Things investors should be thinking about right now. Coronavirus feared have a Market Correction what to expect them here. Some stayathome stocks held up better during the storm, with got the nays and whats ahead. And bob stepped down at disney, why it makes sense the themepark has take the helm. Ben levisohn, jack hough, you dont need us to tell you its an ugly week on wall street heres a rescan s p 500 plunged into correction territory down 11. 5 for the week that makes february at the worst month of the market since the great recession. Treasury years fell to their lowest yield ever with attend yield on trade year yield low but the recent Market Action perspective. Longterm investors have had a wonderful decade since the market in 2009 stocks have delivered a total return of 448 . Ben, what should make of all this . See necklace talk recession. Do we have to . Profanity right out of the gate. Around a year ago thats been very reliable recession signal. The fed went ahead and did the rate cut and everybody talked about the planning and then we thought forgot about it but everyone was saying at the end there is no sign of recession and lissa get a shock guess what we got the shock. This is gonna be a problem the economy wasnt looking all that great even before we had the coronavirus come along. Jack thats contrary to what were here and give us some data on that. First met her industrial pmi this Industrial Survey data was Getting Better but the service pmi was getting worse. Job openings were falling, they werent looking for as many workers thats not good things. Then along comes the coronavirus and this is very possibly people just stay home and stop shopping. The economy grinds to a halt and this is not the worst Case Scenario where we all told have to work from home and then you have real problems. I think the recession might be coming but their only knowledge of recession is what happened in 2008 with the Global Financial crisis. Recessions they do happen we dont want to talk about the pain but we had recessions in 1949, 67 and 90 that we dont talk about anymore. So a recession may come, i think we may need to keep in mind is what happened 12 years ago. Smack in after recession had pent up demands. Exactly city of recession or people are staying at home, because their corn cedar working remotely, when things turn around, there is going to be that pentup people again to be using goods and services again. I just want to point out bennis could be a nice guy he only gets grumpy when he talks of the coming recession. I am not quite there with you. But what i will say if i have to guess around the stock market i guess up and keep it simple. But we think of the stock market is following reflecting the economy. Sometimes it does but sometimes the economy follows and reflects the stock market. Consumers have felt pretty flush from this long bull market. If you have stocks continue to slide from here you could get a reverse wealth effect or would start to hurt spending. I think thats a lease on friday where he had the fed come out the statement while the market was in turmoil saying we are aware of the situation right now. We will use the appropriate tools if needed. In the market turned around then on friday and that may be why. I want to ask you one weird thing then, the market plummet in gold goes down with it. Usually when the market goes down gold goes up. Two and today the gold is doing great until today. The rumors out there basically theres a lot of margin calls. We get a margin call you sell what has made you money, in this case its gold. Jack other things went up over the last week which most people wont realize there are a few stocks that were really green what happened with that. Where to calling at the stayathome stocks this is when your quarantines where the goods and services you will be using. She had zoom Video Communications or people are forced to work remotely or cant travel, youre going to have videoconferencing. Peloton, the 2000dollar exercise bike makes a little more sense and people dont want to go to the gym. You have netflix going up, clarks going up, people are going to disinfect everything. Youve got to wipe off the peloton. [laughter] be nine jack Something Else is happening in the market. Non virus news bob iger replaced by bob j peck you spoke with them on the phone everyone has respected bob in what is and at the park for the last five years why would you go to parks i would every talks about streaming so thats disneys biggest earners television so why would you go to bob meyer with the streaming business the first answer is parks are the fastestgrowing part of disney right now. They are becoming profoundly popular and i can envision in the next couple of years parks overtaking television becoming the business. Also hes got 19 years of hollywood experience before he ran the parks business if you ask about streaming he says its not called streaming is called direct to consumer. And there is nothing more direct to consumer than running the parks. Jack tough time he because parks are not the place we want with the possible pandemic. Jack barely had to close in shanghai and hong kong. You can see a downturn in attendance here in the u. S. Is things get worse. But keep in context this is a business where you are at 7 billion in operating profit just up from a few billion dollars five years ago youre probably headed for 10 billion so things are moving in the lon right direction over longterm. Jack kind of rough guide he agreed customer. I spoke with him at disney world last year at about 285degree orlando heat. He is matter of fact. I have something in the magazine are described below bit and i say hes not what you would call an oscar party raconteur. He likes to get down to business. He is a guy who talks about storytelling and be at the heart of every thing disney does, something ive heard many times from bob iger. Jack torsten from deutsche telling talking about the markets well be right i am totally blind. And non24 can make me show up too early. Or too late. Or make me feel like im not really there. Talk to your doctor, and call 8442342424. 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 . Earning on that eclair. Dont touch it dont touch it yet let me get the big one. This one . No this one . Yes no. The big one theyre all the same size with freedom unlimited, youre always earning. Let me get them all. Im gonna get them all. I cant decide. Jack coronavirus be a fierce spook investors and pushed into the fastest correction ever from a peak. Deutsche bank torsten slok tells what means for the global markets. Torsten you had a widely misquoted chart can you tells what it said and what it didnt say . The point of this chart is to try to figure out how quick was this correction that we saw over the last week, and the answer is if you look at it from the peak that was an alltime hi, how many days did it take before we got a 10 correction . This was the fastest we have seen basically since the 1930s. So the reason why this is interesting is doing from euphoria basically a week ago we are at alltime high every thing is good, now we suddenly have a whole different view now that we come to the end of this week. Jack s are generally investors are told when everyone else is selling youre supposed be buying. At what point do you determine its a buying opportunity or you aint seen nothing yet its going to get worse . The old saying is you do it at the worse and you look at the situation today can get much worse . The problem with the situation is so difficult to figure out what the imp occasions are because the coronavirus is going to hit both the supply side of the economy more people be staying home, the b disruption of supply chain, so basically therell be less productive and less apply the economy overall bit on the man said bergens see people going less to restaurants, less traveling. Basically having less consumption which means thats going down. The magnitude of these things combine those most importantly with the stock makes it very hard to figure out where we are at the worst yet. But we will look worried at next week how things obese still significant the downside going ahead. Jack thats an important point because everyone throughout the tenure bull market has had the consumer, so important to the economy has remained strong. At what point does the consumer get a little worried and starts point that . This is really critical the Unemployment Rate is essentially at the lowest level in 50 years. So from that backdrop, this coronavirus, came at a time when the economy did recently well from that perspective number of other things you worry about. Job creation is good but moving into next week we will not get any information from payroll numbers about the coronavirus. This was all measured before this week. So thats like wise for the corporate sec. We dont have a corporate sector will be taking this hit. So we really dont get any information thats particularly helpful. That means a cloud of uncertainty is still hanging over the markets. We are quite worried looking ahead next week this continues to be a problem. Jack can you explain to victory . This virus originated in china but the u. S. Market was having such a horrible week, chinese stocks were doing relatively better, ways that . One thing i thing that is going on and when you look at what markets have been doing over the past week, is that there are signs theres improvements in the number of people affected and also improvements generally speaking the Second Derivative here is the slowing growth and that looks to be a little bit better particular in china or it looks to be a lot worse in europe and the u. S. Still. We really dont know how well its measured. That of course maybe china is having a little bit away from the coronavirus problem. Where is here its getting to be more of a problem. Too that could explain some of the reasons why we have seen some assets in china over there and in particular to up a little bit in those have benefited from the idea that china is beginning to move away from the corona problem. P9 how you look in International Diversification right now . Other areas in the world that look like an opportunity . From that thing we are looking to see where we see things are going to improve and deteriorate. Thats very difficult when you look broadly. Europe was also hit quite hard this week. Now the insurgency is really about the u. S. At the moment, which is why you see u. S. Rates and levels of Interest Rates come down. Much more than what you have seen in europe and internationally. Jack so what should we take from that . Bond market relish would be happy about that . Or the bond market signaling worse to come . Wed have today globally about 14 trillion in negative yielding debt in the world. Thats roughly 25 have an negative Interest Rate. To the Interest Rate is of course Interest Rates are going down is normally goodness in particular people had the moment rates bed and bad news in the situation code has a reflex to things, both that people might be revising their views and Inflation Expectations are going down people think Economic Activity and gdp of a going forward. Also reflects another thing that people are going away from and have to have a safe asset and the safest acid is just treasuries. So yield metals are going down because both people revising the strategic outlook and also because people are selling more risky assets, Corporate Bonds, highyield, ig, and also target being their money in u. S. Treasuries. Jack and thats has worked out this week. Coming up historic low Mortgage Rates have a lot of homeowners thing about refinancing. Economist mark zandi weighs in. Well be right back. You wouldnt accept an incomplete job from any one else. Why accept it from your allergy pills . Flonase relieves your worst symptoms including nasal congestion, which most pills dont. Flonase helps block 6 key inflammatory substances. Most pills only block one. Flonase. The better question would be where do i not listen to it. While im eating my breakfast. On the edges of cliffs. On a ski lift. Everywhere. Download audible and start listening today. Wthats why xfinity hasu made taking your internetself. And tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. Thats it. Im calling kohler about their walkin bath. [ sigh ] not gonna happen. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . 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Thanks for joining us mark parham stocks the punches got most the headlines this week, but tells was going on the bond market . Well, their record lows. Tenyear treasury are closing in on 1 , officer reflecting the panic and the bad news and prospects for global recession. So rates are falling. Not falling is much as Corporate Bond yields because her concerns about the credit quality of the companies. So we are seeing spreads at wyden for highyield debt and other corporate debt. Mortgage rates are falling, they are more tied to longterm Interest Rates as you pointed out 30 year fixedrate Mortgage Rates are now pretty close to record lows. If theres any good news and whats going on here, its for homeowners and folks who are looking to refinance their mortgage. This a bigger time to do it. Jack want to ask about that but quickly due to the falling yield is worse to come . I think it signaling recession. I think were going to have a global recession. If the cdc is right, and the virus shows up here in a meaningful way, for example for closing schools and different committees across the country, yes, i think its going to be very difficult to avoid a recession, and thats precisely what the stock market and the bond market is telling us. Signaling fears all over the world. We are in the strongest economy on the planet, we are still aaa credit on the planet. Theres a problem anywhere, money comes pouring into here. Weve got a problem so the rest the world has a big problem. For a while he been hearing about the strength of the u. S. Consumer. But the fears of the coronavirus and recession is there reason to worry . Yes, the stock market reflects the economy but also impacts the economy very directly. We have a lot of baby boomers and visitors in fact free of baby boomers own more than half of all of the stocks in the country. Over 25 of all their assets, financial and nonfinancial are tied up in stocks. Boomers are in their 50s and 60s and their focus on the stock market like a laserbeam, thats their nest egg. If that nest egg starts to diminish and clearly diminish this week, theyre going to respond to that. Obviously the virus goes away, the stock market rebounds no big deal. Kind of like what happened back in 18, if it stays down out expect to see that in weaker consumer spending, particularly among those boomers at least at first. Thats a prescription for recession. The line between in expanding rick connie and it recession is the american consumer. I hear about panic selling in stocks is there such thing as a panic refinancing on mortgages . Is that what people should be doing . I look at treasury yield diving and im trying to figure out what is the best time for folks to start calling riverbanks. Should they wait for breakfast time on wednesday . One is again hit bottom on Mortgage Rates. Now, go online and so you can do literally. The average coupon and outstanding mortgages 4 . To the typical american homeowner is a 4 Mortgage Rate but Mortgage Rates are three and a quarter so youre in the money you get theres going to be a fee shrink that money back in a year because of the lower rate. Its time to move, i would move very quickly. Youre talking recession is the bank going to want to give someone like me a mortgage . I dont know about you. But for the typical person freddie. Sandy mae fha, yeah sure they are going to sell that bank wells fargo, quicken, theyre going to make that loan and then theyre gonna sell it to fannie or freddie or fha or whomever it is. Theres going to be a buyer there. Thats not going to change. If not a down the middle kind of potential homeowner with credit score loantovalue ratio debt to income ratio youre not in the sweet spot of the loans the banks gonna make that on their own Balance Sheet theyre gonna take the risk. You may have a problem that might be more difficult for you. If you look at house prices relative to incomes, rents, things like that you think housing in america broadly speaking is a good deal right now . Depends on where you are if you are out west, west of the Mississippi House prices are very sharply very high relative to income and rent. Valuation becoming an issue but with a downdraft in Interest Rates, thats going to give another jump up and house prices. Heres what i say, abstract and from nearterm things. The housing market, particularly for affordable housing, workforce housing, the plainvanilla housing is vastly undersupplied, we dont have enough homes and we are not building enough homes to meet the underlying demand. Jack bergen have to leave it there thank you very much. At the next roundtable members give their suggestions for the next week. Next week. Stay right there. Theres smart and then theres street smart, like a hybrid with best in class epa estimated range of more than five hundred eighty two miles. And ford copilot 360 technology to help you outsmart some of the things youll encounter on the road. With more available second row leg room than a chevy suburban. This is the completely reimagined, street smart 2020 ford escape. This is the completely reimagined, street smart yeah right. Iand the earth is flat. Ahhh treat your cough seriously with robitussin cf max. Nothing lasts longer and treats more symptoms for your cough, cold and flu. Robitussin. Because its never just a cough. Jack subject, earlier this show you said whenever anyone asks you what the markets going to do you gas up. I still optimistic after this week . I am, i need something calming. I dont do yoga said this is financial yoga. Deep breaths. But assume any position you and think about the basic principles of the thing its not we just point to a chart and say stocks outperformed bonds and commodities and other assets. Its what stocks represent. When you are invested in them you are invested in people with talent across the country, around the world. These businesses only exist to the extent they can turn financing and stuff, which is another saying bonds and commodities, into higher returns. B9 karlsruhe start with you. Campbell soup. This is a corona virus people stocking up on canned soup goods, it limited international exposure. Also the companies under activist attack two years ago its wellness away and turned around plants of the still room to grow outside of the coronavirus. Berkshire hathaway. Stock has a Balance Sheet is been beaten up, it is like the market but its with Warren Buffett its a kind of self he loves. Stock will probably degrade from here. Jack and of course when things are going bad, hes got a lot of money on a think youll do good things of that. Thanks very much ben mark carlton jack thanks for listening different follows on twitter at barrons online. Thats all for us, see you next week on barrons roundtable. Fast cars, new cars, old car cars. Cars more famous than the celebrities that come to see them. This is, right. What is the the concours dontelegance. The Comfort Level may be a little dif