a communist state and we cant do that here yeah. I think that we can deal with it we can mitigate it we can do our very best to control it there are very common sense Public Health measures we can do, isolation of cases, quarantine of contact, all doing our social distancing. We will need to do phases or versions of what they did there, i think n terms of limiting social contact during this very unique, unprecedented time that were facing of course, were not going to do the most extreme things that they did, but many of the things that they do in terms of limiting travel and contact with others are things that are effective. Dr. Mulligan, how able is our medical system able to handle this just determining based on the number of cases that might be coming through. We heard from some hospitals that theyre already pretty full without the coronavirus. Thats right. And thats how it is every year during respiratory virus season, during flu season we tend to fill up our hospitals, our icus, older people, people with respiratory illnesses are in the hospital so, i think our hospitals have capacity to absorb a large number of cases, but it is also possible that we will exceed their routine capacity in that case, most Hospital Systems have made extenuation plans where they can make new wards or handling of patients. The worst case scenario, we exceed our second level expansion capacity what about staffing in those situations because we know we have shortages of ventilators and of masks and things along those lines but i also know from people who work in hospitals theyll see 20 of the people call out if theres a snowstorm. What do you do if people get worried about coming into work because of the coronavirus right i think that we might have a shortages because of the exposures and people have to go into quarantine. Maybe workers who are coming to work get exposed on the way to work some case was on the subway, Something Like that. I think it would be a shame for Health Care Workers not to show up for work because they wanted to avoid the situation i think they have tobelieve that the personal protective equipment and the measures, the operating procedures we have in place work we know that personal protective equipment can be highly effective. The things that the doctors, nurses who will be taking care of patients will wear, those work are you in a position to give an opinion on what the actual mortality rate is . Yes. What do you think it is. Do you think its as high as the w. H. O. Said . Which figure . Because the figures are changing all the time. 4. 3 , but that was worldwide. 4. 3 what do you think it really is my opinion is that that the denominator is much higher and that the percentage will be lower. We actually know from some of the reporting that the mortality rate in wuhan itself was over 3 but that everywhere else in the globe was closer to 1 . Why my feeling well, because the reporting and the cases that were appearing there were the severe illnesses. All the people doing well, remember for 80 of us f we get this, younger healthy people, were going to do just fine. Children do extremely well with this there have been no deaths reported with children under 10. Lets keep this in perspective 19,000 people have died of flu already. We had 29 million flu infections. We didnt rush any of that stuff on the air that is a difference we try to do what we can, doctor considering both sides thank you. Appreciate it. Youre very welcome. Much more on squawk box when we come back, well be joined by david booth for his take on the recent market swings. D ffanjerey it inle, the ceo of air bus america will join us from the chamber of commerce aviation summit. Stay tuned squawk box will be right back. We see access to fresh food being the global norm, not the exception. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Futures under pressure major indexes deep in the red premarket as extreme volatility reign on wall street. This hour, well tell you where you might put your money to find value. Da oversees more than half a trillion dollars. And the growing coronavirus pain for the Aviation Industry well hear from the ceo of air bus americas the final hour of squawk box begins right now good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square our guest host sam zell. U. S. Equity futures at this hour are now down over 600 points on the dow. Indicated down about 75 on the s p. The nasdaq down 225 or so. Thats giving back about half of what we gained yesterday, which got back about twice what we lost the day before, which went down about half of what we lost on monday. I got that right, sam . Thats about right roughly. Roughly treasury yields we havent gotten back exact its off by 70 points. 96 theres nothing to the left of the decimal point. Thats wild its wild. First time. And then crude oil prices, opec putting out a press release confirming have agreed to 1. 5 Million Barrels to cut in Oil Production this is an idea, becky, that maybe we just keep santoli all the time he can be standing in front of the. He is the only one who can properly write need a guy off to the side that once in a while for comic relief. No, no, no. Off the side who then joins us at the table for the rest of the time. Do you remember how many pot jokes he had to be subjected to by carson. Every night. Now its assumed any way. Lets get caught up on the latest coronavirus headlinings around the globe cases totaling more than 95,000, more than 3300 deaths. More than 150 cases reported and 11 deaths in the United States california declared a state of emergency after a coronavirusrelated death in that state yesterday the house, the u. S. House, passed more than 8 billion emergency spending bill aimed at prevention and Preparedness Measures and vaccine development. That bill now heads to the senate and in the meantime, facebook confirmed contractor based out of a Seattle Office tested positive for the virus facebook closed that office until at least the next week and encouraged seattle employees to work from home. Microsoft is telling its employees near San Francisco and seattle to work from home for the next few weeks as well and the conference fallout from the coronavirus continues. Apple will no longer attend the south by southwest festival in austin, texas, this month. I have to tell you, they shut that whole thing down which they say theyre not going to yet. I dont know how they dont. But the damage to austin. You think about the damage to a lot of these places. Is huge. I have to say, andrew, devastating. The biggest weekend of the year. But i watch the things that are being shut down, another thing i was supposed to be doing, got cancelled today you have been saying the same thing. Constant cancellations of anything thats out there. I was supposed to be on the road next week two weeks from now its a constant issue. Now its affecting me then. Now its affecting you. Youre stuck here. No, i was going to go next week skiing. Youre not going . Oh, i think i need to be here and i dont really feel like but youre not going to be out of the office anymore . You know, ill be right here. Thats just super. You cancel skiing i did. Because of because i think the markets going to be i think this whole thing is still happening by next week i think if i went to colorado i might stay there i might whole up in vail and never come back. Youll come to times square everyday i know. I honestly dont feel like taking a plane out there, honestly. You have had some concerns yourself. Unless they remove the tray tables. Call me in two weeks. So you havent cancelled these things yet a couple of things i have cancelled. Things today i cancelled question is how far out . In real life things like this are happening. Its rolling, yeah. Well see. Meantime, the Broader Market yesterday took the latest virus news in stride the dow surging more than 1,000 points for the second time this week futures are much lower this morning. You can see where things stand right now. Cnbcs Senior Market mike santoli looking into the jumping trading range as he joins us now with his take and then i have a question for you. Sure. Andrew, shows you if has zard of trying to tell the specific story of whats driving the individual daily move. Look at the s p 500, stint, since june 30th of last year this captures a lot of the ups and downs. Obviously this is the very range were talking about. This is the s p. Its going to be down half of yesterdays advance. So thats down another 75 points what we have been doing is trying to see if this area, which was kind of the highest from the summer and then the lowest from the summer where fridays lows actually if you wanted to look where we bottomed out early on friday. Were trying to see if thats going to provide a little bit of a buffer right here. What really is clear is that that december, january kind of levitation, thats been wiped away now as the market is trying to find some equill librium in this range, obviously in a relative news vacuum in terms of what the fundamentals are going to look like this is an unusual aspect of the decline and rebound. If you look at a oneweek basis of the s p low volatility etf, these are stocks specifically selected to move less dramatically than the s p itself they actually have been up on up days more than the high beta the aggressive stock which you expect when the market is swinging a lot is going to be more Spring Loaded what this largely means i think in part is a yield story so the market is kind of hunting for sustainable sources of yield given where bond yields have gone to. But also suggests maybe its not a vote of confidence people really want to go out on a limb and say the economy itself is going to rebound very quickly from whatever were in for so this is a little upside down scenario very rare to see big upside days we have seen when you have the very defensive stocks leading the way. How much do you think this is we were talking about this before how much do you think was virus yesterday . Yeah. Either some kind of acceptance of it, though today there isnt. Or really politics whether it was the biden win and what the sort of sort of fat tale risk of sanders being removed or lessened. Look, they didnt take any delegates away from biden overnight and given up half of yesterdays gain not to be glib about how its not a factor everything is a factor look at the Health Care Stocks 100 that was biden over sanders move as far as the broad market, its not terribly unusual after you get a record fast 12 correction from an alltime high to have the market kind of be fibrilating this way and latching on to the latest bit of hope or fear that comes across the tape i think thats what were looking at so the day before yesterday there was this reaction that seemed to say the fed does not have the ammo or the enemy were facing right now where as yesterday it was, guess, what, maybe the economy will be fine this will be a brief pause we just got a half point rate cut we didnt necessarily need thats bullish i think all those explanations have merit but really its just the market trying to swing around some vague estimate of equilibrium right now. Mike, thank you for that. Joining us for his perspective on the market, legendary investor david booth is. He oversees more than half a trillion dollars in assets good morning to you, david. Good morning. Help us understand how you have been thinking about these market moves and the impact of coronavirus and the feds moves as well over the past week well, you know, of course market volatility isnt anything new. We have experienced it every year basically the in fact, its a lot like where we were a year ago at this time if you recall at the beginning of last year the market had been down quite a bit, and people were stressed out. And similar to what theyre doing today. The way they are today and what happened . The market was up 30 or whatever, bond prices went up. So, what that points to is you want to stay invested. And i think the good news in our view is, in all of this, is you dont have to forecast a shortterm fluctuations in order to have a good longterm experience you always want to keep focussed on long term outcomes. And the way you do that is figure out what your goals are and figure out what kind of investment mix makes the most sense for you. Right. You cant control markets but you can control the amount of risk you take. Can you speak to what inflows and outflows you had in the fund over the past week its been largely flat. Largely flat . Yeah. I dont have the exact numbers modest outflow i would say the last few weeks nothing see, our type our clients have bought into this kind of philosophy that you want to stay invested you shouldnt have to make dramatic changes very often. That being said, this may be one of those times you may want to consider a change in the sense that the vix has gone from 15 to 40 to whatever the last week or so thats a huge shift. So you may want to go back to basics, relook at your asset and figure out how much risk youre willing to take. Returns in essence are not that predictable, but risk is or volatility is somewhat predictable. And so that being said, it looks like over the next period of time volatility is going to be with us for a while. Isnt there a much more specific element to it i mean, you cant sit there and say lets sit there and relax if youre in the hotel space or the Airline Space or youre in a particular space thats being impacted very directly by the virus. You know, there may be supply chain problems in certain kinds of companies, but thats very different than the consumer or your customers instinct and saying i dont want to take the risk of flying on an airplane with a bunch of other people or i dont want to go to a hotel. I want to in effect stay as clear as i possibly can. And i think those kinds of companies are likely to have a much more significant risk factor than the overall market well, the question is how does all that get priced out you always have to remind yourself markets are where buyers and sellers come together in a voluntary transaction they elect to get a good deal or dont trade. You look at the market mechanisms, market trading volumes, everything looks like normal. Does it seem normal to you. How anxious are you about the steps the fed has taken in the past several days . Is that the right decision well, we can debate how much influence the fed has over longterm returns. Here again, a year ago they had been raising rates and rates dropped. You dont think the fed has a huge impact on longterm returns . No. I think it can come in and affect liquidity and affect shortterm outcomes quite significantly, but i dont think it has that much influence other the long haul. What do you think about what do you think about the tenyear falling below 1 . Just some of the big moves i know that we have seen a lot of volatility, but the volatility has recently stepped up. Yeah. Here again, you have to come back to with careful planning you consider a lot of these options. But if you look at what really counts is your aftertax real return the yield minus inflation. Right and its kind of in historic levels. Because inflation is so low yeah. Yeah but certainly lower Interest Rates than we have seen incredibly low Interest Rates for a decade at this point but watching these rates continue to be this low and even fallower, that is a lot of longterm investors even thinking, wow, this is a different scenario than anything we have seen before. Well, it is but you cant control markets. I mean, thats you have to keep focus on what you can control which is in the simplest form how much do you have in stock versus risk assets that sort of commitment. In todays heightened volatility, you want to kind of refresh your look at that and make sure youre not taking more risk you know, what you dont want to have happen is people get totally stressed out and exit the market i mean, people i feel sorry for, those people in march of 2009 couldnt take it anymore, got out and theyll never get back to even. Yeah. But i think the other question is if you have cash on the sideline, would you be putting it to work right now sure. Very much yes yeah. You have to figure outyour look, you have to make decisions under uncertainty everyday in all kinds of circumstances you just make the best informed choice you can based on science and what youve learned from the past, based on my 50 years of experience of studying these things, every year the source of volatility is different. Last year we were talking about brexit all the time. And i think for the average investor you have to rely on Market Pricing the market prices are thing reget the hundreds of thousands of investors out there trying to do the best job they can okay, david booth, thank you. Nice to see you. Appreciate it. Thank you you bet. Coming up, an exclusive interview with the ceo of air bus americas as aviation heavy weights deal with the one of the most Uncertain Times in the industry in years. We want to draw your attention to shares of zoom video, the conferencing stock is down sharply in the premarket even though it beat analysts estimates for the Fourth Quarter. Zoom have gotten a lot of attention lately for being a potential stay at home stock that could benefit, could see a benefit from the coronavirus be a shame if you bought it on that it is happening. Money goes downhill. As we head to break, a reminder you caalys wchn waat or listen to us live on the go on the cnbc app. Stay tuned well be right back. 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At your local xfinity store today. Welcome back lets get back to our guest host to talk strategy amid all the recent market uncertainty. Sam zell is here the chairman of Equity Group Investments is opportunistic and knows how to look into volatile times and take advantage of it sam, part of what people are trying to figure out is how much of this is fear of what might be coming and then how much human reaction based on that fear does it really change the reality of the economics. I would start by saying that human reactions creates the scenario so if everybody gets scared of traveling, youre going to see a dramatic reduction in travel justifiable or not you know, i remember 9 11, i dont know maybe it took three months before people were willing to fly internationally i mean, i had a director of one of my companies from england and after 9 11 he said i literally flew hes from london he said i flew on an empty plane. Commercial empty plane. A commercial flight that was empty. A commercial flight that was empty. And i just think this whole concept of mobility and so much of our society, you know, has been built on mobility and tourism and, you know, traffic and sales at Luxury Department stores. Even restaurants, going out to the movies. Yeah. Although interesting im surprised at least so far i have been in a lot of different restaurants. I havent noticed any change in restaurant activity. Was that in chicago los angeles and chicago and new york you know, im not seeing im surprised. Thats also because we only have 100 reported cases. Do you think that changes if you get 1,000 . Its happening in seattle and the surrounding areas there. Do you really think we only have 100 cases no, we have 100 reported cases. You know, you would think so. I just i think were all in uncharted territory. Mr. Booths comments, you know as i said, were missing the word uncertainty but theres an enormous uncertainty issue that nobody seems to be in any ability to narrow it down. You already told us earlier this morning that you are being opportunistic in places like the energy field but when theres so much uncertainty in some of these other areas, it is too soon to i think its people always ask on real estate, you know, what market are you buying i dont ever buy a market. You buy a deal in the same manner, you look at whats going on and you have to you are forced to make a decision on your judgment on that particular situation. We just killed a deal but deferred a deal that we were almost ready to close that was dependent on exports of food and you know, the question is this a good time to be in the export of food business. Let me ask you, did you defer that deal because you think the export of food business is going to be ir remember bli damage or did you defer it because the terms you were about to set was based on a different reality did you want better terms at this point well, part of the question is what terms should i ask for . Right. In other words, is this threemonth disruption, is this a sixmonth disruption is this a multiyear disruption . Is everybody in the world going to get the vaccine thats not necessarily off the table. Its not going to happen at the price you had been talking about before. Part of the question is, you know, price discovery is based on fact. Right. And i cant imagine a scenario where were less fact governed than the one were trying to deal with today. How many deals, i have been trying to get my arms around this, i hear this from a lot of people who are putting deals together, how many deals are put on hold, large ones we wouldnt known too much about im not sure theres much difference between the term hold and slow in other words, i think nobody is ready to say no nobody is ready to say i know enough to know i shouldnt be doing this. But i also dont know enough what i should be doing. But i also dont know enough as to whether i should be doing it, degree to which i should be doing it i think that theres so many variables and frankly the data so far is so minuscule do we have 100 cases or do we have 1,000 cases and even if we have 1,000 cases, 330 Million People, 1,000 cases doesnt sound like a lot of cases. I dont know the answer. But part of the whole environment today is not knowing the answer. Right. And when you dont know the answer, thats why the stock market is acting like a yo yo. Right on monday you wake up, i feel good today im going to correct the mistakes of friday then Tuesday Morning i wake up, oh my god, i was too opportunity mystic yesterday im going to pull back thats literally the kind of scenario we had two 1,000day moves. Its thursday. We only have three days and two 1,000 point moves. 725 today. Now its 725. Yeah so i think that this is enormous uncertainty. All right. But youre not seeing conclusions. Youre seeing caution. Sam zell is our guest host. Well have more from him when we come back. A lot more of the latest reads on jobless claims and productivity, breaking Economic Data all due out a the bottom of the hour futures are at their ssieson lows right now, down 700 points if we opened up. Well be right back with more. Welcome back to squawk box. Right here on cnbc were live at the Nasdaq Market site in times square were just a minute away from the latest jobless claims data and a new read on Fourth Quarter productivity lets show you the futures right now because it is not a pretty sight. Looks like if the dow opened up right now would open down 731 points right about now the s p 500 looking like it would open down about 86 points. The nasdaq looking like it would open down 251 points Rick Santelli is standing by at the cme in chicago ahead of the data and before you hit us with these numbers im curious about where you think the equity market and the tenyear are, in particular, we should show you that as well right now, rick i know you have a take on all of it yeah. I personally think were going to see a lot of 1,100 point up and down sessions for a while, but i think at the end of the day, that theres going to be a resiliency to the equity markets and of course the longer it lasts the more the volatility will last. But ultimately the deviner in my opinion of an all clear will come from the global sovereign market the yields are too low and i dont think theyre too low necessarily for the back channel of Economic Activity i think that the drain of safety via globe fearful of negative and lowering rates is the reason to attacks of the coronavirus by other Central Banks will pingpong back and forth until we see these yields ease up a bit, i think the yellow light stays on in terms of jobless claims, im a bit surprised that they havent popped a bit higher. Higher the coronavirus may indeed be incubating here and the numbers are going to go up, but i certainly think theres a little more hysteria than warranted 216,000, actually down 3,000 on claims continuing claims actually are very lateral basically from 1. 72 million to 1. 729 Fourth Quarter productivity, 1. 2, darn close to expectations, couple tenths light in the Rearview Mirror do remember when we look at productivity, this is going to be affected more on the global basis in my opinion of late. And we look at unit labor costs associated with those productivity gains, they were easing back, only. 9 so, labor costs. 9 productivity about in line the aftermath here we see that were sitting at 60 bases points and twoyear note yield, among the lowest intraday levels going back to the summer of 2016 for a twoyear, tenyear note, 90 is the intraday low in this series that, of course, was from tuesday. So we want to pay close attention. We didnt take it out yesterday. Were getting very close you also want to keep a very close eye on the other Central Banks. Great article in the wall street journal today. Christine lagarde and company are more put in the box by us getting in front of the coronavirus from a central banking perspective before we have any of the returns in and i think that this is going to be an on going issue. No what ter what Christine Lagarde says or any of the ecb members tell you, they have very little ammunition left and if Monetary Policy becomes the tools to try to combat a coronavirus and i understand the very weak link to the economy without any facts really being known, it is just going to make it worse theyre going to be put to a spot on their rates and their policy where there really isnt any room for any economic expansion much less a backside to this that truly has economic negative consequences versus health negative consequences there is a thread there. Becky, back to you. All right, rick thank you very much. Steve liesman is here with more on this right now, too. Steve, what do you think not only about these numbers but what rick was just saying act Christine Lagarde being put in a box. Right so lets go back to the video tape of warner wolf was said then his teeth fell out a couple times. Hopefully mine will stay. Yeah. You have the g7 statement on Tuesday Morning . Uhhuh. And that basically said all Central Banks will fulfill their mandate. Remember the market got really upset that there was no policy action in there . Talk talk talk. I have never seen the market be so wrong in its assessment, right . Because the g7 by itself has no policy to cut, individual Central Banks have policies to cut and treasuries and mint finance treasuries have money to spend. G7 has nothing, just a collection of people yeah, but thats where all the talk from the friday and the weekend before people thought, okay, they would coordinate something maybe. Right Central Banks okay. So, two and a half hours later the most important central bank in the world cut Interest Rates by 50 bases points. We didnt coordinate. Hey, do it but good luck this was a very similar statement to the one they put out on the financial crisis. Not word for word but very similar. Bank of canada yesterday youre the only one who remembers that and next week getting around to answering your question, ecb is going to step up. Yeah. And thats going to be something unclear about how theyll do it but the owness is on them. Everybody expects them to move what you see is 100 chance that the fed goes again at the march meeting. At the meeting in two weeks less than two weeks . Thats what the market is priced at. 80 chance call it of a second cut in april this is kind of new. A third cut, so lets count it up, 25, 25, is 75. 50 so the expectation in the market is for 125 bases points total of coronavirus credit cuts or Federal Reserve cuts 125 when you start at 100. Right, exactly. That gets you to negative. Negative territory . Exactly not negative negative is not priced in. Another 75 from here the new range, if that is correct if you want to say how the market is priced, its to get to the range of 25 to 50 so, if the fed has put the ecb in a box, what is the market doing to the fed with this the market is putting the fed in a box, right . I think thats the question youre asking, right so what happens now is, look, you have to have these guys speak and they will eventually in terms of what theyre expectations are, bullard yesterday was quoted saying the 50 the fed makes a rate cut in march less likely but a bunch of feds speak today and a bunch of feds speak tomorrow. Can i ask sam, i know you talked about this earlier, will it do any good do you support what the fed has done here . I dont know that its going to make much difference. I think its got a much more psychological impact than other. Thats going to affect somebody doing something. But, when priced as low as they are, frankly other than in a trade or something, i cant speak to that. By the way, this is coming from a real estate guy yeah. Because it really isnt you know, its like when libor was very low and all of a sudden every loan had a libor minimum never had a libor minimum before all of a sudden there was a libor minimum. I wouldnt be surprised if they cut rates and put in minimums that effectively counter exactly what they just accomplished or tried to accomplish. Who puts in the minimums . Lending institutions. Basically saying at least this week Interest Rates are negative or Interest Rates are very low were not lending you this week. Were not recognizing. Youre not buying floating rate debt. So therefore if you want, you know, or maybe you are buying floating rate debt if you want debt from us, you need to give us more protection. Promise well make money. Than just based on today. Arent you the president. Dont you want to be paid to borrow i never admitted the condition pay to borrow. We talked about it the other day. You saw there wasnt a direct come on if the president wants to take a loan out one of these days and get paid he would like that i covered real estate guys my whole life i know what guys like really cheap debt like Long Duration debt, all of those are a lot more relevant than a shortterm opportunity to be on the Receiving Side do you remember that talk you probably do. Oh, thats right. Were back to that again do you remember who it was i didnt try to this time. I think one who was it . Brewer and shiply we have to go. All right. Thank you. Im going to introduce lebeau. More phil is better. Aviation industry being hit by a onetwo punch the grounding of boeing 737 max and the coronavirus, the International Air transport association this morning said that the global revenue hit to airlines this year could reach 113 billion industry executives are trying to navigate one of the most Turbulent Times for their business in years. And phil lebeau joins us now from the 2020 u. S. Chamber of u. S. Aviation summit with an exclusive guest. Phil hey, joe. Let me bring in jeff knittle we were talking as you were listening to the conversation here, were in a strange time both in terms of the market and in terms of the Airline Industry let me start first off with coronavirus. You saw the estimate from the International Air transport Association Dramatic increase in terms of what the revenue hit will be to airlines. Yes. Whats your perspective right now . I think one, you have to look at it from a longterm perspective. And i think airlines are doing that the reality is theyre making shortterm adjustments to their schedules to ensure their financial strength i would add, phil, by the way, the airlines have never been financially stronger to handle an event like this so theyre making shortterm adjustments to address this problem. I dont think it changes the longterm aspects of their strategic plans or ours, quite honestly but they have to look at the current situation. You have been in this industry a number of years, i wont say exactly how many, but youve seen sars, after 9 sl 1, give me your perspective how you think the man shakes out the reality is we have seen some type of vshape return after all of these now, after 9 11, it took a little bit longer. But you also have to remember the airlines at that point in time were in very poor financial states and there was a lot, a lot of uncertainty i look more at sars as an indicator of how this could shake out. Now, our expertise in this quite honestly comes from the true expert, the world health organization, the cdc and their recommendations and what they see and how they see it playing out. So, we rely on them as the experts and we adjust our Business Plan to that. But as of right now, youre not changing either your production schedule, what youre planning or changing what you think is likely to be the order demand rate over the next year or two, correct . Not at all. Quite honestly, we were in a situation where we were with with 7,500 airplanes in our backlog, we were pushing hard to keep up. So we dont see any shortterm issues from that at this point. When you look at your plant down in alabama and youll have the a220 plant fully on line by august, do you have to modify operations at all given whats going on with coronavirus . No, not at all. I mean, circumstance can change obviously. But as of today, when we speak with the expert, and when we look at where we are in terms of our plans, we intend to deliver our first airplane, the 220, out of alabama in august to Delta Airlines and were continuing to ramp up our productions on the 320 to from six a month to seven a month, delivering close to 70 airplanes. Jeff knittel, you are busy. A220 the first being delivered in august. And then you have to navigate coronavirus. Guys, were at the summit all day long well talk with a number of airline ceos this is were in that capacity cut range right now. Youll start hearing from airlines either expecting hits in revenue and or at the same time cutting their capacity for the second and third quarters if not for the rest of the year guys, back to you. Phil, thank you very much. This morning we remember a business legend, friends, family and Business Leaders are gathering here in new york city at st. Patricks cathedral to pay their respects to jack welch, changed the way american corporations operate and oversaw a period of tremendous growth at General Electric and also a close friend and mentor to many people here at cnbc. Robert frank is outside st. Patricks and joins us with more. Robert reporter good morning, becky. This mass for jack welch expected to start in 20 minutes at 9 00 a. M. Already the number of people in top leaders in business and finance and media just incredible how many lives that jack welch touched, that he improved, that he impacted as both a Business Leader and ceo and as a mentor and partner to so many people i want to show you the program from this mornings, which the list of pallbearers shows you the impact that jack welch had on so many people. So included in the list of pallbearer this morning, Mike Barnacle, cowrote the book with jack welch straight from the gut bill belichick, larry, andy lack, david zaslav, eulogies from many of the family members as well as ken langone and Mike Barnacle again, the number of business load leaders, finance, media, coming in this morning, just incredible how many people he touched and i thinkthats really what today will be all about as well as hearing from mi mbe, dren, stepchildren and falyemrsguys. Robert, thank you very much squawk box will be right back welcome back to squawk box, everybody. The futures this morning have been under pressure all through the session. In fact, right now were at the lower end of that. We have seen down 700 but right now the dow is indicated 670 points coming after gain of more than 1,100 points yesterday for the dow. S p futures right now down by 80 nasdaq off by 270. The dows big swings giving wall street some whiplash. With two 1,000 point gapes this week alone and 1,000 point drop last week, here to talk more about where investors can look for opportunities, darrell kronk, chief Investment Opportunity of wells fargo wels and investment management. You like it or not does it give you opportunity or add to that . No, we like it. Matter of fact, earlier this week we took a fair amount of money out of short duration fixed income because we thought fixed income was overbought at this level, put it back into large and midcap equities in the u. S. When did you do that . Tuesday happened to be the down day, up yesterday and back down thursday well see. You have to track the levels the interesting thing here is no matter how volatile the equity markets are, if you look underneath, there arent as many signs of stress and strain as you think. The ten year below 1 , Energy Prices below 50 a barrel . They are. But they stabilized here this week, right . Oil stabilized around 47 exactly. There isnt signs of stress on the short side of the yield curve yet either so the repo market is not showing signs. Counterparties are not stressed at this point. U. S. Dollars found a tight range here so well see but equities still are all over the place. Rates are this low, people talk about equity prices and they worry that its because rates are so low. Right we attribute moves to safe haven buying ten year at. 97 or. 79 is safe. You could lose your butt in that, couldnt you, sam, in a tenyear, three years from now rates were up and got less than that thing will be worth 800. But what do you do refinance something today with a fiveyear butt or threeyear butt and you refinance it today with a tenyear and 9. 7 and three years from now the tenyear is 2. 5 . Now, the tenyear is arent we lulled into a false sense of security about the bond market whats riskier, the stock market or bond market looking at valuations you would have to say bonds are more over valued than even stocks are at this level. In our opinion the oneyear is at 54 bases points even if you get 2 yield on the s p 500, you know, youre still yield to yield much better even if you get no appreciation margin calls are scary, what happens with all the debt thats outstanding, the floating rate debt, your debt service could triple. It can. It can that could be a problem. I think one of the things we watch really close is the issuance market has kind of dried up the last couple weeks not surprisingly, right . People are not able to come back and issue new paper and new bonds when the market has seen this stress. Despite the fact the rates have gone down. Despite the fact rates have gone down. Excellent point, sam so we need that to open back up, right . Thats a key issuance market has dried up. Liquidity is your risk here, its not the absolute level of rates. Despite the fact that liquidity has never been greater but the individual decisionmaking liquidity is critical. Just this last week weve seen 20 outflows out of the highyield etfs of the total asset value. It went down the wrong pipe, thats why im coughing. Dont worry. Its from drinking its not from the coronavirus. Its from Drinking Water youve got to stop drinking during the show. Well, sam, youre the one who brought it. Yeah, youre right. We cannot get through probably a segment without talking about coronavirus yes do you at your shop when you have sales meetings or strategy meetings, do you have a doctor come in . What do you we have. You have . Epidemiologists come in and give their best estimates on models and that type of thing. Really . Yeah. But its so hard to predict. Theres no good comparable you have to watch the Capital Markets for the signs of strain more so than the reality is viruses dont respect borders, nationalities or governments. Or Technical Analysis thats what i wonder about sometimes. Or certainty. Or certainty. The ultimate you know what it is, we talked about it earlier this year. Theres unknowns and then theres unknown unknowns weve got an unknown unknown you dont worry about the unknowns, you worry about the unknown unknowns. But sentiment positioning and technicals do matter. I think so too. I buy that but were back to the question of whether you think the lows are in on this pullback actually we do. 2850 seems like a solid Technical Support level. We havent retested it we may retest it again before its said and done but if 2850 holds, then youve got a durable bottom forming, we think. Ha, you, that was not me i dont know if i can sit on set anymore. Im worried. Weve talked about garden variety corrections. A pandemic seems like you shouldnt have one of your normal annual that it could be more significant than a garden variety correction. We havent done it yet on any given day we could make new lows theoretically. On any given day coronavirus is the reason to be up because cases have come down and today its the reason to be down, right, because you saw the state of california declare emergency, the city of los angeles, spikes in south korea and italy in caseloads again. 666 now, perfect. Anyway, darrell, thank you i swear it went down the wrong pipe. Excuse me lets get down to the New York Stock Exchange now where our good friend jim cramer joins us. Hopefully hes not coughing. Jim. No. Look, i wish i could be as optimistic as your previous m rk like everybody else, your instinct is to say i really dont want to go out ive got a fundraiser tonight, im looking forward to that. But i think to myself, geez, a Gathering Place is not where i want to be its amazing how quickly things how sentiment changes when you read whats happening in the state of washington, which i think is pretty bad. Or another cruise ship holy cow jim, but what i dont get about this is you had a terrible day two days ago then yesterday things seemed to come back. Now were down again wasnt it clear that this was going to be exponential . What happened on monday, we had a huge day i think the existential fear of Bernie Sanders being the leader of democratic party, the standard bearer, i think was diminished youre with blankfein on this, yesterday was a political day . I think there were a lot of people that lot Bernie Sanders would get the nomination other people felt that a socialist at the top of the ticket would be very bad for the democrats. There was a kind of a i think there was a sigh of relief that a socialist is not going to be at the top, at least right now we dont think but look, theres some Companies Like splunk reported a great number now its time because of the futures. There are some stories that are good that were reporting but a lot of people say, wait a second, is the state of washington looking like china . I think its very frightful to read the stories and know we dont have the teftsts. Were all just reading news and reacting i dont think we can offer anything in particular that gives us any comfort because there is no comfort. But when you look at we were talking about travel plans. So many of these conferences are now getting shut down. People joe just cancelled a trip to go on vacation. Theres a lot of variables with that. We just cancelled our vacation. What did you say . We just cancelled our vacation. You did when was that supposed to be in two weeks to go to florence okay. Thats italy. Would have said, sure, italy is great. Two weeks ago you would have said florence is great and then florence is closed. Italy is terrible. How did that happen . But it happened overnight. I think our fear is if it happened overnight there, why wouldnt it happen overnight in other countries . Italy is not particularly a place that has a Terrible Health care system. So i think that were all i dont want to do doomsday but i want to understand your doomsday version what do you think the low could really be in terms of how the markets will take this remember, i think that there was a huge percentage of the actual s p is made up of companies that are relatively immune or immune and then theres travel and leisure, which i cant find the bottom i thought that when i listened to phils reporting, id come back and say, well, i dont know even though the airlines may be in the best financial shape, you can only run planes at a with a small group of customers for so long before you really get in a lot of trouble same thing with cruises. I mean do you want to go on a cruise, andrew no, but you couldnt pay me to go on a cruise right now. I could see it in the travel industry we have retail even the facebooks of the world, at some point youre not going to advertise if you cant get the customer, even if its all delivered at home. Im not disagreeing. Jim, a lot more from you. Well look forward to that in a couple of minutes. Dont miss the interview a little later with the president and ceo of hp after the company lln cted xeroxs latest 35 biiooffer. Stay tuned squawk box returns you should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified Technical Analysis. You still have service . Call the Insurance Company sfx [phone ringing] its them, calling us. Its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . By automating claims with Machine Learning and analytics, cognizant is helping Insurance Companies advance how they serve even hard to reach customers. Cool danafarber Cancer Institute discovered the pdl1 pathway. Pdl1. They changed how the world fights cancer. Blocking the pdl1 protein, lets the immune system attack, attack, attack cancer. Pdl1 transformed, revolutionized, immunotherapy. Pdl1 saved my life. Saved my life. Saved my life. What we do here at danafaber, changes lives everywhere. Everywhere. Everywhere. Everywhere. Everywhere. We want to thank out of guest host, sam, for being here. Its been a pleasure. What about a side car on your motorcycle i want to get the hell out of here. I dont know if i have enough sanitizing equipment to do that. Anyway, its good having you here. Thank you, sam. That does it for us today make sure you join us tomorrow right now its time for squawk on the street. Announcer this is cnbc breaking news, market selloff good thursday morning, welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber coming off wednesday, they are giving about half back state of emergency in california, cancellations from google, apple, netflix and more. 10year down 95 basis points uncertainty beginning to weigh on the street. Stocks going to open lower. Plus hp rejects the