Transcripts For CNBC Squawk On The Street 20240713

House considering Financial Relief for workers and businesses impacted by the virus. This is what the president said yesterday. We are going to be asking tomorrow, were seeing the senate, well be meeting with house republicans, mitch mcconnell, everybody, and discussing a possible payroll tax cut or relief, substantial relief. Very substantial relief. Thats a big number. Were going to be talking about hourly wage earners getting help, so that they can be in a position where theyre not going to miss a paycheck all right jim, we have a presser at 5 30, but right now dont expect specific proposals i think theyre mulling over some things. Theyll give direct support to workers, which is fabulous a lot of workers live hand to mouth. Theyre coming to work even though she shouldnt because theyre sick and this is a great holdover Small Business loans, they can expand that greatly. We have a lot of money coming into the treasury. They can waive the interest and penalties for people who file extensions thats terrific. That puts a lot of money in peoples pockets. A payroll tax cut, i think they should hold that one back and be ready for the cruise industry, Airline Industry i think theyre well aware of that theyre seeing a lot of Business Leaders today, banking tomorrow Banking System theyre confident of i see things theyre doing one thing that made things better today is that this was a recognition that things have to be done. And that was very reassuring does that mean that could be like bernanke when he said i need to cut rates, but theyll put things in place, theyll stagger them in case things get bad, maybe worse its something is it enough for you to feel more comfortable buying stocks after yesterdays . Yes, it is. Crushing blows to certain sectors . Im thinking energy and to a lesser extent but also the banks . I think energy was really bad. I go over a lot of the banking Balance Sheets, they learned their lesson in 2016 when it comes to nonperformers if you go out now and you say this makes me feel good, it made me feel good at 5 00 like everyone else. If youre buying up 8 , people say thanks for nothing i never do that. I dont buy the up opens do i feel marginally better . Yeah this is what i wanted. Ive been saying this over and over again were looking at the banks. They were shocking moves. Absurd. Bank of america down 15 . We dont have Goldman Sachs there. Less than 60 etf with the Interest Rate environment as it is, there are those who say, well, things wont have a lot of earnings momentum no, they wont have a lot of earnings momentum. But at the same time, if youre going to decide this whole group now were on oil here yesterday seema reported norwegian got a new revolver from jpmorgan for 670 million. I say are you kidding me they say theyre our client. Do i want jpmorgan to give that loan i prefer that loan to come from the u. S. Government. You have jpmorgan saying, listen, were okay with this then you have dr. Fauci saying dont take a cruise. Jpmorgan is bringing a knife to a fauci gunfight goldman takes carnival down they cut it. Thank you very much its an amazing call. They say stocks are pricing in the downside, hence below average for the foreseeable future down 62 look, what are you going to do did you think the most important person in health care in our country would say dont take a cruise take a cruise at your own risk i cant believe the administration was thrilled with that but theyre notcrimping fou ini. I think carnival is the blast zone thats probably the most dangerous stock. When do we have the uncomfortable discussion of who gets what, what kind of relief, if i dont take vacations, why am i paying for a bailout in the travel industry . Bastian says theres no question there will be Government Intervention in his industry i think thats true theyre not ready to do that theres a degree of hope there are people who say the sun will come out. The flu has peaked flu has peaked, but not novel what does nol meavel mean novel means theres no immunity. If this thing doesnt die down, the airlines do die down i think its early i think the Cruise Companies should be in there saying were not bad actors we will go others will respond, Corporate America just got a huge tax cut a couple years ago and they spent it on buybacks. I dont think the administration is in there trying to figure out how to save these companies. Theyre trying to figure out if they default, whats there whats left . Because its just its a health care thing. Its not like, hey, we have to have carnival. Prevent a recession, theyre try doing that a lot of people work for the cruise ships but if i were in the war room i know theres thats not going to put us in recession, the cruise ship industry if you were in the war room, like that roosevelt room where it shows you where we were, wouldnt you like to have a worldwide map where the various cruise ships are they seem to pop up all the time the San Francisco one that went under the Golden Gate Bridge yesterday, it landed they dont have enough kits. If you have 100 degree temperature in new york, you dont get a kit. Because youre not sick enough azar this morning did say we are on our way to having a surplus of kids. Surplus best news of the week he may be part of the surplus when this thing is over. I liked his comments yesterday on the economy what did he say strong. Always good to hear about him talking about the economy. Go to Nursing Homes see the aventis downgrades specific to the stock market, yesterday later in the day, i was talking to people looking at dividend yields. Are they . Whether its bp, which was almost at 10 . They just raised their dividend or et, Energy Transfer no. Ive been saying that thing is to avoid that thing is just a rogue operator or looking at the banks you didnt mention occidental you think thats beaten up too much occidental hit 25 . That sounds sane. Shocking. Occidental had an 11 11. 2 billi market value at the close yesterday. You can see its up a great deal now this morning i want to put that in perspective. When they closed the deal to acquire anadarko, not that long ago. Right when they closed that deal, it was 36. 7 billion in value 55 billion deal it wasnt 55 billion stock and cash. 37. 6 billion. The cash and stock equaled at the close in may, roughly last year, 36. 7 billion the entire company now has a market value before todays open of 11 billion. Yeah. In the Great Recession, there was a moment where i was in an argument with a major west coast bank why dont we just well, it was located there. Lets call it washington mutual. And the argument was i said you guys ought to just surrender. What is that rather than just go through this whole process of liquidation, bank lines, say we surrender i think its time for occidental to surrender they put up a white flag in front of their office and surrenderment who are they surrendering to . I dont care. Does it matter we surrender as a result of that usually when you surrender somebody comes and says okay does it matter . I think the important thing is the surrender. If you had done that yesterday you would be missing out on a 28 move higher thats true today is a better day to surrender. Marathon cutting capex. Did you see that. By a fifth. Suspending all drilling and completion activity in oklahoma. Diamondback started that. Diamondback was a major reason why things went bad yesterday. F. A. N. G. They didnt want to surrender. F. A. N. G. Is one of the most, lets say, conservative and serious companies. And they basically said whoa, were cutting back were cutting back big yeah. One thing i want to say very nice. Really . I hated that axe aoccidental from the moment they announced it do you think Warren Buffetts money is good . Easy come, easy go. Also did have he did better than the common stock. When it was announced, i went to occidental just like on the xerox people, i said would you cut it out . Cut it out this is a bad mistake. Mike worth, so smart, chevron, dropped out. Please dont do this deal. Who am i im some guy in journalism please dont do this deal. They decided i was like jimmy olson. I was jimmy olson. Now youre taking umbrage at their refusal to listen to you and making them pay. Yeah. You were skeptical from the beginning, you didnt count on this coming. I said its pure attitude, state of mind, not unlike Steven Seagal you knew it was coming. Putin was like midmarch i was taught by david tepper. One time i tried to sell bonds for a bankrupt Stove Company i went down there to tepper. I said i want a quote on those he said whats your name i said jim cramer. He said i got a guy willing to fleece every client in the world, his name is jim cramer. So i feel like occidental is like jim cramer. Tepper did that, made a fool of me i learned. I had a lot of hair. You had good hair, too. I did curly i didnt look like curly, more like larry. We did have those Circuit Breakers yesterday lets get to bob pisani this morning. They dont have Circuit Breakers going up, do they . Why dont they i guess nobody complains about that the market is going up, we have to stop things we had that Circuit Breaker kick in yesterday, 9 33 a. M. Eastern time closed for 15 minutes. It worked well object is to get liquidity into the market again slow things down a little. It pretty much accomplished the task s p futures here there is a Circuit Breaker on the upside for the futures contract 5 here. You see were trading below that at some point, you cannot trade above the 5 , but you can trade below that the futures are here the rules are simple on this for the futures. During nonregular trading hours. Its plus or minus 5 on the futures. Nonregular trading ours during trading hours, its the same as the Circuit Breakers, 7 , 13 , 20 to the downside keep an eye on that. By the way, we had comments yesterday, everything worked smoothly some people were baffled because the vix was not calculating at the open people said where is it . Its hard to calculate the vix because its priced on the s p the s p had the futures locked out. Marketmakers will not make bids and offers on that these Circuit Breakers are important. They slowed the market down, there are consequences to them in the modern world we have all of these derivative products priced off the s p if the s p is not able to calculate because its frozen, locked down, whatever reason, its difficult to price these derivative products. Circuit breakers should not kick in often because it does create consequences, but when they do, they do have some positive effects. Its all a question of what kind of tradeoff youre looking for meg tirrell is at hq with the latest on the coronavirus. Good morning good morning. With the veeirus reaching 105 countries, infecting more than 115,000 and killing more than 4,000, the World Health Organization saying the threat of a pandemic has been very real but it also said it would be the first pandemic in history that could be controlled. Noting the actions of governments, businesses, communities and individuals can make a difference. Were seeing more stark action being taken around the globe the in italy a lockdown extended to all of its 60 million citizens some epidemiologists warning the u. S. Is not taking the virus seriously enough dr. Mike osterholm said this morning that washington is handling this like a d. C. Blizzard, like it will pass. The cdc stepping up warnings to highrisk groups older people and those with Underlying Health conditions another doctor warning its likely many will be exposed to the virus this year or next and people should stock up on medications, Household Items and groceries. Vice president mike pence plans to meet with executives in the Health Insurance industry today. Many have said theyll waive copies for Virus Testing and expanding access for telemedicine i dont know what your experience is, im finding very different adoptions of behaviors between people some take this seriously, they listen to what youre reporting and the like and the potential this will be with us for a long time and are changing behaviors. Many others, smart people i know are choosing a very different path what can you tell them in terms of how they should behave based on the reporting youre doing and talking to many of these people following this thing so closely . Its an important question. Theres a cohort of people who say this is just the flu a, if it was just another flu, that would be bad on its own but there are many reasons that people are saying this is potentially worse than the flu its more contagious, more deadly than the flu. The flu does infect more people, as of right now therefore the number of deaths is higher, the percentage of deaths with covid19 are currently a lot higher than for the flu. Ive been encouraged to hear older people taking precautions. Theyre all over 60. Those are the groups that the cdc is speaking directly to and those with Underlying Health conditions should be cautious. Its household behavior, but as were talking, the vatican is closing st. Peters we know italy is taking their lockdown nationwide. Harvard this morning told students not to return from spring break the cdc says bring Exchange Students home. Its less the household and more the corporate behavior thats changing but we do have encouraging news it looks like japan peaked south korea, perhaps it peaked do you think that the testing in south korea helps and perhaps if we got that in europe, we would be less freaked out . Yeah. South korea has really been lauded as seeming to have one of the best responses weve seen, increasing testing so quickly. Weve seen case counts go up its above 7,000 there, but the death rate is much lower they are still in the course of the disease, for the most severe patients, the course of the disease can take six weeks the situation in italy is concerning given the high number of deaths. We are hearing that it is effecting older folks there, and that accounts for one part of it but there are encouraging signs around the world its important you dont want to minimize it when youre older, we can say oak, thats fine. We have a lot of deaths but theyre old. Theres a lot of old people. Its not like thats a cohort, hey real people yes baby boomers yes i can imagine someone said 65 and saying, well, i feel much better not. Well get cramers mad dash countdown to the opening bell. We are looking for a bounce. Well get to a bunch of names, all related to the virus, honeywell, disney, american, southwest, stitch fix and more back in a minute through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Dont just plan to retire. Plan to live. An annuity helps cover your essential monthly expenses, so youre free to live the life you want. Find out how an annuity can give you Lifetime Income at protectedincome. Org can give you Lifetime Income which of your devices are protected by daily security updates . Daily security updates. Daily . I dont know. The only thing. Im struggling with this. Some providers you have to manually download updates to each device. Comcast business securityedge updates every 10 minutes to help keep your connected devices protected against new ransomware, malware and phishing threats. Every 10 minutes feels pretty good. Get secure, reliable internet and voice for an amazing price. Call today. Comcast business. Beyond fast. Well get a lot of news out of the airlines today at this jpmorgan conference. Ed bastian saying bookings are down 25 to 30 . Cutting international and domestic capacity by double digits two weeks ago our revenue trajectory changed dramatically as the virus spread meaningfully outside of asia. Since then weve seen a 25 to 35 decline in net bookings and were prepared for it to get worse. We expect demand erosion will continue in the nearterm and built a plan that prioritizing Free Cash Flow generation and preserves liquidity. Interesting transpacific is the worst, largely he says because of government restrictions as opposed to a drop off in demand. Look, there are the cross currents here are incredible i keep coming back to the idea that these companies will need help whats really a shame. These companies have balance shed sheets that are good they didnt spend a lot of rainy day money. Its an industry that chronically in various times needed help. And this is one of those times i dont think that the country will let these countries down. Unlike the cruise ships. Theres an element where the cruise ships might tide the workers over because give them some forgiveness, let their attacks wave the interest and penalties so those people are not hurt the companies themselves wont get bailed out maybe they do it but the airlines, no delta had 849 million shares seven years ago, and now down to 642 mi 742 million. In some ways thats almost a bed bath buyback yes bed bath consistently bought back their shares at high prices only to have that stock collapse all the while they did that and used the money for those purposes have you been to bed bath down sharply. Which one delta still a 28 billion market value. Look look at the carnage in the banks and oils jpmorgan, i wish jamie the best of luck in his health, but i think jpmorgan was uniquely hurt by the double whammy of people worrying about loans and jamie dimon is such a force. No one announced a big buyback did you notice that . Nobody announced a big buyback isnt this when the airlines should be buying back . No no no they bought higher bastian said theyre considering a hiring freeze. Gary kelly is taking a pay cut oscar munoz and the president forgoing all of their base salaries through june. Thats okay compensation and employment will be at least theyre doing it Dennis Muilenburg was thrown under about 17 buses by david calhoun, he said it was at the bess h behest of the board that sealed his fate these guys have been forward looking. They make more than the rank and file i dont know if people at home know that. They may be aware lets get to a mad dash now well take you to the opening bell about 4 1 2 minutes away i was going to do abbvie. Ill save that for another moment i want to have something that to me is outright positive. Analysts an analyst comes out of the closet and says its time to buy chipotle. This i like. Nicole miller reagan, always has been fantastic the stock is down huge she says the numbers will be the same recovery uninterrupted comes out and says, you know what the time is now. I think thats a great call. This is good its a Great Company stock is down. Thats good its good reminds me of evercore, they said right now were in a quarantine light environment going into a quarantine heavy environment, they thinks that helps qsr as opposed to casual dining i thought netflix would be helped theyre not doing well did you know they quarantined the revenues at stitch fix i cant high five you dont you dare touch me thats why jimmy chill carries as many gloves as possible thats alcohol. 63 ineffective. I tried to get alcohol. I went to harmon, related to bed bath, they had none. I walked into bed bath, what did they have . Shoe mats. Thats the place to have it. I carry these, you have to throw them away every single time. This is not reckless there is a lot of waste being created as a result of precautions taken for the virus. Thats really the issue dow chemical are asserting they can pay the dividend if you want waste. Anybody who does gloves, every time you use them you have to throw them away. I decided to use the gloves, i dont know, seemed effective wash your hands, david . I keep dropping my pen. I want to come back to this market as we get ready for an open people looking at high dividend paying stocks right now that have been crushed, but occidental highyielders. Yes how has that proved through history picking those up not very good does the dividend adjust to what you might anticipate . In the Great Recession of mad money, i repeatedly did this, they almost all worked almost every one of them the ones can good Balance Sheet where the stock came down a great deal isnt everything a good yield . No. No occidental is not a good yield theyre busy surrendering dorothy. Occidental is a separate case dow down 44 what about bp trading at 2. 5 times ebita they just raised dividend a solid company. Mike worth on mad money said, listen, we have no problem they stress tested the dividendd i just hate the Oil Companies. Remember the new tobacco xom a dividend yield a rock solid blaalance sheet oil can come back. These guys, they cant have lower longer if Oil Stays Lower a long time remember, occidental has 33. Lyft, 34. Some of these other companies are much better at that. I like what theyre telling people, we just refinanced all our debt so the 9 , we have total coverage will people go to amusement parks . What about disney . What about cedar fair . How about bernsteins cal this morning, pricing in 100 probability that domestic parks close at disney. He had a numbfunny name for s piece. Some of these guys are showing their true colors. Bernstein says disney, the din f definitive complete guess into covid19 gary kelly, he has no losses i like it. 3m, i think the dividend, its safe thats a high dividend okay. All right yeah. Look at the green. Look at the green. Lots of it. The opening bell. And the s p 500 looking good at the big board its red sox ens asha sensana technologies and at the nasdaq, brain yir association. So youre up 3. 6. The algos go up. If you buy today, you hope someone will come in tomorrow because theyll listen to what the president says, and theyll look at the payroll tax, doing Small Business loans you come in and you need someone to take you out. Thats not necessarily up 3 going to make it happen. This is too big of a move to come on top of do you want to pet it will be up 1,000 . Could be wells fargo up 2 bucks maybe. It was down yesterday, has a new chairman that can work better with charlie sharp up 3. 6 . As karen cramer would say, moron, you had to buy it yesterday. The moron is sanitized it is also a market in which people are or investors are looking for the dislocations that have occurred with stocks sometimes have knockon effects. Sometimes stocks are used to back up indebtedness at another company. Right there are things that raise their head when you watch stocks suddenly move down 10 , 20 , 30 in a short amount of time, that are that uncover themselves i wont refer to specifics, certain things im looking into, but many investors are other impacts can be felt from that fall. All right one thing that we should point out. One reason why i dont think the banks are that horrid is that they have buybacks and divide dividends, they can suspend the buybacks they dont have to. Can i go back to stitch fix they did say some things about future revenues. I was being glib about the quarantine, but i listened to the call i didnt think it was the worst thing maj sniniblimaginablimagie stock is down down 40 last night yeah. Thats sub optimal. Surrender, dorothy. Thats my new term i like it yes surrender, dorothy. How about serenity now . What . 12step program for stocks yeah. Some of these Oil Companies, theres a surrender, dorothy going on in apache in marathon. These are all just ones where its like theyre at the emerald city its not going to help them. Oil is back almost at 34, jim. The saudi boost in production, 12. 3 Million Barrels a day thats above their capacity. Theyre really trying to put their heel on the throat of they want to crush the russians the russians want to crush us. This is a Serious Business there are a lot of jobs at stake. You see where halliburton is Great Company. It is incredible. We look at wti rebounding from yesterdays incredible fall. We produce 13 Million Barrels a day. Going to 15 million before this it feels like weeks ago we were talking about 10. 8. They cant its almost like they cant stop pumping they cant ratchet back that fast i do think that theres a lot of risk i dont want to own those stocks this idea that putin is trying to put our shale business out of business, so to speak, is the theme that came from yesterday. Theres so much private equity money waiting for this to happen so they can get in there. They can get in there. Theres private equity money everywhere talk about something that will be a hazard. Thats an accident waiting to happen if i were in some element of the government, i would be calling up every pe firm saying just how reckless are you being rein it in a little. That would have stopped in 2007. Yeah, if we had stopped the private Mortgage Companies from giving a mortgage to anybody who had a pulse. That would have been helpful the banks from taking all of those mortgages and securityi securityizing them i disagree with that whole analysis you insisted that they have a pulse. They gave a lot of loans to dead people people who were not even alive. They did. This is not them. Its better now when it comes to that. Without a doubt our Financial System is no way in question. There were weeks and months where we questioned the foundation of that system. This is nothing like that. This is just not just, this is a virus spreading, causing incredible dim anything munitio activity the key thing is the working person who works at a Small Business, at a restaurant where they cant carry it because nobody comes in. Thats not the fat cats theyre not trying to bail out we get it thats the difference between the big and the small. Heres united. They raised 2 billion in new liquidity yesterday. Thats hard to do if you run a restaurant or if you are a fast food franchisee i think thats who is whos at stake the people who work very hard and because of the covid they cant pay their taxes. They get laid off. Thats who you have to address without a doubt or the people encouraged not to come to work when theyre sick they live hand and mouth. I dont think this president will bail out any of the companies i think the president has the horse sense not to bail out the rich people. That is contrary to his game plan but i think hes going to bail out Small Business thats fantastic i like that. Very good. Thats who is getting hurt people dont want to go to restaurants in the year of look, we serve corona. Yeah. Why wouldnt you we serve corona we have corona and covid get rid of the modello honeywell wereaffirms. Darius is one of the great executives imfriends with dave cote dave picked a guy so good. Dave cote, previous ceo to Darius Darius has done so many things right. Tremendous liquidity some of these industrials have gotten their acts together they were ready. They learned from 2007 right the banks learned from 2007 and that makes it seem less contagious the tech stocks have good Balance Sheets there are good Balance Sheets its hard to find an unlevered company other than maybe apple yeah. Microsoft . You dont think microsoft is good amazon amazons good apple, amazon facebook . Facebook is okay. F. A. N. G. netflix i wouldnt put in there. Thats why i didnt mention it youre not worried about a cut back to advertising budgets . No, theyre getting factored in as between f. A. N. G. , which is Diamondback Energy and f. A. N. G. Which is the one david said are fine, i will go with the f. A. N. G. David said, not the f. A. N. G. In the oil patch. Im not going to midland, texas. You know the twin cities you probably think minnesota, st. Paul midlands are odessa. When you go down there, let me know the capex budget cuts will make things more difficult there. Thats why halliburton, they were dick cheney before that it was democratic. Look at this during the vietnam war evercore takes apple to 325 today. I think they were at 365 we got antidotal evidence on china mobile phone sales for february not so good i wish we had downgrades theres been no downgrades of apple. Rather incredible. One thing that worries me about this, they have this bounce up were not getting a downgrade. Other than the oil patch, which is just wow. Yeah. The oil patch, they have given up the armageddon they were calling it oilgeddon apple and microsoft have been safe havens. The Balance Sheets. Apple is down 6 . Look who has the money. They can borrow by the way, if i were the u. S. Treasury, we get to almost negative Interest Rates, borrow a trillion bucks we were talking about that yesterday. Refinance the treasury. Remember the chinese undertake the massive infrastructure spend we should have done years ago. Yes or actually pick among the rubble imagine that if they could do that . I dont understand. The Oil Companies that go under. I dont want the u. S. Government i like infrastructure spend lets not get involved in the markets. Lets spend an enormous amount to upgrade the infrastructure. What will you make of the cruise ships im not worried about them. You dont want to melt the scrap, turn them into too many boats . Are we overboated we need smaller boats its hard to turn that into a beer can, jim. The ones that are not being used are going to other high capacity regions. We could make bridges out of them take the people out of them first. Dont make it like gold finger. Get the people out im thinking of the car not the lincoln the one they put in the he had the mustang. Thats what im talking about. I know. You cant lift a cruise ship. Cyprus is worth mentioning a deal that was out there. Itsnotable because during thi period of volatility we did not mention it the other day when there was a number of press reports saying the president was poised to block its acquisition by infineon, a german company. And the news this morning is that cfius, of course, the committee on Foreign Investment in the United States, has completed its review, and its approving it saying there are no Unresolved National security concerns with respect to that merger you can see the response did someone report it wrong it happens. No, thats what happened. It happens. A reporter i think a number of reports it happens i dont know where that was coming from. Glad we didnt mention it at on the day in question. You can see what happened with the stock. Looks like the deal will go through. Okay. By the way, speaking of deals, whats your line on the Abbvie Allergan speaking of reporting, talks last week said the ftc was very close within a week of approving it thats not proved to be the case yet. I dont have an update for people i have heard nothing to indicate real concern they have a its the spread, jim. The spread and so many risks, and youre talking about a 37 rate of return its crazy. In allergan and abbvie, still strong expectation that that deal will close. More encouragement is Dicks Sporting Goods with terrific samestore Sales Numbers theres a sign that not everything is going wrong. 5. 3 comps thats good. You like Abbvie Abbvie is in my travel trust. Why . Allergan has a which i have to have with me a pill that gets rid of your migraine within two hours. And when i have a migraine, i want to strangle the dog, its so loud. I want to kill the darn thing. The melonox deal is still out there. Any day now nvidia is doing unbelievably well amd doing unbelievably well. Lisa sue had an Analyst Meeting last week. It took the stock over 50. Here it is back to 44. Thats a buy shes talking about 20 Revenue Growth for the foreseeable future shes in a secular bull plan. The data centers have been stocked. Still have a lot of data the companiesyou mentioned, th g. A. F. , google, amazon, alphabet, facebook, doing quite well i saw jim gaffigan on sunday how do you think he started his comedy routine were all going to die no hot pockets this time . No. Were all going to die it was a littledown. Little dark then he kind of took it up a little yeah. I think hes a genius those who dont know him, google him. Great on twitter. One of the funniest people. He maybe my best twitter follower fabulous lets get to bob pisani dow is up 630. A lot of faith in fiscal stimulus there nice bounce in the United States, particularly on commodities. Chevron helping the Dow Jones Industrial average i want to show you whats going on here. Banks on the upside. Energy having a nice bounce. Semis as well. Consumer staples lagging gold is down this is the exact mirror opposite of yesterday. Yesterday gold was up, Consumer Staples were not down as much as the rest and the more cyclical groups like energy were creaatering. I said a lot of faith in fiscal stimulus here. Japan, lititaly, hong kong, cru bouncing here. Copper bouncing nicely threeyear low in copper yesterday. Global markets are bouncing a bit here want to reference oil, speaking of oil look at saudi aramco 32 reials was the ipo price. It dropped to 27 yesterday it dropped below the ipo price bounced to 31. Close to the ipo price 32 was the old ipo price for saudi aramco you want to see the avl lafrnl avalanche of companies withdrawing guidance, booking, withdrawing guidance two weeks ago they said were not sure whats going on they are certainly reasonable withdrawing and they cant quantify the virus impact. A number of companies talked about this in the last couple of days host hotels, united, jetblue, hyatt, all of these companies are saying were unsure about guidance now the market priced in a lot of that uncertainty the question is what is priced in the earnings situation. I want to show you, a few weeks ago i said analysts were taking down their numbers for the First Quarter, and the second quarter, but they seemed to have stopped. We have estimates where First Quarter earnings are up 1. 7 for the s p 500. This number is certainly wrong for whatever reason they have stopped taking the numbers down as aggressively as i think they should have. January 21st if you want a better indication, look to europe and what theyre doing with their earnings estimates. Europe is ahead of us. They are dealing with direct impacts in italy from coronavirus. January 21st, this sin industrial estimates 5. 4, now down 24 im not saying this is the same thing that will happen in the u. S. , but when theyre a month and a half, two months ahead of us potentially in terms of the impact, thats what you want to look at at this point. The analysts should have been more aggressive. They stopped a few weeks ago, im not sure why but look to europe for whats going on at the lows of the day, but still up 600 points. Carl, back to you. Thank you very much jim, people are looking at the italy case trackers, and were following them, but i was looking at average age in italy, 45 years old in the u. S. , its 38 we know theres a lot of older people in that country right maybe thats why they have taken such drastic actions strange the Italian Health care system is pretty good i think that people are surprised. A lot of the doctors i speak to find it a total quandary they just dont get whats happening in italy again, its novel virus, and italy has to be the outlier. Its really important they be the outlier. I know italy is an older country. The problem is that the virulent nature of italy versus south korea, japan and singapore is confounding a lot of good doctors involved in this its not like the italian med care system is awful its the opposite. Its very good the entire country is effectively shut down. I know. Its very worrisome. I was going to go there this week its not an insignificant economy. No. Its also look, its a country of very important very important country in europe sixth largest economy it is this is remarkable you have to hope thats not the way its going to be boy, they have not figured it out. Theyre trying to stop it in its tracks milan, i spent a lot of time in milan we had a case near me in summit where someone was with someone from milan milan has tremendous cross commerce with the United States. And with china. And with china. Do we need to be doing similar things here . Or i know. Thats what my worry is. Thats the question or are we doing enough to slow it ill tell you, no one knows one of the things, dr. Fauci is so good, but italy is the case study. What went wrong there . Its got to be figured out we find that every day, its hypertension thats bad, diabetes thats bad, but we seem to be confounded by milan and by italy, and thats very spain just closed schools. Trying to figure that out, we dont want to be italy britain not italy. But weitaly. We need to get a handle on italy. Everybodys got to it is very wuhan like. Prices rebound after plummeting yesterday on a day that were getting headlines that appear to be holding out some hope, the saudis and russians can talk again. Yeah. Hey guys, good morning listen, you know, thats the key word is hope are they saudi arabia flooding the market just to draw the russians back to the table i mean, thats really all were dealing with the problem is were dealing with two a two sided issue. One of the hydra as krayem wocrd call it. Supply shock, way too much oil flooding the market very soon and you have a demand shock. You have slowdowns in italy which uses about 1. 2 Million Barrels a day. I think the big risk from the oil market perspective, guys, is if the u. S. , we use 20 Million Barrels of oil a day 50 of that is driving just driving around. You know, trans commerce if we slow down 5 because people arent going to work or doing whatever, 500,000 barrels a day here taken off the market and then spain as you talked about, italy over here, suddenly, you could be in a world oversupplied by five Million Barrels a day at the same time that russia and saudi arabia have having a schoolyard fight. And that doesnt bode well brian, you know, what are you hearing in terms of capex cuts from u. S. Producers . We have a few diamond back, the original faang yesterday. We had a few others this morning. These are mostly smaller companies. We havent yet heard from the big boys last week exxon and chevron had investor days. They just sort of announced basically sag nant investment plans. Everyone i talk to expects that every major or Minor Company is going by the way, more are minor now than major is going to come out and start having to cut capital spending, cut cruise, cut jobs there is a school of thought, weve been doing this a long time the school of thought used to be low gas is good for the United States because we drive in the end. It does matter to people to a point. But we never had an industry of this size before and so i dont think those historical comparisons hold up in an industry that employs millions of people yes, fossil fuels is dead. Yes, they may die. Were going to need to figure out a new way to do things in the next, like, two years if thats the case, guys. Yeah. And what about the pressure on p putin or saudi arabia . You know, are they willing to just withstand whatever it is paying their putting on their own people as a result of the decisio decisions theyre making here . David, you ask such doggone good questions thats the problem with you. I take it one step further, mbs, hes a monarch hes the kings son. Hes the, you know, semiruler of the country. He has a 500 foot yacht. Listen, everybody throws out this they need 85 to 88 a barrel in saudi to pay the sons. But heres the problem unlike, you know, marathon oil or chevron, they have the power to print rubles. They can print, you know, reals, they can deflate their way out of this in the short term. I think, remember, you got these sanctions on rosneft in russia run by putins bff he is probably saying, you know, screw the u. S. Industry. If theyre going to do this to us weeshgs goi us, were going to break them. Jim has been on this story for a while. Jim, in the last two years, four million new barrels of oil have come on the market inthe unite states none of them are economic. Nobody can make any money. Maybe at the margin unless youre chevron or marathon or pioneer. 40 of all oil being taken out of the ground in the United States roughly right now is money losing and this is an industry that is going to have to get smaller fast or its just literally everybody burning down everybodys house at the same time yeah. Thats a really good point brian, i think that the only saving grace we have a little bit of natural gas is going up a little bit just looking for something positive youre right. If we slow drilling which everybody has talked to said we have to, well get less natural gas which means prices may firm up and thats good for some people in the world. Brian, thanks well talk to you later. Brian sullivan on the phone. Lets get to jim and stock trading. Look, ive been focusing on positive, accentuating the positive you know, interactive take two is getting back in the nfl game no, there is not an end to madden but take two has the nfl i think this is a real coup. Maybe they lost their way with madden so watch to see exactly what theyre going to do with the nfl. I salute them. All right jim, how about tonight i dont know. Its a long way away i got dexcom tonight. Im trying to do the stocks that dont have any exposure. It is dexcom its diabetes, you know, older people with diabetes, older people, hypertension diabetes needs to be under control in order to deal with this and kevin has done work to try to get diabetes under control than anybody in america. All right jim, well see you to night. You want to see the presser at 5 30 and then jim at 6 00. Ill be late probably live show maybe im ready live. David, once again, im going to tell you, surrender you need a smaller boat. Happy birthday happy birthday to david hes 65. Medicare, let me fill you in thank you ill get the paperwork markets up. A bounce after yesterdays decline. Up 725 back in a minute good Tuesday Morning welcome back to squawk on the street. Were at post nine of the new york stock exchange. Market is bouncing dow up 700 points. Companies announce defensive measures now and the governments from japan, australia, of course, the u. S. Mull some stimulus looking for more details on that this afternoon lets bring in our strategists thank you for coming in. Good to see you. Thank you how about the action yesterday . What does it mean . So what yesterday was was starting to price in the recession. The actual recession not the fear of recession. But the actual recession driven by lower inflation expectations. A collapse of Oil Investment in this country and really the fear of where this is going in the real economy on the demand side so before we had the supply shock problem and now we have the demand problem schools close. Municipalities start to curtail what people are doing. Some are arguing the markets are overplaying that thesis. We dont know what the stimulus response is going to be. Look, the announcement from the white house yesterday and the suggestion there might be some action with congress would be extraordinarily helpful here on the sentment side were going have a lot of chop here theres a lot of chop. The news is not all out. We discussed this before there is a lot of bad news still in front of us youre going to see chop yesterdays bottom was a reasonable place to go if you look at all the Technical Levels but we also went through some Technical Levels as well you have to start pricing in if we have a recession and if we have a 15 earnings decline, where is the rational place for the market to be and its lower than yesterdays low. David, for the moment, are you getting enough talk of stimulus from the federal government, the president and the Federal Reserve to feel more comfortable about this market . Well, i think excuse me i think so i would take a slightly different interpretation of the price action the bond market price action to me was really pricing in a move to the zero lower bound. The fed is going, the fed is going to be at zero with a very high probability in the next maybe three to five weeks. Maybe even sooner. Certainly id say after the march meeting. There is a really good probability of that with another intermeeting cut if things get worse. The stock market is sort of not really, you know, doesnt know how to exactly deal with that. If there is an aggressive stimulus coming in and an aggressive response from the fed and fiscal responses in Small Business lending, something in tax cuts, then we might be able to skirt through this and the s p 500 can kind of flirt around with this 3,000 area and not have to go down to 2500 or 2300 which would be much more consistent with the recession area so im not sure i interpret this as pricing in a recession. I think what monday was about is really sort of almost front running fed policy and thinking about the fed coming onboard quickly. Funny you say that. As were talking, here comes the president. Our pathetic slow moving Federal Reserve headed by jay powell who raised rates too fast should get our rates down to the competitor nations. They have a two point advantage and stimulate and adds the Federal Reserve must be a leader not a very late follower which it has been. Were going to see how powell responds to that next week yeah. Look, if you have more days like yesterday, youll have another Immediate Response not wait until march 18th i would just say to davids point, the other thing being priced in yesterday was the fear of negative yields here. Im not saying its going there. However, with such a Rapid Movement in yields and such a rapid decline in sentimentand expectations that are going to the zero level here, you can see the fear of negative yields. Of thats why the Banking Sector collapsed yesterday. Thats why you had moves like that theyre pricing in what happened to europe. Not saying were going there there is fear we could get there. The question is sort of moved on, david, which is can the fed actually do anything to help this problem i mean, we saw the 50 basis point cut. We see the markets pricing in extreme more cuts. We saw the fed injecting more liquidity into the repo market and easing rules on lend egg what else can the fed do to help the economy if its paralyzed in fear about a coronavirus i think, look, we still have a one to one and quarter percent funds rate we have no risk of inflation we just saw the Oil Market Collapse in an epic way the second largest in modern history. Were going to have pretty big disinflationary courses hit this economy. The idea that is the fed is trading off some inflation ris wk a monetary easing makes no sense here not to mention the other sort of tradeoff is financial instability meaning they create bubbles and were pretty far away from bubble creation after what we have seen in the stock market over the last few weeks so there is not a lot of excuses for them to sit here im somewhat sympathetic to what the president s tweet said i think theyre independent of politics. You know the secondary spreads have blown out aggressively. Secondary trading is really difficult to get here. It is important in the marketses, david you know them well its only right now. Doesnt mean its going to extend for a long period of time and we have over a recession last time we took the Balance Sheet to 4. 6 trillion during qe in a one, two, three step. And every Federal Reserve official that was part of that says we should have probably done a little bit more a little bit faster that is kind of the lesson of the last ten years in the crisis so they have got theyve got ammo coming out of their ears as far as im concerned the Balance Sheet of the fed is Something Like 20 to 22 of gdp. Europe, 45 . We can extend and add a ton of liquidity into the system tomorrow that will have a very large impact on asset prices will it stop the virus will it stop the contagion were seeing on the ground no but it will ease a lot financial conditioned pain that comes from it and thats important. Is that staying within treasury mbs or need to expand last week there was a suggestion they may go further i agree with david the key is to support credit markets and Small Businesses and the Banking System so we dont get a crisis ala2008 were functioning under a new financial regime, a new Banking System regime that hasnt been tested yet with all dots you need liquidity for the banks and corporate sector and credit markets. Yesterday was also about the credit contagion as well would you think of picking at stocks you can edge in here but i dont have conviction here yet because i dont feel like were fully there. We have to see fiscal stimulus there has to be some sort of fiscal act what the president can do is roll back the tariffs. He doesnt need congress for that can he do that today but his pal powell is not goo suggest that on the flipside not going to happen if theres concerted action with the Democratic House that would go a long way in making this a tradeable bottom guys, thank you really good discussion, david and alicia, appreciate that. Dont miss cnbc special report tonight 7 00 p. M. Eastern time markets in turturmoil for the last couple of weeks consistently youve got to watch up 757 points on the dow eunice yoon in bay shaeijing wi president xi jinping visiting wuhan earlier today. President jinping is vowing viktctory over the coronavirus china and said the outbreak at the epicenter in wuhan is basically curbed she was touring wuhans first prefabricated hospital he was rallying medical workers and held a teleconference with some of the coronavirus patients there. His trip also coincides with wuhans closure of its last popup clinic, and his visit has just generally all day today at state media been featured as a sign that victory is near. Thats what the state media has been saying. So this all comes at a time of course when beijing has been trying to get the economy back on its feet. The latest data shows that the epidemic is weighing on prices at least it did for february, Producer Prices sank by 0. 4 , suggesting a slack in demand the core c pshlgts i at a tenyear low at 1 food prices were up by 21. 9 , due to transportation as well as hoarding likely. Inflation is probably going to continue to see downward pressure, not only because of questions over how much people will want to buy, how much demand there is, but also because of the slump in oil prices now, despite the confident comments that were coming out of president xi jinping, beijing revealed it is concerned about new outbreaks introduced by oversea its travelers. Beijings International Airport said it will ramp up Health Screenings for people coming from the most affected regions and countries. Guys so eunice, you dont hear a lot about president xi and President Trump collaborating or discussing ways to battle coronavirus. Im just curious what the reaction is in china toward the spread all over the world and particularly in the u. S. , because we could not be approaching this differently in terms of what china did and what were doing. Well, i think that there have been two reactions one is here, there was a lot of queds, questions, people wondering why the u. S. Is reacting with such panic, when the numbers there dont actually, just the situation is totally different from here, where the outbreak was here and the numbers were big and so there is a little bit of a question mark as to why the level of panic over there, but i think that now, there is a big concern about the potential for more cases to come, to come in from the u. S. In to china, so theres been speculation today, especially with beijing increasing its Health Screenings, that wasnt only for places like iran or italy, but also there have been some imported cases from spain and from the u. K. And now that people are wondering are there going to be imported cases coming from the United States and will we see travel restrictions on americans coming in to china because of it. Eunice union, thank yoyoon,. Northwell health will begin manual testing for the coronavirus. New york states Largest Health care provider anticipating it will begin processing 90 tests daily and once automated up to 1,000 tests daily. Joining here ceo of Northwell Health Michael Dowling delighted to be here. One question everyone is asking is what took so long . It should not have taken this long we have been moving to urge the process along for many, many weeks but bureaucracy takes a little bit of time it should have been moved more quickly by the cdc and the fda, but thats history we are now doing the tests and we will eventually be able to move to automated tests, so when we move from manual tests to automated tests, takes a piece of a period of time, we will now be looking for funding approval from the cdc and fda and when we get to automated tests, which could be, we can ramp up by the end of the week, assuming we get the approval and move in to next week, we would be able to at least do a thousand tests a day, and probably up to 2,000 tests a day, when its fully operational because were going to ramp this up we have the largest lab in the region, and one of the more sophisticated in the United States, and we are just urging, as the Governor Cuomo has been doing on a consistent basis each day, telling the fellow government to actually move this thing along a little bit more quickly. So where are people getting your tests, and do they have to pay for them no. We can go to peoples homes and do the swab. People come in to the hospitals when theyre sick. We have to be careful. We only want to test those that we have to prioritize, those that are sick, or those that are in contact with somebody with the virus, because the last thing we want to be doing is making sure we get the public to think everybody can get tested that is a dangerous phenomenon we have two problems here. Youve got the issue that we have to deal with, and youve got the fear factor and anxiety around it. So theres two different strategies we got to keep people calm, keep people realistic, focus on the issue, solve it, and we will win this this is you can defeat this like weve done with ebola and sars and h1n1. This will go on for a period of time but at the end of the day, youve got to be optimistic, it will end the criticism that the government didnt use the World Health Organization test as a blige, is that legitimate or not . Not exactly sure. I cant answer that specifically i do think the federal government was slow to respond we activated our Emergency Management system six weeks ago, when even at the federal level, people are talking about dont worry about this its going to go away, when the weather gets better its going to disappear theres no evidence that that is actually going to happen, so this is actually going to get worse before it gets better. We dont know how long its going to take. But we in our health system, along with all the other Health Systems are well prepared. Were very organized we have an Emergency Management system that has been working for a long period of time. Right now, in fact, as i sit here, all of our relevant staff are in Emergency Operations center organizing how it is we continually sp lly respond to ts because it will evolve and change what we do today is different than what well be doing next week its not what happens to you that matters its how you respond to it right now we have to focus on the response and do it thoroughly. You said we will win. Yes sounding a note of optimism do we need to be doing more . Does the government need to be doing more or is it your opinion were doing everything we can right now to win i think the governor has been fantastic here the federal level i think it would be nice to see the leadership at the federal level acknowledge that we have a Public Health crisis to stand up and say we have one. Weve got to deal with with it, throw everything we can at it. This is a Public Health issue. Until that happens, isnt this going to continue to spread at a fairly rapid rate or perhaps more rapidly than we would like more rapidly than we would like, unless there is Real National lead irship we have to control what we can manage locally, and thats what we are doing our best to do, and doing it successfully. Are you concerned as some are that if this were to move quickly it could overwhelm the Health Care System it will put stress on the Health Care System it will stress us to our maximum, thats beginning to happen a little bit, but we have to respond to that and deal with it i am an optimist, so my view is no matter how bad it gets, we will respond and respond intelligently. You can deal with this if you come with the perspective of optimism youre going to win. That is not going to defeat us were going to win thats the message that needs to come nationally, as the governor of the state is doing on an ongoing basis. We need that National Leadership do your health care and hospitals have the mass and preparation and training they need yes weve been doing this for a while. Weve been through this before when youre on the front lines like we are Health Care Groups are special employees, this is what they come to work every day to do. So we have for the moment the supplies, we have the masks, we have what we need from now and obviously were going to be getting more i think americans need to be grateful for anyone who is in an industry thats helping address this from a Public Health standpoint theres pictures of drivethrough Testing Centers in south korea and some parts of europe is that feasible we are looking to see how we can develop more and more mobile units so we can get out there. You have to do this right. Remember, when you test, you can make sure the test is the correct test, that the results are proper you dont want false negatives everybody wants these very, very Fast Response on tests but you got to do it properly because the last thing i want to do is test you and give the wrong result you got to perfect the test process before you actually expand it and roll it out. We are looking at what theyve done in south korea and all over the world, which were in contact with all the time to make sure that anything that were doing that can be improved, we will improve and move to the maximum in terms of efficiency and productivity. And that we have the staff to do it we have the leadership to do it. We are working closely with all of the other Health Systems in the region and with the state, and im very, very confident that were on the right track here and for all of the Health Care Workers out there that are listening, i want to say thank you for all of the great work that you do on an ongoing daily basis. Finally, you mentioned something quickly about warmer weather, maybe not being a variable i dont think that is any evidence at all weather has any effect on this it might but i dont think any Scientific Evidence that makes a difference despite claims to the contrary by others how long are you planning this to be with us in terms of getting backup tests we are going to be with this as long as it is there and we will continue to work on it hopefully it will dissipate over the next number of months but im not suggesting thats going to happen. Im not suggesting it may not disappear for a while and come back we dont know. What we do is screen as much as possible, test priority the right way and the public if theyre focused on doing the things they should be doing, hand washing, wiping surface, you primarily get it from somebody putting a hand on the surface and coming later and touching the surface you dont get it from somebody walking by you on the street thats not what happens. Somebody sneezes on you and thats a different story but primarily from people touching desk, chairs, doors, et cetera no touching keep your hands up all the time no touching your face and yes, you can touch this but then dont touch your face, yes. Were learning that quickly thanks very much. Thank you very much yes, thank you meantime, white house is considering Financial Relief for workers and businesses that are impacted by the coronavirus. Eamon javers has the latest. Reporter President Trump last night stunned some of his own officials when we announced at that press briefing hed be holding an Additional Press briefing today to roll out the details of his administrations economic plan to respond to the coronavirus. He said those will be major details and it would be a dramatic unveiling of the specifics inside of there. Im told as of last night anyway, there was not a plan that was finalized and ready to go i was told its not there right now, as of last night, as of the time that the president said that so aides tell me this morning there are some details circulating behind the scenes here there is a press briefing scheduled for 5 30 this afternoon. It may be there that we see the president talking about whatever the details are, wherever the administration ends up, but the key is it is going to be this meeting up on capitol hill between secretary mnuchin, larry kudlow and Senate Republicans as they gauge the political will on the hill among Senate Republicans to do some of these various items that havent been unveiled just yet. The president talked about a payroll tax cut and aid to hourly workers who might be sidelined due to the coronavirus. Not clear now how many federal dollars would be involved in that or who all would pay or what the mechanism would be. All of that being hashed out throughout the day im told, guys, no plans as of right now for the president to go to the hill, or to have lawmakers come to him. He can always work the phones behind the scenes but no plans for any sitdown formal meetings to negotiate on the specifics. Well wait and see whats there but aides were stunned last night when the president announced that he was going to be holding a press briefing today onthe economic plan. Guys eamon, people should look at your tweets from this morning the way you described the freewheeling nature of the presser, even to the degree to which navarro ended by the lectern nobody had any plans for. Hes not on the task force. They were surprised to see him there and one speculated Peter Navarro wanted to get his picture out there. I spoke to navarro this morning and he called it a malicious leak and a lie and said th president invited him personally to join that briefing yesterday and you can tell there is some degree of angst around peter in a vnavarros presence aides are pushing different perspective. Navarro is one of the leading advocates behind the scenes of the payroll tax cut, that idea not popular among republicans on capitol hill moving parts, different aides with different agendas here, all of that to be settled by the president at some point in the future we just dont know exactly when. Carl all right, eamon javers, thank you. Lets get back to todays market action. Market is holding in first hour of trading up 750. Mike santoli what is on your radar . First stop is if the market couldnt rally at least in a reflex way off of some of the most washed out conditions weve had in years at the close yesterday would have been a problem. This is good the market can respond to whatever you look at in terms much measures how indiscriminate and intense the selling was. We got basically back to where we were around december 2018 lows thats a good thing. But where are we rallying in the s p up to below levels we thought yesterday had to hold on the downside. So you are still in that zone of were way overdone on the downside, could see the ingredients for a decent rally, multiweek whatevernews cooperates im still watching how the credit markets are going to react after yesterdays kind of gut punch and then the volatility index, up hovering around 50, still tells you theres this residual agitation in the market and a little bit of a split inference from that, on one hand you say people are way too neglective, theyre hedging too much, thats a good contrary signal. On the other hand it says if they feel forced to do so, if people are so offsides that you have this kind of willingness to buy protection at expensive levels, that tells you Something Else might be wrong. So i think we can rally here the news matters in terms of the fiscal response but i think its another form of sentiment indicator, because when things get bad enough that is catalyzes policymakers to do something, thats usually when youre getting around the end of a selloff phase are you scott minar is bearish into this, suggesting bbbs go 400 points above treasury are you in that camp its within the realm obviously. I dont know that we have to extrapolate that at this point today the Corporate Bond market might be reopening a little bit for high grade issuers, a first step i saw other work saying the Investment Grade credit market is priced in half a recession. 60 is what b of a has. Second half is the tough part weve been up to these levels before in terms of spread without really dipping into recession. Exactly. Youve done some work to price something in if the market, if the earnings are going to hold together anything alike in this area, then youre below 16 times, its kind of where weve had these pullbacks and in the past but thats a big if, if earnings hold together. You mentioned news flow yesterday you could argue obviously the market was dealing with that incredible fall in oil prices, the effect of course on capex spending and so many other knockon effects are we getting back to more of a coronavirus headline market again . You would expect it went away but i think you would expect so, and i think the markets response to that is to me coming into the week, what was going to be the important thing in other words how much have we built into prices, everybody more or less knows in terms of where the numbers are going to go doesnt necessarily i dont know the answer to that to be honest, i dont know if we overshot to the downside to the point you say of course we knew there would be x thousand cases in the next couple of weeks. Mike, thanks. Stay close mike santoli as we head to break, we are up sharply on the dow, 654 top stocks right now, chevron, energy gets a boost, Goldman Sachs, apple, those battered banks and energy are leading the pack though. Not as strongly as they fell yesterday. Weve got 28 out of 30 dow stocks higher and reminder, watch us live on the go on the cnbc app download it today. Squawk on the street will be right back apps are used everywhere. Except work. Why is that . 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Down double digits technology and financials also doing better President Trump last night did talk about preparing fiscal stimulus, that is certainly helping, coming off of our worst day since the financial crisis etf spotlight, iyt recouping some losses from yesterdays massive selloff delta is among the airlines participating in todays rebound, despite saying it will be cutting capacity by double digits as the coronavirus weighs on demand, but in his presentation to jpmorgans industrial conference, deltas ceoest bastian offered this message to investors our conviction delta say compelling Investment Opportunity is unchanged this dmands demand is temporary. The reasons people fly have not changed and our brand strength and structural advantages are enduring Airline Stocks are higher today, but nothing sharp compared to some of thedecline theyve seen looking at some ofthese names, like delta, for instance, in the last month its lost 24 of its value. Its up 0. 4 whether they can convince wall street to invest back in their stocks, i dont know its hard to find an analyst to tell us to buy right now those stocks were higher at the open certainly they have kind of started to give back some of the gains. Overall stock market losses the last two weeks could start to have their own effect on consumers. Robert frank is back at our headquarters and has an explanation for us as to why robert good morning, david more than 5 trillion in wealth lost in the stock market over the past few weeks, we are getting a little of that back this morning, but all that wealth destruction and all this volatility could create its own consumer fallout economists call it the negative wealth effect, the idea that a decline in wealth whether from investments in your home or the stock market can cause consumers to lose confidence and reduce their spending the rule of thumb here is that for every dollar lost in wealth consumers spend three to five cents less, so that 5 trillion drop could result in a 250 billion decline in Consumer Spending thats a small share of a consumer economy, where personal spending can top 14 trillion a quarter but moodys estimates a 10 drop in stocks and were well past that now could reduce gdp by 70 basis points the sectors that could field the greatest impact from a negative wealth effect are travel, hotels and clothing, that of course could compound some of the same sectors hurt by coronavirus. Some argue the wealth effect is no longer as powerful as it used to be, since stocks are more concentrated among the wealthy but with the top 10 owning 85 of the stocks, it could hit that group very hard. Also got home prices continuing to rise for most americans, especially with all these low mortgage rates, so that could help offset the stock losses, so a lot of cross currents here, guys one other piece of collateral damage, a Ripple Effect from all of this, in addition to coronavirus, youve got the wealth effect itself possibly weighing on Consumer Spending in the coming quarters. Carl, back to you. Ill take it, robert, thanks. Time to get a news update, sue herrera, good morning. Heres whats happening russian president Vladimir Putin says he backs an amendment that would allow him to remain in power. Putin told his countrys parliament he supports a constitutional amendment that would let him run for a third term as president. A nationwide vote on that amendment is set for april 22nd. Greek forces are deploying razor wire along the border with turkey to deter my grants from entering that country. Greece has stopped nearly a thousand people from illegally crossing the border. Italy has started its first day on nationwide lockdown to halt the spread of the coronavirus. Travel is being restricted to work, health needs, and emergencies. Italians are also facing more restrictions on traveling abroad austria is banning all travel from italy spain is not allowing flights from italy until march 25th, and italians arriving in britain are being asked to selfisolate. And dutch Prime Minister mark routa telling fellow citizens from now on we will stop shaking hands to stop the coronavirus outbreak unfortunately he then turned to the dutch Health Official and shook his hand he apologized and then as you saw he went for an elbow bump. I guess if youre a politician, you shake hands. Thats just just what you do going to an elbow bump might take a while sara, back downtown to you. Someone should tell joe biden and senator sanders and President Trump and everyone who is campaigning this year that as well there has been a lot of comment on that, youre right. Thanks, sara after the break, former Energy Secretary ernest moniz on the wild moves in oil. Quk t see wl be right back 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. Oil rebounded this morning a bit after wti and brent saw the biggest oneday drop in 29 years during yesterdays trading session, hitting lows not seen since 2016 for the overall commodity. For more on that oil shock were joined by former u. S. Energy secretary ernest moniz the Energy Department focused largely on nuclear weapons, stockpile, but Energy Production falls under that as well what do you tell people in terms of how they should be thinking and we should be thinking about Energy Production, given we produce 13 Million Barrels of oil a day . Well first of all, of course the department of energy we spent a lot of time on the longer term issue of the energy transition, that is going to low carbon, and we should not forget that that longer term trend is also something that can be influencing how people are looking at the extreme volatility that weve seen in the last few days. Now, obviously the last few days have been this clash between both a drop in demand through, because of the coronavirus together with frankly a glut in the oil market and the competition between saudi arabia and russia for market share. When of course in reality, the real issue in temples of the oil supply is what youve already alluded to, the United States, being up to and maybe even a bit over 13 Million Barrels a day. Thats really been an enormous change in the oil markets over the last several years now, a number of people who follow these markets closely have posited the theory that it is putin who wants to put the shale players out of business, so to speak. Certainly wants to pressure the industry here in the u. S do you buy that line well, i cant rule it out for sure, but we should note the history that we have had some pretty big fluctuations over the last several years with prices going lower, and frankly, it led to a dramatic improvement in the cost structures of the industry. Frankly the shale production has continued to go up im not saying that in this case we wont see some shakeout particularly as we all know some of the smaller players carrying very, very big debt burdens but you know, i think the big majors have moved in here they have their own pretty deep pockets and their own way of hedging future prices, so i wouldnt overreact to that, although again, that may be the plan, try it again, didnt work the first time well see what happens now are you saying, mr. Secretary, that oil going from the high 50s, low 60s just since the beginning of the year, all the way down to the low 30s isnt going to create some sort of broader damage and pain in the u. S. Energy industry no, i certainly think that there will be some of that, as i said, especially with some of the smaller producers, but again, weve run this play before, and reality is the shale producers had tremendous efficiencies that came in, when the price went down. And so the reality is that the production with Oil Prices Going up and down, Oil Production in the United States has continued to go up now, as we look to the coronavirus and the demand side, we dont know how this is going to play out yet and i have to say, im a little bit more on probably what youd call the pessimistic side, that its going to be quite a while before this virus is under control, and that will continue to have demand side implications, both directly in terms of consumer use, but also in things like disruption of supply chains for our Manufacturing Industries i think this demand shock again, we can never be overly confident, but im afraid i see this running for quite some time about half an hour ago the u. S. Said it would postpone sale from the spr i wonder if thats material and i wonder what your view is impact on employment in states like texas and north dakota. Well, first of all, i have to say i have oalways been opposed to the dramatic sale of the we patrol yaum reserve. Its been short sighted, based pwn a complete misunderstanding of independence are. This sure isnt the time to put extra oil on the market. I hope there is a reorganization of this and substantial delay or frankly, in my opinion even better a reversal of this idea of lowering the we patrol yaum reserve and using it as a piggy bank to pay for issues that are not Energy Security connected. Secretary moniz, always appreciate you joining us. Thank you. Thank you checking on the markets, weve cut our xwagains here, dop 400 points we want to focus on the cruise lines. Theres scrutiny of the cruise lines debt payments. Seema mody last week decelerated 35 from suntrust. This number does not take into account the cancellations we likely saw after the state Department Warning on sunday but with lower visibility into the future, Royal Caribbean pulling its First Quarter and fullyear earnings outlook this morning and secured an additional credit line, it comes after Norwegian Cruise Line yesterday locked in a 675 million Revolving Facility with jpmorgan, in an effort to boost liquidity. Bangers telling me the cruise lines are incentivized to secure additional liquidity now versus later when their financial positioning could make it harder to secure good credit at a lower Interest Rate. S p in the last five minutes placed cairnival on a credit car watch negative after taking into account significant drop in earnings, the risk of a default is low but that could change and a dividend cut still is in the cards. Cruise line ceos submitting proposal on health and Safety Standards to the white house and im being told theyre awaiting an answer sometime today carl, back to you. Seema, thanks as we go to break, top stocks on the s p, oil is definitely involved there, apache up 9 plus. Weve cut the session highs not quale in hf. Sawk on the street is back in a moment. Robert shiller says the coronavirus panic has not peaked yet. Get his outlook on resqwkatn. Bcom mo ua on the street coming up. We have the latest on the coronavirus at headquarters, meg tirrell, things are moving fast. They sure are well look at where we are in the United States. The cdc yesterday warning many in the u. S. Are likely exposed to the vir thus year or next case numbers rising to more than 750, with 26 deaths. For the last week, each day has brought more new cases than the day before with the expansion of testing capacity, and as Health Officials trace outbreaks in several states hot spots in the u. S. Currently centered in washington state, with 179 cases and a majority of the countrys deaths most tied to a nursing home outbreak california also hit hard with 167 cases, mainly in the northern part of the state and new york at 142. In oakland, the grand princess cruise ship docked and passengers have gun to disembark and will go into quarantine on land 21 passengers and crew tested positive for the virus carl meg, just quick followup on italy, 60 Million People under quarantine and a virtual lockdown of this country what kind of updates do you have for how their Health Care System is dealing with it sara, it sounds like the Health Care System in italy at least in the parts hardest hit could be getting overwhelmed that is a concern as you pointed out with the Northwell Health ceo this hour, that this could happen in the United States, and italy with more than 9,000 cases the most outside of china in any country and the most deaths, their Health Care System seems like its getting overwhelmed, its impossible to treat everybody who needs care so its a scary situation and folks saying we need to take pains when we can to try to spread out this spread in the United States so our Health Care System doesnt get overwhelmed. Meg, thank you. See you in a little while. Ber ta coombs a look at where we stand on the nas today. Carl, we are off of the highs of the morning but we are seeing more or less broad bounceback apple still down for the week, but is bouncing back, one of the things we saw apple yesterday, even though it yesterday even though it fell nearly 8 on the day did manage to hold the february lows. Apple has yet to put together backtoback up days since the beginning of february. Thats going to be one to watch, whether we can close higher today and put a second day together of gains for apple. Chips also bouncing as well, but a number of them remain down for the week theyve edged back from bear market territory but micron, which fell 10 yesterday, down about 7 for the week. If oil prices collapsing yesterday were the tip of the spear in the downward momentum that we saw, we saw a lot of pain in the regional banks, particularly those who have exposure to a lot of shale producers like texas capital, iberia bank, which is still down some 22 after having fallen yesterday for the week at this point with todays bounceback. Airlines bouncing back as well as a number like american say theyre going to be cutting capacity, jetblue withdrawing its guidance, getting a bounce today, and ryanair in the heart of europe also cutting its Passenger Capacity as well as its seen a number of cancellations. Back over to you bertha, thank you. Well send it over to jon fortt with a look at whats next on squawk alley. Good morning, jon. Good morning. As bertha was mentioning, from oil to travel to tech, we are going to take a closer look at some of the follow on effects of these coronavirus concerns, what you should do if youre adtring to prepare for whats coming next thats next on squawk alley. Welcome back to squawk on the street. Im contessa brewer. Still green across the board this morning with sector performance. Looking like a reversal of yesterday. I mean you could be forgiven if youre out there seeking treatment for whiplash energy, financials and tech lead, Consumer Staples lagging a bit relative to the Broader Market it remains one of the best performers over the past week. Some of the names that have really fueled this staple underperforming include kimberly clark, clorox, Campbell Soup and costco send it back down to you, downtown contessa, want to check on the Broader Market as you mentioned. We are off the highs the gains have faded pretty rapidly here at one point the dow is up 900 points, cut that by more than a third, up 270 points s p up 41 or 1. 5 . The context here is this comes off after a day where the dow lost 2,000 points. That was the worst point decline ever and almost 8 decline for the Broader Market i dont know, david, what does that tell us if we cant hold on to the gains today. It doesnt feel good, i will leave it to bob pisani to give us expertise a day after almost an 8 drop, certainly doesnt feel particularly good as you point out. A number of stocks now, the entire Health Care Sector in the red or most of it, most of the big pharma companies, sara, as well the banks, which had a very a significantly strong open, are all shedding many of those gains. Caterpillar below yesterdays lows as is boeing. Cdcs chief is on the tape right now saying that europe is, quote, the new china on the virus forefront. Probably not going to help sentiment as we see the caseload on italy and germany and the uk every day. Scary reports about the Health Care Systems being overwhelmed, doctors fighting to save peoples lives. A move that goes similar to this in the bond market where the 10year yield is falling still higher on the day but well keep an eye on that closely as we know its been very corelated with the news lower yields back for stocks lately feels like the market is pushing, they want fiscal stimulus, come out in full, perhaps more fed action and more data on the tests and what the numbers are going to look like here. You will be watching all of this on the closing bell. What else do you have coming up . We will talk to the ceo of jetblue. Today is the day were starting to get Airlines Cutting guidance and capacity and routes and fees this is an industry that has been in crisis as a result of the coronavirus. It will be great to get thoughts from robin hayes today all right as we go to break take a look at some of the f. A. A. N. G. Names as sara says, were hanging on to 340 points. Session high up 945. Squawk alley starts in a few minutes. announcer carvanas had a lot of firsts. 100 online car buying. Car vending machines. And now, putting you in control of your financing. At carvana, get personalized terms, browse for cars that fit your budget, then customize your down payment and monthly payment. And these arent madeup numbers. Its what youll really pay, right down to the penny. Whether youre shopping or just looking. It only takes a few seconds, and it wont affect your credit score. Finally a totally different way to finance your ride. Only from carvana. The new way to buy a car. These are our sales. By product, by region. You can actually see taste trends. Since when can we do that . Since we started working with bdo. announcer people who know, know bdo. 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