On this busy day, weve got full team kovrnl like you could not get anywhere else. Bertha coombs at the New York Stock ExchangeSteve Liesman digging into the Economic Impact and meg here with the larapid response from companies. Dow down more than 1000 points b Bertha Coombs is there for us. Hi hi, kell lichlt the dow taking out its january lows today and dropping below 28,000 for the First Time Since december chip makers among the biggest losers today the surge in cases now in south korea, weve also seen the consumer names, tap tri leading the sell off while carnival crashes. Health insurers, its about medicare for all about Bernie Sanders put in a decisive win following a big win in the New Hampshire primary. That sector down 9 from last week finally, bucking the trend at the opposite end, gilead hitting a new high with Health Officials siting process on the ability to treat the drug and clorox, but guys, keeping things clean is the first line of defense against infection. Thank you very much see you in a bit the trigger for the selling today. Number of cases worldwide is now near 80,000. The big concern now is over the rate of the spread of the disease outside of china 219 cases in italy include iing five deaths. The Chinese Government admitting it does not have this spread of the disease under control. E eunice joining us live from beijing. Thanks so much. Well, president xi has said that chinas efforts had its shortcomings, but Health Officials here said that the situation is under control or improving. They determined the drop in new infections is real chinas aggressive approach has been effective in curtailing the virus spread. The only drug that seems to work is one by gilead and the virus will likely be around for months now the w. H. O. Is urging other countries to take on a rigorous approach and theyve raised their alert to the highest level and urged them to take unprecedented measures travel restrictions. They postponed the start of the year to march 9th. Theres been a will the of anger in south korea directed towards one particular megachurch and thats because more than half of the cases are linked to that church where a member was urging other members not to come forward to authorities so that city has been gripped in a will the of chaos. And that church which is quite secretive, does have a branch in wuhan so in south korea, theres been a lot of speculation that could be the link. Brian. Again, i know listen, weve been talking and youve been not only reporting through this, but obviously living through this. You have to deal with this every d day. What about the people you enkenter on a daily basis. What if anything has changed there are more people on the stree streets, there have been more people who feel they need to come back to get business going again. On saturday, i had to get another pass in order to authorities have been restricting the number of family members that can leave an apartment to three at least in my compound and for many others. Thats bb been more challenging to go out. It gets quite tiring thank you todays sell off wiping out all the gains. Is this the beginning of a larger coron a induced correction what do you think . Listen, this is the second or third biggest point drop of all time, but it does not make the top 50 percentage drop simply as the numbers get larger it is serious though is it the beginning or the end its impossible to tell, but one of the things thats probably weighingon the market is the data is start iing to co through. We first encountered this issue in january 22nd. Obviously, theres not going to be much even the High Frequency data isnt going to respond to it we now see data like you know, Small Business in china activity plunging other activity really pulling back so i think just the personification of this concern is starting to come through. You know u, as you look at the markets, weve talked a lot about where the damage is centered and what it might look like move fing from china to ot parts of the world do you think anything is out of whack or does it make sense . That the stocks are only off, from the highs about 5 is it going to be deeper we came into this with a barbell approach with technology on one hand, large cap tech really outperform. Given the advent of coronavirus, we saw this defensive play come into action. So yields, u. S. Dollar gold even the reet, and utility sectors all outperforming. Where we have concern now is that tech sector, which had been the leading performer in the s p. Its directly in the line of fire when it comes to supply chain disruption, when it comes to the spread and reduced demand from the global markets. Very much multinational, dollar exposed. So we could see volatility coming out of these leading sectors here but that being said, the defensive play probably in the near term okay so i think thats an interesting di cot my well see in the markets. Surging cases in korea, thats impacting things and you see the stocks down, we were saying its almost down 10 . What i think is the craziest thing about this is that chinas down less than the u. S. And europe are from its highs. The color we were getting earlier that things arent back to normal, but at least its not getting worse, last friday, we were talking about how our biggest most important chart to watch was cases outside of china and then saturday, it just exploded higher so the fact that the market is down a lot today i dont think is surprising given that people are rightly be concerned that it may be spreading. We dont know where its going to go. Thats the problem and as jack was saying, as davis starts to come in, only time is going to tell. Were down more than 1,000 points right now the low we were down 1,073 down about 1,110 right now we hear this a lot the chinese, its not getting worse. How do you know . Not just you are we to take basically at face value, the information were given or is there the sense that going back to the report about the thermometers, they might be using the wrong kinds. Is there a sense we can trust the information theyre giving us you saw the w. H. O. Saying there was some quote unquote Real Progress o. So i think other independent agencies saying theres maybe some improvement ewan is said things are getting maybe back to normal but i think the key here, china is we cant be 100 trusting of the data what happens outside of china. So italy over the weekend, that really freaked a lot of people out and rightfully so. If we go tonight and theres not another big escalation of cases, i think you could just as easily see the market up strongly tomorrow on some relief. Thats the irony, jack. We just talkeded about how were not that far off all time highs but maybe thats part of the problem. Is its not simply fears of the coronavirus and a slowdown in china, which is responsible for the onethird of the entire worlds Economic Growth over the last couple of years, but rather than this is a market at 25, 27 times trailing earnings on tech was priced to perfection and we are suddenly a long way from perfect. Thats true we had a growth last year, so clearly it was an evaluation expansion. I think there are some pressure points related to valuation. What im writing about this week is really the bigger issue and that is will many of these tech companies, will many governments start to rethink their relationship with china. The fact is that you know as a source of unreliable source of Global Supply chain, as perhaps as transparent, will we see countries shift away from china and that will have broader impact for not only Economic Growth, but investment prosperity over the next decade. Jeff, if you look at the dow performers is United Health today. Is there a ber aspect to that as well i think so. I do think theres some sort of a bernie overhang. One of the things i did look at was hemt care stocks they tend to be u. S. Focused centered here. And do they deserve the pounding i think this could be the bernie effect and you know, well see we isnhavent seen the investors react yet to the democratic primary. We may start to see that now today was a surprise. We didnt expect this over the weekend. Lets hope it gets better, but it could get worse talking about bernie . Coronavirus what do we do . Should we be selling stocks . If those dug does, if were down 1,000 points because of couple hundred cases in italy and south korea, what if we have 5,000 cases . Its interesting. When you look back at sars, not a perfect example, but during that period, ipindices were dow 15 . Chinas down 8 . S ps only down about 3 since january 17th there is downside to this market but in any given year, one to three corrections are the norm so 5 to 10 corrections, we have not experienced one. The iranian situation didnt thats a good time ultimate tloi pick up some stocks youve been looking at could be a buying opportunity. To be determined, still. But something to keep in the back of your mind. Thank you very much paul, youre sticking around for the entire hour. Thank you for that now if the impact of the coronavirus is as bad as the markets seem to be fearing now, will the fed and other Central Banks around the world cut rates and if they do, can they cut enough to rescue the rally Steve Liesman has thoughts on that the first ones not a question mark. Its pricing a very aggressive Federal Reserve response to the coronavirus as economists downgrade their outlook for u. S. Growth here are the percentage probably probableties april at a 50 it was july last week. July now at 85 then you start to price in a second cut, a 60 probability for september and a third cut where theres a 44 probability for december ran into gregory here who says the fed will react more quickly to tightening and financial conditions because of the coronavirus than they will to data, which will only show up, but Roger Ferguson speaking here, now the head of tia craft, said its not clear rate cuts are the right answer it may well have a spill off into macro economics, but its not 100 clear having Interest Rates 25 basis points lower is likely to have an impact on the ability to manufacture goods thats one of the questions the fed has to think about. Fed said they would wait before committing to rate cuts. Stay with us. Could the coronavirus trigger a global slowdown . We want to ask jay bryson about this hes a global economist with wells fargo. Were keeping mona and paul around as well so, jay, do you still anticipate a nice rebound in Second Quarter . Its really difficult to say right now. Obviously a very, very fluid situation. But if this coronavirus doesnt completely spiral out of control, we were saying before, not sprirl out, now its completely spiralled out of control, you could look for a rebound this year, but its really going to muddy the picture up in terms of the data over the next few months it will be hard to get a real read of where the u. S. Economy is at this point this brings up the question of politics. Theres more at stake than in a typical year are you in the camp where it might is this a kind of demand that could slow things down for the rest of 2020 . I dont think you want to which for a big slowdown here because things can kind of start to spiral out ofcontrol. Some of your guests were talkinging about the Financial Health of the corporate sector if things slow here, the businesses start to lay people off and if they start to lay people off, the economy weakens furth further, so again, i dont think you want to wish for a slowdown here because this could turn into something nmore drastic the major question is whether a fed response is the right one. Steve, you talked to Roger Ferguson about this. He sounded skeptical im curious, mona, if you think the same thing this is what peter alluded to last hour. Can people still believe that the fed is going to come to the rescue here . Yeah, its interesting. When you hear fed officials speak, all have been skeptical about stepping in at this point. Now they dont know the updated coronavirus data they dont see whats happening in future economic results, but thus r far, theyve been reluctant to use any more fire power. Jay powell has articulated he wants to see a Material Change in outlook before making a change thus far, we have seen q1 data is softerexpected. Look for the ism print on friday if it comes out much lower, that could be a trigger for the fed they watch that. But the bond market has done the feds job. Rates are pretty low as it is pretty low . Near 100year lows on the ten year and europe. 240. Not negative yet. However old this great nation is, were near all time lows on the 30year. But i think when you look at it, its where does, we see an outbreak in the u. S. Lore rates may not help that but if we look abroad, it may help the u. S. Knowing that the fed is there at the ready. If things come here, people arent going to go out because points are 25 basis points lower. And look to the central bank is not the right body to respond to a disease outbreak. I think investors have to differentiate with the fed can and cant do they can respond to whats happening today, which is lower stock prices that the Federal Reserve will see as a tighten ping of financial conditions lower than it wants it to be what they cant do is restore supply chains that have been shut down because the virus. If the main problem is the market, the fed can and perhaps might address it at levels like this or moves like this, if they keep going, could certainly bring the Federal Reserve back in if the problem is supply changes, i think the feds going to be skeptical that lower rates will solve that problem. Its a little weird we talk about falling yields needing to be met with cuts and rates why . So they can cut rates and send the yields back up i just wonder, steve, would a rate cut even move yields lower . Dont know if this gets worse in europe, we could see trillions of dollars from asia and europe and the norwegian sovereign fund, maybe that comes in and buys treasuries and sends us below 1 on the ten year. It wouldnt be for the bond market, brian, because its going through its own adjustment if stocks were to go into a free fall, the Federal Reserve would see that as affecting the Macro Economy andthats something that would bring it in before the data would show. So the idea that oxford, i had in my report would say tighter financial conditions would bring in the fed because the data is going to be messed up. Its going to lag by the way it may be until next month that we see the first inklings of what if impact is is and jay, well give you the last word. Something Warren Buffett alluded to this morning. He said he and Charlie Munger talk about why would anybody take from the federal government at a 1. 3 yield when theyre saying theyre going to have 2 inflation. It suggests they dont believe that inflation is going to happen or again, that theyve just, they dont care, right so it must be that they dont believe we can get there this is a big risk off move if theyre going to b holook a g bigger losses, thats something. One thing you need to keep in mind here is not necessarily the level of yields per se its whats happening to Corporate Bond spreads steve talked about liquidity in Corporate Bond markets and those things locking up. So if you cant get borrowing into the system, i dont care where the treasury yields are, it really has an effect on the overall Macro Economy if corporates cant raise cash. Great point where this all supposed to come out in the wash. Appreciate it. Thanks for joining us. Mona and paul will stick around and Steve Liesman. Check out the dow right now, back near the lows of session. Down more than 1,000 points. About 1,073 and there are yields as well. Just an ugly picture 1. 362 a spike in coronavirus cases outside china over the weekend in both south korea and italy is partly sparking todays sell off. There are about 80,000 cases worldwide. The outbreak in northern italy is drawing attention with authorities unable to identify patient zero our next guest is dr. Win. Shes from George Washington university she said Health Officials are shifting from containment mode to dealing with a pandemic what do you mean when you use the word pandemic . Its nice to join you and i think were heading towards a pandemic which means its a sustained, Community Transmission thats not just with people who had been to the epicenter, to wuhan, china, but its person to person in the community. This is what were seeing now, now we have over 30 countries where theres this Novel Coronavirus and many of these cases are not related to travel. We are also seeing countries that dont have well developed Health Care Systems and i am very worried about what happens when this outbreak hits those countries. Its likely, too, that the numbers being reported are an underestimate. That there are a lot more people that have mild or no symptoms who are not being counted or tested who may have coronavirus and be spreading it to others yeah and you get that because theres a couple hundred people in italy that ostensibly have the disease. It has a population of 60 million. So chinas more than what, 20, 25 times larger than italy do you think that china is purposefully underreporting its numbers or you think they genuinely do not know . There are many reports of hospitals running out of testing kits and it seems that there just isnt information about how many people who could be out there who could be infecting other people and just dont know it i think italy certainly gives the concern, too that