Excellent meghan, a real pleasure listening to your thoughts today and we will have you back, of course, as soon as we try to get our gps with regard to the coronavirus and its Economic Impact in the marketplace. Thank you for joining us today Carl Quintanilla, back to you. Rick, see you in a little while. Good monday morning. Im Carl Quintanilla at post nine morgan brennanp with us from cnbc Global Headquarters, jon fortt from the floor of the nyse another eventful monday morning as im sure you know by now. We did trigger a Circuit Breaker at 2521, went down around 2400 and then since added about 100 s p points as we are at 2501 on the nose dow was near 25 and now 21. 2 interesting session, guys, as the day is far from over already jon, some headlines creeping out, this one just now, italy Lombardy Region posted the lowest number of new cases in the week, the kind of headline the bulls will want to see. Yes, indeed you know, i continue to watch the levels where we are jon, can you hear me . I can can you hear me . Were trending around the levels after the plunge on thursday and a number of tech stocks continue to hold up decently well a lot of peoples focus on how work gets done and family gets taken care of. Here at the Stock Exchange as weve mentioned already, coming in, we answered a questionnaire about how were doing, making sure that theres no fever we got our temperature checked on the way in. Precautions taking place in work places across the country, of course, and here on wall street to the extent that people are coming in. Definitely. So many moving parts such an evolving situation not just the day at a time but hour at a time in addition to equity markets and the moves there, weve been seeing big moves in other Asset Classes as well. Copper, gold, coming off today, as well. Also the Energy Complex were continuing to see pain there with brent and wti trading lower. Big move lower in rbob thats one to watch here every sector in the s p is in the red. Financials and real estate the worst performers today but another group to continue to watch, of course, is the transports too theyre down about 7. 6 , but obviously weve seen so much pain in the airlines and some of those Freight Carriers as well really on the front lines in terms of some of the Realtime Data where trade and people flows around the globe are concerned. All right guys, bring in lazard asset managements ron temple this morning. Thanks for your time as always. Thanks for having me. Whats important for viewers to understand this morning in your view . I think there are a few things one is we still dont know how many people are truly infected with covid19. I believe were likely to find the true number is between 10 and 20,000 at this point seems like a reasonable number and when i think about this kind of extrapolating out, the key point im focused on is where the vulnerabilities in the Health Care System in the United States and if we assume a doubling rate which is basically kind of a fancy way of saying how many days does it take for the number of cases to double around six days, that means we could be at 434,000 cases within 33 days, starting at 10,000, or at 27 days starting with 20,000, the reason this is an important number is the u. S. Based on our analysis has about 21,700 intensive care unit beds available that could be called into service if we typically find about 15 of people with covid19 need hospitalization and one out of three of those people need an intensive care unit bed at 434,000 units we could be out of icu bed capacity importantly by the way, the beds arent special, whats important is that you have a ventilator because these are people in respiratory distress and you need Health Care Experts trained to deal with these people. Thats the most important point were looking at on the health care side right now. Your language is striking in your note and quote, while the Trump Administration has either not grasped the severity of the situation or not honest to date, the fed doesappreciate the gravity of the disruption to the economy and markets. I guess on both fronts, white house response and now fed, whats your grade . Lets start with the fed. I would give the fed an a. The fed recognized they did not have a lot of dry powder to work with and if you dont have a lot to work with youre better off trying to achieve a bit of a shock and awe to get the most bang for your buck what they announced yesterday was a sweeping attack on the problem and theyre doing all they can do. So i gives the fed an a. Wecht dig under that if you would like more. The fed cant solve a coronavirus. That requires the federal government to basically be on the front foot and whats disappointing to me so far is, frankly, even the bipartisan compromise legislation they passed in the house on friday night has giant loopholes. One of the key intentions of the legislation was to make sure that people who are sick dont go to work and infect other people but the legislation allows exemptions for any company with over 500 employees and allows for an application for hardship exemptions for any company under 50 employees thats 80 of americans that work in those companies which means youre making People Choose between putting food on the table or potentially spreading an infection if i look at the press conference on friday at 3 30 from the white house, it was disappointing there as it quickly became apparent that the website for a National Database that supposedly was being worked on by google wasnt accurately portrayed and also, you know, its great that these companies are offering capacity in their parking lots for testing but also still isnt clear who is going to be responsible to roll out the testing and when it will be available i think what we realized is the federal government has either been not aware of the situation or has been too focused on politics to make people aware. This is really important for people to understand the importance of social distancing have to be told the truth and the issues around effectiveness and i worry weve had two months that have been wasted in terms of communicating that message. Yeah, ron, i mean certainly theres a lot of different factors that are playing into all of this right now and we know from Peter Navarro on our air today you will start to see executive orders drafted around things like medical supplies, for example, coming back to the manufacturers here in the u. S. As well. We will have to see how all of that continues to manifest your thoughts on the markets specifically, the fact that were seeing i guess i should say the behavior that were seeing manifest across different Asset Classes right now, the fact that you would have equities selling off but also gold selling off here, i mean the treasury market specifically has been used as a gauge or a signifier for behavior or correlations across others assets and weve seen that essentially break down in the past week as well, do you feel like there has been i guess a disentanglement or that that relationship has been compromised . I think what youre seeing in markets is actually a combination of factors and i guess point number one would be i think it would be unwise to try to trade this because you can obviously get whip sawed and lose a lot of money but what we saw last week in particular with treasury selling off at the same time as equities was hardly forced derisking or basically deleveraging of some levered investors having to sell their liquid assets to meet collateral calls and basically because in many cases risk models would force them to deleverage as volatility goes up to your point historically you would be rebalancing from one asset class to the other but in this case volatility went up in all Asset Classes and forced people to lower their rilevels i think that was hopefully not a longterm anomaly, but i do think its a great example weve seen this in prior crises, by the way, or prior sharp downturns that we always have these mathematical models that tell us what correlations should be and then whenever things are really bad correlations go to one. They dont end up being negative. Yeah. Ron to your point about the fed and the federal government in general right now, how worrisome is the credit market picture and what do you think needs to actually happen to keep credit markets open so i do worry that as we see these announcements rolling out, for example, last night from illinois and ohio, new york citys announcement in terms of basically shutting down bars and restaurants, congregations over 50 people, i think this is incredibly painful for the Small Businesses in the u. S. Basically i think theres a critical need from washington to figure out a way to, a, have a bulletproof sick leave policy, not what we passed on friday but something much more robust, b, to make sure there are ways for companies to get access to liquidity and maybe it might end up being government grants or aid to keep people employed because again, the most important thing right now is for people to engage in social disney distancing. If people are sick they should stay away from work and dont infect other people and we need to make sure we keep that money flowing so people dont have to choose between paying mare mortgage and going to work i think thats part one. But then part two on the credit markets the fed does have more tools. There are limits on what fed can do, but i think what they announced last night is very powerful and should get money flowing back into the markets. Im a little surprised mortgages arent respond morg morgue positively. I think the mortgage part of the announcement was important keep in mind the fed had many programs in 08 and 09 to make sure money got where it needed to go in the economy to keep credit markets open. Ron, all good stuff we hope you wont mind if we lean on you in the days to come. Thank you. Thank you very much ron temple. And now the s p is down a little less than 7 . The level where it was halted. Lets get a check on the nasdaq from Bertha Coombs who is there in times square. Thanks very much, jon we are coming off of the lows just a bit, not a whole lot, though weve got right now the nasdaq composite down about 6. 75 , having hit a new low today the reason because small caps, the russell 2,000 hit a new 52week low as well. 36 off of its 52week high. Biotechs among the names hitting new lows, particularly the smaller cap ones large caps holding up relatively better as i walk the wall here apple is a little bit better, up now just 7. 8 . Microsoft as well. Apple and microsoft have held on to doubledigit gains on a 12 month basis and their market caps remain above 1 trillion. It is a very different story for the other faungs facebook and alba bet among the media names hitting new lows alphabet confirming it is launching two bay area covid19 including menlo park and san jose to help triage people who may be experiencing symptoms there. No surprise, a number of retailers among todays 1500 plus new lows including amazon which is now experiencing supply shortages on stapesles like bathroom tissues as consumers have pulled forward a lot of buying, stockpiling as they fear that stores could be closing as things really start to shut down a handful of stocks today are bucking the trend. Moderna, one of them, the biotech working on a vaccine it with the nih confirm that the early stage trials of that vaccine is launching today zoom video, as millions of students are going to be learning from home for the foreseeable future and more businesses also being conducted virtually. Back over to you Bertha Coombs at the nasdaq, thank you. New york city set to shut down restaurants and bars to curb the virus creating a run on supermarkets stu leonard junior joins us on the virus impact on grocery is stores i tell you i was at a number of Grocery Stores myself over the weekend and it didnt matter the time of day or what the store itself was, they were very busy and it was very specific items across those Different Stores that seemed to be sold out what are you seeing in your locations right now . Well, were definitely seeing panic right now and weve seen that for the last really three, four days, really since trump gave his speech that first night. Everybody is out there, wo wore ried right now. They want to get food and stock up weve seen water fly out of here, paper towels and the thing that amazes me is toilet paper one of the biggest sellers one of the things i did, theyre buying things like this now, fresh squeezed orange juice because you can freeze it. The meat right now is literally everybody is buying it, you can freeze it. We have these even fresh fish here, salmon like this, thats frozen this stuff theyre just gobbling up and putting in their freezers at home. So youre seeing people buying product and freezing it and the hard goods and staples like water, cereal, paper towels, tissue, all that, really filling their carts up with it. Yeah. How concerned are you about supply Chain Disruption or the potential for that here . How quickly can you get the items back on store shelves . Well one of the things weve been very fortunate about is we buy direct from the supplier the producers, the farms we get direct loads from them. Weve been lucky to get food as you can see we have plenty of food here fortunately. It makes me feel good. Weve been in business 50 years and were supplying our customers and giving them what they want right now. But were seeing some disruption from california right now. Its getting tight out there they also just had a little bit of rain which hurt them a little more we have other sources of fresh fruits and vegetables that we can get. Weve also seen a little disruption with salmon in canada and the bay up there, but were able now, were bringing up salmon from chile. I think most of your retailers if they get the distribution part of it down and can get the products out there, we just have to get it in the storesp, except for a few items like toilet paper, purle, masks we cannot buy on the market right now. Even amazon has run out of things online but its mainly the fresh basics that you need, we feel theres good supply and we will have them here at stu leonards. Whats the smartest way for people to shop that would actually be helpful to you should people be ordering delivery instead of coming in . Are there practices you wish people would employ to shorten lines or get what they need more efficiently . What im finding and ive been on the floor, you know, i was out in long island yesterday at our farmingdale store, theres a range of peoples acceptance of the coronavirus. Some people are not worried at all and theyre just saying im going about my daily day, other people are petrified what weve done at the store is were wiping everything down every hour from the bathrooms to the registers to the keypads, pens. Were giving everybody a sani wipe i was in costco they were giving me a wipe when i walked in lots of purele bottles around the store right now. What i would recommend to everybody is, i feel the were doing our best job keeping the food safe, keeping our workers safe, theyre all trained in food science, theyre wearing gloves all the time, teaching them about keeping disn distance and using good hygiene all day long im washing myhands like everybody watching today, im washing maybe 20 times a day now. So i think taking normal precautions every single day is the way to go right now. I wouldnt be personally i dont think you have to be freaked out right now and say cant go out of my house. Yeah. Thats my own personal opinion. Other people are doing. Stew, im curious what you make of some of the response efforts coming out of the federal government right now as the owner of a mediumsized business, Something Like payroll tax cut, for example, how much would that help a business like yours in this time of uncertainty . Well, i think it would help and definitely i feel really bad for a lot of people, like look at the restaurants that just got closed you know, were a Family Business here and i really feel for that because thats probably some family right now that had to close their restaurant and they still have rent, they still have electrical, they still have all these expenses its really putting them in a hardship and i think the federal government really has to do something to help that not business, but family out at a tough time like this right now. Stew leonard jr. , thank you for joining us today. Thank you meanwhile, the work from home plan is hitting some glitches some apple workers have found they cant do their jobs remotely because of the Security Software installed by apple to fend off outsiders that according to the wall street journal. Google also sent home 119,000 employees and now its reportedly getting overrun with requests for Remote Working equipment, computers, cables, printers real challenges are in store Contessa Brewer joins us via skype from home perhaps with more well, jon, im actually at the home of ceo martin smith who collect umbilical cords and working on stockpiling stem cells and he like other americans is trying to log on from home, 100 with of his staff right now working remotely and theyre joining the college kids, the Elementary School kids, everybody trying to get on at once, which leaves us with a few big challenges one is capacity. Picture the lincoln tunnel if you have little traffic going into the tunnel everything is smooth sailing you take a whole lot of cars and try to shove them through the tunnel and all of a sudden you have a twohour slowdown if youre connecting to your corporate devices via vpn, a secure tunnel which connects your devices to your corporate network, thats likely experiencing massive slowdowns atlas vpn shows usage in italy grew by 112 last week and in the United States it grew by 53 . Interestingly, verizon tells us its not seeing a significant uptick in Internet Usage lets see if that changes this week in italy the telecom actually saw a 53 the number here 70 increase in internet traffic the head of that telecom says that was all fortnite. The other challenge working from home is security at this point Cyber Security experts say we dont always practice the best digital hygiene at home. For instance, take a look at the texts that i got that was a phishing text. If i look at that, i sent this off to checkpoint security and they told me that text is actually from a malicious actor, if you go on to it it would be an infecting website according to checkpoints threat intelligence, there have been 4,000 coronavirus websites registered since january and they are 50 more likely to be malicious. What is good digital hygiene a strong password for your devices and for your wifi you need strong Security Software with multifactor authentication your corporate devices are safer than your personal cell phone and laptop and then you have to be aware that because were working from home in emotional times, it makes us all more vulnerable to phishing or in my case, the smh kind of thing. I wanted to ask marty a question here you told me that, in fact, you were concerned about working from home because of productivity can you explain to me how you think this is going to work . What are you looking for when it comes to productivity . Yeah. Good question. So what we found is that in the past, we tried this, some folks work really well at home and others really struggle with it weve been really setting up a lot of remote tools, slack, zoom, Video Conferencing and Conference Calls with daily standups and looking for what are the daily metrics we expect to get done fort day and are they actually happening . You also had a big global Conference Call with your ceos that youre on this big group with what are the ceos in italy telling you about preparing for this great question. This is im part of eo international, which is an Entrepreneur Organization and they had a Conference Call with the leadership in italy and the message was get ready. Its coming pup and its likely whats going to happen here is going to look completely different from what we have right now in two weeks all right so thats marty. You can tell that my skype skills need a little help here, but if this is the new reality of working from home im going to work on that. I dont know. Im pretty impressed thank you for bringing us that the amount of zoom invites my family has gotten for school and everything else, its through the roof Contessa Brewer. Lets turn back to the drop in stocks, specifically those in tech rbc mark and chris join us now good morning to you. Ill start with you, specifically apple, we have spent the better part of this year talking about the china impact as we saw coronavirus affect that country on apple where that country is concerned. But now that you have Retail Stores there opening back up, Retail Stores in the rest of the world for apple closing, what does that impact look like morgan, thanks for having me and its a very good question. I would say a month ago, you know, when this whole thing started and apple preannouncing on president s day, largely china and more importantly on the supply chain, and what you have seen over the last one month is the supply chain in china is coming up to speed, about 50 compared to 25 a month ago and theyre trending toward getting to 90 to 100 by the end of the month which is a positive now the focus shifts to demand and like you rightly pointed out, you know, with the supply chain last month was demand in china and now its slowly climbing to demand in the western world and we think there will be impact on that its hard to quantify today where we are sitting when we do an analysis we tried scenarios looking at, you know, current consensus numbers all the way down 3 in europe, apple, their Global Demand gets impactd in the hardware side because of the virus yeah. To that point, krish, what could there is any way to get your arms around what that demand picture could look like for things like r iphones and other luxury Electronics Apple is known for if people are losing their jobs or forgoing paychecks, not feeling so confident, we see the economy going into recession, are they going to be willing to spend that money or move into another upgrade cycle . Very valid point. Its a tough one to answer but i would say that the way we looked at it was prior to this whole situation, i think the iphone unit numbers of 200 million for calendar 20 and now we are doing a worse case scenario, around 180 units which would probably trigger replacement demand level because we look at the install base of iphones around a billion uni units, shy of a billion units it implies 200 Million Units so at 185 units it just is below what i characterize as the unit level. Anything else beyond that would suggest to you like people prolonging in other words, if apple ends up shipping close to 185 units its down previrus but a certain number of the replacement demand happening. Anything below that i would say below 185, 180 units it implies people are holding out and not willing to switch phones at this time. On those lines, how are you modeling europe . Because im thinking not just about apple. Im thinking, for example, about huawei which is doing a lot of business in europe on handsets on the consumer side and when youve got not just italy but also spain and france starting to place all kinds of restrictions on what kinds of stores are open, how people can shop, im not sure theres enough Delivery Available for people to buy phones and equipment even if they still wanted to buy them at a time like this when there is such concern. How much reduction in demand for electronics in general, maybe apple specifically are you modeling and how long do you expect that demand to be suppressed sure. So i think on apple, i would say that overall right now, like i said, we had like 202 Million Units iphones this year, gone down to 185 million give or take, roughly like a ten person cut. On huawei, i think huawei is slightly different because the reason is, john, we have a valid point. They do have shares in europe but i would say ever since the u. S. china trade wars last summer or two years ago started, and the ban on huawei since last june, i think some of the demand in europe has waned. Huawei largely is the china brand today, of their units go into the china market so i think from the standpoint probably slightly insulated i think to your point i think its more of a question of apple and the other brands which will have an impact from europe but right now we are seeing a 10 person haircut to iphone units and also keep in mind the demand does slowly start coming back in the second half and q2 numbers are going to be weak and the stocks are already discounting that on a monthbymonth basis to see if the demand collapses beyond q3 or q4. Balance sheet health, i imagine apple is in a league of their own but beyond that who is at the top absolutely. That is one good thing for apple. Solid Balance Sheet. I think the cash flow should still be strong. Its interesting last week we spoke to a couple investors and, you know, they acknowledge that apple is in a better place than many other stocks. This is, you know, unfortunately a question that is a market which is the valuation metrics dont really matter at this point it will start coming back at some point and Balance Sheet will come back into question but that is the Silver Lining for apple given all the issues youre seeing on the consumer front. All right krish, outperforming on apple price target of 370 thanks for joining us. Lets get a news update with sue back at hq. Hello, carl, everyone heres whats happening at this hour the white house has new measures to protect President Trump and his staff during the coronavirus outbreak, including taking the temperature of anyone who enters the complex. In the press room, social distancing is being implemented with signs on seats to be kept empty. The Supreme Court is suspending some operations due to the coronavirus it has postponed oral arguments through the end of the month the Supreme Court has been closed to the public since last week in france, the automaker that builds peugeot vehicles will be closing factories in europe until march 27th. The company cited the spread of the virus, disruptions in its supply chain and a sudden decline in auto sales. Here at home, scholastic has set up a free learn from home website for kids who are stuck at home without school content is divided into four categories, scholastic says each section has a weeks worth of content with 15 additional days on the way that could be a game changer for parents. Thats the news update at this hour john, back downtown to you sue, we need all the help we can get. Exactly. For more on todays massive market drop, let us bring in economist and former pimco director Paul Mccauley you are cheering the feds move to cut rates to zero im also wondering, though, is the market correctly pricing in the domino effects of so much of business Small Business being shut down several weeks and the businesses that might go out of business, the employment challenges that many of the American Consumers might face . I think the fed categorically did the right thing. They threw everything they had at the moment. Zero criticism of the fed. The equity market is discounting the uncertainty so they know the direction on the real economy. So i dont think theres any sort of indictment from the equity market of what the fed did. The equity market is looking at the real world and the real world is going to require a lot bigger response than just the fed doing everything they can. Its going to take a fiscal policy response to literally get money in peoples pockets. That ises the bottom line. The fed can get money into wall streets plumbing system and theyre doing it, but the bottom line is we need to get hard, cold money in real americans pockets. The most vulnerable amongst us. Absolutely, paul. Thats what im wondering about. The consumer, which has been so important to this economy, certainly to these markets, where the markets are right now is that kind of helicopter money being priced in or is this pessimism or fear about the uncertainty and whether that kind of fiscal response is coming its interesting, you mentioned money, what the fed did yesterday wasnt helicopter money it was conventional monetary ease down to zero, plus a huge amount of q3 to try to restore functioning in the marketplace, but it was not helicopter money a helicopter money would be essentially granting treasure overdraft privileges on its account at the fed, but treasury could use printed money and get it to the people were one step away i think from helicopter money the fed cant do that itself it would require an act of commerce and, in fact, as a citizen and economist i would be in favor of that i really want to stress theres a huge difference between qe dealing with liquidity and market functioning and helicopter money the Fiscal Authority telling the fed send out checks and well run an overdraft on our account. Key point right there i want to dig into this further though because the tools that weve seen the fed basically unleash in this unprecedented manner terms of timing so much over such a short period of time, really in some ways harkens back to 2008 these are the tools that were used for a Bank Solvency crisis. Are they actually doing do we know are theyre going to be effective tools for what is a pandemic and a liquidity panic they can do a lot of things on liquidity in fact, the next one they need to do is to do a commercial paper funding like they did a dozen years ago which i was involved with, which actually restored functioning in that market and that is a connectivity to the real economy because you have companies that have to continually roll over their commercial paper and their natural buyer, particularly money market funds are not buying longer dated commercial paper. We need a buyer of last resort for commercial paper and i think that will happen probable within the next 24 hours hopefully. The fed can do that from the standpoint of keeping companies that issue commercial paper from facing a liquidity crisis. Fundamentally, it is now all over to the Fiscal Authority and congress essentially taking the lead and getting money into peoples pockets and if necessary, and i think it is, changing the laws so as that the Fiscal Authority can direct the Monetary Authority essentially to grant the Fiscal Authority an overdraft privilege. Yeah. Paul, thats what i want to ask you about in terms of the political realities of that actually happening, what kind of odds do you give it, and what do we need powell academically bless the school of thought we heard last week or the week before i think mr. Powell is doing a fantastic job, so ill be the last person to criticize him what he did yesterday and what hes done in recent weeks has been superb and i certainly think that he is encouraging the authority to step up to the plate big time and i think he will be cooperating to the max appropriately he doesnt want to take the political lead in telling congress what to do. Hes just basically saying, you have scope to do what needs to be done and get it done. Paul, how important is Government Communication right now . Im talking not just about the economy in general and what theyre going to do about that, but also, Public Health and protocol weve heard a number of different messages from the white house, from washington, over the past few weeks about this being like the flu, not being the flu. Social distancing, not social distancing perhaps theyre getting more consistent but hey, its only monday how important is it for the government both federal and state to get consistent in messaging . I think its absolutely critical were dealing with radical uncertainty on the part of our citizenry because weve never dealt with Something Like this before when you have radical uncertainty you freeze and its incumbent on our government to provide information that is robust and correct and where they dont know, to say they dont know here in contrast to chair powell, i would say mr. Trump has been a lost ball in deep rough when it comes to communication in recent weeks. I realize this might be early days to be asking this question, how long would you expect rates to stay at zero . I ask that because if the expectation is that this is a pandemic crisis to last for weeks or potentially months what will it take when it actually passes for the fed to start basically restocking its arsenal . I think were down here for a very long period of time i dont think the notion of take back once we get on the other side of the v has any legs to it remember, going into this crisis, the fed missed its inflation target on the low side for essentially a decade the fed wants this economy to come back really strongly and also for inflation to go up. The whole notion of it will come down it zero and then in a month or two, you know, take it back, i aint a buyer of that whatsoever were down here for a very extended period of time. The last time we went to zero we stayed down there seven years. Im not forecasting seven years but any notion of a quick takeback is something i think would be wrong and also i think the fed recognizes it would be wrong and would push back on any expectations of that concept developing in the market consensus. All right we will hunker down as many have been saying in recent days thank you. Former chief economist at pimco. Got the s p down 6. 4 . Session low was down almost double that. Apple closing all of its stores outside Greater China as the coronavirus spreads. Josh is in San Francisco with all the latest hey, josh. So, carl, apple really surprising investors with that decision deciding close all its stores outside of Greater China until march 27th apple spent a lot of time, money and effort to build out this network of stores. Sometimes we just kind of forget how big that foot print really is in total apple operates 510 stores around the world. 271 here in the United States alone. 52 stores in that great china region will remain open, thats an operating segment that includes china, hong kong and taiwan apples Online Stores do remain open in a letter on the companys website ceo tim cook writing that most effective way to minimize risk of the viruss transmission is to reduce intensity and maximize social distance i caught up over the weekend to get his take on the Financial Impact of this decision and munst munster estimating apples Retail Stores account for 8 of a total revenue in a given quarter and if the Stores Remain closed only until march 27th as expected and this decision impacts revenue in the current quart by about 2 , but also did catch up with tech analyst ben beron, a longtime apple watcher like munster and says theres a bigger concern for investors right now which is as consumers get more worried about the virus, about the economy, do they now pull back on Discretionary Spending and how much do they hold off on buying the new iphones, watches and air pods back to you. All right josh lipton, thank you i know in my household for one with a couple kids staying home from school im think doing they have the right ipads and laptos to get work done, and at the same time other decisions like that being made great report thank you, josh. Lets stay on the topic and in Northern California now talk about the challenge of leading through a pandemic for tech ceos who have been in that seat less than a decade, cara swisher joins us now good morning hi, how are you doing im doing fine, thanks. I hope you are as well so it strikes me that even though theres all of this technology for exchanging information over a disney thtant comes out of Silicon Valley and modern Tech Companies the place has a lot to do with interacting face to face whether the open plan offices, the roads are clogged because people are trying to get to the spaceship headquarters apple has in cupertino or googles campus where the cafeterias are normally open, how big a shock is this to the culture and operation of tech in Silicon Valley well, for digital people theyre analog as you know from being there they go into the office a lot, their office is mini campuses and where people live and work and do dry cleaning. Its a big change not to gather. I think thats up with of the things even though tech may use a lot of devices they are a gathering kind of culture. I think theyve done a pretty good job of announcing early closing of companies, employees, and doing a range of things that they are supposed to be doing like facebook cleaning up issues around disinformation which they should be doing, which is the lowest bar they should be doing that as a matter of course or giving money Mark Zuckerberg pledged donations and so did google. Theres all kinds of things theyre doing including just getting out good information to people and creating the ability for people not to feel adrift. For themselves as well as others while having this conversation about technology were having difficulties with the connection well come back in a moment. Out to chicago to Rick Santelli at cme groups Global Headquarters in chicago. Hey, rick. Yes, Global Headquarters. We dont hear all the other voices but you know what, trading floors are wonderful but the fact that were up and running at all and markets are fluid is a good thing. Lets start out with the main issue ive been paying attention to, whats going on with that relative value trade all the yields around the globe, of course, when our fed basically goes zero to 25 rates have come down it wasnt shocking to see them come down yesterday on the announcement the difference between our 10 and the german 10, 131 basis points as you see on this chart. Thats the closest theyve been basically in five years, going back to january of 2015. I think that is very significant for a number of reasons because ultimately when there is some sort of normalization in the world, we need firmer rates. Europe needs healthier banks the fact that theyre getting closer together isnt necessarily a bad thing. Tens minus twos, its been all over the place right now in the upper 40s its hovering around 47, its virtually the steepest its been since may of 2018. About two hours ago it was under 40 the long end has been very volatile finally in my opinion, the dollar index is a good tell, a good market to Pay Attention to. Many people are scrapping their heads over gold and bitcoin and the safe harbor trades whats a safe harbor and how long is that safety last weve discussed it if you were in the market 31 basis points on a 10, 69 on a 30, alltime historic intraday lows a week ago youre not feeling that was a very accommodating position although its been more against you than it is now. But the dollar index on the other hand, dont think of it as a safe harbor. What it is, its a bigtime demand many countries and economies around the world the ones that find the most nervousness when we get these global macro exogenous shocks they need dollars to fund all their obligations. So basically we traded down just under 95 thats the low close its bounced so currently with the dollar index hovering above 98 currently close to 98. 25, what i want to put across is, is that if you look at this 95 area, that is a good area that most likely weve had lots of key bottoms and tops, lots of consolidation above and right there. It is home base. If we start trading below that, the rest of the world might be happy but i dont think its sustainable. I think the demand continually comes back we did test within a dime of 100 just four weeks ago, that doesnt look look for a range between 95 plus and 99 plus in the dollar index if we go above it on this side it wont last long but it would be vicious and if it goes below here it will be a slow melt. Ultimately this is the place it should hold. Carl, back to you. I will take it, rick. Between 95 and 99, thank you we will watch that try again with cara swisher and see if we got a better connection this time cara, i want to ask about the impact of this on techs perspective toward the rest of the world, particularly the government here. President trump called out google specifically saying its going to help with this website. Lots of questions about exactly how much google had planned to do that before the president said it was going to happen. But google had been criticized for not helping out as much with military things as the president would like is this an opportunity for a different stage of cooperation between tech and government . Yeah, i think so. Government, you have to separate trump from government in this case i think tech, it really is moving forward with all kinds of parts of the government to try to get information out and minimize misinformation, price gougers and things like that and to provide products. In that case in this way, theyre working hard they met at the white house last week as you know, tech leaders and all kinds of things they can do i think that one of the things thats critically important to remember here is that, you know, when these companies do rise to the occasion they can do a lot of great things and they can, again, just at the very base provide great information for people who are stuck at home or provide technology so i do think you will see a lot more cooperation between these companies. It doesnt between companies and the government doesnt mean some of the issues with the companies is going away there were hearings about antitrust, still issues around all kinds of issues around big tech for right now it will go on hiatus until this crisis is over mentality wise, cara, how do you think and maybe its too soon to tell, were still early days, how do you expect a crisis, a shock like this, to affect the valley . We lived through the dotcom bust which i would argue had a bigger impact than the financial crisis did on the west coast. How heavily ises they going to weigh based on what happens to valuations, delayed or skutsled ipos, attitudes towards risk you will see the ipos scuttled airbnb and others and airbnb is taking a hit with travel and things like that probably unlikely or some delay in their ipo other Companies Like apple, of course, have a lot of Retail Operations theyre exposed in that way its not a huge amount but an amount including Discretionary Income spending on things they are going to be affected other Companies Like zoom and others create these products could do well. Amazon with delivery, people start to use delivery and start to like it, you know, they could benefit when this is over as people begin to change their habits the other thing is working at home the idea and products that help you work at home. People might like this kind of format or get used to it as this winz down in the months to hope. It depends on what company you are. In general i suspect Silicon Valley will be fine coming out of this in terms of the tech tools they provide to people and people getting used to living a digital lifestyle. Cara, to that point, weve sa lot of these big Tech Companies, google included making bigger pushes into the Health Care Sector as well i realize its ban source of contention and controversy over the weekend but were starting the see some of those sources launched in a small, limited way. How does this propel or maybe even spur faster some of these pushes into this area . They have to. I think its really clear that part of this is the Health Care System continues to be problematic for most citizens of the United States. We cant get things out quickly and health care is not available to everybody no matter what side of this youre on, you want better delivery of health care to people you can see one of the things we talked about on my pivot podcast was what if amazon was doing the testing. What in some of these Companies Good with logistics did it this will show people how much the Health Care Area does need to be innovative and think of better ways to deliver services to patients and others kara, prior to this our conversations were about facebook and the degree to which they were not willing to step in and make a judgment on the voracity of something on their platform do you think whether its facebook or any over tech company, well see changes to that policy in the National Interest could you envision facebook that says there is this rumor about National Curfews or what have you is not true. I think its interesting because Mark Zuckerberg gave a rare interview today where it was a bit of a victory lap of well take off that. Thats the lowest bar. This should be something they to without pausing, getting rid of Bad Information on any platform. What it does is they are capable of taking off information and making decisions, editorial decisions about Bad Information. I think it should apply to everything all year round and not just here. I absolutely think it should apply here they have been moving quickly to give them credit also what will they should be doing in first place i think theyve been very clear. I think they were alling it black and white, easy black and white decision it is an easy black and white decision to protect americans. It should be a black and white decision to have Accurate Information on the platform on any topic all the time finally, i want to you about events and conferences google cancelled io effectively. Apple moved wwdc to being digital only you participate in and host quite a few of these yourself. What do you see happening to those traditional tech gathererings i dont know. Well be delaying ours we think its really important for the health and safety of not just the people that attend the conference but the speakers and our staff. I think they will come back. I dont think well do only digital conferences. As i said, Silicon Valley is an analog place as much as a digital place and a very analog place compared to Many Industries youll see those gatherings coming back. I think its critically important People Network and know each other. Life eventually will return to the next normal, guess youd call it. We all will have some important lessons to learn about these kind of crisises i think they will return but not for a while and not, at least until the fall, if not longer. Good point. These things do change us. Hopefully in positive ways thank you. Thank you profession mall spoal sport suspending their seasons or flat out cancelling their games and tournaments. With us mlb agent scott boras. Thank you for time today were grateful good morning. What is the calculus inside the league for the sake of these Media Companies who relied on this live content, can you envision games without crowds . Say sometime before memorial day. I think that first thing is that the sport provides baseball provides a daily life type of involvement in household i think the most important thing is a return to normalcy. If we can provide for people that were in kind of a stay at home mandate now that best for every one and i think that initiating sport in way we can deliver to homes will be a good first step and something that i hope that were kind of using the model of shanghai as a method to understand a bit about. They are ahead of this they are through the waves we have yet to go through we can kind of see what they are doing with disney reopening there and potentially their basketball leagues opening and after a shutdown of a period of time i think those models will be helpful for us yeah. Whats the mood among players. Are they anxious to play nervous to play . Somewhere in between i think its very difficult for baseball because in the nba and nhl they have played like 80 of their season. Football players what were doing with our own internal training staff, were making sure their environments are following cdc recommendations and i think the clubs have done a good job of allowing places for players to train and while following recommendations and carrying out professionally isolated environment, having Health Care Professionals near them is really valued. Its a difficult time because youre ramping up for something and yet theres a strong interruption and you want to do your best to aid your families and every one around you and following protocol, proper protocol for the cdc to evolve through this correctly but also theres a real demand on the athlete to stay where we know that button is coming and they have to be ready to go and theyre really ramped up for the seasons and spent the last four or five months getting ready for the season psychologically its a time its a very difficult time to go on a hiatus for major league players. As far as support staff, arena workers, we have seen generous moves by mark cuban what do you think the responsibility is among owners, franchise president s and so forth, gms to support the industry surrounding the games i think all of us who employ people thatare in a sport thats shutdown, i think its important to make sure that were going to have, particularly in baseball, were going to have were going to want to do the best we can to make sure that every one is operational as as soon as practically possible to do that, we cannot lose employees that are trained and are familiar with the environments of operation operating the game officially and i think that we have to invest in that and we have to make sure that all of our employees are prepared and ready and consequence of that, i think, is making sure that they have dollars in hand to allow their lives to get by and yet knowing that we have to look at this and maybe 40 days, 60 days, whatever that period of time that all these employees will be back at work and be called upon to do what theyve been trained to do and create a product and an environment that is at a level that it was before scott, coming off the weekend where the nfl players ratified a new labor deal, i wonder what you think this will mean for all right. Im going to have to stop myself there. We have some breaking news scott boras, thanks for joining us steve, well get over to you for these headlines. Thanks very much. The Federal Reserve announcing an additional 500 billion in overnight repo the Federal Reserve does one of these in day it did win this morning. 129 billion was taken down. Apparently unsatisfied with the functioning of the market, the fed coming in with an unusual second repo. 500 billion of overnight repo i dont think the 500 is the number to focus on fed is saying to the markets as much as you possibly need is what were able to provide for you now in terms of overnight repo here. Its one of several operations the new york fed is executing today including going into the market purchasing 40 billion dollar of additional treasury securities and Agency Mortgage back it did an 8 billion offer this morning. 21 billion dollar in bids was submitted. An indication that there is tremendous demand out there for the purchases the Federal Reserve is making. All right one more important incremental news flash that we have gotten today. The session is down 2800 and were down 1600. Given the announcement we heard from the fed today and over the weekend, whats important to listen for when the white house speaks at 3 30 fed chair jay powell yesterday repeatedly said the Monetary Policy was really in the third tier of responses he believes to this coronavirus issue crisis. He said pit was Public Health i the first and fiscal in the second and Monetary Policy in the third. I would be listening to the extent to which the white house has together a major pla