Transcripts For CNBC Squawk On The Street 20240713

Treasury, the efforts to stimulate an economy in free fall jim, you got off a call or an interview it was a call as well with secretary mnuchin what stood out to you . That you shouldnt lay people off. I want to point out i got a correction, he said on Small Business payroll, two weeks, he meant two months two months means you do not lay people off without, i think im not saying its irresponsible but everything is being done to keep businesses open Small Businesses open. David, with the fed, i think theyve taken off to me anything involving credit the secretary talked about anything involving liquidity we cant produce demand. You keep people around for two months, but they wont be able to produce demand. There will still be a burden on Small Business not sure how that will be resolved thats an interesting point jim, we did we were watching the futures, which appeared to be limited down at different points in it the evening last night after japan opened as well then we got a fed announcement this morning just to go quickly into it taking off the size limit in terms of the treasuries, Mortgage Backed securities and i think importantly as well this direct business, main Street Lending program to support lending to eligible small and mediumsized businesses, complimenting efforts by the sba how important is that in your opinion . Look, in the end, our economy is Small Business. In the end, those are the people that really are trying to figure out whether to open or close you cant be thinking about just now. You need to be thinking about when we beat this. If you wipe out Small Business, the whole country will be run by amazon and walmart we cant have that happen. The Restaurant Industry will not really survive remember, 50 we have more than 50 Million People in service. Most of them do not work at walmart. I think its just really important to be able to make it so the average working person gets a job and keeps a job and that means you have to give the Small Business person money. And i think the dems and republicans favor that not sure i would love to hear from Speaker Pelosi and from senator schumer how far apart they are secoretary mnuchin indicates theyre very close time is of the essence as we know, as we know watching the markets as well. The reversal today is on the fed. The expectation, as you say, that well get something out of congress in the nearterm. Jim, just to your point, im sure you had these conversations, i certainly did over the weekend with a lot of different people who run businesses, typically larger ones, but, you know, everybody is trying to figure out a day by which, all right, this is my first layoff round, thats coming this week most likely is what im hearing this is my second. My sales are down, 40 , 50 , 60 , and i know how long i can go this is happening in realtime. Those layoffs are occurring in realtime thats not to mention, of course, as you point out the person the Small Businesses, whether its the person who works at a hair salon, a nail salon. The dog walkers, the restaurant workers, the garage attendants, the personal trainers, the gym employees, and it goes on and on and on we all have one thing in common in this country, the person, the dry cleaner, where we get our hair cut, where we try to help local, it is i try i live in summit, new jersey were trying to figure out this weekend how do we help local every business is closed it sounds like the treasury secretary understands that i have to believe that senator schumer and Speaker Pelosi understand that. Thats why i dont think that far apart. I was hate to see we had the first remember t. A. R. P. , we had the failed vote this weekend. I think that sent the market down limit i know its also creating such havoc that were going to get the layoff announcements today i expect big layoff announcements in the next half hour one thing that can happen, if they come together and make it so the Small Business feels like, okay, at least i can take care of payroll. The next thing is rent we have to be sure theres some sort of forgiveness on rent or else you will say its not worth the effort i sure hope that isnt the case. Yeah. I know you and i have talked for some time now, over a week, about forbearance up and down and how that would work. Again, we hear things antidotically, but it doesnt make them less real. Im hearing that rents are not being paid by the way, also by companies that are fairly large, theyre saying were not paying. The landlord has to turn to the bank and say were not going to pay. You need the forbearance up and down we have not gotten there at this point. Not quite sure how we do but thats sort of a very important component of this as money is not going to be flowing. Weve all been getting the emails from tom barrick, hes on commercial mortgages if you go to the dems, i think commercial mortgages are really important. Thats what Steve Liesman was talking about with the fed the fed should be able to, it sounds like, back pretty much anything so provide liquidity is what i can say. Lets say you dont pay, it goes up the food chain. It sounds like that the bills of a major real estate company, how much would Simon Properties like to call in, those properties will not go under. So many of them are connected with the stock market. You saw a lot of companies that are say mortgage reits evaporate last week. Because they had good dividends, you know thats where the elderly, the people with no other income, thats where they were what bothers me tremendously is not just the jobs side but the savings side given who we are at cnbc, we seem to have, i think, better call on how you have got to protect the seniors who dont have a job and wont have income if this thing keeps going away i know. Your point is a good one weve seen dislocations, what is a lack of proper functioning in a number of markets. Theres been so much coming at us over the last week, its hard to focus on one thing at one time but our Corporate Bond market is not working particularly well. The Municipal Market got blown out. The feed appears to be trying to deal with that initiating liquidity facilities to ease that crunch on Corporate Bonds theyll be in the muni market, the shortterm side of it. We have not even talked that much about some of these enormous dislocations that are going on in huge markets, jim, that are not related to stocks we can talk about etfs as well that are trading strangely youre so right there is a lack of liquidity to the point where people kind of, i think this opening will be met with heat seeking missiles people who need money so badly, david. What i want to caution people to do, when you buy up like this, remember you have to have that bill passed. Then after the bill is passed, we have to start thinking about the numbers that will come out unemployment numbers people are talking about 30 unemployment thats a daunting number that exceeds youre talking about numbers that take out the Great Depression we have never seen anything like it. Ever some of these numbers, as you say, 30 Unemployment Rate that down 24 print on gdp that goldman put out, last week, it may be higher now, and the earnings reductions that were talking about for the Second Quarter, which are negative. So 100 plus percent decline in earnings, weve never seen anything like this you go back i spent more time reading about the depression this weekend than Current Events one thing that sticks out is the small banks. The small banks that provide the loans locally, they shut their doors. Finally fdr said listen, lets have a bank holiday. That would work in a time where we had very slow reactions were in lightning speed we have to make sure those banks are equally as protected theres so many entities in this complex economy. If you even leave one out, that could be the one that is like jenga. You pull it out and the thing falls. I think theyre trying to cover every single base. If they dont get this legislative package passed, these gains are going to be something that i say could evaporate in seconds yeah. Jim, weve spent about nine minutes talking about the economic crisis. Lets move on to the Health Crisis, of course. It is not as though the virus doesnt continue to spread in various communities around the u. S. I did want to bring in on this topic specifically and obviously more broadly as well to talk about whats going on michael roman, the ceo of 3m they are the maker of those n95 respirators that are in such demand and short supply right now. He joins us on the phone its good to have you. Lets start off right away with where things stand in terms of your ability to produce the n95 respirators and get them to communities in need, particularly new york, seattle and a couple other areas around the country . Good morning, david and jim thats is the top priority for us our highest priority at 3m is the safety of our people and the public our teams around the world are focused on supplying Health Care Workers with Safety Products they need. Here in the u. S. We have accelerated our production starting in january. We ramped up our production. We had a longstanding decision to invest in excess capacity, keep it idle and turn it on in times like this. Thats what we did we doubled our output from 19 million respirators to 35 million a month. We are prioritizing Health Care Workers and working 24 sh 7 to p to the front line Health Care Workers. We are working to expand that capacity further in the nearterm and longterm as well. Is that u. S. Capacity i wonder, there was a period of time when this crisis was centered in china. And the need was there you have manufacturing facilities there but were unable to manufacture because people were not coming to work or a lot of people werent. Is china manufacturing back on is that output going to end up back here in the u. S. . How does that work we actually are able to operate all through lunar new year, the extended shutdowns in china. We had special permits to operate because of the importance of the Safety Products we were producing we ramped up in china starting in january as well we served the market there out of our production in china we manufacture these respirators in every region of the world china was a great example where our team jumped on it, ramped up to full capacity and were able to meet the demand in the local market mike, thank you for coming on good morning, jim one thing disturbing to Many Americans was to see at target in seattle all the n95s on the shelf. I dont understand how that kind of dislocation occurs where we have the Retail Market have them and yet over ucsf they run out of masks certainly many of the new York Hospitals really touch and go. How did that happen . We ramped up our production we came in the year, about 95 of our respirators go to industrial channels in a normal Business Environment when you have a crisis like this, we shift everything to health care. We were able to do that with the implementation in march of the emergency use authorization from the fda and also the u. S. Prep act, all of that enabled us to shift what are normally industrial respirators over to Health Care Workers. It allowed us and gave us the certification that we needed to be able do that. That happened. Now, there was some inventory, as you would expect, throughout the supply chain from what was happening even as we came in to 2020 its not itsedy appoi edy g when you see that, but that changeover and that shift, and now everything is going to Health Care Workers. We are producing and shipping directly to those Health Care Workers around the u. S when our president contacted you, i believe midfebruary, were you able to divert and get as many masks as possible here or was there a miscommunication where they did not request what they could have . Well, weve been working closely with the Vice President and the president and now fema to get respirators to where theyre needed most. Weve been doing that every step of the way it was it was this emergency use authorization and u. S. Prep act that enabled us to shift everything to health care through all channels we have from the early stages in march weve been responding and shifting everything to health care. Mike, i want to get to the specifics of the problem here. Certainly a lot of it is in our hometown, new york city. A lot of people have seen this memo from the chief of surgery at new york presbyterian, usually they use 4,000 n95 masks a day, theyre now up to 40,000 and he sees them going to 70,000 are they going to run out of masks or will you figure out a way to get these hospitals the masks theyll need at numbers theyve never seen before . Yeah, david, we have prioritized new york and Washington State and over the weekend we shipped more than 500,000 respiratorers into those cities more than 350,000 are landing in new york today they are coming into use and well be able to prioritize and ship we are working broadly with partners its impressive to see the Way Companies have stepped up. Many companies are working in partnership with us to extend capacity were working with other companies to help us in logistics, expedite. Were ready to expedite respirators to wherever theyre needed new york is a priority in the nearterm. As i said, were getting respirators on the ground there. There are other respirators serving new york through Health Care Distribution that we would normally be shipping to. This is an expedited shipment that is getting there today. Mike, is there a way to get back just lets say if you go on right now, i think if you go on alibaba, theres tons of masks, any way to get the masks from china back . Like a Lease Program from china which is doing so well and our company which is now bearing the brunt with you being the broker . Yeah. We are working every angle to get additional respirators into the market in the u. S. We are working to really prepare ourselves for this we have to ensure that we meet the standards of the u. S. From the product the standards vary around the world our team now is doing that then as soon as we can bring capacity from international to the u. S. , were doing that what can we do with the other part you know everything about what goes into a Health Care Worker a doctor right now in an emergency room what else can we get for them . I think everyone in america wants to help these people we want to help the Health Care Workers first. If we can do anything, whether its make it so they dont have to pay taxes or have a gown, what can we all do to help those people we are focused a lot on respirators, but were working on ramping up hand sanitizers, were working with Many Companies, its amazing how Many Companies have come to the table with great ideas, and bringing together some capabilities we have in the Broader Health care business to support them i think theres a broad effort and a very focused set of teams that are working to do that right now. I think that supporting them really, supporting those teams is one of the best ways to do that keeping focus on the supply chain that serves those companies in order to continue to supply into health care, thats an important aspect of it even what we were talking about earlier, making sure we have the ability to move products and materials around the world that we dont see export restrictions come into play those are all aspects of what we can do to Work Together to solve that so that those are some things that from a company and business standpoint that were working together to try to bring to the table mike, given your knowledge of whats going on in terms of what Health Care Providers need, far beyond what your products are, ventilators being a key one, do you think the president should make sure of the defense production act to get needed supplies into the hands of these hospitals . The administration is encouraging industry to look at the defense production act as a tool to expand our capabilities. Thats the response ive been talking about. We are we are building on our capabilities and working together to he arespond to covid19 including personal protective equipment, vaccines, ventilators. Thats been a positive part of the way the defense production act has been presented were discussing this with the administration, working to partner in the supply chains were working with fema to make sure that together were getting our respirators to where theyre needed most. All of those are positive steps forward as part of the discussions around the defense protection act thats a positive step in encouraging everybody to find a solution and get them to market. Mike, this is a little bit of a theorial question. Between dr. Fauci and what i read online, theres some people who feel that 80 of the people in this country will get sick. Do you think, as a business person, i cant ask you to be dr. Fauci, do you think were all going to get it . Were focused first and foremost on our on the safety of our people. We have implemented all Remote Working the social distancing, were separating our people and focusing on their safety we implemented new operating procedures in our plants as we work to keep those running, so we can continue to produce respirators. I would say thats i think thats the preparation we need to really get to the best outcome here this is the critical time to act on those, prevent those worst Case Scenarios yeah. Mike, finally on that broader point about preparing the company for a significant and steep economic downturn, perhaps the likes of which we have never really seen, youre obviously selling a lot of respirators, there are other parts of your company that one would imagine that would suffer as result of economic slowdown. What are you doing to prepare the company for that we activated our crisis teams in the company, one thing we do is every day were looking at the business scenarios and what do we need to do to stay on top of that . That crisis team led by myself and our senior leadership, were focused on people and delivering for the Public Health crisis and looking at Business Continuity and making sure were considering the scenarios in front of us. Were very Strong Financial company. So were really putting ourselves in position to manage through this well. Mike, thank you for taking some time out from what i know is an unprecedented period of time here for all of us. Mike roman is the ceo of 3m, appreciate him joining us. Jim, any thoughts here in term of where we stand as we get ready for an open . Before we go to steve, i know we want to go to Steve Liesman ge aviation planning to reduce approximately 10 of its work force. This is what we expect yeah. This is why the market is very odd in terms of its rallying ge is first, but there are going to be many more. Steve, what have you got the fed is working hard on this main Street Lending program. Whats clear is that to get this main Street Lending program going, jim, the fed will need the stimulus bill. Im assuming theres an allocation in the stimulus bill, that stimulus bill will go that money will go to treasury treasury can use that as the back stop for the Federal Reserve to go out there and lend to small and mediumsized businesses we dont know more about it. The fed says they will announce it soon. More detail on the Corporate Bond program if a company decides to defer interest and principle after si months, they cannot pay dividend or conduct share buybacks. No particular restriction i can see on whether or not they can fire employees, the fed not saying fed saying thats not in there as you know, they have now said they will do as much as needed, which means theyre going to keep buying treasuries, buying more dama Mortgage Backed securities and commercial mortgages until this is fixed, but no indication of when theyll stop. Theyll keep going as much as needed jim . I keep hearing people in the markets say theyre frozen, theyre frozen i just think that cant be true. I mean, maybe thats just people wanting a better price the idea its frozen the fed rolled these programs out step by step its not a Silver Bullet situation is my understanding the way guys are talking to me in the markets they need to be in place today the critical money market Lending Facility will launch that should help markets trade it should provide critical liquidity. As we found, very much like the crisis, its like whack a mole fed does this here, problem over there. Does it here, problem over there. Now its providing liquidity and back stops for almost the entire credit market thats out there piece by piece these programs are going into place. We have only the slightest information or the slightest inkling that things have gotten better well see after today. I suspect some of these markets will perform better. Steve, real quick you mentioned the crisis, of course we have never seen the fed do anything quite like this no. Thats absolutely right. You were there step by step when the fed rolled out the programs. What happens now is the fed is going further down the risk spectrum taking risk it has not taken before steve, i know youll be obviously filling us in as we get more and more details as this moves along Steve Liesman, going to a quick break here we have about five minutes before we get what well call an opening bell i think they may actually ring it at the New York Stock Exchange the floor is closed. Jim and i, we remain right here ready to join us when squawk on thstetcos ghbae re merit ck people know aflac. Aflac . But not what they do. So were answering their questions. Aflac is auto insurance, right . No. Uh uh. Is it Homeowners Insurance . No. Uhuhuhuh is it duck insurance . Nope. Ahhh do they pay me money directly when i get sick or injured . Yeah. Aflac you got it. You know aflac boom get help with Expenses Health insurance doesnt cover. Get to know us at. Aflac dot com. We segetting to patientscines in record time. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. You still have service . Call the Insurance Company sfx [phone ringing] its them, calling us. Its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . By automating claims with Machine Learning and analytics, cognizant is helping Insurance Companies advance how they serve even hard to reach customers. Cool welcome back to squawk on the street. Im david faber along with jim cramer lets do a mad dash, jim, or let me tell you what i want it to be on, if you dont mind. Lets talk more about ge as you pointed out, right before we went to Steve Liesman, we got news out of ge the Aviation Division planning to reduce by 10 the total u. S. Work force there will be a temporary lack of work impacting about 50 of its u. S. Maintenance, repair and yoef ha overhaul employees for 90 days they have a hiring freeze, cancellation of the salary and merit increase, dramatic reduction of nonascent initiess spending, and the ceo will forgo half of his salary and larry full salary for the rest of 2020 larry culp, right they are not asking for a bailout. I think theres that term gets tossed around boeing not asking for a bailout. A lot of companies are very, very sensitive to the idea that bailouts, what the American People hated in 2008, theyre trying so hard to be sure that people understand that its not they dont have demand, but theyre still not asking for the government to give them a handout. The 50 furlough, u. S. Maintenance, repair and overhaul employees for 90 days, makes sense. So few of the airlines are flying both boeing and ge are faced with what i addressed to the treasury secretary is this demand issue you cannot create demand its similar to the Great Depression, there was supply, but no demand. They have to stimulate something so theres demand. We dont want remember, the Great Depression ended when world war ii started thats the demand. It hung around it hung around because there were no people who figured out what to do i know you have to go to the opening bell ill give you that all right lets get an opening bell in and continue our conversation on the other side of it this is highly unusual, as is so much else going on in the world. Tom green, the vp of building operations, is ringing the bell at what will be an empty New York Stock Exchange. At the nasdaq, we can only show you sort of an outside shot of times square theres nobel ringer there we are going getting moving today we should point out that, jim, we looked like we would be down, then we looked like we might open much higher as a result of the fed action, and now im trying to figure out where things will stand. What are you looking at . I think that there are a lot of companies, particularly the retail all service companies. David, we always talk, were a service economy. These companies, the workers could be bailed in the sense that they get the small and medium sized businesses get the money. Again, you cant get outside in new york, very typical, we dont have the ability to be able to shop we dont have the ability to be able to go grab a beer i only mention that to say listen, you can keep workers, but it would be great to have that cash flow workers are only part of the equation theres rent, suppliers, and so they take their toll on the small and mediumsized business. You cant forgive rent throughout the whole food chain. Then at the top people wouldnt be able to pay their bills either thats where the stocks are involved thats where you start seeing stocks in trouble. I think well be the world will be divided between companies that dont need credit, because they are basically worldwide, and have demand, and those who need credit and the ones who need credit, thats up to the fed i dont know whether theres going to be enough they may try to make it enough its such a fractured system there were not a lot of Big Companies to worry about i know. To your point, how you get the money to where it needs to be in terms of at least preserving some sort of lifestyle for those workers who are paycheck to paycheck, and to stimulatemorni conversation with somebody who owned garages in new york city not something you think about, but not an insignificant business employs hundreds of people their numbers are down 40 and going down this week probably 80 . The question is how many of my workers do i furlough . Who of my vendors do i pay or not pay . This is going on across the board certifiedly in k ll lly c key areas that are hit hard and across the country yeah. No matter what they do, you still get what phil lebeau is sending me now, average planes were 20 , 30 full you have industries that want to be bailed. You have the cruise industry the president said yesterday thats an important industry you have airplanes boeing, an important industry. Aerospace, an important industry travel, an important industry. David, theres too many important nobody is unimporta unimportant. If cruises are important, who is unimportant . The whole economy has to be saved. Thats why im glad secretary enough season talking about two months of payroll and direct money to a family of four. Okay how about this who is more important . Everything that we heard, the fed, the secretary, treasury, gilead or regeneron or doctor fauci or the drug that is the people that are the hydroxychloroquine the malaria drug the zpak. Those are more important lets keep tletting the scientists solve it. Lets figure out how to get the people out of the hospital now len schleifer, the ceo of regeneron, is hopeful. He was not hopeful when this started. He was not i do not have a direct line into some of the companies that are, lets just say, on the exact front line of testing, i did get a note from mark casper, from thermo scientific. He says we ramped up Production Capacity to 2 million test kits and are ramping that up to 5 million in capacity per week as we get into april. The tests are running in a number of labs, results can be gotten in a short period of time test sites are utilizing our tests quickly. Thats great were starting to get this whole sense, theres a debate going on now, how do we make it so that perhaps we dont shut down the economy. Do we quarantine those 60 and over and just test everybody who is below that and get the economy going again . I think that may be something that is going to be on the agenda once we have unlimited testing. Right now were just testing the people who seem to be needing to go to the hospital. Its imperative that we make it so that the people who are under 60 get back to work as fast as possible and not be worried about their health i think thats not stressed enough we have to start thinking about what happens on the other side listen, it is a conversation that is ongoing, jim a lot of people are having it, which is is the effects of the depression thats what were talking about here greater than the impact of a widespread and deadly in some cases virus because whats the world going to look like on the other side of this if we endured month after month of massive unemployment and incredible declines in growth its a worth while point but the key one you make as well is we need to rely on science. We have to hope theres going to be an antiviral or some sort of combination, as you point out, that at the very least is going to modify, mitigate the effects of the virus to the extent that people will stop being concerned about getting it if you can get to that point, you can restart activity and we can sort of take it as it comes with the idea also of not overwhelming the Health Care System i dont know how many months will that be were not talking about that happening next week. The layoffs are happening every single minute. Right theres no if theres no capital, if no one is coming in the door, as much as you want two or three weeks as secretary mnuchin said to get the money, it is really difficult to try to figure out why you shouldnt just close your business you have 500 employees, you have a real company i dont mean to disparage the smaller companies. I own three of them. Closed two of them, and its just very tough. Were trying to give people pay, but the problem is, david, what happens three weeks from now how long can you go . Thats why one thing that happened thats interesting, Governor Cuomo i dont know if people got to hear it around the country, he talked about how the president is making the hydroxychloroqui hydroxychloroquine getting it to the hospitals, we heard this works or at least the president feels good about it. Do you want to be in the double blind test where you get the one thats the placebo no i would say im not going. I dont want the placebo i want the one that the president has a good feel for. It corrupts the test i think i understand why dr. Fauci has been saying can we just slow it down . You have the french, everyone is excited about what happened in france unless you do a serious test, what happens is we create false hope yes. We all hope this works and this zpak works with it. That starts tomorrow as someone who is trying to develop a drug, i know that you got to get this right or else what happens is you have a giant fiasco jim, lets step back for a minute and look and talk about the Market Action. Of course, like everything else, its been somewhat extraordinary. Last night, before i was checking out for the night, we were looking like we would be limit down in the futures, potentially have a 15minute halt early on. That changed this morning when we heard from the fed and, in fact, it was a huge reversal and the broader markets looked like they might be up as much as 2 , 3 on that as Steve Liesman told us, the actions of the fed. Starting to buy cnbs, and as well unveiling this direct business or main Street Program to try to get money to small and mediumsized businesses. However we find ourselves sinking on the s p to the tune of 3 . Theres an absence of legislation at this point at least from the federal government and congress. You talk to secretary mnuchin at about 8 45 this morning, he indicated its close, but were not there as yet and by the way, we are also looking at adding, i dont even know what the numbers are, 3 trillion, 4 trillion to the National Debt . Take your pick it feels like were throwing money at it more than look, no one wants to be president hoover who tried but didnt think big. People want us to be fdr, but fdr was trying to do anything. Wherever you could throw money, he tried to do it. Turned out to be something that made people feel better but it did not bring back demand. I was reading a piece written by owen west, he has some credibility, he was a partner at goldman, assistant secretary officials defense, served in the military there are 125,000 medical professionals in the military. I think a lot of people would feel good if those people were somehow more involved. Its time i think secretary mnuchin can do it, i would love to see someone defining the problem, i would love to see someone the head of a task force, someone who could say, you know what . This is not political. Maybe thats what it takes after we get this deal i do wish the senate would stop dal dallying dont ask me to buy a stock. Dont ask me to put money into this thing the senate cant even agree to anything i think thats part of the reason why were getting selling. I know. Jim, a lot of people for good reason listen to you in terms of at least your senses to the market and people are looking at their portfolios down 10 , 20 , 30 . Im sure certain stocks, if they own individual stocks, more than even that. What do you tell them today . Do we get to a point where you feel the prospect of enormous stimulus coming from the fed is enough to bottom us in terms of stocks even with the prospect of unemployment numbers and lack of earnings coming, the likes of which we have never seen i think the market is much more bifurcated. Its a shame we have all these different etfs, i did screen after screen, 500 stocks, 1200 stock, everything that you could imagine in terms of dividends, you come back to a lot of companies are in jeopardy here a lot of reits are in jeopardy retailers in jeopardy. A lot of banks in jeopardy unless they somehow say, listen, your bank is fine, were also going to guarantee theyll be able to maintain their solvency, and the loans will be good well provide liquidity. I found so few stocks where i felt like, you know what its time to get in. If they could get a bill passed so that people have some money and maybe theyre a little more creative and saying listen, well provide money for people to eat i was thinking its one of those things, in 1932 they had scripp you got scripp, so you could go buy food and go you could use contact lists to buy local they have to be more creative than theyve been, or else what happens is you have i came up with about twothirds of the s p thats very hard to own. A lot of companies have to cut their dividend a lot. David, you want to bring in duncan yeah, you bring in duncan so we can talk about it again, these unprecedented times. Just listening to you talk about scripp and people needing and finding a way to get ahold of food you know, it takes your breath away that were having a conversation that includes that. Could be my daughter in madrid where shes accompanied by a policeman when she goes to a grocery store, thats kind of extreme. David, we have someone who might who you have known for a long time. He can speak to the idea that we have a peopleless New York Stock Exchange duncan niederauer. Duncan, fill us in on what its like to make it so that you can have the New York Stock Exchange run like the nasdaq. Good morning, first of all. Its been a long time. Thanks for having me on. I think its a historic day. Most of the volume is already electronic i think this decision, as we say in our household sometimes, it wasnt a multiple choice question it was time to do this it was the only decision to make i think the exchange is more than prepared to do this so i dont anticipate issues with liquidity going back to hurricane sandy, the exchange was prepared to do this in an around sandy and operate the contingency plan im sure that plan is better now. So this is not a new thing that the exchange is trying at that time i wouldnt describe the banks and brokers nearly as well positioned as they are today to work remotely and work decentralized. So i think it should be pretty much business as usual and, you know, unlike sandy where we thought we might have to do it for a couple of days, we should assume this will be going on for quite some time does this mean that we can expect some things to change after were through with this tremendous scourge where maybe people dont come back its a good question. You have to ask the people running the exchange now my view from this Vantage Point would be that that even if its a limited amount of the volume that doesnt trade electronically, there are moments in each day, the open, the close, pockets of turbulence where its valuable. I would expect i would expect that youll see that maybe it will be different. But i think a lot of the people who run their business from there will come back theyll probably go back to the model, the hybrid model weve had. Well see how it goes and how long this lasts, as you guys were talking about before i came on duncan, the question becomes how will behaviors change in general as a result of this crisis after and hopefully as soon as possible when were through it we just dont know a lot of times things do go back to the way they were, but oftentimes there are moments in history that do significantly change the way business is done. Yeah. I think well its too early to tell on this one. Theres so many different scenarios. You could have a fairly quick vshaped recovery, a long, drawn out issue around all this. When we know more, well be able to answer that question. But youre right, sometimes these events do create the opportunity to change a Business Model tied to the behaviors youre referencing well see how that goes. Duncan, why do you think we have such illiquidity . What is going on that the equities market, i think you and i would say, is not really working . I think you were eluding to some of that when i was listening to you guys before i came on. I think a lot of the volume is is what i would call either speculative in nature or the unwinding of leverage. People are not finding a lot of reasons to come in to the market right now. I think you see a vix at 65, 70, 75, that tells you all you need to know about underlying liquidity. I was seeing the exchange heads united about keeping the markets open mnuchins idea was interesting, you could make a case to have a shorter trading day so people had more time to consolidate liquidity, think about their positions more, do some more research, not watch the screens as much. But i think you made a good point last week, the thing im finding the mosttroubling and we can look no further than this morning and overnight for an example, the overnight futures market, just seems to be created a lot of stress, a lot of volatility i dont feel like its adding to liquidity. I dont know what you think about that but i just think its all over the place. I think its giving people are watching the screens overnight and getting really nervous, and theyre up and down and sideways with no rhyme or reason with how stocks open. Duncan, real quickly also on this same subject, etfs. When you were running the nyse, they were coming to the fore in terms of something now which is kind of the way a lot of people invest were seeing some weird stuff with some of these etfs to put a nontechnical term on it are you concerned at all i think the etfs are a volume, we all have to be concerned. Im sure people will analyze that more. Theyve become a part of so many individuals portfolios when you look underneath the covers on some of these etfs, well call them sector etfs, but in point of fact since theyre capweighted, theyre two, three stock bets disguised as a 15stock Company Portfolio those will be looked at. I think first things first, as you guys were talking about before i came on, the next few days are all about the senate delivering package we can all get behind. Well, i know we got to go to bob, but i just want to ask one thing to duncan. How can we repair for the new world . I know this is crying and people want money i think the new world should be talked about too in order to give people hope what would you want to see i think weve got to see a few things here coming up. I think number one, i think the fed and treasury are doing everything they can. I think thats bought time for a bipartisan solution out of congress, and i think theyve got to deliver that asap i think we have to hope that the policies were all putting in place to stay at home approach works. The virus peaks quickly and we can get back to business and life soon. I think we all know the americans collective resolve is unmatched anywhere else in the world, and when we think about it, were not being asked for big sacrifices this is staying at home for a while and trying to stay healthy is really not a big sacrifice. And then i hope that everybody appreciates that the medical professionals today should be thought of the way we thought of First Responders after 9 11. Theyre todays heros and as you guys were alluding to, i hope the next wave of heros comes out of the farm industry you cant imagine how hard theyre working together on things you were referencing. I think if we follow the rules, we get policies we can all get behind that are bipartisan, and we just take a time take time to get through this, i think theres a lot of reasons to be optimistic if we can turn this around quickly given how good the environment was going into this yeah. Good points. Thank you, duncan. Somebody else familiar with the New York Stock Exchange is bob pisani he hasnt seen it in a little while. Good to see you again, david. Of course, you want to take a look at the futures. It creates confusion we were down big overnight down at one point. We rallied at 8 00 a. M. Eastern time on the treasurys announcement it was remarkable. Went green, and then when we opened, we were positive and dropped down dramatically. The liquidity isnt necessarily very great preopen even with all the craziness and we would think theres massive participation, but, in fact, the futures gave us a deceptive look about how we were going to open if you look at sectors we sort of are all over the place throughout the morning tech was an early leader staples were down. Energy the down. Industrials, routes still not really bouncing. Even though announcements of buyi buying mortgagebacked security helps a substantial amount of the route market look at the dow movers Goldman Sachs gave an aggressive look boeing on the up side. Bouncing all over, 3m down United Technologies, but theyre not moving together recently even the Consumer Staples names are weak on top of that. I think the most important thing this morning from my porch as an etf watcher is the feds announcement it looks like theyre going to be buying Investment Grade Corporate Bond etfs thats a real difference there now, thats something japan has been doing for a long time but not in the United States so if you look at lqd, the biggest corporate Investment Grade Corporate Bond down 25 . Rallying today youve got to be careful obvious you cant keep buying etf. You need bids for the underlying bo bonds. This is a separate issue more to say on that later on hanes is rallying. A remarkable turn around for them just about the temporary floor, ive been watching the action. Everything appears to be operating fine all trading has gone electronic. They tweeted out normal market hours will apply talk you want about closing. Thats not happening it doesnt look like shorter hours is happening any time earlier as well. Note the Financial Services workers are essential workers, exempt from the new york order to stay at home. A lot of concern about that. Finally the floor is part of the Business Plan. Its not part of something in a st nostalg nostalgic. Its there and i think it will come back. Its part of the Business Plan back to you. All right, bob. Appreciate you talking about the Corporate Bond market. There is concern as well about some of the shortterm bond funds. You know, you never know whats under the hood until a period like this. But important to point it out as you did the fed potentially moving into that market as well. Speaking of that market, lets get to Rick Santelli hes not at the cme group, but hes out there somewhere hi, david i am at the cme group. Im not on the Trading Floor at the corporate head quarters. The entire yield curve is under pressure the third year bond was off in a universe by itself look at twoyear note yields 27 basis points. Thats down five now, as you move down the curve, look at an intraday of 30 year bonds, 142 its exactly unchanged its unchanged, 142. They were higher on the day for most of the morning. We know that the notes over bonds spread was just under 70 basis points thats the anomaly on the long end. Look at a long week of tens. Tens at 73 theyre down 12 basis points informal everything is under pressure they were at one point, they were at one point at 68 basis points and the equity markets have had positive volatility to the up side as we seem to hear more out of washington that theyre going to put a lot of glitter back into the system and the glitter the liquidity is always viewed as a positive. Even though exactly where its needed, you know, theres a lot of questions as to that. We all can harken back to another time with tarp where votes were either put over the top or not put over the top. Finally Foreign Exchange look at one week of the dollar index. It was flirting with 103 touches. We havent closed above 103 since december of 2016 weve given up some ground but the dollar index remains strong and is one of the global issues. Demand for dollar being able to satisfy it david, back to you rick, thank you from the cme, though not the floor. Well take a break we have the s p rebounding still in negative territory. Down about 1. 2 . A t resqwkn e street right after this you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. When i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. It is already working in cities like tokyo. Can we go get some ice cream . Alright, we gotta stop here first. From smarter atms, to after hours video tellers comcast business is connecting thousands of banks to technology that turns everyday transactions into extraordinary experiences. Hi there. How are you . Do you have any lollipops in there . laughing no, sorry. Were helping all kinds of businesses go beyond customer expectations. How can we help you . Good monday morning, everyone im sara eisen along with our panel. Were all coming to you live this morning from separate locations as we put social distancing into practice as a precaution were about a half hour into the trading day. Were looking at declines for the dow and s p. S p down a little less than 1 the dow is down 192 points Consumer Discretionary is the only area in the green it looked like we were going to have an up day because of the fed just stepping in in a major way again to try and prop up the credit markets what do you make of the action weve seen this morning so far i actually dont think its bad. I think there are a lot of companies, i know you and i both dont necessarily want to see the market led by zoom because that means once again that the stay at home economy is still really playing the biggest role. Every time i see amazon up, i think okay, what happens to everybody in the mall . Theres still tremendous pressure on health care. It surprises me. In the end health care does not need help from the government. They have fantastic Balance Sheets people want to go for something thats a complete bad news that might get better, boeing, or with technology where theres a secular growth story, 5g, or the cocacolas what they have going for them is theyre not down today, but pepsico is up. People are saying people still have to drink and eat. We want real demand and we dont have it. Pepsico keeps getting upgraded two upgrades today Morgan Stanley and rbc as a defensive play we need Consumer Staples i wonder how much today is about the fact that congress cannot get agreement . I know secretary mnuchin spoke optimistic when he spoke to you about getting something done today, but Elizabeth Warren is saying its a slush fund for the treasury how are they going to come together they need 60. There are people who cannot come together when i listen to it, look, i know theyre all going to be im not a legislator, but the emphasis over and over again from secretary mnuchin was the worker, the worker, the fed taking care of a lot of the big credit issues. I feel like that if everyone were in the room where theres negotiation, i think the worker is taking precedence on both sides. Thats why a nancy pelosi, i cant possibly imagine why she wouldnt say the worker comes out on top lets get this done and then look at it later david . You know, jim i want im sorry go ahead, david i want to turn to kelly and get her take on things as well given your focus through the years as i always remember has been onto a certain extent the bond and credit markets as well and the fed. Extraordinary measures this morning. The likes of which as steve said weve never really seen, and as sara referenced the market did seem to be on an up tick toward the open only to reverse again but what is your take on these moves at this point and what they will mean the only thing i was thinking was the timing this morning. It came after that vote yesterday. Right . I mean, you had the bill not advance last night, and here comes the fed saying effectively to me saying we cant afford for this not to happen so if look at just the Corporate Bailout piece of this. You can either have the money coming directly from the federal government or not. If they get hung up on it, the fed said were going to support the corporate debt markets and make sure the Asset Classes keep functioning. It take it as a sign of washington, if you want to maintain your leadership over this economy, you have to advance this bill or the Federal Reserve is going to do it anyway i dont know. I mean, i think this is david, the fed going all in this is qe infinity. Were going to buy whatever is necessary to make sure theres no liquidity problem in the market and if were going to be on the other end of the train if nobody wants to do that information and thats a sign of strength. Thats what the fed can do and should do during the crisis. And i just wonder even if we do get congress to pass 2 trillion of stimulus which is not a sure thing, well watch the votes we have a Health Crisis to deal with and the slope of the curve and the fact that its not flattening, and how much of the nation is under lockdown right now and whether thats going to make an impact whether the doctors can get the ventilators or the masks they need these are the questions wall street is grappling with i think the biggest one is when is all of this going to end . It is unclear how long new york, california, Major Economies in this country are going to be on lockdown before people can feel confident. I was reading the new studies sort of like the new analyst notes for us this morning. Talking about 20 days that people can still test positive for the virus without it leaving their system thats a long time yeah. I listened to that, and i keep thinking madrid, milan those are worse case we want singapore and south korea and japan. It keeps coming back to testing. Thats why im glad that mark casper thinks he can do 2 million tests this week. The thing that i want to see, theres something that came out last night in israel theyre quarantining elderly those are the ones who its life and death for. You certainly theyre people, the elderly who will die if you want to get the economy going, you test and you get the people back. And i think that the idea that were going to forever keep the 45yearold on the sideline who wants very much to go shop and has already been tested okay, thats a mistake and i think that the president has to be a leader here and say you know what . We are going to risk the now that we have all the tests, were going to risk a quarantine for the people who if they get sick they die, and were going to let everyone else go back to work and its not irresponsible. I think its important jim, its going to be interesting to see what mix they end up using i just want to go back to what you said in speaking with secretary mnuchin this morning where he was throwing some big dollar figures around. He said 2 from the stimulus bill directly. He said 6 trillion if you leverage the 500 billion theyre hoping for through the fed i dont know if we got anymore color on how that would happen it sounds like maybe through a variety of lending facilities. So its more than just that kind of 2 trillion thats at stake here its their plans to get up 2 trillion is 10 of the economy were starting to talk about upwards of 50 here. At a time when the estimates are coming down 30, down 40 if you heard bullard for gdp in the Second Quarter we want to think theres a great bargain and if we have unlimited capital, you could make such buys you listen to people a note says its the end of the world. When you listen to a lot of the retailers, they are its the end of the world its not the end of the world. Absolutely the Great Depression is on the table, but you know what we will not need a war to get out of this. We need a bridge to be able to get hcq working or get regeneron working. And the idea that we somehow have to give up on the economy is wrong if regeneron calls in and says we have it, all this despair ends so yes, there are some levels where you have to buy. Yeah. But the question, of course, becomes what the levels are. And i continue to see in terms of the dislocations in various markets as a result of liquidity needs, notwithstanding what the fed is doing now in terms of a lot of these markets, its still an issue in terms of really determining a fundamental price here i just dont you know, there are a lot of situations where thats very difficult to do right now. Yeah. I mean, i think that its i dont mean to be too ironic but the chinese are the best source of demand, whether its planes, whether it be all sorts of different parts that we make i look at the the United Technologies raytheon, otis might be a buy its heavily chinese chie these are through the pap south korea through the pipe japan, i dont know. We keep having to think about whats on the other side when we flatten the curve, are we still a just a nation that does no business and if thats the case, then and its fundamentally a stay at home economy for the rest of our lives, then were in trouble i think stay at home is a big part thats why ive been focussed on that on mad money but look at Technology Today thats a belief that we are going to win and beat it the despair is so palpable the scaring is so palpable i mean, i almost kind of feel like when you hear reassurance, its polly anna. Its peter pan it shouldnt be. We should be cut and dried heres what comes back when we get a antibody that works against the virus. When put when in. Not if because all i hear is if and i think that makes me feel like okay, lets just hunker down for the duration and be like my daughter in madrid with a month and a half of rice and beans because shes afraid to go outside. Jim, do you think theres any reason why the economy is going to change coming out of this people were flying in airlines, are they not flying coming out are they staying at home permanently, or are they wanting out . We are a service economy, an economy of hope. If we knew that we were lets say if 80 of the people get a virus. We had the Public Health person say 100 get it if they do, why didnt all the people in china get it i see testing. I see people going back. As long as everyone is tested on this plane and maybe we have to give people a star as they do in other countries, then were back were back but we need to have a leader who says maybe just someone who is just on this who says over 60, were going to protect you under 60, this is your chance. Get tested and shop and go out and do your part i know its strange to have an economy where i say its not nra, we do our part going back to work in 1933, 1934. Its do your part and go out do your part and have a beer all right, jim. Well bring it back to this conversation in a moment meantime, new york city is one of the places hardest hit we coronavirus. Its starting to see a surge in patients as officials were expecting. The state of new york has become the epicenter of the outbreak in the u. S. Local hospitals are sounding the alarm that theyre running out of space and out of some supplies Contessa Brewer is on the west side of new york with the latest on this. Contes contessa yeah. The Convention Facility behind me is about to become an Emergency Hospital with 1,000 beds the army corps of engineer says they have gotten money this is the biggest hospital they are putting up in new york city we need it at last report there were some 17,000 cases of coronavirus with 150 deaths in new york state and we know that new york citys Emergency Rooms are already seeing a spike in admissions i want to show you a graphic in october. The beginning of flu season. We see admissions for flulike symptoms jump around march 1st the mayor told cnn the 11 Public Hospitals will run out of supplies within a week and in terms of this protective gear, weve heard from the head of surgery at new york presbyterian warning his coworkers about the shortages he says normally the hospitals use about 4,000 of those protective masks per day theyre up to using 40,000 masks per day. Thats estimated to reach 70,000 per day. New york presbyterian says theyre issuing one mask per Health Care Worker and charging the Health Care Worker to keep the masks clean. Unbelievable the governor of new york state has called on the president to nationalize the manufacture of these masks. He said in his News Conference yesterday whats happening is states like illinois and california, florida and new york are competing to buy the masks, and its driving the prices up and, of course, were in the middle of a stay at home order that came into effect last night at 8 00. All nonessential workers are supposed to stay at home they are allowing Grocery Stores to open up the sidewalks are empty of traffic here the other states that have joined in, seven other states. Thats one in three americans now under stay at home orders. Were expecting another News Conference in a half hour. We expect a new update then. Ill take it, contessa. Thank you. Contessa brewer. Lets get back to potential treatments for the virus and for that were joined by distributed bio ceo jake glanville, the company among many others trying to develop an antibody treatment. And partners with a number of important institutions to do that thank you for joining us this morning. Why dont you start off by telling us what your efforts are centered on right now and whether youre making any progress right well, thanks for having me on. My company is focusing on creating an antibody therapeutic. This is a medicine youd inject into a patient and within 20 minutes the antibodies would protect a patient. It lasts about 8 weeks it could be administered to Health Care Professionals to provide them protection while theyre in a high risk work space. Were anticipating finishing the engineering of our antibody on the week of april 13th or even the week of april 6th. At this point it goes to the u. S. Military and theyre evaluating the potency on live virus. Well, now, forgive me ignorance here what is the difference between this and a vaccine or are we talking about the same thing you said eight weeks its not a lifetime immunization there are two pretty different medicines. Theyre both important with a vaccine, i would give it to you and then your body responds to the pieces of the virus in the vaccine, and after six or seven weeks your body would produce antibodies. Im skipping the middleman im giving you the antibody directly it works right away. It doesnt last for years like a vaccine, but it works immediately. The critical difference is vaccines because they take many weeks to work, you cant give them to patients it means when you run human studies you have to give them to a large number of Healthy People and watch them for a long time thats why theyre estimating its going to take 12 to 18 months for the vaccine to become available. Where this, you just need to do phase one two human study, we can do it over the summer on about 600 subjects, and if it works we can release it by september. Well, look, obviously watch that i know you worked on ebola youre a pandemic expert im curious if you think as a country were doing enough to fight this, and what you think about the testing right now. Sure. We are definitely caught a little flat footed in the first few months of the outbreak china did a great job of buying the world some time. We took a while to adapt as did other countries. At this point im glad were applying strict social distancing measures. In california we have some of the strictest. It seems scarier, but were safer. What were going to see over the next month unfortunately is a continued growth in cases just because thats all the cases that are already out there catching up to us. This month is going to be tough. The good news is social distancing will slow the cases the bad news is china is going to have to start sending people back to work either you tell everyone to go home and slow the virus or you tell everyone to go back to work and fix the economy in which case theres more growth of infections thats what well see the rest of the year, i think doctor, have you seen any mutations in this coronavirus like we do see in the seasonal flu . So other groups are looking at that. We definitely see an accumulation of mutations happening across all the virus around the world scientists are doing a good job of preparing notes the question becomes is there enough mutation that you could become infected and if it stays around, by the next season are you reinfected we dont know that yet mr. Glanville, how many other companies are you aware of working on a similar kind of a treatment, and what distinguishes your company in terms of your ability, perhaps to get there before others id say theres four or five companies im aware of working on this. What were doing is pretty different. Most of the companies are starting from scratch. Theyre taking blood from covid19 recovery patients or theyre immunizing mice and recoveri recovering antibodies there we went back to antisars antibodies. The sars virus is a cousin of the covid19 virus we are using technology in our laboratory to create hundreds of millions of mutations on the antibodies to evolve them to catch up with the new covid19 the advantage is suddenly were piggie backing on years of research to bring them to become a strong therapy toward covid19 in our estimation, this means well have the first antibody thats optimized toward the target compared to other groups trying to find an antibody in the first place. We keep hearing from a various sources whether its in south korea, china, france, by a distinguished doctor that hcq with the z pac works, and the president has a good feel. Dr. Fauci, i respect, and hes saying please, dont get ahead of yourself. Why do you think that theres such widespread use of that pack and obviously its now in new york versus the skepticism is it because they havent done the test i think its a national emergency, and sometimes i feel that even though i know the rules and what the fda wants, lets throw the rules away for a few minutes. Theres a mix there right . So the pack has been applied in china and south korea. But then there have been reports saying its effective. But they didnt share enough data it is essential that when you have an outbreak you can start throwing all the spaghetti against the wall to see what sticks thats what happens. Theres a chance the medicines could help they dont act as a total cure or we wouldnt have any of the problems in south korea where we still have cases but what we need are studies to test the effect now, to your question about can we throw the rules out we dont want to throw them all out. They serve to soften lives we can cut red tape. For the project im working on normally it would take a couple years through traditional development. But we have a couple steps of expediting production. And second setting up a phase one two study thats done usually by oncology groups that enables us to work with the fda to prove the drug works quickly. And we have compassionate use used in the Ebola Outbreak and others where if theres nothing else out there that works, and Something Else does, you can start releasing it to people that need it i was just going to ask about the timeline we do interviews with people like you and i get instant feedback this is hopeful. This is good this is what we need to get this out faster you said what, september is the best Case Scenario is there any way to speed that up faster . It could be a little faster but it could also be worse so the september is the technical time it would take us to basically manufacture the material assuming all the red tape was out of the way and the fda worked with us aggressive. Thats why im hopeful about my active partnerships. Then you have to do one human study. You should do that it makes sure the drug is safe and it makes sure it works otherwise its not productive. Thats going to take it doesnt take that long because you can give it to patients already sick within ten days you know if the drug works thats better than a vaccine you have to monitor for six months after that, you have to scale up these things in principle could be out to september, but we need additional funding we need coordination with the u. S. Government and the military and with other nations we want this to be available globally this is a global problem and we need everybody to have access to medicine mr. Glanville, appreciate you taking time with us and good luck, of course. Were certainly all hopeful. Jake glanville, the ceo of distributed bio. Jim, were dealing with two separate crisis that are linked. The Health Crisis where were trying to get ahead, and focussed on any number of different therapies whether theyre antivirals that mitigate the effects of the virals to antibodies that help Health Care Workers to a vaccine. At the same time were dealing with a moment by moment economic crisis that is only worsening as more and more people lose their jobs david, its really kind of strange. The stocks going down, are the lets call them the procter gambles. Those are the stocks going down in part because i think people are making when we do get the legislation, theres going to be a snapback rally in tech because tech is something where theres still demand if youre building for 5g, then what happens is youve got something cooking. There are people all over the world who feel like its an inexrabble move to buy 5g. The idea that somehow you should throw away the drug stocks i think is a big mace take they have good yields and Balance Sheets just because you think theres going to be a bill passed, lets come back to the idea that where the bargains might be created are companies that have good growth where the growth isnt going to stop. And people are throwing away because they somehow expect some snapback rally thats going to make it so theres demand when there is no demand unless youre talking about a secular trend like 5g. Jim, can i jump in here for a second i want to point out i know weve talked about this but zoom is up 18 today. Its incredible. The stocks at 154 i cant go a paragraph without reading about people saying join our Small Business zoom because cuban had ideas about letting businesses overdraft so they can keep going my neighbors said download the house party app. Were going a hangout tonight. I got a Birthday Party tonight. I dont know if i can attend i have a zoom party with my daughter too guy back and forth with the ceo. I always feel badly that he bothers to answer my email he has so much business and hes there doing the business this weekend. He has the product people want, and secondarily sysco has yeah i mean, its become overnight like xerox the stock chart we remember the tesla stock chart in january im not saying zoom is the same thing, but thats a steep slope on the right there look, those are thats a parabolic move thats unsustainable, but tesla did get to 900 before 400. Zoom is extraordinary. People when they find out hey, i want to stay at home, its just the word that comes up is okay, well, zoom me. So i think its really worth noting until zoom levels off, thats a great tell of where we are in the economy. You want to see it level off if only because people can go back to where they used to work love its up 18 . Isnt much assurance i want to be ptimistic. Lets say hcq or gilead or regeneron works. Lets Say Something works. I see so many people and its driving me crazy you know what . China has it because theyre a Totalitarian Society and we dont have the guts to do it we have the president and dr. Fauci and Governor Cuomo we can do moral authority. What drugs how many nobel prizes do they have . What drugs did they discover im kind of tired of hearing we need a communist totalitarian thing to beat this were all at risk and were all going to get it. And jim with the gloves and the masks, who are you kidding i dont buy that im more optimistic. And when we look to your optimism, its important i want to point out other things happening in the market. Theyre unusual. We have oil prices down. But theyre down less than 1 . Nothing extreme. Energy stocks, worse performing sector on the s p. Weve looked at oil as a leader. Also would note we have treasury yields lower after the fed came in with what some are calling the qe infinity, will do whatever it takes to stabilize the market, and gold and silver are higher today its something a little different. You dont quite have that sell everything mentality that we saw on certain brutal days over the last few weeks its a lot the action today is a little more subdued. What a great point. Theres two numbers that were worried about. Confirmed cases and unemployment on thursday. If we saw any flattening of confirmed cases, were not going to see good employment on thursday people would say its not the end of the world its older than 60 where the risk is. Thank you, lisa, for constantly telling me that that i cant work anymore not going to happen. We hope not someone was supposed to ask me about my show hold on a second. I got Something Else to ask you first. I did want to reference saras mention of oil prices. At some point at the end of this, were going to see a lot of consolidation when it comes to oil, jim, a lot of those smaller oerperators are in deep trouble. Reflelkted in the price of the bonds and the high yield markets. There is an expectation we may see a wave of consolidation. No surprise. At some point when we get to the other side in a lot of Different Industries certainly in oil and gas not clear theres going to be a buyer at all for oxi which we should point out there were some reports that perhaps theyre getting closer to a sentiment with carl icahn, but given their debt load and properties, a lot of people tell me dont look for anything on that front certainly not in the nearterm, even if in the longer term how are you viewing energy at this point chevron, the only guy with the fire power suspended buyback. Bp is doing well, but i dont just like hey, i dont know whats going to happen but mike worth is the guy. And mike worth has this is chevron. Hes going to come out on the other side exxon borrowed a lot of money. The bond yield, in order to pay the dividend thats not a worse problem worse is the cash. Everybody else, i dont want to say everybody, but most others are strapped they need 30 to 35 thats why i thought the president , it was a move by the Texas Railroad commission. The president has to call saudi arabia and read them the riot act. He favors lower gas prices. Jim, youve been saying that for weeks now. It hasnt happened either hes not doing it or it didnt work. I think we should say im wrong. For the petroleum reserve, thats about 5 to 7 of the production so no, i mean, debt fears, i dont know i mean, the president , he has his counsel. My advice was to call them my advice is not being heated. I have a tv show we see no evidence of that. None whatsoever, david. Why dont you just rub it right in jim, that has not been a thats been a sup on the suboptimal strategy. The strategy might be correct, but it has not seem to have been employed, i think. Sub on theal results. Certainly if youre trying to get, operating the oil and gas business thats a connected story given the decline in demand, but also a separate story because of the fight between the saudis and the russians focussed on trying to hurt our operators all that said, whats coming up later tonight . Every night i have a new work at home i try to get a new zoom so ive got cloud flair. Then i also have, wow, i have teladoc. Thats another like it has a zoomlike chart. And then at the heart of the issue right now in terms of credit and belief is our Real Estate Investment trusts and deb carfaro runs venn toss it has a percentage thats Senior Living which we know is on the red hot griddle we have to find out. She did her distribution last week a lot of people thought she wouldnt lets see what she has to say. A great mix of stuff. Its been fun hanging out with you from a distance. We zoomed kelly is probably about 60, maybe 60 feet which is now the new distance 60 is the new six. I still have the math this has been fun jim, well see you later great stuff. We have time now for our coronavirus update sue herera joins us in the studio for that. I do. Good morning, everyone heres whats happening at this hour worldwide cases have now topped 350,000. The death toll from the virus is above 15,300 in spain and theyre reporting around 4500 cases. Here in the u. S. There are more than 35,000 cases and 471 total deaths the hospital ship mercy is getting ready to leave san diego this afternoon it will be heading to los angeles where it will take care of noncoronavirus patients allowing local hospitals to focus more on the outbreak in eastern france, an Army Field Hospital with 30 intensive care beds is being set up for coronavirus patients this as paris is extending a weekend ban on gatherings along around the eiffel tower. No date for the end of that ban has been given and the International Retail h m says more than twothirds of its 5,000 stores have been closed the company is now looking at temporary layoffs that will likely effect tens of thousands of employees and as always, for more coronavirus coverage, you can always head to cnbc. Com. Back to you. All right. Sue, thank you well turn back to the markets now. And nasdaq is positive s p and dow are lower. Cheta ahya joins us and jack an db ablin u. S. Growth to a low in 2020 explain your forecast. Essentially its a significant decline in personal Consumption Expenditure as well as the Business Investment in the Second Quarter so this is definitely going to hurt our forecasts and we are now expecting this to continue into Second Quarter, and then expected recovery from the Third Quarter assuming that cases beat by some time in second half of april or early may what is the economy going to look like if we do peak by that time how strong can we rebound and what kind of unemployment numbers are we looking at . So we expect the unemployment numbers to rise to about 12. 8 in the Second Quarter. So this is going to be quite a sharp and steep deceleration in growth, but we expect it to be relatively strong from Third Quarter. It really picks up from the Fourth Quarter in a meaningful manner to the extent to which we will get back to the normal levels sometime in 2021, but definitely the nearterm looks very painful so jack, i mean, the markets off 30 from the highs happened quickly it happened painfully. How much of that bad news of that Economic Forecast is already in the market . Im going to say most of it you know, the first phase of this selling was probably a lot of it forced you know, based on all thel algorithm related trading. Also add to the fact that we had a lot of passive Exchange Traded strategies where we investors pretty much just gorged everything, baby and the bath water. I think now for investors who need to be longterm, we have to look past this valley, and there may be more to go to the downside, but probably not much more is really three things were looking at and were advising our clients to consider one, shift out of passive and into active. The fact is that while everything is down, we know that the coronavirus and this standstill will likely impact 30 of the economy pretty harshly. And then probably 20 to 30 almost no issue at all and so if you move to an actively managed equity portfolio, a manager has the wherewithal to pick through who will likely be the winners and losers that perhaps a passive investment wont the second is provide liquidity if you can the liquidity premium right now is enormous. So we have a private equity secondary strategy where were providing liquidity for would be or limited Partnership Holders that just want to get out. And that is a great longterm strategy, because we can offer liquidity at a pretty sizable discount to fair value and then the last, of course, is distressed credit. We think now after that is probably the may tag repairman of the Investment Strategies over the last few years. Theyre going to start getting busy and i think providing them with dry powder could provide investors willing to look past the valley an interesting opportunity. Thank you both for phoning in thank you appreciate your insight want to go to stacey cunningham, the president of the New York Stock Exchange on this historic day where the New York Stock Exchange is closed for floor trading and operating through computers for the first time in more than the 100year history how is it going . It is a historic day for the New York Stock Exchange, but for the United States broadly. We are all battling this crisis and taking steps to protect people more broadly across the u. S. So we made the decision to move to electronic trading temporarily until we have a good sense of how to keep people safe and what are you seeing in terms of the Market Action is it interfering at all with liquidity . Is it operating normally yeah. Stocks opened normally this morning. The Market Makers that stand on the Trading Floor every day who arent behind me today are remotely opening and closing stocks throughout the day using their Technology Systems to interact and provide liquidity into the market throughout the day. This is something and as we highlighted, a lot of trading is done electronically already. The people on the floor are using algorithms to trade. A lot of that is happening off floor now. And as soon as we can, well get the people back in the building. What are you looking for to see if that could happen some people are saying look, we might not see the New York Stock Exchange floor open ever if this proves to go well, why do we even need floor traders . Because theres a level of service we can provide to our listed companies as well as their investors and to provide a premium offers just like restaurants offer takeout or delivery. Once we have a sense we can protect the people were working with, just like restaurants reopen dining rooms, well reopen the Trading Floor to provide full service to our customers. Yes its kelly here. Does that mean its a privilege for traders to get access to the floor, or can you explain that a little bit more . Its their customers. Its a privilege to the customer the customer is off the Trading Floor. Those investors buying and selling stocks every day and those listed companies who are choosing the New York Stock Exchange choose because they have that additional level of service of having people at the point of sale providing human judgment importantly, those people arent open trading each day. Theyre adjusting algorithms to respond to changing. Weve introduced technology to scale their products and services and their businesses. Thats why there are fewer people on the Trading Floor today. Theyre using technology to accomplish so much more, but that technology is a critical piece of it. So is the people any time you empower people with technology, and you get a much better result. Thats what we see our stocks trade with less volatility as a result, and today were taking that piece off the table just given the circumstances. Its a wellconsidered response. Its not a panic reaction. And i would challenge all americans to be thinking about their actions right now through that lens. Right . This is a crisis but it doesnt give us the opportunity to make decisions based on fear or panic its very important that we use this opportunity to become the best versions of ourselves make decisions that are good longterm decisions about how we can protect ourselves, our neighbors, and how we can be part of the solution just like were seeing Health Care Workers rise to the occasion every single day. Every Single Person should be thinking about how they can help and how they can be a united member of this country many people are fearful and i know weve talked about this point before, but it still continues to be live and there are still calls for the market to close, for some period of time because people are emotional and they are scared. And there are worries. A lot of that is manifesting itself in the markets which is adding further pain to the economic and Health Crisis that were seeing state your case of why its important to keep the markets open versus say 9 11 where we saw the floor close for a few days but also the market those are different scenarios. I understand its hard to not make emotional decisions, but we have to do that. People have to make decisions whether theyre investments or personal decisions, people should be staying home and focusing on protecting their longterm investments. That means not to panic. The market was closed during 9 11 because it was not capable of opening the industry, the New York Stock Exchange, many of the clients, were not able to operate remotely we have since introduced that capability weve also ive heard referenced over the past few days back to world war i, the markets were closed for four months at that point the number of americans that had their life savings and money invested in the market was dramatically different. Right now people are being stressed and many of them need access to the dollars in the shortterm because of the trials that theyre undergoing right now. We cant take that access away from them. We made adjustments to the market to deal with situations like that. And those situations have been designed well thought out, data driven, and actual responses to market conditions. Not kneejerk reactions to a selloff. I spoke a few times last week with former treasury secretary nick brady he was the treasury secretary following the 1987 market crash. He and the team designed market wide Circuit Breakers for situations like this when there is a major selloff in the market so we can have an informed slowdown that limits panic at moments in time to give people a moment to react and to think wisely about what theyre doing and to not feed into a panicked selloff his point and his message to me has been consistently you need to make sure the markets stay open this is why we designed this its easy for me to say dont worry. I also agree the markets need to say open they need to provide access to investors their money. Thats number one. Thats most critical it is also very helpful to understand and to highlight what the public sentiment is. Thats the useful tool to have on its own, i think its critical that people have access to their money but having the markets reflect back how americans are dealing with the challenge is a useful tool as well i see youre still at the floor. Is there any thinking that the floor could open sooner than many think i believe in cuomos order, Financial Services are part of the essential work force of new york Financial Services are an essential work force we will open the floor as soon as were confident we can do so safely thank you for joining us. President of the New York Stock Exchange the coronavirus is taking a huge toll on the Retail Sector as major notable retailers like nike, nordstrom, my macys and apple are temporarily shutting down Stores Across the nation. Our next guest sent a letter to President Trump last week seeking Financial Aid for retailers and Small Businesses the president and ceo at the International Conference of Shopping Centers tom, its great to have you here what do you say from people who say you are among those seeking a quote, unquote, bailout. Were not seeking a Corporate Bailout in any way 70 of the tenants in Shopping Centers are Small Businesses were facing an Historic National crisis. The government has taken appropriate public herlt Health Actions thats put strain on our members. All were really suggesting is that during this period of time when we all should be focussed on the health and safety of our fellow citizens that the government steps in and supports Small Businesses and quite frankly the economy as a whole were reacting to appropriate actions taken by the government, and as a result, retailers and restaurants have closed their doors throughout this country. And so were just asking for action were focussed and hopeful today the act will pass. Theres language in there around Small Business protection. And loans. Were hopeful that will be broadened to ensure the Small Businesses cannot only maintain their employees but cover all their operating expense pences during this period youre supporting this bill because it supports Small Businesses which are as you said people with less than 10 employees are critical to your shopping mauls alls and centers. What would the language in the bill do tenants and you . What happens to people who own shopping malls i think to be clear, we believe this is an appropriate first step look, were in the midst of an historic crisis. We dont know how long this crisis will last whether its a month, two months, three months i believe that there will likely be other necessities for Government Action. But we believe right now its urgent that the government step in and the act on the table right now, we applaud the administration and congress for taking action and putting legislation in play to discuss we think it needs to be passed immediately. I think what this act does is provides shortterm liquidity into the marketplace its necessary to ensure that businesses can maintain their employees and be positioned to recover from the crisis. And its really important that companies are positioned to maintain their employees, because while ive heard some conversation around this being a sharp decline and well bounce back quickly, if companies dont have employees, whether its in the Retail Industry or any other industry, once this crisis abates and it will abate at some point, if you dont have employees, its hard the ramp up to get back to really be positioned to serve your customers is going to be a much longer one than it would be if youre able to maintain your employees. Thats why i think Government Action is important. And were supportive of tieing it back to Employee Base do you think the government can really save retail jobs in america . Its such a key part of the employment picture in this country. Do you have faith that these kind of bills can really keep americans working in this sector for an extended period look, one out of every four jobs in the United States is retailrelated if you want to save the u. S. Economy, its really hard to do that without leaning in to the retail segment i think every job that is saved is important obviously there has already been actions taken by Many Companies not just in retail but throughout the u. S. Economy to adjust their head count. Thats why i think time is of the essence. Thats why i think passage of care today and then moving on to the next recovery bill. I think there will be a next we have been very and you mentioned the letter that i sent to the administration and Congress Last week weve been focussed upon suggesting that there should be a broadbased wholistic approach, Something Like a business disruption Recovery Fund that would operate similar to Business Interruption insurance thats quarantine grn guaranteed by the president. Were in the midst of something weve never experienced as a country before and weve fundamentally shut down the u. S. Economy. I think this is the time for government a all right tom, we appreciate you joining us today again, be well through this. Take care of everybody hope we can get this back up and going quickly. You too appreciate your point of view today. All the major averages are lower. The nasdaq has joined the dow and s p wndo in negative territory. Stay with us welcome back to squawk on the street. Im david faber along with kelly evans and sara eisen unique opportunity for me to use both of your expertise sara, we havent talked about your beloved dollar of late but that figures into the equation here its been quite strong even with the prospect of adding whatever the number may be, 3 trillion or more to our National Debt right. So everybodys beloved dollar right now is really the story, david, and what we saw over the last few weeks of trading is theres been this rush into anything that is dollar denominated. Thats a real sign of fear and of crisis and of the fact that, you know, companies and countries overseas, theyve all borrowed in dollars. Its going to be pretty painful. It just adds to the economic pain the dollar got so strong last week it just had its best week since 2008 that you really began to hear speculation that u. S. And other Central Banks and treasuries around the world could actually intervene Something Like the plaza accord in 1985 where they did come together in a massive step in to the Foreign Exchange market to weaken the dollar to alleviate some of the pain we were getting to the point of that so youre seeing the dollar down about a percent so some of that pressure has been eased, whether its speculation that we could see stepping in, actual intervention in the market perhaps, but also things today are a lot calmer and i think that the key is how the credit market and how the treasury market are functioning and if that goes okay the dollar hasnt been at the super strong levels. Last week when looking dicey it was a mad rush into everything dollar based and that was a good sign of fear. There was a mad rush to cover trades or to get out of things where you had to buy dollars to do so was your point that did create demand for the dollar that did not necessarily have to do with rushing to a safe haven currency. Right i would use that on your dashboard as sort of the levels of pain and sort of the alarm bells in the market. If you really start to see some notable Dollar Strength thats an oh, point were not seeing that. I would use crude oil as well. Crude has had some dramatic aggressive selloffs lately and thats been hard for the market to process and hard for the high yield market which we know has much more exposure to energy than the Overall Energy market those are sort of pain points to be watching. Gold as well when gold was weakening and the dollar was strengthening it was a sign even the safe havens you traditionally go to were getting dumped in favor of just dollars. Yeah. Kelly, i know a number of people looking at the move in gold and sort of wondering what it meant given you would typically expect as sara referenced the idea of moving into gold that was not the case at this point. Right the fact that people were saying i need to sell what i can in order to just raise cash and we saw everything do a draw down. David, i pointed out earlier but you asked me off the top whats happening in credit markets, i wish the news was better you know, guys who i really respect, the Brian Reynolds of the world, say the pricing is not that encouraging for Equity Investors yet. Berkshire hathaway issued debt at higher yields than what it was trading, Companies Use them, but they did so they had to unfortunately investors really demanded a premium there are people out there saying we havent seen equity prices catch up yet with those conditions the it fed is helping, its back in a leadership position, you know, helping calm things down, but, you know, people are able to access the markets but it comes at a high cost right now on the credit side yeah. Were keeping a close eye david, i have a question you are as well. Sure, sara. David, my question to you, what youre hearing out of hedge funds and how much pain and what sort of moves are being done to meet margin requirements and to liquidate and what their clients are doing with their money yeah. I mean listen, as you might imagine a lot of people have taken off an enormous amount of risk and in this environment, sara, you cant necessarily trust what youre hearing no hedge fund is going to tell you its in extreme duress and they dont want other Market Participants to be aware of that you can expect that there are going to be a number of casualties here. Although from what im hearing a lot have at least mitigated some of the risk, taken a lot off, taken the grosses way down at this point but i dont have a great feel in terms of where some of the real pain may be, sara we know its out there and a lot of the moves were seeing are a result of people taking off significant trades and sort of dislocating in certain markets as a result of that. Well, were keeping an eye on that thread as well as many others the dow down about 462 points right now. We got as low as down more than 600. So were off the session lows. Another day of extraordinary unprecedented intervention from the Federal Reserve to shore up the markets. S p down 2. 4 . Losses picking up steam. Quick programming note here, as we head to break, dont miss the ceo of Quest Diagnostics on the testing efforts, how many tests there are and how widely they can get them to americans coming up on closing bell at 4 00 p. M. Eastern. Were going to take a quick commercial break here stay with us as we continue this breaking news, market coverage. Yes im stuck in the middle with you, no one likes to feel stuck, boxed in, or held back. Especially by Something Like your cloud. Its a problem. But the ibm cloud is different. Its the most open and secure public cloud for business. It can manage all your apps and data from anywhere. So it can help take on anything, from rebooking flights, on the fly to restocking shelves on demand. Without getting in your way. Good morning i am jon fortt with Morgan Brennan and kell