Transcripts For CNBC Closing Bell 20240713

A payroll tax cut to provide shortterm stimulus, pu sources telling cnbc the white house is far from ready to roll out the proposals and a number of Companies Cutting their dividends and Spending Plans guests this afternoon, the ceo of jet blue as the company pulls its guidance due coronavirus jim oneill joins us to discuss the Economic Impact and government responses around the globe and what to do with your money now. David herro will join us as we count you down into the close. 59 minutes left of trade joining us for the full hour, paul hickey and paul, you guys have been doing some research as to how key and how stomach churning this final hour of trade has been this really is the most important hour of the day lately over the last ten days zblsh repeat that. Most important hour of the day. Over the last ten trading days, weve seen an average move of 1. 1 in the s p 500. Weve only seen that five other times going back to the early 80s last 15 minutes of trading, average move of. 8 . The only times we saw moves higher were in 2008 and after the 87 crash so h type of volatility is unprecedented. Hence the 50 plus vix for the second day in a row were seeing is there anything to take away from that in terms of does it play into some of those fear versus gauges that weve been seeing instead of trying to call the market bottom . I think what these indicators are indickive of, fear in the market when you have that, you see this uncertainty. As that can tuinto facts, the market can stabilize and get on a better footing i think right now, investors and consumers and everyone is in the dark on things and until we see a better baseline, people are assume uing some chance of the worst. Do you analyze anything direction about whether its a rally into the close the direction of the last 15 minutes doesnt necessarily have a big impact on the next day and what the reason is is because in the hours between the bells, youre going to see a lot of news good or bad and it changes depending on the events. As you can see from the intraday chart on the nasdaq, all three indices, were close to the highs of the session, not quite there and we did go negative briefly in the mid ofl the day. The nasdaq is up 3 with 57 minutes left mike has his market dashboard. Eamon javers is in washington with the white house response to the coronavirus and claudio is in rome with the latest on italys lockdown, but first, oaf to mike whos taking a look at previous 20 sell offs near 20 . Let me look at the s p 00. Some lines in the sand in the chart over the last two years, which is a little bit instructive. It kind of puts todays bounce in a wider frame right here. So there it is if you remember late last week, we were trying to figure out if perhaps this level of 28. 50 or so two fridays ago was going to hold it didnt as of yesterday. So right now, were kichbd rallyinging to a level thats now below that so it still seems as if theres a lot of work to do to make that up last night, the market was just pulveri pulverized so it had the makings for at least a bounce like this and its probably a good thing its responding to those conditions with this rally today. But yes, take a look at this 30year chart of the s p with circles around these areas that had a 19 or 19. Something percent decline piqued a trough on a closing basis, but did not get to 20 in 1990, there was a short recession societyuated with that here was 1998. 2011, european debt and u. S. Sovereign crisis then of course december of 2018 theres more 19 declines than random chance would have you think would be possible everybody tievery time we got a decline of greater than 19 on a closing basis, it was a bear market meltdown when market lost about half im not saying those are your two choice, but thats the interesting take away. It seems as if were not going to have a recession, a bear market, this seems there would be some support at that minus 20 level and yesterday, we closed down 18. 9 in the s p on a closing basis. Clearly, were bouncing today. One thing that stands out to me is that the banks and Energy Stocks are towards the top list of performers today. On most of the other days where weve seen green in the last three or four week, those sectors that have laggeded to the downside have lagged to the upside, but today they are enjoying a bigger bounce than the rest of the mark today, youre seeing the stuff that was stretched the furthest to the downside is bouncing the most and by the way, also the market, the stock market has just tracked treasury yields almost perfectly so we are trade iing at the highs o fe day on ten year note yield those would be in line with energy and banks doing better intraday it is interesting that we never get down to that 20 from the high that would mark the bear market. Are there just buy signals to come you have to take some of that into account i think people see that level and theyre like, okay, unless somethings really bad, you get people stepping in to buy. To what mike was saying in his chart, the market pretty much had to go up today we were down over 5 yesterday every time youve had a 5 decline in the s p going back to world war ii, theres been nine other times, every time the market was up the next day on that tuesday, hence the term turn around tuesday. Average gain of 4 this resbound below average for the 5 declines. It wasnt looking that way all day. Weve seen strength lately coming in through the last hour and you cant read too much into todays move as the rubber band snaps back into place w were going to see volatility as the news and headlines come out, were going to be going back and forth. To the coronavirus and response from washington eamon. Yeah the president has return ued to the white house after meetding with lawmakers on capitol hill nat republicans in this case that was said to be a key meeting where he was going to be pitching those lawmakers on the ideas he wants to roll out for safeguarding the economy here due u to the coronavirus were working on finding out what exactly he pitched. Well bring that to you. Meanwhile, we had the president sitting in on this day with health snrns ceos here at the white house. The Vice President mentioned a couple of points in that meeting. He said that the health care, Health Insurance ceos had made some pledges to the white house including that they wouldnt charge copays for coronavirus testing or treatment he said theyve committed to covering tell medicine and no surprise, billing. Thats an interesting one because generally speaking, surprised billing is thought of as coming from the out of network providers, not necessarily the Insurance Companies, but the Vice President said its something theyre working on with the Insurance Companies a as well so some commitments from that industry to the white house Going Forward. The president said hes going to announce his economic stimulus ideas today. We dont know when that will be. Nothing has been scheduled officially no word on when were going to hear from him, but were running out of time in the day so presumably thats before too long and is there belief theres bipartisan support for this in congress not necessarily, no i think you know, i think ths a bipartisan sense on capitol hill they want to do something. What the something is though i think is very much a matter of dispute. Its interesting that secretary mnuchin seems to be taking the lead on negotiations with Speaker Pelosi on capitol hill you have to imagine that the relationship at least from President Trumps perspective and i dont know Nancy Pelosis perspective as well, but at least from President Trumps, that relationship is so poisoned, it would just be difficult for them to sit across from a table from each other and hash things out. Looks like mnuchin will be the point guy from this point guy in deal wg the speaker of the house now. Eamon, thank you. You bet there are now more than 117,000 coronavirus cases around the world with 804 in the United States more businesses and industries are feeling the impact of the outbreak booking holdings Royal Caribbean joining a growing list of Companies Pulling their guidance over coronavirus uncertainty then there are the airlines, which have made significant moves lower this year. Delta and american, both pulling guidance and slashing more flights amid falling demand. United says domestic bookings are down 25 and executives a at southwest, united and jet blue are all taking pay cuts or forgoing their salaries. Well talk the robin heys next hour some company rs taking steps to mitigate the pain to their workers if theyre forced to stay home. Da darden says theyll provide paid sick leave to all employees not covered by policy and walmart is deploying a new emergency leave policy after a worker in k kentucky tested positive for the virus. Under that policy, employees are coronavirus will receive two weeks pay with the potential for more if theyre unable to return to work. Important moves by companies absolutely. In light of the current situation. Italy taking extraordinary steps to lock down the entire country as coronavirus cases there top 10,000 lets bring in claudia live in rome whats been the reaction from people to this extraordinary measure taken by the government . Do they support it or feel its some level of overreaction to be honest, theres an overwhelming support to the actual measures and this comes from the i a talianas who are not famous for abiding to rules, but in this case, were talking about their own health and they have understood. In the last couple of weeks, what a danger this coronavirus represents to the health not particularly of the youth, but of the elder ly as they are the ones that are the most affected and they are the ones in that critical age group over 70 who are dying of this disease. If in the beginning, someone may have taken this lightly, well, they are no longer because the numbers of those infected by coronavirus here in italy has been spiralling out of control and thats why the Italian Government yesterday on monday decide d to extend to the whole of the nation the travel restrictions that first initially applied only to the north. So its telling all italians to stay home. All the 60 million italians, stay home. The its better for you and said yesterday the prime minister, the future of this country is in your hands, so act responsibly to be honest, they did because today, barely anybody was traveling around rome. We were traveling around the camera shooting and it was so easy to move around there were not many cars not many people. Even here at the coliseum, its usually one of the most crowded places in italy. There was barely anybody so to tell you the truth, from what ive seen today, the italians are really staying home as the government has asked them to do. Wilfred. Cheerilearly that applies to things like large gatherings and sporting matches which we know have been banned completely for the meantime what about for people that do need to go to work in order to work that cant work from home. What are the rules around that and do you think there will be a major drop off in Economic Activity well, theres a drop in Economic Activity because a lot of shops and restaurants are closing. Now the rule officially is that you can go out if you have a work related reason or a medical energy or if you need to go to the supermarket. But if you go out, you need to fill out this. This is a selfcertification in which you need to state who u where youre coming from, where youre going to and why. In case a policeman stops you then you need to show this for anybody whos there and breaks the rule, theres a fine of up to 250 and as much as three months in prison of course its never going to get to that, but certainly this gives you an idea of how seriously the authorities and italians in general are taking this thank you good to get an update from you paul, one of the questions that some investors were trying to figure out that i was talking to, is the u. S. Going to look more like italy or more like south korea . And im not sure really it could be the number of cases r that are spiking. The trajectory the preparedness were trying to figure that out. I have no idea. But the question is italy or south korea and you know one of the thick things wed like to know is what the hospital situation in italy like. Because the big fear here is that hospitals are going to become overrun ive heard talk, but havent seen pictures or real stats that say the hospitals are overrun. Its not like it doesnt seem at this point like its an issue with china where theyre building makeshift hospitals all over the place so thats, thats the kind of information we need to sus out here in the u. S. And fortunately, only time is going to tell us that. Still to come, the former chairman of Goldman Sachs asset management, jim oneill, will join us to discuss whether traditional monetary and fiscal tools will be whats needed to combat coronavirus hell tell us what hes suggesting next. Later, Occidental Petroleum slashing its dividend today following the collapse of oil this week. Well talk to one analyst who says the industry is face iing three headed monster well be right back. 45 minutes left of trade it all starts with an invitation. To feel exhilaration. The invitation to lexus sales event now through march 31st. Get 0. 9 apr for 60 months on all 2020 models. Experience amazing at your lexus dealer. You should be mad your neighbor always wants to hang out. 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The ceo says this is all in an effort to reduce debt, strengthen the Balance Sheet due to the sharp decline in Commodity Prices the stock is rebounding along with Energy Companies to the tune of 12. 5 . Still down 43 this year and the last time occidental cut the dividend payout, 1990, after a iraq invaded kuwait and oil prices started tumbling. These stocks have been decimated. Cutting the dividend and c cap ex buys them more time you have, its the outlook is very bleak weve seen the Energy Sector lowest since 2004 yesterday. The its just hard to get excited. I would just mention that europes Energy Companies havent enjoyed as much of a bounce partly just by virtue of the time european markets closed around the e lows of the session here the footse down. But even overnight, even before the market opened here, they were, credit was lagging. Exactly and asia, nikkei was up less than 1 today so the u. S. Certainly enjoying a bigger bounce trump said he was looking at relief for Shale Companies now in the face of the coronavirus, our next guest says traditional monetary and fiscal policy the just wasting bullets and said hes calling for Public Health preparedness. Joining us now the phone is is jim oneill. Jim, great to have you join us good afternoon to you. Just wanted to ask first of all what the key things you are watching out for in order to try and judge whether weve seen fear in these markets pique. Well let me, the question you asked me, i learned to be hum uabled by markets. Particular ly in the kind of environment down to i dont know but with that, i have been immersed in analyzing or at least trying to follow the trends of the incidents, the death rate, recovery rate. Ever since it first started. Theres been an issue in the middle of january. Partly of course the work i did on antiviral resistance. A lot of that is out how well you could get genetic c consequences on that caveat, i think we need to see still evident that a western g7 country is getting it under some kind of control what i would say is that each day passes, i think can tentatively say that a number of north Asian Countries seem, seem to be getting it under some kind of control at least now obviously china itself, but also south korea and perhaps japan. But we dont in all of western europe or the u. S. Or elsewhere where to what you said before, where were going to be close to south korea in two weeks or italy. And so i think until we see evensville evidence about that, its very hard to believe that this wild volatility and the downward pressure below it is going to disappear because youve seen italy had to shut the place down china had to do that in the month of february and the economy essentially fell in half and the markets are worry ied tt if that happens to the whole of the g7 country, wed have tom big, big economic negatives to put it mildly. But we dont know yet. Hey, jim. With that said, what we are getting in this country at least is stimulus. From the Federal Reserve cutting rates. Inject iing liquidity into the w pea markets. Treasury secretary meeting with the house leader what do you think when you hear that fiscal and monetary stimulus is coming in the u. S. To fight this . So i think i mean it seems to me that for some time now, the Federal Reserve board has sort of become the automatic bullet that can solve whatever the problem b. Im in the camp that i think last weeks rate cut was a mistake. It have too early. Even accepting my underlying thing that i cant really imagine what on earth lower Interest Rates are supposed to do in terms of helping and im saying i expect them to cut more because the fed is just seemingly become of that nature. But i do not think it makes any sense. There is, you cant ignore positive issues going on in life and i think as much of the past three or four years thats passed on as we see a lot around the world, the whole laud of issues of perception and equal inequalities and Monetary Policy in supporting bonds and equities or trying to in almost any circumstances, has partly fueled some of the legit maimacy of questions about how modern capitalism is. I dont know what why the fed is doing that certainly no obvious need why it would do anything. Other than the obvious fact that financial conditions indicated the u. S. Economy and the fed probably thinks you might as well try but i think its premature. On fiscal policy, the help, policies can strengthen the health system. In your case in the states, its quite worrying that low income people or those without the ability to have good insuranessl cant get tested in terms of trying to control the spread of infection, that is not a good thing and i hope that the president and people close to him are listening to hear about that because thats the kind of fiscal policy support that is probably going to be immediately most effective i do think like more businesses. Jim, we appreciate you phoning in okay. Good luck, guys. Jim oneill thank you and to you we are looking at session highs just around there. 960 was the session high up on the dow. Were up 905 points. S p 500 up 107 almost 4 . So building on our gains the most important hour of trading is the final hour. Up next, wells fargo says a a few select retail names have been punished too e severely amidhi ts downturn they say to buy now. Before we talk about taxsmart investing, whats new . Audreys expecting. Twins wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. Stay two nights and get a free night for your next stay. One night, two nights, free night. Book now at bestwestern. Com. Welcome back to closing bell 32 minutes left of trade time now for word on the street. Deutsche bank naming l brands as a catalyst call buy idea expecting the retailer to outperform coronavirus relating stockpiling at bath and body works Hand Sanitizer is sold out but then b jeffreys is out warning not to fall for the sanitizer hype, estimating it only makes up about 5 of sales and says its a mall based stores and that its still feeling pressure from mag based traffic capry holdings, foot locker and tapestry and g3 apparel. Stocks too cheap to ignore the firm says these retailers have clear fundamental issue bs but multiples have overshot to the downside where do you stand as to how retail has been played by inv investors during this crisis is it very simple by the costcos and defenses of this world you buy the retailers that have been doing well before this i dont think you really want to step into these retailers that have been under a lot of pressure because of this because they already had fakctors workin against them a tough call foot locker in the shortterm. I dont think anybody wants to go try on shoes right now. Hand sanitizer may only be 5 , but lotion everybodys got a a lot of dry hands right now. Another 5, 10 youre taking the bull side we have up 3. 5 on the s p. Breaking news from the white house. Eamon. Were learning more about what the president pitched on capitol hill in his meeting with Senate Republicans and whats under consideration here at the white house in terms of economic ideas. A white house tells me that a assistance to the Shale Oil Industry is under consideration here at the white house. They cautioned though that they dont know whether or not that will be needed and theyre saying theyre not talking about a bailout here at the white house, but are closely monitoring the situation with shale oil to the oil price decrease weve seen and they say some federal assistance to that industry is in the mix here. Secondly, im told that the president pitched a payroll tax cut to zero percent on both the employer and employee side when he was up on capitol hill today. This would last under the president s pitch, through the end of the year. Thinking here is its go big or go home time on that proposal. Im also told that theres some consideration, some discussion of making that zero percent payroll tax rate permanent all of that will be suspect to negotiations on capitol hill the fact that the president pitches it doesnt mean its going to become law or signed into a package, but im told thats where the president s head is and thats what he was pitching on capitol hill working on more deatails here, but shal oil and now a zero percent tax rate on employer and employee side through the end of the year certainly in the conversation in a big way, guys. Thank you the dow up 733 points. Time now to get a cnbc news upkau update with sue. Hello, everyone heres whats happening. Washington governor is indicating hes getting closer to quote, mandatory measures to limit the spread of the coronavirus. Those measures could curtail social activities like large public events. We are talking to the communities and leaders and Public Health experts so we are considering those measures i would not be shocked if we have more news on that in the next few days. And in a possible sign of things to come, european leaders gathered around screens and m o monmon monitors for a Video Conference on the coronavirus they met remotely to prevent further spread topics included their response to the virus and how to accelerate research into a cure. Here at home, Bernie Sanders is campaigning in michigan as voters in six states head to the polls. Outside a polling station near detroit, sanders criticized President Trump for not taking the coronavirus outbreak seriously. You are up to date back downtown to you sue, thanks so much for that. Lets get over to mike now for a check in on the valuation of the Broader Market thats right. As you of course know, were going to track the tides of valuation here because over the last several years, weve had the neutral or average level change a bit so since weve gone into this pullback, weve goep from the highest, just about the highest valuation on a forward pe basis for the s p 500 to somewhere around the neutral zone for the last five years. This is a ten year chart since around 2014, weve been in the higher zone of valuation now within that five years, every time, we havent spent much time below 16 times forward earnings thats where we are right now. If you want to just sort of put that there in december of 2018, you got below 15 times forward the huge, huge caveat is we dont know at all the fate of the forward earnings forecast were now working with the numbers havent really come down that much u on an aggregate basis since the end of january when this sudden slowdown fear has gotten into the market were b probably more expensive than this and how udoh you compare the evaluation of equities given the slowdown and where bond yields are. Are they even a good beacon for some comparable as an input for equity valuations . But that being said, if the market holds together, if earnings hold together anywhere in the zone of what theyre expected, you would say the valuation is a lot less challenging than it was a few weeks ago. Great stuff see you in a little while. After the break, Morning Star International fund manager of the decade, david herro, joins us with his outlook for global eck equities amid the volatility a check for you on bonds yields recovering from their historic lows but tenyear treasury yield hovering around. 76 . Which is a lot better than it looked just yesterday under that. 5 so overall, the market is in rally mode the dow is up more than 800 points and treasury yields are rising our Retirement Plan with voya gives us confidence. So we can spend a bit today, knowing were prepared for tomorrow. Wow, do you think you overdid it maybe . Overdid what . Well planned, well invested, well protected. Voya. Be confident to and through retirement. Up u about 3. 3 , up 80 o points or so just off the high of is session. Which was up about 963 points. Paul, what do you make of the moment of these proposals, suggestion of a payroll cut. Payroll tax cut down to zero it will help. It will help people as long as theyre on a payroll if people get interrupted by this lose their jobs, not going to be much help if you dont have a paycheck to get it also doesnt have hourly workers sent home without pay. Right because theyre sick. The walmart news we were just talking about earlier, if you get sick, theyll pay you for up to two weeks with a lot of these proposals, its Corporate America and the private sector taking the lead over government. Some are very good ideas to have i think companies should be willing to you know, help out as much with their employees as possible because it was a tight labor market coming into this. If you start you know laying people off, youre quoing to have to rehire them again, retrain people and its going to cause a lot of dislocation so you almost as a company have to just say suck it up. Not to your employees as a company, you have to suck it up u and you know just deal with it and this, too, will eventually pass and youre going to take a shortterm hit, but it will pay off in the longer term zpl this is something the Obama Administration used in 2011, 2012 dont get me wrong. It wouldnasnt hurt jason furman said a 2 cut would only put 500 in the pocket of a single parent earning 25 a year. This is delayed reaction its like a slow drip rather than a fire hose and no telling whether democrats are going to get on board. Its going to be tough. Trumps going to have to give something up to get this its not just u. S. Markets getting crushed. The all world index include uing the u. S. Theres places for opportunity. Joining us now, david harro. The Portfolio Manager of four oak mark funds with nearly 40 billion under management nice to see you, david what have you been doing amid all this volatility . Well, volatility really does bring opportunity because what happens is the price moves quite dra mmatically faster and different direction than the underline Intrinsic Value of a business keep many mind Business Values determined by the present value of all cash flow streams, this years cash flow and to the future to the present value. So when price moves so dramatically and yes, there will be some small changes in value, but it means a big value gap opens up and providing an opportunity for truly longterm investors, so this is a really good time period for valuee by l looking at the price of businesses and have the patience and time horizon to take vapg of this volatility. And so suggesting, david, that whether were talking about italy or about china, that this is just going to be a one quarter effect, is that your expectation . I wouldnt be able to judge whether its one quarter or two or one and a half. But this is something that will pass probably within the year. Probably within the half year. And so have an impact on shortterm earnings. I kind of chuckled over this whether we should be buying companies that sell Hand Sanitizers i mean this is exactly the opposite of value investing. Just because a business is doing good in the shortterm, you have to look at all their cash flow streams, not just what theyre going to do in the next couple of months and plus, by the way, about six months, were going to have too much Hand Sanitizer so it sounds like you see real opportunity and some deep value. Give us a sense of where in the world or which industries that might be in. To be honest, the same sec r sectors that have been punish and killed kind of the value facing sectors, look at the financials in europe as an example. Some of the materials companies. Glenco glencore some of the Auto Companies these are businesses b that have been punished in 2018. And if anything, the value gap has opened even greater as people continue to flock what they perceive as safe completely i guegnoring the price of businesses david, i see you looking at one of your International Funds you hold a lot of banks. Particular ly in europe were wl were talking about european or u. S. Banks, why are those attractive when the rate environment has only gotten worse over the last couple of months and theres no immediate sign of when that will turn in a meaningful manner. Youre exactly right. The rate situation especially in europe has been tough for banks. This means one portion of their earnings, the lending spread, gets hit but banks have other levers to pull and they have been able to pull them. Theyve been growing Noninterest Income cutting costs. All losses have been subdued and so when you really look at the whole picture, for the most part, most of the banks that we own and are in the quality universe in europe have been able to slowly grow their earnings and despite this, if we look year to date, some of these things are off 30, 35 and are trading at multiples four, five times normalized earnings and yielding 9 or 10 we dont expect earnings to completely evaporate they have been able to maintain earnings its been a good test case europe has had negative Interest Rates in many of the developed countries in europe and yet banks like a b and b, like a credit swiss, have been able to grow their book values per share over the last two or three years despite the low level of Interest Rates because it demonstrates they have other levers to pull. And mr. Market hasnt recognize ed this. The meantime, you have a bank hike bnp which yields today around over 9 and a french ten year yield of about negative 40 basis points so you know, youre really given, to me, and to us u at harris associates, oak mark, theres a huge risk return opportunity here in some of these quality financials what about energy david. Any value there . And some ofthe other hard hit places in the market right now as a result of coronavirus fears. Airlines cruise lines i mean what does a Value Investor do with some of the carnage in these groups . We have some exposure to the travel sector in our International Fund us. We have Little Energy exposure just one stock in the small position but in travel, we have a low mar. We have some ryan air, the discount air carrier in europe i mean the last few days, its been one of the stocks thats bucked the trend same with trip, the Online Travel agency in china we think its a really Good Business travel will be a a longterm growth story in china. We saw the interruption in 2003 for travel in china with sars. There was an interruption. There will be, but and well have the same thing in the shortterm here, but the chinese like to travel and as income goes up, they like to travel and a company like trip has very, very low fixed assets so theres not a lot of operational gearing. Its an Online Travel agency oddly enough, its fallen, but not as much as we would have liked. Wed like to kopt to acontinue t add the to our position. But other things have fallen significantly more than trip so this is one area which you would expect to be weak and have glaring value, which just not what we like to see from a value perspective. David, just finally, what would you like to see, what would make you most bullish from Central Banks . Well hear from a couple of them this week and of course the fed next week. I think the level of Interest Rates themselves is not really an issue no one is borrowing money because interest, because money is too high. I think what Central Banks should concentrate on is a, making sure theres enough liquidity in the system through open Market Operations and b, whether its the central bank or the governments particular minister finance or treasury, make sure that those businesses which have been temporarily hit as a result of this active nature to make sure that they have access to funding and liquidity to make it through this downturn. I think this is what policymakers need to do. Is to make sure companies through no fault of their own because of an active nature, have the ability to weather the storm. The storm will end it always ends the market is very emotional today. But three, four months from now, were going to look back i mean people ive you know, young people who work with me dont even know what sa rrrs was these things come and go, but we have to make sure companies do not just go out of business simply because of this act of nature david harro, thank youfor joining us thank you we are look iing at a dow thats up 950 points as money continues to go into stocks, out of bound bonds a reversal of yesterday. This is the last commercial well take before the close. Welgonse e rkl iidthmaet zone next on close iing bell sensei a live bookkeeper is helping customize quickbooks for me. live bookkeeper okay, youre all set up. sensei thanks that was my business gi, this ones casual. vo get set up right with a live bookkeeper with intuit quickbooks. Shouldnt you pay less when now you can. Data . Because Xfinity Mobile gives you more flexible data. You can choose to share data between lines, mix with unlimited, or switch it up at any time. 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It is up sharply having been down sharply yesterday after announcing it will slash its dividend from 79 cents, the and gas Company Plans to cut Capital Spending by more than a billion dollars. Those announcements perhaps less bad than feared. Down close to 15 yesterday. Mike, clearly, we mentioned this earlier in the show, but Energy Taking part in this rally is also an encouraging sign in a way that other sort of follow up bounce days hasnt done. I would say its intuitive. Energy was the most sold out sector in a sold out market. By that, i mean just really lopsided, extreme, oversold. Conditions so i to think the bounce in energy makes sense a lot of the Energy Sector was priced for high bankruptcy risk and so now i think now if the market calms down, you can go name by name, company by company and see their Capital Position and make a better decision is the rally stimulus hopes or just a bounce after a terrible day yesterday i think its more of the lad rer. I think overall look iing at it, its been so beaten down in the shortterm, even in the next six months or so, i dont know how attractive i would by to it. But if youre just an individual investor b and youre looking for exposure and you have years rather than months, xle Something Like that isnt necessarily a bad option session highs, up 1,046 points Airline Stocks are trading higher, but remain under pressure the index down 32 in a single month as people continue to put travel on hold airline ceos expressing concerns at jpmorgans Conference Today we have seen a 25 to 30 decline in net bookings and are prepared for it to get worse very fluid situation. In an environment in which its incredibly difficult to forecast future demand. So given this uncertainty, weve suspended our Financial Guidance for the First Quarter and the full year of 2020. When i look at how the demand u situated the last couple of weeks, it appears to be worse than what we saw after 9 11. Idwest cles lly, were seeing bookings down about 25 while those numbers are encouraging compares to international, were plning for the public concern about the virus to get worse before it gets better. In terms of the level of bounceback weve seen, also going to factor in the lows we got to on friday quite a pronounced rally since then the Airlines First of all able to bounce off of con f confirmation of bad news so you have all these ceos saying yeah, things are bad, but also the companies are in retrenchment mode. Delta suspending buyback so its again another example of i think the question is the market have been compressed value especially with airlines, right . What kind of shape are these Companies Going to be in after this Coronavirus Travel crisis we learned from what the financial crisis, they did clean up their Balance Sheets. They did their you know, took some tough medicine, changed the Business Model a little, but is it going to be enough . The previous guest from oak mark was saying you have to value these companies on not just the next two or three quarters, but future cash flows and the Airline Sector was in much better shape heading into this than they were head into 9 11 we see these Airline Executives talking about how bad the news was and when stocks can rally on bad news, thats positive and travel suspect going away. Maybe for the next few months, but years down the road, Airline Travel is not going anywhere markets up almost 1100 points on the dow 4. 7 of gains on the s p 500 coming up on the airline front, well dive into the sector with jet blues ceo hes todays close also news just crossing. Cnbc confirming the new york e auto sthoe will be reskreded from april to august due to the virus. Gene genevas had been canceled and beijings was postponed so more of the same the there in that sense. So we have three and a half minutes left shares of Royal Caribbean rebound iing after falling to levels not seen since 2014 lets get to seema for more on Coronavirus Impact on the stock. It moved lower after its 2020 earnings outlook and announceded its taking out a 550 million credit line but then comments from President Trump saying hell help the cruise industry sent royal, carnival and norwegian stharp sharply higher on the day it comes after the three cruise lines saw their stock prices drop as much as 20 in yesterdays trade. An historic day. And with carnival, princess lines struggling to keep coronavirus off their ships, there are concerns that the loyal cruise passenger will get back on a ship data show cruise bookings have plunged and that does not take into account the cancellations we likely saw off the state Department Warning on sunday thanks so much. For that mike, in terms of the market internals, improving throughout the session. Up almost 5 they have been improving. Theyre going to get a lot of scrutiny because when you see one of these upside rever talls, people want to see if there was tree ruch of demand. Take a look at the up versus down volume on the New York Stock Exchange folks are going to want to see this get to 90 . I think were short of that for most of the day. If were 90 , it would be one of these reversals where people say fine, we can say the low might be in. 52week highs and lows this is not going to come around because we are down so much so youre anniversarying some stronger numbers about half as many as we had yesterday. Volatility index, it is receding rapidly. It hit 60 yesterday. Cant go down that much that fast because realized fol viola tillty, the actual volatile thety in the market, has been so high in the last couple of weeks. Other important upside reversals happening today, crude oil, its up 11 after its 25 down day yesterday the dollar is actually higher today by about 1. 6 . Thats a bit of a change and treasure ary yields are high rer after they fell to what,. 33 yesterday. Were back up to. 75 lets go uptown Bertha Coombs at the nasdaq especially in the large caps which have trimmed about twothirds of their losses from yesterday. Apple, microsoft, leading there in some of the chip names as well not so much of the same story when you look at the mid caps and small caps theyve only turned about onethird. In fact, weve seen more than 1300 new lows, stitch fix among them after providing disappointing guidance and also the regional banks although they are surging today, bouncing back, they are still looking at some double digit losses for the week. A lot of them, especially the ones banking with the oil producers. Going out at the highs of the day. I dont normally put up treasury yields i want to point out the stunning move in treasury yields. It moved the stock market to 27 basis points. 795 thats amazing thats lefted the banks, all these vague hopes of stimulus. Jpmorgan, citi the bank stocks are down about 30 in the last month or so so it was a good day r for them we also saw some cruise lines moving on some hopes for some kind of Stimulus Program we are going out at the highs for the day. The Dow Jones Industrial average up 1160 points s p up almost 5 welcome, everyone, to closing bell well a comeback today for stocks and another 1,000point move for the dow. This time, it was higher the dow closing up almost 5 1,164 points again, yesterday, it lost more than 2,000 points. S p 500 also coming back closing near the highs of the session. Every group was higher inside the s p and the leaders were those that were hardest hit yesterday. Technology and financials. Consumer discretionary, energy even participating in the rally today. Check out the nasdaq the tech heavy index also having a good day as technology rose today up 5 . It was actually the outperformer the russell 200 index of small caps which has been the hardest hit of all them bouncing back 2. 8 , so not as sharply as we saw the major averages i was just saying as well the s p 500 outperformed the euro stocks by 6. 5 today so i dont know whether during the afternoon, hopes of stimulus packages decided the atlanta or what spurred markets higher, but either way, massive outperformance that didnt see the same level of bounce but as you pointed out earlier, whether it was oi, oil, the dollar bounding, yields rising, certainly a pro risk move this afternoon. I mean looking tat week to date performance of the italian stock market, down 14 its just tuesday. Extraordinary moves now several airlines are withdrawing annual forecasts due to the impact of coronavirus well talk to jet blues ceo about the state of the industry and how his airline is being hit. Hes todays closing bell closer must watch. Interview of the day joining us today to talk about the market, chairman of Research Affiliates and still with us, paul hickey, cofounder of be Investment Group ferocious rally, but not that unexpect e unexpected the set up was there for Something Like this in terms of it being extremely stretched yesterday. I do think the rallied when and how it had to. In other words, it absorbed so much potentially scary virus related headlines. Yes, you have one eye on policymakers in washington because maybe there will be a policy response but i think that in itself is also just another form of sentiment indication because when things get to bad, thats what mobilizes policymakers its not about tang babible hops earlier, one of the negative headlines, cdc was saying that europe is looking a lot like china. We saw european stocks lose their earlier gains and then u. S. Stocks went with them paul, o can both take for granted the fact we got a 1,000 point rally . Didnt look so certain earlier in the day we were down right br noon. So it wasnt looking great i think its encouraging, but were going to see, weve seen these, several of these moves in the last week, so i wouldnt read too much into them and were just going to have to see how things play out unfortunately and thats going to take time we closed down a level lower than ever yesterday. So you gain back a little more than half of yesterdays loss. The high for the last week is around 310 and 0 and here we are at 2880. Zpl we should say one of the biggest point gains on the best days of the market have happened during bear markets. During the financial crisis, so thats always a warning. Thats true and the way to interpret it is the market has to go farther to find people with higher conviction so thats the process were still in zbh whats your take on the size of this bounce we had today . Was it expected wed have some level of a bounce at least well, its unsurprising to see a bounce that recovers half of the drop. Whats a little surprising is the magnitude of the decline in the last three weeks that magnitude of decline is more typical of late stage bear markets than early stage markets fall faster than they rise but to have the drop from the all time high to 19 decline in just three weeks is a bit startling. But u markets fluctuate. This is, this is not abnormal except in its pace and size. So what are you, rob, telling investors to do right now . Volatility can be our friend. It creates opportunities when you see markets crater, some things are going to be turned into bargains as a result of that. Emerging market stocks have been b hit very hard this year to date roll the clock forward five years, is coronavirus still going to be a big issue . Are emerging market economies still going to be crippled i dont think so so if youre looking for opportunities, anytime you see market turbulence, youre given an opportunity to sell something thats newly high. Beyond yields are terrible and so bond prices are unusually high and emerging market stocks are unusually low. Hang on, everyone we want to go back to eamon javers in washington for the latest from the white house and any stimulus preparation here, eamon. What we know as of now u is that the president pitched this idea accord iing the white hous officials in his meeting with Senate Republicans of eliminating the payroll tax. Cutting it to zero percent on both the employer and employee sides. Now i spoke to a white house official about this. I dont know have the figures, but there would be an enormous cost to that i said to this white house official, how much would that cost the response, gives you a sense of the thinking on this, the official said how come you always talk b about how much tax cuts cost. Thats our money we should be able to keep it not really a cost, so thats the way theyre thinking about it here but the idea is from the president s pitch, zero percent on the employer, on employee side on payroll taxes. Through the end of the year. Im told also in that discussion on clapitol hill was the idea o making that permanent. Now how much that would cost over years and years and what the implications are for Social Security and medicare and medicaid is i think an importance caveat here because that would affect the ability to get any deal done on capitol hill also im told, guys, that there is consideration at the white house for Shale Oil Industry relief federal assistance Shale Oil Industry given what weve seen happening in oil prices over the course of the week so far. That huge decline weve seen they feel that there might be a need for something they caution though that they dont want to do a bailout for that industry. They also caution they midnight need to go anything if the sw s situation irons itself out in time so a couple of things here on the president s mind today thanks for that mike, to what extent do you think the afternoon rally was based on stimulus hopes and would we fall back if its not now delivered . Maybe a general impression that something is going to be moving as an off set to some of the slowdown thats happening right now. It was a little bit disjointed throughout the day in terms of getting these reports, but just the idea that yes, theres going to be some counter vailing force to a lot of what were dealing with, but i think more than else is we just really did stretch things very far and so there was going to be most likely a rally of some description if you know, the market did not back off. How about what eamon just said the white house response would be on the cost of payroll. Doesnt that go into entitlements is that going to hurt our Social Security so theres the cost. Right . Well, exactly look thats a kind of a, thats one idea logical idea that all tax is i dont know that everybody subscribes to that i want to come back to the hopes of and sarasaras point, e see italy down 14 and they have announced some pretty pronounced stimulus measures. But again, it just goes to show that if the number of cases here continues to rise to an extent that people are perhaps yet expecting then the market can happily still move against any stimulus measures that are announced. I mean absolutely i think thats kind of your forced clause here if things really do get out of hand and restrictions need to be that mauch more draconian, the premise of the rally today might not be rob, do you get excited about stimulus whether its coming from the government government, the Federal Reserve . Theres a lot of places it could come from right now. Well, the most effective stimulus is tax cuts thats the one with the highest multiplier economists at both sides of political spectrum would agree on that. The ore thing worth noting is that stimulus doesnt fix a virus. So youve got a potential risk of a pandemic, although anything unlikely as anything as drastic at 1918, but time and medical care fixes that. In the 1918 pan dem i, stock market went up, not down in fact as the pandemicsed, the market rose almost 30 in nine months lets get more on what we might be able to expect in terms of stimulus package. Elon has more from stoouf mnuchin. Just more color on the payroll tax cut. Senator rubio said he could see a package as big as 300 billion just in the payroll tax cut stimulus alone so well see if that is where this figure eventually ends up but clearly, lawmakers from both parties and chambers are trying to map out what exactly goes into a fiscal response Steven Mnuchin after meeting with Senate Republicans along with President Trump during their weekly lunch, then went and met with House Speaker nancy pelosi they talked for about 40 minutes and after it was over, i asked them how the meeting went. I left the meeting with the speaker. We worked together on the spending deal that and on a bipartisan basis to get things done quickly and were going to help the americans that are most impacted by this in small and medium sized businesses that are impacted is there negotiations und underway i wouldnt say its negotiations were having discussions about various different policies the president and Vice President just had a very good lunch with the republicans. We spoke to them about ideas so i think theres a lot of interest kind of bipart sisan e basis to get something done. One of the outstanding questions remains whether or not lawmakers would need two bite of the apple or whether they could do all of this in one single package. Guys, well keep talking to lawmakers and let you know what we find out. Back to you. Thank you we were talking about whether this would be you know, if they were, if the administration was able to put this payroll tax cut through, if this would be enough, would it help the economy. We had more recession forecasts coming out we saw that activity in the credit markets you know what would it do to an economy thats been paralyzed by this coronavirus so i dont think it would hurt when the fed cut rates last week and this, they may not have a big shortterm impact, but it greeces t greases the skids so when things start to feel better, you have easier conditions and things i guess im wondering what is the economy going to look like were not going to 1. 5 of gdp dont we want to hear whether or hospitals are prepared, whether the tests are being given on a much bigger scale what the plan is are we going to continue to travel out of the state and country. Much bigger driver of markets is going b to be on the health side of things i think in the short run. But in the absence of the ability to have an instant cure o clarity on those things, the market does want to see the fed and people in washington act because that can get initiated quickly. Yeah. And the idea that theres a coordinated response is something that i guess is the payroll tax can cut that is that enough of a fiscal stimulus its an additional cushion. Its not a tarp creativity. We did get a big rally today. Back to bob on the floor with more of what moved us there. Help for airlines, cruise ship operators, the shale industry thats what moved the market early on then again later in the middle of the day. Just like the Royal Caribbean president mentioned were going to look for help that was halted three times in half an hour as the president made those remarks, on the upside he didnt say anything about the rental car business, but peripheral companies moved hertz moved off the low. That was when the president made remarks just before 12 00 p. M. Noontime marriott rose. A lot of other things rose even the shale industry rose you have these vague reports the president was seeking aid for Shale Companies. We saw kontincontinental go up. All the shale plays moved to the upside the 27basis point move lifteded all of the banks citigroup, jpmorgan, all on the upside, but remember something, most of these banks as a a group are down nearly 30 in the past month or so. Its all about stimulus right now. Guys, back to you. Excuse me bob, thank you so much for that. Rob, where do you stand on the banks . Enormous rally for them today, but off the back of sharp declines over the last month or so zbh sure, the Financial Services sector going to be affected by the back end of the, the supply chain issues are big but they have ripple effects. The back end of supply chain is payments if they get stalled, you have rolling bankruptcy so there are going to be consequences back to the topic of stimulus, i dont know why we couldnt just get rid of the payroll tax on the first 20,000 of income right off the bat. If youre making minimum wage, why should you pay any tax at all . Get rid of it. And if Something Like that were done, that should be appealing to both parties. And would be very powerful stimulus thats interesting. By the way, just want ed to mention, Bernie Sanders campaign canceling a rally in cleveland, ohio tonight the first ohio cases were zig d diagnosed this week and they were in cleveland. I think there were three cases this is going to be an issue theyre still doing the parade, right . I dont know. Three candidates in their 70s. Thank you both very much. For joining us up next, well discuss the extraordinary move in energy weve seen over the last couple of days then airlines facing coronavirus fears of course and possib enoc owwn lspeak with jet blues ceo. Back in 90 seconds feel exhilar. The invitation to lexus sales event now through march 31st. Get 0. 9 apr for 60 months on all 2020 models. Experience amazing at your lexus dealer. At outback, theyre for steak and beer. Walkabout wednesdays are back get a sirloin or chicken on the barbie, fries, and a draft beer or cocacola all for just 10. 99. Hurry in wednesdays are for outback. Outback steakhouse. 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. Crude seeing a bounce today a day after its worst drop in nearly three decades joining us for more, tom and francisco, head of global commodity and Derivatives Research at b of a securityies. How do you go about making a forecast for the price of oil in this environment hi. Well i think look, we have to start up off by understanding that we have the worst shock since the financial crisis when it comes to energy and also, apparently, as of this weekend and overnight, the news from saudi arabia and from russia suggests were going to have the biggest positive supply shock since 2014, 2015 so we have a lot of barrels and no demand for them and perhaps this means that oil, its going to grow up into the, stay in the 30s for sure, but drop into potentially the 20s over the course of the next couple of weeks until we find some kind of agreement between russia and saudi arabia or the u. S. Shale sector capitulates and starts reduce iing operations pretty ft here one of the two has got to give here tom, do the saudis have ammunition in the shortterm to maintain below 30 price levels for how long go ahead, tom. Im sorry i think for the next two months, you know, anything goes. I agree with francisco were seeing a demand shock, which probably on some days in the quarter and the next quarter could be 4 Million Barrels a y day. And theres so much uncertainty about the virus and whether or not social distancing spreads in this country that when you were talking about a stimulus before, youd have to sort of give the stimulus in terms of Airline Tickets or cruise tickets and on the saudi side and the russian side, this is a cat fight between two of the three largest producers in the world theres been talk between the two, but thats not likely before april so were shaping up to see a march, april and perhaps early may like weve never seen before we think that the range of prices for brent over the next eight, nine, ten months is is as low as 20 and as high as 50 toward the end of the year but thats probably a little bit of blue sky tint at the end of the year so francisco, how do you think about what the shale industry in this country will look like . Well look, i think the big question is whether this is a point, a cat fight between russia and saudi, theyre teaming up to go after the shale industry remember neither saudi nor russia have lost market share in the last four, five years. The members of opec plus have lost market share include iran, venezuela, nigeria, libya. So we dont know if saudi arabias saying hey, we dont care if we get ten Million Barrels today, 60 a barrel or we get 15 Million Barrels a day at 40 a barrel. Were going to be fine but if its going to be 15 Million Barrels a day, weve got to go after the shale industry and take that u. S. Market share away so if that is the case, if this is whats going on in the background, i think the u. S. Shale industrys going to take a big hit and well see ovall the weaker hands leading the market and see big consolidation with the Major Players becoming bigger and the stronger Balance Sheets surviving here. Tha going to be the story over the next three months. Francisco, tom, well have you both back to talk about it coming up, mike is taking a look at haas nights lows and whether its looking loi ining like a b jet blue along with other u. S. Carriers have seen their stocks cut by 30 or 40 in the last few weeks. The company pulling their guidance this morning. Well talk to the ceo of the airline to find out what hes idicg in the face f this epem and you can watch or listen to us live on the cnbc app well be right back. Woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. There has never been to have a favorite food. With new grubhub plus you get unlimited free delivery and cashback rewards for ordering noodles, and noodles. And noodles. And noodles. Grubhub plus. Free delivery, cash back, and noodles. Its more than just fast. It keeps all your devices running smoothly. With builtin security that protects your kids. No matter what theyre up to. It protects your info. And gives you 24 7 peace of mind. That if its connected, its protected. Even that that petcamera thingy. [ whines ] can your internet do that . Xfinity xfi can because its. Simple, easy, awesome. [ barking ] wall street higher, marketedly so. Close to 5 for the dow and s p and nasdaq the russell did lag somewhat, up just 3 and saw a huge part of those gains in the final two hours of trade for much of the earlier afternoon, we were close to a flat loin bline but a stron rally into the close with those 4. 9 gain. Still leaves us down about 3 for the week after yesterdays big sell off back to mike look iing at inveso sentiment. Depths of sentiment as we came into today, take a look first at the ned davis research, daily crowd sentiment poll this is a little bit of a composite of different readings. Its in very negative sentiments in a contrarian where you have better odds of gains in stocks on a Going Forward basis it was not quite as negative as we saw at the very end of 2018 my read on that its been too soon since the top to get really truly kind of washed out sensement entirely and that was after three months of going down some 20 , but still its down where typically some kind of market lows have taken shape then similarly, the ratio of put options to call options thgs coming into today was at a severe extreme so when this number is higher, it means yore whemingoverwhelmiy more than average as opposed to speculating. This takes you back to the december 2018 level, pretty much exceeding everything else. That was the set up for today and by the way, today, you did not have a total reversal of that condition great stuff thanks so much for that. Meantime, lets go to meg for the latest on the coronavirus. Hi, wolf, cases now u toppinging 118,000 with more than 4200 deaths outside china, italy is the hardest hit country, reporting its largest daily jump in deaths today, now 631 out of more than 10,000 cases in south korea, a different story. Though the country u has more than 7,000 reported cases, daily case counts have been declining for five days and today were the lowest since february 25th widespread access to free testing and strict social distancesing measures being credit d in the u. S. , mitigation steps are starlting to ramp up. New york state closing schools and other public gathering places and washington states governor saying hes considering mandatory measures to contain that states outbreaks sara meg, thank you. Coming up , the best way for the u. S. To provide stimulus to the economy, were going to debate whats needed right now and what would be most effective. And on the other side of the break, robin hayes sits down to discuss the coronavirus and how industry is being hit. Fz test. The world is built for you. So why isnt it all about you when it comes to your money . So. Whats on your mind . We are a 97yearold firm built for right now. Edward jones. Its time for investing to feel individual. Dealing with our finances really haunted me. Ttle cranky. Thankfully, i got quickbooks, and a live bookkeepers helping customize it for our business. live bookkeeper youre all set up janine great vo get set up right with a live bookkeeper with intuit quickbooks. Welcome back theres a check on the closing bell big board stocks rebounding today and technology was the Top Performing sector many the market heres a look at the leerd adobe up 9 . Paypal up 8 some of the hard hit names in the recent volatility. Some of the chip makers. Financials also did better, up 6 now time for a cnbc news update sue herera has it for us hi, sue. Zwl hello, everybody heres whats happening at this hour britains conservative led government has narrowly defeated an attempt to ban Chinas Huawei from building part of the uks new high Speed Telecommunications network britain went against a u. S. Ban on huawei based on perceived Security Risk bs kansas citys mayor was turned aaway at his polling place when he tried to vote in his states president ial primary. It happened shortly after he made this video urging people to vote he was able to go back later after it was discover his name had been incorrectly entered the u. N. Secretary general trying to draw attention away from the coronavirus and back to Climate Change he says the outbreak is a temporary problem while global Climate Change shows no signs of going away and it must be addressed are constant action. And ben jerrys free cone day has fallen vick totim to the coronavirus outbreak they say bans on large public gatherings meant some communities could not join in. They hope to reskred later in the year you are up to date back to you. As always, thanks so much now Airline Stocks rebounded today. But the sectors still down 30 or so so far this year in the face of coronavirus fears. Jet blue, delta, united, american and others took action to combat the virus impact on the industry in addition to withdrawing guidance airlines are also reducing flight, waiving change and cancellation fees and some executive leaderships are taking pay cuts jet blues ceo joins us now. Hes todays closing bell closer very good afternoon to you thanks for joining us. Thanks very much for having me so earlier today, jpmorgan conference, i think you said that the demand drop off in reaction to this virus is worse even than 9 11 is that right . Yes, it is at least as bad if not worse. If you look at 2001, the industry saw about a 30 drop off in demand from the month before august 2001 to october 2001 and right now, what were seeing as we go into march and april is something that has dropped off more than that how quickly do you expect it to rebound do you expect it to go back to longterm levels once we do rebound . The reality is that no one knows. Were planning pru dentally, conservatively the event itself then what is the knock on effect that the coronavirus fear could have on the economy and the demand that would follow so you know, were going in with a very strong Balance Sheet, but were taking a to reduce our costs. So is it safe to fly right now r if people . Flying really is as safe as anything else you do if not more safe theres lot of theres been lots of concern about the air on airplanes. The way the air on the airplane works is it comes in from top, comes down over you to the bottom to be circulated every three minutes. We use filters of the planes of the same grade as in a hospitaling open rating theatre. The air is extremely safe. Its really then talking about the same precautions youd take anywhere its about washing your hands. Weve got disinfectant if customers want to wipe down their seat and weve got lots of disinfectant wipes available in the airport for people where is the drop off in demand most pronounced is it because corporations are putting policies and imposing them on their workers or are individuals just as concerned they wouldnt be traveling any way . Its both weve seen first of all, jet blue doesnt fly to any other countries that are direct affected by these travel, but none is lethe less, weve seeb in the places we fly weve seen companies introduce temporary travel restrictions. A lot of people cancel and refund trips jet blue is the first one to come out beginning last week to waive change and cancel fees we want to be responsive to peoples concerns. So you were the first to do that but as i saw the announcement, it was for people who book flights february what, 26th or something on right new flight bookings the problem is everybodys booked their flights and they have to cancel them now. Thats how it started,evolved were making changes for customers who booked flights before if theyre travel is up to and including the end of april. No change fees. Correct whats the broader approach theyre taking in terms of micked capacity cuts and just cutting prices coming into this, being fairly decent i mean, again, january was really good. We were sort of at the revenue guidance we were ahead on the side. The corporation was strong we had a bit of a dramatic effect from around the 25th of february so we were one of the first a airlines to announce a cut in capacity so we reduced april capacity down by 5 and also the prices have fallen the for me, the most important thing is to reassure people that flying is safe and as safe as anything else you do in your life whether its go to the restaurant, to see a movie, going to the store its about the cdc says if youre above 60, you shouldnt be taking long flights right now. I think from one of the high risk groups, whether its subject to preexisting medical condition, you should rethink that, but you should rethink that in everything you do. In your daytoday life. So Everyone Needs to follow the cdc advice its changing daily. I recommend that people stay up to date and the other thing if youre not feeling well because as the change in cancel fees have been waived, you know, call up your airline, jet blue, change your flight how long would the last couple of weeks style level of demand have to persist before the future of your company and some of your peers really starts to come into question. Well i dont want the speak for jet blue we spent ten years planning for this we went through the financial crisis in 200, 2008, 2009. Weve for the last ten years, managed our company very conservatively we have a lot of liquidity we have over 1. 2 billion of liquidity. We have a revolver that we havent drawn on of 550 million. We have a third of our fleet thats uninl couple bent so we have a lot of liquidity. Even if its something that will be b a long time, jet blue the is well equipped without speaking specifically about rivals, whether we look at europe or here, do you think its plausible theyll there will be consolidation to happen in the year ahead because of coronavirus initiated fears . I mean i would say that while the industry and u. S. Is relatively healthy compared to the rest of the world, which was very different than ten years ago. Its very likely were going to see airlines a lit in europe, british airways, do you think some European Airlines are going to go under weve seen flybie in the u. K. And they partly blame the coronavirus for that you look at whats happening in europe whats happening in asia theres a lot of airline extreme stress right now so if you do find that one of your passengers tested positive, what do you do how do you do the Contact Tracing . So, we follow the cdc guidelines so if that was happening, if that was was to happen, wed work with the cdc on that. The Contact Trace iing thats i place is from countries that are sort of what the cdc called level three countries, like china and others where if a customer is tests positive for coronavir coronavirus, the cdc will want to go back and track if i take a flight from cleveland to new york and you find out someones positive, am i notified if we find out that, so the way the procedures work is if that happens, then we would contact other people or the cdc would contact other people who were around the customer on the flight wed also notify crew if that were to happen as well to wrap things up, its impossible to guess when this will end, but talked about the last couple of weeks and how much demand had fallen off do you sense things are going to get worse before they get better or do you feel were passed the worse . Were plaping for it to get worse. We dont think bookings have stabilized weve continue ed to see trendsn bookings continue to worsen since last week in the near term so were planning cauti innin n. I think it has time to play out all of us at jet blue a, our 23,000 crew members are doing a great job reassuring our passengers the white house talk ed at a stimulus any sense of what that would look like . Right now, jet blue has a strong Balance Sheet you dont need it no, we have not made any request for government assistance things that would help are things like a waiver when you, an airline flies into a congested airport, if you dont fly a certain number of slot, you can lose them. Clearly, you dont want to do that this is whats letting europe fly around empty airplanes, which is madness especially with Global Warming and carbon emissions. Were urging the faa to grant the u. S. Industry a slot waiver. It costs the government nothing, but would be a huge help for airline to navigate through this thank you so much for coming in thank you so much next time you come, well talk about the new york london route youre going to launch anytime not top of the list today id love to talk about that up next, the white house also discussing payroll tax cuts to stimulate the economy in face of coronavirus. Details remain emergency workery. Were going to debate the plans and whether they will work next hey there people eligible for medicare. Gimme one minute. And ill tell you some important things to know about medicare. First, it doesnt pay for everything. Say this pizza is your part b medical expenses. This much about 80 medicare will pay for. Whats left is on you. Thats where an aarp Medicare Supplement insurance plan, insured by Unitedhealthcare Insurance Company comes in. This type of plan helps pay some of what medicare doesnt. 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This as the Federal Reserve cut Interest Rates by 50 basis points last week, but President Trump says more needs to be done slam iming the fed again twitter this morning joining us now, former deputy treasury secretary, also from our Federal Reserve board governor payroll tax cuts that was the story of the ta will it work well for what were dealing with now, i think it is time to make a turn to fiscal stimulus to some fiscal structural kinds of solutions here. But keep in mind that the Economic Health of our country right now really depends on the consumers health. The individuals health and so the kind of stimulus that is really going to be most effective is the kind of stimulus that a is actually going to deal with the health of the American Household so that is really what i think immediates to needs to be the fu really if were looking at doing something to kind of stimulate demand, it would need to be something that would be focused on what exactly the American Household is dealing with. If we see some kind of broad fiscal stimulus announced, does that mean the fed doesnt need to and or wont cut again or do you think thats sub priced in that were going to see more i think we could still see rate cuts. Keep in mind rate cuts are going to be most effective when they respond to a demand shock not a supply shock its possible the supply shock has morphed into a demand shock. So you can see now the possibility the consumer demand could essentially fall off or get reduced if people pull back from their spending and that essentially is the you know, thats the recession risk. Thats the piece that has to be watch and so really what is necessary is a coordinated policy a coordinated use of fiscal tools and Monetary Policy tools and to take that coordination point broader, keep in mind this is a global potential pandemic so the real kind of coordination that would be the ultimate way to go would be one that was globally coordinated among other countries fiscal authorities and Monetary Policy. Not much is being globally coordinated now. Im afraid not. So there was an attempt, there was a g7 discussion. Im losing track of time last week right a week ago today. The rate cut was only a week ago. It was that same day, but nothing came of it we didnt see in essence a kind of coordinated step towards containing any potential falls, shortfall in demand. Were going to have a meeting tomorrow at the white house with all theback ceos what do you expect the to kind of come out of that is that just window dressing or is anything kind of meaningful on the regulatory side or lending side that you could could materialize . I think there could be some meaningful discussions to come out of that because keep in mind that the fed has not just you know, the fed funds rate cut at its disposal, but some regulatory tools at its disposal so the fed and regulatory banks could have discussions about what kind of steps in terms of forbearance could be made. What other kinds of regulatory opgs are there for the banks to be taken riging right now that d help cushion any kind of blow here at this point, eight days from the next fed decision, is there any way they come in line with what the market is provekting for them . Its hard to imagine that they wouldnt because essentially, they do need to stay aligned with markets, but the other hand, they do have limited bandwidth as we know and weve talked about lot before. They are close to the zero lower bound. Query as to whether this is the point in time when they are going to feel they need to use it how close are are we to qe . Ah, qe. Well it has a really negative taste for a lot of people. They remember it from the, from its use in the during the response to the financial crisis they recall that it was massive. That it continued for a long period of time whos they, at the sfed no, this is americans americans have a sense it was really something that was in ways, actually not democratic. That it was engaged in by a group of elites who were not in touch with what was really happening to the economy at the time and youll recall that it was, it took a long time to actually turn the situation around that it was, its use was quite extensi extensive. It had by the way, big effects on our distribution of wealth in our society so it had great you know sort of, it thinned out the middle class it had a sense, there was a sense really that this was not a good thing from the perspective of income and waelt and equality sounds like you dont think theyre going to go there so soon thank you. Were out of time. Up next, mike back at the telestrator with a look at the credit market. Plus, wall street heads to washington as with we just mentioned. The white house inviting top executives from Banking Industry to discuss possible ways to combat coronavirus well discuss coming up. This piece is talking to me. Yeah . So what do you see . I see an unbelievable opportunity. I see bestinclass platforms and education. I see awardwinning service, and a trade desk full of experts, available to answer your toughest questions. And i see it with zero commissions on online trades. I like what youre seeing. Its beautiful, isnt it . Yeah. Td ameritrade now offers zero commissions on online trades. 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 welcome back lets get over to mike for the final installment. We have to be conscious of the undertoe of tw of the softeg credit conditions. We have the high yield and Investment Grade the lqd is Investment Grade. What you see here recently Investment Grade underperforming treasurys. It shows nervousness sur roupgd the lower quality end of Investment Grade and triple b, and treasurys with a little bit of a comeback today. You wouldnt say these are at critical levels, but it definitely bears watching and it was a very dramatic repricing of credit and response to the oil move and it did improve throughout the day as the equity markets rallied today. Thanks for that up next, evercore isi will weigh in on these markets. 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I certainly think that right now the biggest thing is the path of the virus itself you could have good developments on policy, fiscal and monetary, but it gets swamped if we get an epidemic that looks like its getting out of control in the continental United States, but that doesnt mean the policy stuff doesnt matter, right . Its important that fiscal is getting mobilized. Its important that the fed does its job of lowering rates and putting enough liquidity into the market and that certainly helps. Given the pain that were starting to see in various Industries Like travel and cruise and consumer, what is your expectation for how the u. S. Economy handles it and how close we may get or even go into a recession . So, look, it seems to me that most of the Global Economy will probably go through at least a brief, technical recession around the middle of this year in the early part and through to the middle of this year, strikes me as touch and go as the u. S. Is part of this, and i can see the u. S. Economy going through a couple of very weak quarters here i think what were looking at is a u rather than a v. The key thing is to make sure it doesnt turn into an l whats your view on the China Economy in particular at the moment do you think that could be worse than currently priced in. So its encouraging to see the chinese appearing to get on top of their own epidemic at home and to getting Production Supply chains back up and functioning not perfectly, but certainly a lot better than was the case a couple of weeks ago i do think the complete recovery of the supply chain will take a long time. I also think that the consumption side will take weak for quite a long time in china and consumers were driving growth in china just like they were driving growth everywhere else before the virus hit and of course, china now has to contend with weakness in some of the core export markets, as well so i think they will need some more macro stimulus and thats one thing to look out for in the period ahead krishna guha, thanks for joining us. My pleasure just want to flag, as well, coming up tomorrow, of course, that big meeting of wall street executives in the white house. 3 00 p. M. Eastern time, perfect time to kick off a meeting and ill be traveling to d. C. To make sure we cover it. Rare, of course, to get all of those executives in one place. What will they tell them . Jamie dimon wont be there, but gordon smith will be going in his place the focus from the white house is they want to hear from small and Mediumsized Companies lending and what can be done from both sides to make sure its going well and also, it will be interesting to hear how markets have functioned liquidity levels and so far it seems pretty good and youve heard tightening up in credit and treasury markets and lending, small, medium sized and liquidity and well see what comes out of it. Exactly Broader Markets, mike, as well, and a crazy rally. Its been hazardous to extrapolate any one days action into the next, but i do think that you can look at yesterdays low and see a decent chance that that was a good low for a little while and it will take incremental, in an adverse reaction and thats the way people are viewing today as potentially a significant upside reversal when it was more mixed signals. Another hugely volatile day and this time to the upside and that does it for closing bell fast money kwot begins right now. Live from the nasdaq marketsite this is the nasdaq marketsite. Joining us is tim seymour, jeff mills and Karen Finerman buyers coming back into stocks following yesterdays selloff, but should you believe this bounce were going to debate and get some answers what really went on between the s saudis and russia that led to the split and she was there and where oil may be headed. Were breaking out your stlatility playbook and the four