Transcripts For CNBC Squawk On The Street 20240713

Jim, its clear that even though we had some constructive things happen tactically yesterday, sounds like you dont expect this bounce to last for long were the most oversold weve been i guess you could go back some people say get some great stuff from mr. Williams who is one of my favorite technicians, larry williams. I want to point out, hes done work which says going back to 1933 this is one of the most extreme panics ever. He wants to buy panics on the other hand, you say whos there to buy i feel that were due for a bounce i dont know how much money there is there is to buy much more stock liquidity is a concern in every aspect of finance, at the same time any time you skip over the Public Health issues, you forget that right now strapped in san francisco, strapped in boston, strapped in new york maybe theres not just equipment. The nightmare is occurring what do we make then of stei stifel looking for a 15 rally, gun gundlach not shorting. Why are there these Little Pockets of not optimism but bullishness . Somebody called yesterday in the lightning round about wendys. Wendys was at 6, it went to 9 6 . A lot of companies are priced for insolvency or were two days ago. I think when we got to those levels, people say lets take a fly. Maybe if the economy gets restarted, a lot of these buys are we have to start thinking about when things get better heres what we have to do. I dont mind that thinking the problem is were not Getting Better i think were getting worse. As we get more knowledge of things, one of the most informed discussions i watched last night was on facebook when Mark Zuckerberg was interviewing dr. Fauci. Were still trying to get our arms around the idea that the younger people are infecting the older people were not yet geared at all for what happens when the older people go to the hospital and theres not enough ventilators those are the stories that will define this weekend. I dont think they make is so you want to buy. Against that, its the most oversold its been in terms of the recordkeeping. Yeah absolutely you dont see the credit problems in the stock market dave is following the credit side its really a mess yeah. Listen, you have so many different issues as you know, including liquidity. Its a mess in some areas. You know, jim, to your point, right now when i speak to bankers or management teams or those who were advising them, its just survival mode. Thats what were talking about right now. Yes figuring out what we need to do to make sure we survive, to make sure we get through whatever this is thats one of the key questions and variables. We dont know how long and nobody can seemingly answer that definitively at this point. I guess as we get closer and closer to it, well know when were there. Yeah. Theres things we know that have to happen. Test, test, test people get back to work. If we dont test them, we dont know theyre healthy we need to create some demand in the system boeing is the paradigm in terms of Corporate America where there is demand. All they want is liquidity theres another dead weight part of the economy, whichis the huge Service Economy that is driven by hotels, restaurants, retail i dont know theres the black hole of the System People talk about a trillion dollars. Thats a nice Wishful Thinking number if we can get the malaria pills and they work. Or the regeneron drug works. Or the gilead drug works otherwise one month is fanciful and a trillion dollars is tiny 60 minutes on sunday is going to take a look at the race to develop not just treatments but vaccines as well i think theyll pay a visit to the first clinical trial, jim. Yesterday on twitter, this was jarring to me. You said i dont want to be too dire, but one of them better work, you are referring gilead and regeneron because we cannot shut down the country for months and then the journal oped we have to decide literally theres triage like everybody who is over 80 in italy. Also, by the way, another strain of it over there thats far worse than the strain we hear about. Everybody over 80 looks like theyre being triaged. Thats whos dying you have that side we could be like italy and may not be an issue. The other side is how many peoples lives will be wrecked and the tension, the pain, the suicide, the horror, the heart attacks that will be caused literally by the fact that people are out of work and depleted their savings versus the people who need the hospital beds to fet the drugget the dru. Do we triage the people in the hospital who are in the hospital north of0 a 80, then put the ret of the country back to work if theyre healthy, if theyre not healthy they stay home until we find out whether the combination of the hydroxychloroquine and the zpack, the test in france, you need to see if thats working. You need to be optimistic but also realistic and also someone in the white house or congress to say do we is too much damage putting the country out of business . You need to be a fill lophiloso more than a doctor i hear people saying theyre more worried about a collapse in the economy than they are about the virus itself and how you balance those two, and when we look back did we make the right decisions . One poorly executed not decision but series of events is the lack of testing i dont know if you watch those press conferences the way i do, but i am well aware that testing is still not where it should be. There are doctors offices in new york that were administering tests last weekend and people still do not have results and were told it would be until next week, which more or less defeats the Testing Process in the first place. The idea that somehow were immediately able to get test results doesnt seem to be taking place in the real world, not to mention all the different anecdotes we see of hospitals low on equipment and trying to make do with what they have. We have to deal with those things and lets hope they can figure out an antiviral and get it into peoples hands quickly enough so that it can lower the fatality rate and allow everybody to take a deep breath. Yeah. Testing is probably the ultimate hope for the economy barring the giant break through when it comes to science one thing that len schleifer, talking about regeneron, clearly maybe the most focused on trying to get something done here they need testing to see if someone is currently infected with the virus thats talked about publicly, and they need testing to see if someone already had the virus and has recovered. Thats a different set of testing. They cant do this with just one test theres been no public discussion of this this is the standard seri serialogical test. We need two tests, you need the test that says you have gotten over it, you should be at work that person should be at work. And then if you have the virus, that person has to stay home we need people to go back to work in a responsible way without it, we have no demand and then paychecks have to be put in the hands of people who work at restaurants, hotels. That story will change beginning next week as all of those test kit makers weve been showing you on the screen roll out tests in the hundreds of thousands, and well see that numerator, that denominator rise will that be a positive story or not . I think that people will shrewdly say this is positive because youre getting our arms around it. I dont know if the stock market will be that savvy about it. A couple days ago, g3 drops to two and change after being at seven. Then reports an unbelievable number and back to seven the next day a lot of lottery tickets like that again i think when these numbers come out, people will say i have my money in my 401 k , im 57, 67, whatever age i have to take that down because im running out of money and while they talk in washington about punishing the new ceo of boeing in order to give him money, what they have to do is give me money and theres not enough a trillion dollars is a very small thing. Thats like saying we need four aircraft carriers. Maybe we need like 30 aircraft carriers without analogies to world war ii, were kind of thinking way too small. This is nis not desert storm, wd war ii this is a missiondriven government which is basically saying we have to get the testing done, get the vaccines on the road we have to get the mon money in the hands of people in industries where theres no demand like the Restaurant Industry well said lets bring in danny myer of Union Hospitality group. Its sad to say, i think we all have a sense of whats happened to business in the past couple of weeks, essentially going to zero you made an early decision to close. Since then you announced plans, if you buy a gift card, all of it goes to your employees. Ill ask you for a characterization of whats been happening but also your best ideas for solutions right now. Yeah. First of all, the conversation you guys are having is really, really helpful its a twopronged issue like 9 11, for example. Once we got over the Emotional Trauma of what had happened, at least our industry could stand up and feed first responders, feed families, encourage the public to come back and stimulate the economy by going out to eat and also stimulate Emotional Wellbeing of society we dont have that tool now because theres no green light that says its time to go back to work. Therefore its time to go back to eat and we cannot wait to be in that position but its truly right now as if the entire Restaurant Industry, which, by the way, there are 600,000 restaurants in america we think about huge Industries Like airlines, automobile manufacturers, as well we should, we dont often think about restaurants because there are so many independent mom and pa restaurants that you dont necessarily know about how many there are. When you multiply 600,000 restaurants and you say if on average each one of those restaurants only had 100 workers or 50 workers, you can see the magnitude of the problem in terms of peoples employment, in terms of products that are not getting bought and sold. And i would say, you know, a running theme throughout your conversation has been the emotional, fear part hospitality is a word whose root is hope. One of the real reasons, besides employment that we cant wait to get back to cooking for people and welcoming people to restaurants is that people being with people is hope. Thats one of the real tragedies of whats going on what do we need . We have to recognize this is a twopronged issue. Its safety and health, have to keep people alive or all bets are off. Then it is rebuilding peoples lives. I would start with the people themselves even before the businesses it sure would be good if the government would freeze the obligations and cost structures that people have, rent, taxes, every one of the expense lines that restaurants have. It would be good to freeze that. I would actually spend more of the money taking care of the work force because a lot of the people in our industry work on a daytoday, week to week certainly not more than a month to month basis and we want to make sure our work force has been fed, has been has a roof over their head and is healthy by the time we need them back. I dont know when its going to be, but whenever we do get the green light its safe to come back to work, keep in mind its going to take a good month or so to recruit our teams back and to get them trained before we can serve the way we used to because operations will have changed so much . Operations will change, and we had to lay off 2,000 people, we want to fight another day, if we are not around to be solvent, what good are we to them if 80 of the work force is gone, yeah, were trying everything we can to stay in touch with people via zoom calls, emails, intracompany communications, but theyre gone imagine spring training for a baseball season where on march 1st, instead of the teams starting their month of spring training so that they could start the regular season, imagine if the general managers of the teams had to start recruiting on march 1st and creating spring training at the same time. Im not complaining about that im just trying to share a dose of reality i loved what i think it was jim who said that as soon as we can start to say who can come back to work, who for whom is it safe to come back to working i know that well start to see some green chutes in our industry the minute we hear that, well put people to work well start by cooking for people in our company. Then start to cook for people in the community. Yeah, it wont be restaurants where you gather, it will start off by being takeout and curbside pick up, but we cant even do that in our company safely now until we hear that people can come to work without fear danny, youre so right. I enjoyed my the last night i was happy was my 65th at your restaurant thank you very much. Danny, you were doing two things that people are not talking about. One, youre actually helping your workers second, youre getting rid of your pay i think that that is incredibly selfless, you have to be appreciated for that one problem that america has right now, is that they feel the bosses, the managers will be the winners, and the workers are the losers youre trying to do both my restaurants im struggling we laid off people early on monday i think that i dont know if i have the wherewithal i think a lot of Restaurant Owners dont have the wherewithal to reopen you should speak to the notion of capitalization of most of the people it is a shoestring industry. You built a great empire, but can you speak to the industry where they dont have 1099 employees, cant get a payroll tax cut. The unreal nature of how Little Washington knows about our industry i think you nailed it, jim. This is what i was trying to say earlier, because we are such a disaggregated industry, its one of the great things about restaurants, how many entrepreneurs got into the business, how many employees got their first, second, third job in our industry. We dont necessarily speak with one voice. And i think that the independent restaurants in this country are finally coming together i was on two or three calls yesterday with a lot of independent restaurateurs who were basically saying how can we have a voice and how can we let washington know that this is a massive, massive part of the economy . I think Andrew Andrew ross sorkins notion of government for all is an interesting one we should look at i want to make sure our industry doesnt get lost with respect to my compensation, that works for me, it doesnt work for most other restaurateurs. I never would want to suggest that that is the way an independent restaurateur should go its tough times its tough for the employees but also tough for people who have taken such responsibility for hiring people and putting a lot of people in the work force who are now stuck with the bills i have not seen a lot of landlords stepping up and saying well stop charging you rent i have not heard a lot of Utility Companies saying we know you have no income but we wont charge you for gas and electricity in your restaurants until this thing is over so we need everybody to step up now. This is an economic and safety wartime effort right now i think we all recognize that. I want to put a plug in for one other thing. You guys over the last five years or so have been amongst the people that asked me and others about the wisdom of eliminating tipping in our restaurants. If ever there were a time where i feel like that decision is actually being reinforced as a good thing, for the hourly workers on our team who face unemployment as of this week, when they go to the unemployment line, their compensation that they can show on their work2, because they were not paid adjusted minimum wage but a wage that accepted the fact there was no tipping, so it was way above minimum wage, that makes me feel a little bit validated on the decision we made five years ago to eliminate tipping i look forward to the day we can have the discussion again about the tipping policy when all the restaurants are open and a discussion now about forbearance up and down, which we have been talking about in terms of not being able to pay your bills take me out when we are through this, when we get to the other side what are your expectations for what its going to look like in terms of how many restaurants are able to reopen, and whether or not behavior in some ways will be forever changed amongst people in terms of their willingness to socialize in the same way and patronize a restaurant at the same frequency. I think people are resilient. I really think that human beings are a very social creature, social animal. Thats one of the reasons that restaurants play such an Important Role just, again, think about what weve all been looking forward to we were in the process of planning graduation lunches and dinners, easter, weddings that got canceled for june. All the reasons that people come together just to celebrate friendship thats not going to go away for those restaurants that survive but heres what i would say. Even before this, our industry for the last id say five or six years has absolutely been moving in a direction where because the quality of food available in fast casual and fine casual restaurants has and with delivery and takeout has been on the rise any way, even without this, so when we come back, and we will, people are going to keep eating, thats a good thing people will not stop eating. The question is, where will they be getting their good food im going to bet right now that we will see fewer full Service Restaurants than the number that we went into this with and well start to see even more acceleration in the trend that already started with really good food that is available to be served as takeout, as pick up, quick service. I think thats going to be a really, really good category i cannot wait. I think that autumn of this year should be an exceptionally good time in our industry because theres going to be so much pent up demand to be with people. Again, it all starts when some Higher Authority turns on the green light and says first of all its safe to go to work. Its safe to go out to eat right to that point, danny, fauci is on the today show this morning on how long americans will have to stay at home. Going to be several weeks. I cannot see that all of a sudden next week or two weeks from now it will be over i dont think theres a chance of that. I think it will be several weeks. We keep talking about this idea of workers needing a place to go back to once they get the green light. For you, you must have run some models that has a date that says if it goes past this date, there will be no union square for us to rehire to well, what were looking at is a little bit more optimistic than that, carl. So were now down to 150 employees in my company. I cant i dont think ive been able to say that for probably 25 years. Since Union Square Cafe was my only restaurant before opening grammarcy tavern theyre tasked with building a bridge to the day that the sun is shining again what does that bridge look like . The bridge looks like creating opportunities for revenue for our company that are safe as of that moment. If in two months, if in one month we still have not gotten the green light that its safe to cook food for people, even on a togo basis or pickup basis, i think we will find a way to do that as a matter of fact we already have a Skeleton Crew who is cooking food right now for a contract that we have with another business, we are obligated to do that very, very small crew doing that but that bridge could look like some entrepreneurial opportunities that maybe we have not thought of today we have kitchens, those are assets we have really good chefs, really good wine directors maybe well create a broadcast network not to compete with you guys, but maybe well give cooking lessons, wine lessons. One thing the government said we can do is safely sell alcoholic beverages off premise. We have never been able do that before maybe ushgtv well find some way to create revenue as a bridge even before we get to the time that i keep calling the green light where we can all come back to work and do what we love doing, cooking great food and bringing people together its just crazy that the thing we love doing is now the thing that we just cant do. Were looking for ways to bring hope back to our society danny, our thoughts are with you. We appreciate you coming on and sharing views with viewers this morning. Thanks thank you all danny meyer. Lets get a coronavirus news headline update with rahel solomon. Cases around the world are rising above 246,000, more than 10,000 people have died. In italy, a country of 60 million, cases top 41,000, the death toll is more than 3,400. That surpasses klechina. Today spain became the second country in europe to report more than 1,000 people have died. Officials are warning the Health Care System could be overwhelmed. Here in the u. S. , confirmed cases stand at over 14,000, and 205 people have died within the last hour, new York Governor Andrew Cuomo tweeting that the new york tristate area and pennsylvania will extend mandatory business closures, so this includes hair and nail salons, tattoo shops, other Services Starting saturday night at 8 00. Out west, in california, cases jumped 21 in 24 hours prompting gavin newsom so issue a stay at home order for 20 Million People that includes all dinein restaurants, bars, gyms, Entertainment Venues close as businesses close in california and across the country, Layoffs Mount stay unemployment offices reporting unprecedented spikes in initial jobless claims. Federal data points to a 33 increase in claims over the last week Goldman Sachs in a note predicting that for the week ending march 21st, claims could be in the millions in other words, the largest increase ever and perhaps highest level on record. David, back to you yeah. Thank you. Those numbers conceivably are, as you point out, the likes which we will have never seen. Lets talk stocks for a moment in the two minutes before we get the opening bell. Jim, quick look at my screen in terms of stocks up for the year. Just what i got here teslas up netflix is up. Eli lilly is up. Gilead is up and your mad dash is up. Amazon. People are out of their bunkers. The analysts have been waiting for a oneup day to say some good things. Theres a chorus of people saying you have to buy amazon. The world has changed forever. People realize they can buy many more things on amazon than they thought. I got home last night there were four packages from amazon that my wife ordered. All sorts of things that we would have went down the street to a riteaid or walgreens why . Because we want to avoid crowds. Walmart announced a spectacular bonus plan i think, david, we come out of this sooner than other Small Businesses open if we come out of this, there will be three retailers, amazon, walmart and cost costco that is something that the government cannot afford to have happen if it comes out that those are the three, can you imagine, david, what it means for this country to have three retailers . No. No it would not be a good thing in so many different ways, jim. Youre right, theyre dominant already. And certainly cementing that dominance conceivably given the highly unusual conditions in which we find ourselves. Carl, we have an opening bell. Over to you. David, lets get to the bell. Final day of trading at the New York Stock Exchange for the week before they go all electronic. Tom green is the vp of building operations at the nyse the global head of Capital Markets at the nasdaq there. In terms of todays activity, oil has been swirly today as the russians say we dont need anyone to intervene in our saudi relations after the president said yesterday that there was opportunity perhaps its hard to know what he meant in terms of restoring some stability to oil. It is interesting the president talked about filling the Strategic Petroleum reserve last friday. In some conversations i had with the administration, people are starting to think that under 30, we might lose our Energy Independence this morning, rusty brazil says that we are still going to pump 13. 1 Million Barrels a day thats the exact opposite of what russians want we just seem to not know how to we cut back 40 in our capex budgets. Now theyre pumping from the permian, that will keep them in business if they can get it north of 30. I think the president is trying to figure out at what level do the people say hes not doing a good job and keeping costs down. Weve seen gasoline below a dollar in some places, versus keeping this industry alive . This aerospace and oil are the two industries that are most keeping our nation competitive and making it so its strong one call from the president to saudi arabia says we continue protect you unless the oil floats above 30. Thats the break even. 30 you have to get there. If not, well have a huge amount of bankruptcies. The bankruptcies will start in two weeks. Theyll be stark and frightening to people. So the government has to get ahead of this. You have to get ahead on aerospace, on oil, on restaurant and retail and on hotel. Yeah. Oil reversed oh, darn it. You know, jim, youre right the restructuring is thats where there is a great deal of focus right now, as you say. Its you know, listen, my old world of mergers and acquisitions, you have so many different people focused on what deals will actually close and what deals will be renegotiated, what deals will fall apart whether the banks will be there to fund or not whether they will claim material adverse changes, even if there wasnt necessarily something particular about a pandemic in the contract that allowed for it were just at the beginning of that process right the beginning so many firms being hired to advise on restructuring. It will be an important component of revenues if we want to look at it that way for the Advisory Firms out there, a significant change from the fairly good pace that we had seen previously and advising on all sorts of other transactions that had little to do with the restructurings or bankruptcies david, if theres no activity guys on davids point about Investment Grade, the lqd down 10 in september of 08 this month down 20 . Double the 08 decline, and you had gundlach yesterday saying the reason ig went down more than junk could be redemptions, but could be the market does not expect many of these ratings to stay ig. No. But theres a question, of course, jim casey raised it with us i guess last week, its hard to keep track from jpmorgan, cohead of investment banking, this idea when you get that wave of downgrades, the high yield market, carl, is not in position to handle that kind of volume. High yield is closed right now for new issuance but in general, the difference in dollar amount from ig to high yield is vast. Thats also a key question that we sort of have to keep an eye open for as we watch the credit markets and how theyre operating at this point. Its an important component overall of all the different markets. David, this is something that the president , with one phone call to the saudis would take off probably about 300 billion in high yield trouble. Now, a lot of the oil and gas, you get a chesapeake, its obvious how much debt they have. The president has to be focused on what can be done with phone calls today. Get oil up a little. Take that off the table. Get the testing done get the credit line, some sort of line to boeing. Theres 17,000 suppliers and 2 Million People involved with that pick a couple of industries, save those, put money in the hands of people who they killed demand for if you own a restaurant and youre told to shut, why dont you get the Business Interruption that secretary mnuchin talks about . Then get out there get out there like fauci fauci is everywhere. Get out there. Get out there. We probably want you want a simple solution . If youre over 60, dont go to work under 60, go to work the president has to come up with simple Ronald Reaganlike totems the president is never going to listen to me or anyone else for that matter. I think its very simple you have to make the call to the saudis, talk about how well ramp up with testing and do a mea culpa, just do it for the nation like fauci did yesterday talking to Mark Zuckerberg, we didnt have it all right. By the way, fauci and zuckerberg can you believe were talking about this dr. You to zi,fauci, stop playie cough drop or something. Youre right. Fauci on the today show said we are rapidly getting to the point where we will have many, many tests out there virtually for everyone this is fauci this morning. Early on it was not that way it should have been. But were really now very much in the right direction, flooding the system with it look at that. Thats constructive look at that. Heres the 79yearold man with reg regis those for you in the New York School system, know thats a great school. First he admits they did something wrong. I like that. Its called humility second he says we do have hope here were going to get these well get these tests to you obviously he makes no false promises he must be talking to roche, and then he says heres a timeframe. The best thing he did on facebook was right at the end. The whole reason why he did it, listen, younger people, we know you think youre immortal. I was immortal when i was that age. Will you stay away from your parents and grandparents 60, go home. Dont get near these calu youth, under that, go to work, well test you simple totems. The president has to learn to give hope without being false hope im instructing the president , i dont give a damn. Then he has to understand eisenhower, reagan, fdr, simple truths, rocks of truth thats how you do it you have to do it that way or all we say is rem this and that. No simple truths. Too late in the game am i going to go back and get a phone call my mom will be angry with me i have to tell the guy how to do this thing im tired of the im tired of the way theyre doing it one small piece of ill call it good news, david china buying 756,000 metric tons of u. S. Corn, the first major purchase under phase one when is the last time we talked about phase one other than Fiscal Relief . Yeah. Its funny remember when trade was the greatest single threat to our economy or the trade war dont we all long for those days guys, listen china is starting up again we know that its funny yesterday i had a conversation with someone who advises on deals where the chinese are actually buying from latin america and from south america thats starting up because of course you also need to get the ships ready to go, things of that nature. They are starting to come back into the market for commodities. You pointed out the new agreement, but around the world, the chinese are starting to buy again. We dont know what the numbers will look like out of china terms of what their economy has gone through im stunned when i look through the numbers that are estimated here, whether its jpmorgan or Goldman Sachs for what well look look in the Second Quarter in terms of the downturn i have never seen anything quite like thosenumbers. You know what theyre buying, david . Theyre buying i know this, theyre buying what were about to talk about. Buyinging airplanes from boeing. Yeah. Lets talk about boeing, jim squawk did an extensive coverage about haleys leaving the board. What do you think about that wants to be president thats okay. You want to be president , you have to get off the board. People who do well are fat cats in the country i think she wants to run for president. Good grandstanding some of the best ive seen by the way, shes holding up better than senator Kelly Loeffler did you see the buy she made she got citrix near the some senators who have been active in trading. Its like watching najarian and unusual activity boeing wants to get they have orders unlike restaurants, they have orders try these orders they want to make planes, give them the credit line avoid the vaudeville theres terrific training in the senate theyre not listening to me. They bought a lot of hotels. I never liked the hotels on mad money. They bought the constellation. The rails what is she doing made some bad buys richard burr, hes been that guy is all over the place. Completely diversified yeah. Yeah hes looking good. Better than aaron yeah. Not bad. How much different trades . Wa m a 33 trades sold. No new neat positit positions. What are they doing with the hotels a lot of hotel analysts were negative maybe their chartists. You think theyre chartists . I love a good head shoulders. Some of these guys are doing cup and handle theyre way beyond that. Cup and handle. Theyre using cup and handle how about this one no, the relative strength index. Theyre in the relative strength index, theyre buying some stocks that you never in a million years would have bought. 1. 7 million of stock dumped reassuring about coronavirus richard burr man, you got to when you go out there and you say im selling, maybe you should say im a little less confident. Maybe dont be so confident. I dont know speaking of relative strength, guys im not able to swim anymore. I dont know what you guys are doing. I have to figure a program out talking about aerospace, im going to for a second go back to our old world and talk about a potential a news story that i can share at least with you at this point involving something we would have discussed certainly in when we were just covering the markets. United technologies, jim, we talked a lot about it. The ratheon deal still waiting to close people familiar with the discussions with the department of justice about approval of that deal say it is getting very close. Approval is actually near. They are very close to figuring out and having done a divestiture package to give the clearance to United Technologies ratheon deal, which once it does close will result in utx breaking into a number of companies, jim just for one minute i wanted to go back as though we were in ourwell, you know time capsule . Yeah. That deal might not be so bad. A lot of people are worried about the otus part of the deal. You get paint, you get the aerospace business, you get the Climate Control business, you get the elevator business, otus. People are worried that that business will be the worst, thats heavily chinese now that the chinese are back and dominant, i think you want to keep the elevator side. China is doing well. As i said at the top, no new reported cases in china. To the degree you want to believe it, thats up to you you did mention the activity in alibaba as being especially encouraging. Thats a good stock kind of look, im not being facetious. China is ordering airplanes, china is ordering food by the way, the chinese say the only cases they have are imported cases they are not only back, but if they put a lot of stimulus together, then arguably you could say if we let boeing go, let our defense go, oil go, well be it will be a well be a second rate power versus them. Theyre coming back so fast. Thats not something i want to hear if youre only spending 1 trillion to bring us back, i dont know how you compete against this engine. Its incredible. You use martial law, youre a dictatorship who knows what happens if you stepped out of your house when you werent supposed to. I hate to think theyre the winner, were the loser because were a democracy. The journal oped piece said part of the reason they have been able to bounce is because the government was an owner and absorbed a lot of the losses thats a good point, jim lets get to eamon javers who has more on the fiscal front on the hill i got off the phone with larry lindsay, the National Economic Council Director under george w. Bush, he said most of the analysis is missing the key element of this mcconnell proposal that just went out last night. I want to wake you through larrys analysis he says theres a big bazooka in the bill, its aimed directly at Small Business he said the goal is to keep people on the payrolls ultimately so, walk through this here hes talking about section 1105, the Collins Rubio provision of the bill he said that will provide loans from the Small Business administration directly to Small Businesses for the purpose of covering their payroll he said this will cover employees making up to 100,000 per year but the loans would be forgiven entirely after four months if those companies dont lay anyone off. That is free government money to Small Businesses if you dont lay anybody off after that fourmonth period. Lindsays analysis suggests this could affect up to 80 million workers in the country its authorized in the bill up to 3 300 billion right now lindsay says his analysis is if every Small Business in the country is eligible takes advantage of this provision in the bill, it could be a price tag as high as 1 trillion over a fourmonth period that is authorized and spelled out in the details of the bill. There is a 10 million cap on payroll per firm in there. So you cant go higher than that 10 million if you have a big, Small Business this applies to businesses that are 500 employees and less im told this is a major Job Retention element of this mcconnell bill a lot of people are looking through this bill. This is on page 22, section 1105, have not focused on this but its a huge number its designed entirely to keep Small Businesses, employees on the payroll, incentivizes those businesses to thake those loans and have those loans forgiven after four months if they dont lay anybody off. Thank you dont go far well rely on you for a lot of information today. Jim, how many aircraft carriers is that . Not enough. We keep thinking what danny meyer was saying loans dont work lets say you run a business and its on a shoestring, you hear loans what do you do take a loan and then you try to reopen then you owe more. Its grants to the workers grants to the workers. They have to stop with this onetime notion. I urged them over and over again, youve got to think bigger no one will look back at this government and this president and this congress and say, you know what . Boy, did they ever throw too much at that covid19 problem. No one in the history books will ever say that. This was not like this is this is an issue that is so much bigger than what they think. Its not like stalin where he questions how many divisions the pope has, but we need more a lot more divisions we had an army in 1938 that was smaller than the Romanian Army we geared up fast because there were people who stood up to the president , stood up to president roosevelt and said you are thinking way too small you are just part of the navy, can you imagine someone standing up to the president and saying you dont know how big this is we need someone in that white house, someone in that congress who says this is a 4 trillion, 5 5 trillion problem. Jim, i hear what youre saying but the president s entire experience is in hospitality, travel, tourism i mean, this virus is aimed at his own business as much as it is any other its hard to imagine hes clueless about that. Im surprised hes not saying well build hospitals you see how fast they built a hospital in wuhan well build it twice as fast lets beat them where it matters, in ingenuity, manufacturing. Lets go to regeneron and say what do you need you need a test which shows whether people already have it and theyre immune the president has to be in the front lines. He needs to think strategically as people are tactically but there has to be a recognition that there is no no limit to how much we can do to help the american worker. Without that confidence well see tremendous despair and go under ray dalio mode i dont want us to go into ray dalio mode, every man for himself, and im going to my island jim, quick bit of news before we get to bob pisani you mentioned the walmart hiring and the bonuses for employees. Jpmorgan is going to give front line employees a onetime bonus of 1,000 in two installments. This is reuters. Lets get to bob pisani. Goldman sachs, exxon, Procter Gamble on the downside if you look at the s p futures we moved in 100 point range. 2500 to about 2400 a little bit below that. Remember, 2351, the close the old december 24th, 2018, closing low. Thats the last mental technical level people are watching. Sectors today energy a bright spot early on. Industrials were none of this is holding. Banks underperforming. Consumer staples have been weak in the last day and a half utilities, we pointed out yesterday had a big discussion on this. One of the things theyre looking at the senate may be moratorium on bill paying. That includes utilities disconnecting people thats an Economic Impact for them as well if you look at other things. Consumer stocks as well. A little bit of weakness there remember, these stocks had big runups and a lot of people overvalued hard to believe in this environment. But you see some people having second thoughts about running up food stocks in this environment. I thought it was interesting that virtue announced the earnings today and announced a new expansion of their Borrowing Capacity by 450 million they said this is an extraordinary opportunity to provide valuable liquidity to customers across the global markets. This is a giant market maker saying theres an awful lot of volatility, and were willing to go out there and to put some money out there. Of course, theyre involved in Market Making activity so this is all, of course, in their favor. Its interesting they want to expand their ability to be out there. Bond etfs, huge outflows record outflows here i want to point out corporate bonds. Weak, down 20 a lot of investment bonds might go into junk Territory High yield bonds, concern about defaults muni bonds, they float the debt for the convention centers, for the transit systems that are all out there being affected a lot of tentacles to this finally this quadruple witching expiration these are usually the two biggest volume days of the year. This is the quarterly expiration of stock and index future options. Usually you get movement at the close. People are offsetting and closing and rolling over to new positions. And we usually get a lower volume the hope here is were going to get a lot of volume, even more than normal today and hopefully next week things will calm down a little bit that usually happens, although heaven knows in these kinds of circumstances. Carl, back to you. Exactly bob, thank you lets check in with Rick Santelli this morning. Good morning, rick good morning, carl. So many areas. Lets concentrate on whats going on in sovereign treasury market a march 13th start whats fascinating at 1 , were down 14 basis points on the week tens and 30s are unique. Theyre still up on the week thats how Much Movement there was that we settled back from one yields shot up during the middle of this week. Were up four on the week. We settled at 96 look at a month to date of tens, what information that 54 low close you see, thats the all time forever low close. That was the 9th and 31 was the intraday low were building a little bit of a base but not a lot of cushion at 1 , the all time forever low is at 54 basis points heres a twoday bund, the high minus 14 open the chart up to may 2019, yesterdays intraday low was the highest theyve traded look at september 2018 for the dollar index, the nine was the low. 9489 then fast forward to the 19th. Thats a new high taking you back to january of 2017. Never seen anything like it. Back to you. All right rick, well see you in a little bit. Jim, lets get stop trading. Carl, senator locker in, i would let her take sit rix she sold the exxon in 60 i would like to buy verizon. Why . She doesnt have a lot of income coming in in the portfolio she got smoked in fundco i had the verizon ceo on last night. I feel good about the yield. She sold suboptimal stocks i would buy verizon and also cro crowd strike i got to work on this fella, burr what show does he watch . Maybe hes watching a different network. He doesnt do any of my ideas. Im focussed on the country. But man, look, its good someone is worried about their portfolio. Tongue firmly in cheek. Its only 100 theres 100 of them. Some of them have to look at this stuff i salute them. I think people should also be worried about their portfolios and at least those people take me seriously jim, well see you tonight. They might like amh jim, well see you at 6 00. Mad money, 6 00 p. M. Eastern time when we come back, we have existing homes at the top of the tape session high of 347 as the markets go for back to back ekst tin the firime wes. Dont go away. Liking the now platform . Every time it takes care of something for us, we celebrate. How often does that. Got it. Servicenow the smarter way to workflow. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Good friday morning. Im Carl Quintanilla with carl and morgan we are in separate locations dow going in and out of the red. Session high so far up 347 and the low minus 214. Thats right. If we can manage to get some back to back gains here, mind you the moves are small. Fluctuating around the flat line were looking at the first two back to back gains for the dow and the s p in overa month in the meantime, news from the fed with steve morgan, thank you in a global coordinated back, the bank of england, canada, japan, the ecb and switzerland along with the fed joining together to provide more dollar liquidity around the world and relieve strains in dollar funding markets that have caused part of the upset youve had and the huge strain in the markets what theyre going to do now is theyre going to hold daily operations to provide dollar funding instead of weekly. Let me try to put this out in some kind of terms that people might understand at least ones that i understand. Imagine if the only place the whole world could get big macs was in america wed have a supply problem the price would go up. What theyre going to do is distribute this stuff around the world, hold daily auctions and try to relieve the pressure inside the United States for dollar funding well see if this is another piece of the puzzle with all the other stuff the Federal Reserve is going back to you. Steve, thank you for that Steve Liesman. Were getting existing homes as well for that well go to diana existing home sales jumped to a seasonally adjusted annualized rate of 5. 77 Million Units thats the highest in 13 years sales up 7. 2 year over year sales in the west soared 19 these are based on contracts that were signed in december and january and then closed in february so well before any of this really hit the housing market. And the inventory of homes for sale actually fell nearly 10 annu annually just a 3. 1 month supply. Thats tight it pushed the median home price in february up 8 annually to 271,100. The upper end seeing the biggest sales growth t so many homes are being pushed into higher priced categories. The chief economist said this is all in the rearview mirror. Realtors are reporting a decline in buyer traffic as well as sellers delisting their properties because they dont want people walking through their houses there is concern about appraisals and closings which usually have to be done in person were going to start to see that technology ramp up for online closing and Title Insurance quickly. A lot of the time you have to have an appraiser on your home theyre talking about drive by appraisa appraisals those are generally on refinances they said housing wealth will hold on. They do not seem to think home prices will fall as they did during the sub prime crisis because of the shortage of homes for sale and the market. I asked him if he expected to see any kind of number on the sales drop wed seen some forecasts of a 35 drop in sales this spring. He said it was not out of the question but hes not ready to put a number on it yet carl all right diana, thank you very much lets bring in david, City Private Bank chief Investment Officer to talk about all the swings were getting in the flurry of news even on this friday morning david, thank you for your time pleasure to be here thank you. Trying to weigh the extreme negatives were getting with i guess youd call them mild positives. On the negative, everyone is bracing for whatever this claims number might be next week. Obvious distresses in credit which wevetalked about for days on the positive, a fair amount of insider buying relative to sales. Got to go back several years to find that kind of ratio. Better mitigation. How are you balancing everything you cant balance everything. Were going to have a significant hit to the economy and mitigation efforts are going to extend the length of time that hit is going to extend across the economy what we really are looking at is whats going to happen after this is over and whether or not the government is going to provide the right kind of support. It looks like theyre doing that the fed and all the Central Banks have done an extraordinary job of rolling out the plans from 2008 and 2009 theyve done it quickly and whether its munis or mortgages, theyve done all the right things to create liquidity and confidence theyre going to make sure everything is right including dollar funding on the other hand, were going to take this very giant hit thats going to effect Small Businesses and individuals so how youre trying to look through it. How efficient is the market at looking through it given that we saw numbers coming out of china that really didnt derail our own equities until a lag of several weeks. Thats right. And so my expectation is that were going to see worse numbers in q2 than people are expecting. Were talking about gdp down 15 . Extraordinary unemployment or underemployment numbers that could run and take our levels of 10 or even 15 of people who are furloughed its going to look awful for the Second Quarter and the issue is how do we recover . And thats where the Government Programs come in if whats in the new republican bill that just got released is true, and there were Small Business loans and people can continue to get income for that fourmonth period, then the impact in the economy is far, far less, and we get bridged across what will be a very shortterm extremely zero downturn once the markets see that and it will take i think at least another two to six weeks for them to believe thats going to happen, and then they have to get through the health care crisis, then you can imagine markets being more opportunistic. We expect great volatility and a few relatively ugly pictures of whats happening in major cities in the u. S. As the full Health Care Impact actually hits our screens on tv. Yeah. David, you touched on this im going to dig in it further the markets and the economy are two separate entities. Theyre intertwined, but given the pretty dramatic moves lower, weve already seen within the markets over the past month, are there already opportunities for maybe perhaps longterm investors to be getting in here at these levels even if we do see at least in nearterm, further pain, further volatility as some of the economic numbers shake out . Its an excellent question. Its the hardest part of being a chief invest want officer. About a week ago we wrote if you were going to put money into the market, you want to put a third of it in now you cant be precise about entering the market. Valuations are 30 down from where they were five weeks ago we are advising our clients to put money into the highest quality stocks with the strongest Balance Sheets in industries that are clearly going to be less affected, whether its software, cyber security, health care shares, a long list of things. We also think banks ultimately will be a good place to be theyre going to lead us out even though theres a heavy hit, they were deeply impacted in the markets, theyll be attractive you begin to invest now and you invest more as you get more clarity. And the second thing were advising our clients to do is not to try to market time with their core portfolios. If the scenarios play out, it will take time for portfolios to recover. If you try to market time with this volatility, youre guaranteed to lose thats for sure. When you say takes time, ive seen some desks coming out with return to s p 3k over five years. A long road to get back to levels we saw a matter of weeks ago. I want to ask you about that as were speaking, the president ial presumptive president ial candidate joe biden calling on every ceo to publicly commit now to not buying back their Company Stock over the course of the next year. How much of a drag will there be on equity recovery given some of the policies that might be enacted as a result of the bailouts or rescues . Right a variety of different questions there. I think let me go from the top when you think about the recovery like if people say it takes five years to get back to where we were, the truth is we actually dont know that the amount of stimulus weret g economy if it turns out to be a trillion, will be too small. If it was three or four trillion dollars, inflation adjusted for what happened in 2008, that would be Significant Interest rates coming out of this situation will be 1 as you heard peter talking about. Enormous amount of stimulus. If we bridge this to the other side, the individuals will be hurt less than they otherwise would be hurt. You can imagine a strong 2021 with a 13 to 15 growth rate in earnings last year off a low number last year thats the optimistic view in terms of what you were talking about in buybacks, thats a different story that clearly takes some of the wind out of the markets, because companies will be holding cash to stay safe and buybacks have been a large driver of the markets for the last two and a half, three years. David, i want to know in the next couple weeks youll get another Earnings Seasons weve seen hundreds of Companies Cut their guidance weve seen dozens pull it altogether how much are the numbers going to matter . Well, were getting a clearer sense about the impact that its having on businesses already you know, the supply chains clearly have been strained and in some cases broken sales have gone down in Certain Industries considerably on that basis. What people are doing are giving poor forward guidance, lack of clarity. I think its going to take a toll as we hear the total story. But at least its an accurate portrayal of how deep this moment is in terms of the impact in the economy its going to be unlike anything weve seen in our lifetime and different than the financial crisis this virus crisis is going to be sharper down, more impactful to the average individual quickly and the hope is on the other side we see a faster recovery in the event the Health Care Situation becomes more clear lets say a quarter from now, three or four months from now. Finally, david, as we look at some of the headlines, mnuchin is on the tape tax filing day being moved to july 15th. The vix is back in the 60s weve had a lot of anecdote evidence we havent seen Circuit Breakers in a couple of days. Hoe hoe can we establish a range, even if we chop for a couple months, establish a range around here. Well, these last few weeks have been anything but normal. Vix in the 60 range is extraordinary and frankly, unhealthy and deeply unsettling for those people trying to invest in the market in any rational way i expect for the next really for the next four or six weeks we could see another doubt of volatility thats very severe. Were going to see a lot of news in europe and the u. S. Thats going to be disturbing in terms of the impact on the economy and i cant believe thats going to be good for markets so im not particularly hopeful in the very near term. I am hopeful that the congress here and certainly weve already seen this in europe, are going to take the right steps and build the right programs to bridge us across at that point i think market normality can return im not taking the last 48 hours as an indication of the next several months i think were not out of the woods yet. David, thank you. Our viewers thank you as well. Well see you soon thank you very much for having me. Its been a historic week for the fed and you just tarted this hour with more breaking news capping the biggest buying spree in its history Steve Liesman has the story for us steve. Yeah. Thank thanks morgan. By my count the Federal Reserve is coming into the market and purchasing a historic 107 billion, 32 billion of agency backed mortgages i dont think theres been a single day like this i know for a fact there has not been a single week like this after the end of this week if all the operations are scheduled today come topaz theyll have purchased 307 billion of securities their biggest week in the financial crisis was 162 that was in march of 2009. This would be double that amount you cant say the fed is not being very aggressive in trying to come in and clear the markets and provide liquidity, keep down Interest Rates, and make sure that these markets trade because they had not been trading. Well see the kind of effect it has. On another front, part of the feds reaction is whats going to happen to the economy here. And Goldman Sachs looking for next week. For an increase of 2. 25 Million People on filing for unemployment claim insurance that would be the largest one week weve ever seen the second largest week after that, if this comes to pass was 695,000, a very bad week in 1 2 1982 even during the financial crisis, we didnt have a oneweek surge like this we did have times when there were as many as 6 Million People around the country getting unemployment claims. But not in a single week overwhelming states. Take a look at the Google Search data you can see it surging around the country. This is the search for the trm unemployment benefits. It has surged around the country. But heres five states where its happened the most nevada, the casino business there. Rhode island, pennsylvania, and wisconsin are the places where its surged. And well see. I did not see any comment at all or any mention in the republican bill for aid to states for unemployment, but thats certainly one way the states will be severely taxed in their finances as well as their bureaucracy trying to process this surge in claims thats out there. So it might take some time for people to get their benefits that will have a further knock on effect on the economy the states have to figure out how to pay for it without federal aid . Those are going to be key questions and the jobless claims to be key more leading indicators in terms of data we get in the coming weeks. Steve liesman, thank you for putting that into one hit. Financials feeling the hit Huntington Bank steve stainhour joins us good morning. Weve heard Steve Liesman sum up actions and activities by the Federal Reserve. Given the fact that we are seeing the moves and so quickly whether its repo operations or asset buying and quantitative easing, the cut to zero and Interest Rates a few days ago, i could do do go down the list, how is it impacting huntington right now, and what does it mean for broadly for the Financial Sector the Banking Sector is has never been better capitalized and better positioned to be part of a solution here so there are Impacts Branch lobbies have been closed weve closed ours. Other banks have done that to try to moderate traffic flow and the risks to other customers and our colleagues in the branches but the banks have worked largely worked around challenges relating to the virus in terms of dealing with our customers. Using driveups, atm, mobile, digital, other distribution techniques so were theres a the Immediate Impact of the environmental changes i think have been largely absorbed in a strong fashion by the industry beyond that, theres clearly going to be an impact in terms of lower spread revenue because of the Interest Rate changes by the fed, and these unemployment figures will clearly mean customers are going to need support. And this is where i think the industry being well capitalized can come in. I think theres a role for banks to play with providing support to consumers and small to medium sized businesses in particular for example, we have put a 90day payment deferral for principal and interest in for consumers impacted by the virus as well as small, mediumsized businesses and were seeing an up tick already on that, and its only been out for a couple of days. There are other things we can do as an industry, waiving late fees,moratoriums a host of things to stabilize the environment. As the fiscal elements come into play, were that will be that will serve small, medium sized businesses very well assuming we get the funding mechanisms so the flows happen quickly and the same with the consumers. Okay. I want to dig into that piece of the puzzle more with you, but first given the fact that you did take over at huntington, you took the helm in the midst of the financial crisis in 2009, and the last time we saw a recession, it sounds like and tell me if im right, it sounds like youre saying there were Lessons Learned by the government and the industry that enables a bank like yours to be in a stronger position to help Small Businesses in a more meaningful way today i absolutely believe that the Banking System is almost capitalized at a 2x level from where it was in 2009 thats the case with us. Were collectively in a position to be constructive and supportive as soon as we work through the curve, the duration of the curve becomes known. Theres a resiliency that i think the banks can play a major part in in helping businesses get back on their feet so in terms of the fiscal response that we have seen from the federal government so far, and i realize a lot of this is rolling out in phases. Has it been fast enough . Has it been targeted enough . Will it help your clients be it businesses or consumers enough well, its still in process the large bill is still pending. And it has i think many of the right elements to be very helpful. But the distribution of proceeds, the timing of that will be important, and how the funding for the sba ultimately gets translated into helping these Small Businesses that need support in the near term and im optimistic all of that will work on a very timely basis. But that remains yet to be seen. Speed is important here. A sense of urgency appears to be in place the bipartisanship seems to have subsided substantially so things are now getting done im optimistic that well flow into next week with the opportunity to start helping people and Small Businesses. Of course, youve been implementing some of the social distancing measures within your own banks and among your own employees in terms of interactions with some of those clients. Weve been talking a lot about fin tech in general in recent months and the adoption of technologies by banks like yours. Whats the role thats playing to help Huntington Bank navigate through a crisis like this this is very important. We have a lot of capabilities in our mobile and Digital World the majority of our deposits flow daily through those other channels as opposed to the historic teller. And weve made Tremendous Investments as a company we were j. D. Power number one nationally last year on mobile and internet were very well positioned were the largest sba lender in the country by volume. Were verywell positioned as a company to be part of the solution, and were clearly interested in doing that but i also know my brother and ceos of the different regional and Community Banks are clearly lined up with the same intent. All right that is good to hear steve, Huntington Bank ceo, thank you for joining us today thank you well, we want to get back to discussion about how to treat the virus. Particularly a focus on those Antiviral Medicines that are under development. Can be quickly distributed but theyre found effective and if so, could clearly mitigate effects of the virus and allow many of us to go back to resuming our daily activities f. For that i want to bring in dr. Wa wayne homen. Hes a long time investor but also the founder of ridgeback th therapeuti therapeutics you announced a collaboration for a particular oral drug, antiviral you hope to get into human testing that you think could be effective against covid19 tell us why you believe that would be the case. Thats right. Thank you so much for having me on i appreciate it and the whole team here appreciates this opportunity to talk about what were doing. I know we want to talk about the virus, ridgeback, drive, the collaboration, and 2801, the drug you mentioned were in somewhat of a financial crisis, but this crisis is not rooted in finance. Its rooted in biology and the solution relies on biology. We need to beat the virus. Im confident we as an industry, as a nation, as a globe can beat the virus buy logically. I know we can beat it with medicines. Medicines can be faster. We need to spend aggressively. We need all roadblocks removed we need to proceed safely but quickly. The biologic solution is much cheaper than the financial mitigation solution. I applaud the treasury, the president , congress, the fed their actions are going to be extraordinarily helpful. Theyre essential and necessary, but for i believe for single digit billions, biology can solve this problem and we need to move very quickly. All right so tell me about this tell me specifically about what youre describing as a Broad Spectrum antiviral that you have under development that you hope to get into human trials. Is it any different than what conceivably were hearing from regeneron and gilead, and how fast can you move if it shows its efficacious and tolerable among humans ill tell you what we do, dont know and the vision we have what we know 2801 kills the Novel Coronavirus without killing the human cells. It prevents disease when given to animals if you administer doses of mers and sars, two other deadly coronaviruses it reduces the severity of disease and the viral levels in the lung when 2801 is given as a treatment of mers and sars in animals. We have a favorable safety profile in monkeys weve tested it. At the highest doses in monkey, it had a favorable safety profile. The dose that we its easy to make we can make it at large scale. We have 30,000 plus dosing regimens on hand already manufactured today a plan to make 60,000 more we would like to make 60 million doses. We can do it weve been in discussions and the drive team, a great team led by george painter, 25 years of experience in antiviral experience the whole team has been in contact with fda we want to file an ind as early as next week were hoping to get that ind cleared, start single dose study. We treat patients to look and make sure that we get the right levels of drug into the blood and that the safety we saw in monkeys is replicated in humans, and at that point wed be ready to start patients. We can do this very quickly. We can advance this very quickly. What we dont know we dont know if well get the same blood levels in humans that we saw in animals. We expect we will. We dont know if well see the same safety profile in animals that we saw in monkeys we hope we will. We expect we will, but these are things we dont know we dont know if it will have the same efficacy against the Novel Coronavirus that we had against mers and sars in animals in in mers and sars the level of the virus peaks within one to two days of administering the virus to the animals with the covid19, that peak occurs seven to ten days after youve been exposed to the virus. We have a nice window to treat early. So our vision for any product, but we think 2801 is perhaps the best product thats ready to be tested in humans that has the highest probability of achieving this sort of profile could be a pill that you take twice a day for three to five days as soon as you get symptoms you knock down the virus early you avoid hospital in a maun owe, ventilator icu and we want to prevent people we want to increase survival. All antivirals work better if you use them early so that is the vision. Can the world develop a product you can give orally early thats safe, knocks the virus down, keeps people out of the hospital all right so youre obviously optimistic you done work in the past in ebola where youve had success and are currently i think have a submission with fda for licensing a drug, an antiviral to treat ebola i guess it doesnt i mean, from the perspective, wairyne, they dont care if youre first or gilead or regeneron or some company weve never heard of the hope is as quickly as possible somebody can get a drug on the market the way that youre talking about is it your expectation that will happen and do you feel like the federal government is in a position to execute successfully on actually getting that done as well i believe it will happen. I believe the federal government is very involved with the Ebola Program, we have worked with tony fauci and his team at naiad. We have a great relationship with them. Ridgeback therapeutics last night signed 150 million barta program on our Ebola Program the team at ridgeback knows how to work with the government. The people in the government are working tirelessly towny fauci is an american hero. There are a lot of here rows working behind the scenes. Were confident theyre going to be engaged we have a line into the Vice President s team already and the whole industry, the whole pharma and bio Tech Industry, i have a tremendous amount of outreach already weve been talking to physicians treating disease in other countries. Their people are all in this together we are all working very hard i am absolutely confident that there is a solution rooted in biology, and that we have some of them now. Im confident that some of the other things you mentioned, david, will have a positive impact regeneron worked alongside of us in the Ebola Outbreak as did gilead theyre doing great work i think they have an antibody helps with late stage patients i think the gilead team, theyre very great, dedicated people i am optimistic. I think 2801 has a great profile because we have a lot of it now to give. Its oral. And if the safety and efficacy translates from animals, thats an if, but if it does, it has a great profile. Right wayne, while i have you here and quickly given your long history as an investor in these markets, particularly with a focus on some of the things weve been talking about, Drug Development and Bio Technology companies, whats your approach right now i should point out, by the way, you are somebody who early on i think understood, perhaps, how quickly the virus was spreading. And the impact it might have and you and i talked about this some time back, but im curious as an investor now, not as somebody who is developing new therapeutics but as an investor, what are you looking at in terms of this market are there opportunities . Is it simply too early for you to think that you want to dedicate capital particular opportunities . We will get through this. And there will be amazing investments to make. There are people amazing investments to make today. I think in the shortterm what people need to be looking at is how aggressively are we doing some of the easier social distancing, easier Public Health measures it is true if you never leave your house if youre not feeling well, if you wash your hands every time you come back in from the house, you dont shake hands, dont hug, keep social distance, we will see less transmission less transmission equals more time for the biology to be solved once it is, this is a great economy. We live in an innovative world well continue to do well. We need to do certain things today very quickly for that to be a nearterm outcome all right wayne, were going to leave it there for now. We wish you the best of luck in the development of the treatment and look forward to following the story as it moves along. Morgan, over to you. David, thank you. I want to get a check on the markets as we move back toward session highs an hour into trading. Everything is in the green the s p is up more than 1 26 points. 2436 is the level. The dow industrials is up 284 points or 1. 4 it is time now for a coronavirus update and sue herera has that for us good morning, everybody were going to start with the latest numbers for you we are now approaching a quarter of a million confirmed cases around the world 246,000. Thats the latest count from johns hopkins. Deaths have topped 10,000 with italy and china both above 3,000 each here in the u. S. , more than 14,000 cases 2 05 deaths. Out in california it is the start of the first full day of that governors order that all 40 million state residents stay home exempt for essential trips. Advocacy groups are concerned many of californias undocumented immigrants will not seek medical attention if they get sick coronavirus despite the announcement that they will focus only on people with serious criminal records south korea is sending boxes of protective masks and other items to south korea thats the latest. We have full coronavirus coverage all day any time on cnbc. Com carl, back to you. All right sue, thank you very much coronavirus cases in the United States now passing 14,000 joining us is the former ebola czar for the United States thank you for the time today thanks for having me. We had a long discussion about harnessing the energy of the bio Tech Industry and the degree to which its coordinated with the blouwhite house. Are you seeing parallels to how we tackled ebola in this episode . We are both for good and bad. In fact, some of the very specific drugs your last guest was discussing were drugs that were also tried and had some success in dealing with ebola patients there are echoes of that one of the other echoes we need to keep in mind is even if all these things succeed wildly in the trials and theres no guarantee they will, its going to be probably months before even the first of them is really approved for widespread use. And so i think its really important for everyone listening to understand that for the foreseeable future, these social mitigation measures, staying in your home, washing your hands, all the things were hearing about, thats our tool for at least the next six to eight weeks. I am hopeful about some of the solutions but no one should let down their guard no one should think we have an answer we have some promising things, but they arent proven yet its going to take a while before they are. So when the white house frames it as 15 days to stem the spread and now you have fauci this morning talking about several weeks, obviously your comments just now, its not going to be 15 days . Its not going to be 15 days, and look, i kind of understand trying to get people in this mind set by giving them one bite at a time here, but i think its also really important for all of our Public Health communicators and for the people at the white house to quickly pivot to a more realistic message about how long this is going to be. And i worry, carl, that the virus is more patient than people are that what you see in other countries is as soon as you start to let down these measures, the virus comes back this isnt something we can kind of do halfway where we get it half right, its fine or Something Like that. And so i think we have to balance as we communicate about this, not overly making people glum and telling them theyre all locked in their houses for six months, but i think we need to be more realistic about the fact that i dont think in this country is going to change for several weeks. As far as working remote, out of public places. All these things were starting to live with i think this is the status quo for the foreseeable future, and i think eventually we will have treatments but even treatments, even the kind of treatments, all the drugs that are starting to show some promise, those are treatments not vaccines. That means theyre going to help people who get sick. Our goal is to not have people get sick so these Public Health practices, thats our first and really only line of defense for the foreseeable future yeah. Ron, i mean, its a key point you make as well were seeing it in realtime with china as the country is back online the risk is people coming into that country bringing the virus back with them as well im curious, though. In the past week its been so dramatic in the u. S. American life has just shifted on its axis and changed what practically feels like overnight. Its like the flip switched. How quickly can such drastic action where social circumstances, social changes, social distances are concerned actually change and shift that trajectory for the curve and to be able to flatten it in the u. S. Thats a really great point and something im also quite concerned about. Because this operates with a time lag the people who show up at a hospital tomorrow are people who got this virus probably about 14 days ago so Everyone Needs to stop and think about where was i 14 days and probably 14 days ago you were at work or the stores you were out and so theres going to be this disconnect where everyone thinks im doing all these things to fight the virus but it keeps getting worse. The numbers in the update, its virtually doubling every 24 36 hours. The things we started doing today is not going to move the numbers at all for the next two weeks. Because those people got sick before we started to do this stuff. And so i think, again, were just going to have to be patient in a way that americans rarely are as a country for what were doing and we are doing the right things now in terms of all the social control measures for what were doing to really start to bend the curve its going to take a while yeah. Meantime, theres so much focus on capacity. Whether were going to have enough medical supplies or enough ventilators, icu beds on down the road right now. The fact that we have the navy mobilizing two ships, the air force which is flying in supplies right now from parts of europe, for example. President trump invoking the defense production act earlier this week but kind of backing off of it a little bit and saying he wouldnt enforce it unless its a worst Case Scenario if we see that enforced and quickly, what would that enable us to do i think the president should enforce it now if we wait until were in the worst Case Scenario, even all our great resources, even the great resources of americas private sector, it takes time for them to repivot and do the things they could do right . I mean, if the president kind of takes over 3 m and says were going to produce more masks, its going to take time for them to staff up, get the raw materials. The one thing about this virus response is we have been behind every step of the way. And the only way were going to beat it is to start to get ahead. And so i think i think we really need to get more aggressive on all these supply chain measures now whats the worst that could happen we make a bunch of masks that somehow we dont need . That seems unlikely to me. And i think when we are facing what were seeing this weekend in hospitals, doctors having to use bandannas instead of masks, insufficient beds and ventilators, all these things in short supply, people who are going to get turned away from hospitals. I think overdoing it would be the least of our problems and all these things have time lags. Even moving one of the ships, it takes weeks from get from the west coast to the east coast we have great tools but tools take time and the only way to beat this is to bet ahead of where we are, not continually playing from behind. To that point, ron, i mean, i think we can all agree at this point from an Emergency Response, we were late on testing and certainly some of the reporting on the cdcs early stance now is truly disturbing but fauci this morning said look, we did close travel from china early. Italy did not. And that was a mistake for which they are now paying a price. What is a fair grade on the Emergency Response id say fairly, an f. Ill tell you why. First, the travel ban from china was always only partial. If we had a true travel ban from china, we wouldnt have the virus here, but it is. And its here in large numbers commercial cargo was always exempted obviously the returns of u. S. Citizens were exempted even after the ban was in place, thousands of people were coming from china every day we knew that, and theres no question dr. Fauci is right. It bought us some time but we squandered that time. You look at the countries most successful, they used the time they got from the time they knew the virus was coming until the time it came to ramp up testing, to ramp up hospitals, to ramp up gear, to ramp up ppe and we didnt do any of those things we spent the two months saying its not going to be here. 15 cases, its going to go to zero so on and so forth so what were living with now in this country, the virus was created by nature, but the failed response was created by decisions we made. And i think were seeing the consequences of that theres no reason why that america was testing at a fraction of the rate of korea. Theres no reason we didnt ramp up like singapore to deal with this so i think that the response is Getting Better now but were going to pay a huge price for squandering january, squandering february, squandering even a little bit of march. Hopefully the new things will change the curve as its become the phrase now absolutely. Ron, thank you again. Please stay in touch absolutely. Thanks for having me well, with the dow and the s p each up 1 , the nasdaq up better than 2 , were going to go to mike for a check on the markets and the fact that we are at least right now poised for two back to back positive days for the major averages which we havent seen in a month. Yeah. Morgan, its a small step in a positive direction i think a couple things you would observe over the last couple days. The amplitude of the moves as narrowed for now and i think were really in this mode not of saying was this a bottom is this a bottom its way too soon. The range of possible outcomes from policy to the economy is too wide to really feel like the market has a real grasp of that. I think you can to use the medical metaphor, youre trying to see if you can upgrade the market from critical to serious to stable. I think youve seen signs that this very headlong kind of blind liquidation action maybe were in a lull right now. I was looking at obviously everybody else, looking at the Corporate Credit situation and really driven largely by retail outflows from some of the Fund Vehicles like lqd. An Investment Grade up today by kwoins dense, its basically had the same performance of the s p this week. And that was a sign of just this sort of swapping of anything for cash type activity so if thats gone by the wayside and if we can essentially weve gone sideways since a week from yesterday, since thursday before yesterday, thats tentatively you could say its okay. But i dont think beyond that were making grand statements. The way this usually goes is there a really intense vertical drop phase where people just want to get out at any price that kind of morphs into more choppiness, maybe failed rallies and who knows . We take it from there. Important context, mike, this idea that sideways over the past week through yesterday, because it hasnt felt that way given the drastic moves weve seen on a daily basis. The fact, though, speaking of dramatic moves, that some of the top performers in the s p are some of the names hit the hardest in recent days whether its the airlines or Hospitality Leisure and gaming stocks j is there anything to glean from that i think you can glean some stuff went so far without a pause its a form of profit taking for people betting against them in a form of picking up tickets at the racetrack to see if there are any winners that somebody threw away i think thats part of the activity i would also mention in parallel yesterday and today youve also seen strength in the familiar old nasdaq stocks. The ones that were at their highs for particular reasons such as they werent so subject to Global Economic moves, they were very strong in terms of Balance Sheet and Everything Else its another reason that people if theyre just going to decide to try and get exposure to equities again, that would be a logical spot again, i think its always advisable in these moments to be hesitant about drawing themes out with a lot of specificity or a lot of conviction about what they mean just because were not necessarily through this period where a headline can just whip the market in the other direction. Mike, thanks. Well see you in a little while. Want to get the eamon this morning. Got a tweet from senator bur and a statement from inhoff. Good morning. This statement here from richard bur is explaining why it was that he made the stock transactions that have now proven so controversial for him. Burr, you remember, on february 13th now, sold a significant amount of stock. Somewhere between around a half Million Dollars and a 1. 5. This was after he got classified briefings. Burr saying he didnt do anything wrong in selling the stock. He says quote, i relied solely on public news reports regarding the sale of stocks on february 13th. Specifically, i closely followed cnbcs daily health and science bureaus report out of asia. I asked the Ethics Committee and asked them to open a complete review with transparency hes asking for a review of the matter with transparency hes insisting he didnt make his stock sale decision based on classified information he had exclusive access to. Instead, he was simply watching cnbc like anybody can do and made his decision to sell based on what he was seeing out of our asia reporting carl eamon, ill take it thank you. I want to turn back to the broad impact of the coronavirus on industry across the world including, of course, the Movie Theater business the ceo of imax joins us now on the phone. Richard, lets start off with the basics how many of your Movie Theaters around the world are open right now if any theres about 150 open, all internationally. I think theres one or two in the u. S. Maybe still open. The biggest territory still open is russia with about 50 screens. Okay. And lets talk china, because we bring you on many times and we always do end up talking about it since its an important component of your overall business things are Getting Better there. Things are opening up. When do you think youre going to have screens beginning to open again in china . Yeah. I mean, david, because this happens in china before the rest of the world and because we have a sizable business there, we got an earlier dose of reality than many people, and whileit wasn pleasant at all and still isnt, we have an early look into how this thing might run its course. So where its at now in china is about 21 multiplexes are open. None of them have imaxes in them by the end of march, many more theaters are going to start to open the government has started a process where theyre giving lists of what movies might be available and what cities are going to allow theaters to open. And i expect to see more open by mid april, and then i think our team over there believes that things will be close to regular schedule by early may with new chinese movies being released. Of course, this is all subject to the caveat that people stay healthy and that this plan works. As i saw you guys report this morning, there have been the last few days there have been no new cases in china, i think that that includes today, including from visitors coming in to china. But i think we just it looks good, but i think everybody is going to go slow yeah. Of course. I would expect that to be the case you are in a pretty good position to withstand this period, i think, in terms of your Balance Sheet which does not have a lot of debt on it how long can you go here and i mean i know its so difficult to try to figure out when things may return to a semblance of normalcy, but what are you trying to work with at least when you think about your business returning to some semblance of what it was prior to this crisis so the first thing we do is we run a model that says were going to have no revenues and were going to make very few changes and how long can we last on that, you know, kind of very conservative assumption and our answer is over two and a half years without any changes. While this is awful at so many levels, from an existential threat to our business, there really is none we also have the experience of in 2000 and 2001, the entire exhibition Industry Worldwide virtually went bankrupt an it was an extremely difficult time. Fort fortunately we werent one of them and thats one of the reasons we managed our Balance Sheets so conservatively over the last number of years because we seen it as a company, we used that period of time to transition from analog to digital, to invent or enhancing our dmr process and invent our joint venture structure. One of the things were trying to be focused on is if youre fortunate to be a company that doesnt have a lifethreatening sort of companythreatening existence how do you keeps the troops motivated and how do you get them incented and innovate were focused on that. This is morgan. In terms of the troops with so many of your Locations Closed right now, what is happening to those employees . Are they furloughed . You having to consider Something Like layoffs so imax is a Technology License company so we get the films from hollywood we put in our systems around the world in 82 countries and get a license fee from the studios and our exhibition partners. As a result, those employees are not hours. Theyre employed by our partners the companies. In china for the two months that this has been going on, we havent laid off anyone. This is all new. This phase of it were hoping to keep that to a minimum. Rich, its carl obviously weve got a lot of hard work to do in the next several months, but on the backside of that, how does the movie going experience change . Wave talked to airline analysts who suggested look for social distancinging were going to have to lose the middle seat are we going to put people every five feet and what is the collapse of the theatrical window mean for Movie Theaters its a very complicated answer, carl ill try to do it as brief as i can, but i think in the short run, the likely assuming the Health Issues are addressed, there will likely be a fairly sharp bounceback and the reason is that a lot of the films getting postponed in 2020, like the bond film and like black widow from marvel, theyre going to be bunched in the second half of this year and 2021 also looks like a very good year in the short run i think theres going to be a lot of incentive for people to go out, especially after being cooped up and going through their entire streaming Service Library three times over in terms of the windowing questions, you know, during this period of time a couple of studios have short nd the window in order to amortize their investments and have programming for consumers trapped in the home i dont think the windowing is going to change dramatically over the next couple years if it does, imax shows blockbuster movies and people like to be in communities and they like to socially interact and go to those kinds of things. One of the few fortunate things of having been in my job for over 25 years and at a company thats open over 50 years, a lot of things happen that in the short term lead like lead you to believe theyre going to be longterm trends, but peoples habits tend to stays the same. I was in pompeii last year and people went to see Live Entertainment there. I think its around 1,000 b. C. , maybe a little later than that, but these kind of social Entertainment Experiences have been around for a long time and are going to be around for a long time. Didnt think we would get to pompeii, richard, but we covered a lot there. Now well leave it there i thought it was a good idea. Thanks for joining us. I thought at a time like this history offers us a little bit of comfort. We can all hope that Human Behavior goes back to more or less what weve known it as. It remains something of an open question richard, thank you carl ill actually take it, david. Thank you. Lets get over to rahel salman for a sector sort. Most sectors trading in positive territory Consumer Discretionary and energy outperforming while materials and utilities lag. But the market gives and the market takes away. One of the groups that has held up relatively well through the recent selloffs consumer staples, thats the worst performer today. Just another indication of the volatility that we have seen playing out over the last few days and within that group were seeing weakness in in of the names that have gained traction as consumers have rushed to stock up on clorox and kroger and Procter Gamble kroger down almost 7 . Guys, send it over to you. All right thank you very much. We are actually going to take a quick break. Something were not used to the last several days. A reminder tonight on closing bell, 3 00 eastern time, we are going to talk with the ceo of mcdonalds, chris kempczinski. Sch discussion about the pain restaurants are going through. 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From the day youre born we never stop taking care of you. Good friday morning. Welcome to squawk alley. Im Carl Quintanilla with Morgan Brennan and jon fortt, coming to you live with separate locations trying for the first backtoback gains in about six weeks. Not far from session highs if the surge holds it will no longer be the worst week since 2008. Yeah. Its Pretty Amazing because it has been another wild week on wall street as you mentioned the dow is up 394 points right now or 1. 9 . S p up 1. 7 , 2449 the level there and the nasdaq is the big outperformer up 2. 8 in terms of whats leading the gains a lot of the same names and sectors that have actually been the hardest beaten on a week to date basis as well energy, Consumer Discretionary and things like the airlines which are leading the dow. Transports up 4. 7 right now meantime we have some more breaking news and for that we go it Steve Liesman steve . Another major step by the Federal Reserve. The Federal Reserve now including shortterm Municipal Bonds in its Money Market Fund and will lend, this is for the first time, never did this during the financial