Ago. S p down by 151. And the nasdaq would open down by about 435 points this is limit down, they cant trade lower than this. Declines at 5 across the board. If this holds at the open, heres what you can expect in terms of the nyse Circuit Breakers that kick in. If the s p 500 dropped by 7 during the course of normal trading, trading halts for 15 minutes to have a cooloff period if it falls by 13 , it halts for another 15 minute period if it falls by 20 trading halts for the remainder of the day since these were implemented many years ago, weve never seen the levels tested. If youre watching the treasury market this morning, the ten year, almost impossible to believe watching how quickly things have fallen the ten year is yielding 0. 487 . Its been less than a week since it fell below a 1 yield and we have seen it collapse. Thats a bounce from earlier. So much of this has been keying off to whats taking place to crude prices over the weekend. Well explain what happened but you dont see moves like this often. Talking about a drop in demand amid the coronavirus outbreak. And opec failed to strike a deal with russia over oil prices. On saturday, saudi arabia slashed its selling price for april and the kingdom is preparing to raise its production Big Oil Companies are getting crushed. Wti crude is at 33. Some of the big guys here across the board, marathon almost 20 down this is a situation where you had opec and russia, the opec plus as they call it, who had been cooperating for a long time, finally russia said were not going along with this. In part i think to stick it to us. To stick it to everybody. Tough to make money in shale but nobody is a swing producer, if anyone its not saudi arabia anymore. I think it was to stick it to us, thats what im saying. This is supply but it was caused by the spechter of demand going down everything were talking about, all of it, there are supply components and demand components. But the concern was demand and how it was going to drop off. The 30 2krdrop is purely sai arabia and russia. Its amazing some day well look at it, and its not a Silver Lining but things are going to be cheap at the pump sometime. Not falling there quickly. No. Its a reflection of demand globally, which is going to fall but also that there is a supply. Immediately people are saying its going to be tougher to transition to all your esg stuff with 32 oil i think its going to be tougher to transition to the esg with stocks down, pressure on supply, demand, everything you can argue all of our esg conversations were i dont want to say a market bubble conversation when things are going well you can make change. When things are not going well its going to be harder. You can spend this money for carbon tax and everything that goes with it with delta watching demand collapse 100 . This is real and its bad and its real bad. But the end of the world i think it can only happen once. Theres going to be things on the shelves where youre like, wow, i cant have that so the millennials that are like i cant eat here theres no vegan stuff, that might become more important i cant log into my app, my life is ending. All these things we have it pretty good for a while. Im not saying were not going to, but i think the next couple weeks are going to be a stark reality. Challenging. I bought a few things, i admit. Hording i dont know if im hording yet. Dog food. We go through that quickly. Not us were going to talk about whats happened in italy i dont want to say its coming here soon, but i think it could be coming here soon. The lockdown . Columbia University Closed last night. Stanford. A couple private schools in new york city is closed. My sons school is back open but another closed did you read unis stuff this morning . Have you seen it in stark contrast. I dont know whether to look at that you mean as china ramps back up disneyland not the main park right. But some of the resorts. We have to figure out the testing. Part of it is theyve been doing real testing whether their numbers are real or not, we dont know. And whether theres going to be a second outbreak. Here clearly we have no idea whats going on. I saw a south korea mortality rate where they have the best testing and best mortality rate its. 65. Their testing is phenomenal. Its somewhere between. 1 and. 30 not 3. Youre looking at an area people can get health care i think the higher incidents are areas they dont have the same quality of health care. Rights. Germany, how many fatalities very few in germany at this point. Global markets were already under pressure because of the outbreak now compounded by the Oil Price War. Overnight in asia you can see its rough a big percentage moves down. I will point out we said its been a rough couple weeks last week we closed up. I think the dow was up 2 . It closed up. But look at where we were two weeks nobody is arguing that. We cant say its been week after week after week of carnage. Because last week there was a bit of a rebound but today were back, strapped in. That was in large part you watched the close on friday, came roaring back. It was like the previous friday. Yeah. Six, 700 points the previous week as well look at europe, you see 5, 4, 3 in asia and europe youre seeing big italy off 9. 5 . The market selloff comes after two weeks of incredible volatility, and there you can see some of the days that were point swings that were looking at on a percentage basis obviously when you had been up near 30,000, the percentage swings arent as big but the point swings will catch your attention. Our guest host is jason trenert. What are your words of wisdom this morning whenever were in a period like this, we hear, you know, just keep calm, keep your wits, look for opportunities. Is that what you say this time or is this time where you say you get any bounce at all, maybe you should lighten up, where are you on that . Theres what do you do in the midst of this and how do you position yourself as we hopefully get out of it, which we have, as you said the world ends once, i was here january 2nd and said what works is zero coupon bonds theyre up 36 year to date. Thats the most reliable counter weight, more than gold, more than the yen, the frank. From where we are now, its a sketchy bet at this point. If you look Going Forward, the biggest correction weve had in a pandemic is zika which is 12 . And markets have been up after just about every pandemic we had. The peace with Neil Ferguson is h1n1. This is not a 50 year, its not like sars. We dont know its a matter of how much fear it created in the marketplace and how much supply and demand shock theres going to be and credit in the system 100 . I dont want to debate the health issues. By the way, there are people this is a polarizing issue scientists on both sides have different views. Im just suggesting there seems to be i think theres a decent chance at this point theres going to be systemic issues in our companies. Imagine the world shutdown for a month completely and reopened unscathed the impact to markets would be Single Digits but theres Collateral Damage. Thats why were waiting to hear more fiscal policy stimulus. They said the fed should be buying things other than treasuries china does it, but italy announced, south korea announced. You have to do something to tide companies over. When do you do that you should Start Talking about it now my own opinion is youre also likely to have a slingshot in both Economic Growth and cyclical shares in the second half of the year thats a hope. But there are some credit theres some credit knockdown effects, particularly in the Energy Sector more than any other sector by the same token there has been a vigorous response on the part of the fed youre going to see more, and im convinced youre going to see more fiscal and regulatory stimulus plans coming out of the administration. You think the fed is going to cut more i think they have to, mainly because financial conditions are continuing to tighten. Where are the biggest problems the biggest problems are largely the fact that financial repression and pushing Interest Rates down globally by Central Banks, the irony is its created the debt problem you created a problem in which companies can get access to credit how does cutting rates affect that problem it slows things down as far as the Financial Markets are concerned, they dont make things worse for good companies. They should let the tide stay so they dont see whos naked . Yeah. Youre already here. If i told you i was going to anouch announce that i was going to bolster the airlines with some kind of bail out and do Unemployment Insurance for 99 weeks and im going to i mean, you come up with your list. Payroll payroll payroll tax cut would make sense. You do all of those things, i know what the market will do i want to know what you think the underlying economy does. I was in italy three weeks ago where i was in italy, in the last three weeks you were in italy three weeks ago . What part of italy . I was in milan. How long have you been i was in milan. Im sitting next to you. I came back on february 14th. You were in milan yes i was in australia a week and a half after that. Wait a second excuse me we didnt ask where you travelled thank you for being here. We appreciate your time i was supposed to be here at 7 00, its daylight savings time, you sandbagged me here at daylight savings time its 6 00. Where else have you been . Australia, zurich, logan and milan. Youve been home a week and a half. A week and a half ive taken my temperature its fine obviously given what the markets are going through, its understandable that people are nervous. By the same token i think we have to keep things in some sort of perspective i can say three weeks ago in italy it was business as usual there was no problems. Its not today. You are peaking thats the point, its not today. And we dont know youre probably liking peaking, i would argue in terms of the what the policy makers in italy has done, especially in the lombardy region. I guess the question is, do we see measures like that here 10 Million People under quarantine now or who were told they cant go about business as usual in italy. 16, i thought. Is it more . I dont know. We were talking about this off camera but the political issues will be tricky. If you look back at the great recession, you have people that say, yeah, auto bailouts were great. Bank bailouts were evil. I think that coming itll be the lag from fiscal stimulus in terms of the politics that will be the challenge here. I think if we get something meaningful, thats the most important thing because most Companies Need to be if they need help need it temporarily. But its a political challenge. Its a little bit like f you have to treat it a little bit like a bank run, in my opinion. To say the confidence on the part of lawmakers i thought a lot about bailouts because i spent that time in 2008 thinking about it since then, 10 years the conundrum i face every time i think about this, i dont think i could give these companies enough money to necessarily, depending on what kind of company they are talking about cruise lines, Oil Companies. I dont think im going to solve the problem until theres a vaccine that people believe in people needed the money in the bank to create the confidence. Im not sure that you get the confidence unless you have the medicine i would say theres dramatically different dramatic difference between a systemic problem with the Banking System and a systemic problem with airlines and cruise lines. Theyre extremely important, could be a big hit once theres a vaccine in my opinion, you have a dead weight loss. Its only going to be ready for the next season of this. Its a it takes months to get the vaccine. Well over a year. 18 months. Right 18 months. I doubt whether were going to be on pins and needles for 18 months. The question is, can you get your arms around testing so you know how big of a problem it is. Theyre hoping to do that i hope the china model is not replicated exactly but im hoping there is a way to cap it so it peters out and doesnt become millions and millions youre at 105,000 globally, not at 100 million. Say you said you were going to shutdown all business in the United States for two weeks. Say were going to have an incubation period, everyone is down for two weeks right at the end of those two weeks, have you solved the issue in so far as we have open borders, people can come in, you can restart the owhole thing. Thats the conundrum. Its march, we dont know seasonally how thats going to work people point out its one of the less the other thing is children seem like they dont catch it or the symptoms are so mild theyre just carriers. Yes you can make that argument for most people under the age of 50 or 60 that its actually day care. Please go to 60 thats well above that. The problem is really 70 and above or 80 and above. Its also if you have underlying conditions. Yeah. Underlying Health Conditions are the bigger issues. The underlying condition when youre 80 is youre 80. Thats the guess that a lot more people have it but the mortality rate is lower. Thank you simmon jason back from his world tour. With us till 8 00 i feel fine. Theres a 14 day incubation period. I got back from italy three weeks ago, three and a half weeks. I took my temperature, i think its lower you look like crap. When we come back well continue to focus on the markets, take a look much more about whats been happening right now. You are continuing to watch all three of the major averages. The futures indicate they would open limit down, 5 is how low the futures can trade. Thats where you see it on the future change, the lefthand side the implied open is weaker than that dow futures indicated down by about 1300 points s p open down by about 151 points if if we open here. The nasdaq would be off by 435 points this is all coming as youre watching the ten year treasury yielding below 5. 4 . And breathtaking moves in oil and the Global Stock Markets ten year treasury right now. 466 . Up next a live report from italy where the government issued a sweeping lockdown in the north part of the country to try to attempt a halt to the spread of the coronavirus. Squawk box will be right back. We have like 40 years of data thats incredibly valuable . I. I dont know. When did we introduce siracha . Not soon enough. These are our sales. By product, by region. Set against evolving demographics. You can actually see taste trends. Since when can we do that . Since we started working with bdends. announcer people who know, know bdo. Welcome back, everybody. Early yesterday italys government took the extraordinary step of locking down much of the northern part of the country restricting movement for about a quarter of the italian population its seen as sacrificing italys economy in the short term to save it from the worst of the virus. Claudio joins us with more on that what can you tell us this morning, claudio good morning, becky the coronavirus epidemic in italy has taken a toll on the economy here which was lagging behind compared to the rest of europe and now its taken an impact to the point we saw the stock market in milan dropping by 10 i just checked it its minus 9. 8 its hit other stock markets in europe but its one of the worst performances now the Prime Minister of italy aware of the situation and how bad the impact can be said theyre planning to introduce a Shock Therapy to counter act the effect of the coronavirus to the economy. The Shock Therapy includes right now something presented by the economy minister a couple of days ago they said theyre going to inject at least 7. 5 billion euros, thats 9 billion into the economy in terms of investments and so forth and also they are planning to increase the budget deficit goal to 2. 5 , up from 2. 2 with the help, of course, of a more relaxed european restrictions. Claudio, if you look around you, does it feel different there . Youre not in the lockdown area but how does it feel where you are . Well, even if youre not in a lockdown area, nationwide they closed down museums, closed down archaeological sites im at the coliseum, usually this is bustling with people, as you can see theres not many people around because word has spreed the coliseum is closed and all the museums are closed this is one of the sections of the economy that are being really battered, tourism, theres been a massive drop in the numbers of people who are visiting italy and we dont know when this is going to end, becky. You mentioned before about the budget deficit, potential budget deficits, theres obviously been some intransigents on the part of germany and the eu, and it was talked about how that may be the problem if italy was not allowed to increase their budget deficits they might follow the uk i dont know if thats an empty threat or a real one can you talk about that a little bit more because it seems to me this puts the serious strains on the eu some of these eu relationships this is not the first time italy is asking europe to be more relaxed when it comes to budget deficit goals but this year, of course, they have a real emergency that is not just an italian emergency, its a global emergency, so it could be everybody expects that europe will be a little flexible on that. When it comes to the league, they seem to be backtracking a lot on the promises or threats that were made in the past i introduced salvini myself saying do you think italy should get out of the uk. They said no we should change europe from within so he lowered the tone because of that. We dont know whether because of the coronavirus emergency and whether in relation to the fact that europe will be flexible or not with budget deficit goals hell come back again asking for europe to come out of. Thank you very much we appreciate the update, claudio. Coming up here on squawk box a lot more today on the big market move. U. S. Equity futures falling 5 triggering an exchange limit that means things could be worse at the open. You dont want to miss it. In case you missed this, u. S. State department has issued a stern warning telling americans not to go on cruises amid the coronavirus outbreak they said passengers that purchased tickets already should contact the cruise lines directly americans cant rely on the u. S. Government to intervene with ships quaranti