98 of the stocks to the downside s p 3,000, 10year yield at 1. 25 if you were right on this move, thats a really logical place to say, fine, let me cash in a little bit i think thats what we saw this morning. Not to guild d lily, but we were almost 1,000 points caterpillar has had a spurt in the last few minutes 3m has been positive merck and pfizer im not saying anything is turning around but some people are buying here. The problem is the information vacuum here. The old saying, you cant trade on fundamentals, trade on the technicals the problem is we cant trade on the fundamentals because we dont know what the earnings in the p e ratio should be right now. We saw that with the dispute with goldman going to zero percent Earnings Growth for 2020 then technical, everyone was saying were watching the 200day moving average, we went through that just after the open its hard to trade on fundamentals right now, hard to trade on the technical, and we need a lot more information on whats going on globally about a half an hour ago we saw this, you know, attempt at a rally and also reflected in european stocks in their last half hour of trade mike, how important is the european close i dont know if the european close is important what i do think is important is to start to see the stuff that got hit first and worst to maybe stabilize a little bit that does include some global markets. It does include, by the way, things Like Airlines and hotels. The stuff thats been really weak right in the center of what were trying to price in here, and i think that you actually have seen that what we also have seen is things like microsoft responding negatively to that warning and also apple obviously, nobody can come in here and say we saw this thing coming, i dont think. But i had pointed out that in december apple accelerated from the 280 level to 330 on nothing, on this crowding effect of everybody buying the stuff we thought was going to be okay no matter what happened and the momentum moves then were back to 280 its not like youve cut into muscle where some of the blastedout stocks might have reached a level where it just makes it you can also step back i think its not fruitful to spend any time figuring out precisely dollars and cent, how this infex wiction will work, because you cant. The value of Corporate America has been taken down by onetenth in five days we were historic on the s p last wednesday and the entire global markets, weve been talking about this, all down 10 in the last couple weeks but the s p, 10 in six trading sessions and something you never see, going from a 52 week high to a low, take a look at southwest airlines, 52week high on february 14th. I dont know if we can put up southwest air. It was 58 or so february 14th today its at a 52week low. Let v less than two weeks later gone from a 352week high to a 52week low. Thats pretty weird even going back to the 2008 financial crisis as for the s p, we havent gone alltime high to correction in six sessions since the 20s thats right. As were talking, starbucks, 85 of the roughly 4,300 stores in china are operating again, so does the market want to see that yeah. Do they want to see the cohorts say were on the case . Theyd like to see it all work together. In terms of i think you want to be able to te v see thsee ths are able to manage through this. We need to change our behavior and respond to reduced deand v mand and we havent done it yet. The market is rushing to a point to pricing that all on in. When you see the intensity of this concentrated selling, it does seem a lot like the mechanics of early 2018, even though it wasnt as fast you got to an 11 or 12 decline in two weeks instead of one week back then. We had 10year yields went to 3 can the economy handle it . Did we run too far, too fast youll have this choppingaround period that will be necessary no matter what happens. You mentioned coming back to work it makes me think of what eunice yoon told us a few minutes ago about beijing, somebody getting reinfected from somebody coming back to work too soon. You have to wonder how much is v of this coming back to work is people are feeling better or the government wants people back at work the markets are aware that could happen because we dont know we have to sit and watch i think the question would be what would calm wall street down at this point . And so the natural kneejerk reaction is, well, lets have a coordinated Global Policy response lets have massive fiscal stimulus lets have Aggressive Central Bank actions, monetary actions but its not clear thats necessarily going to fix things. Your prior guest in the last hour mentioned that, saying cut rates more aggressively, is that going to deal with the issue its not easily fixable in that kind of manner thats the kind of problem the markets are having getting their hands around it. The cyclical stocks, get to a depressed level and new infections have not exceeded our fears, thats what you want. Its not like were going to get this under control in a hurry and some policy measure is going to placate the market. I dont think were looking to eradicate the virus were trying to convince enough people they dont need to alter their economic behavior. We dont know where that mike, bob, smart see you again real soon. As we have mentioned, microsoft warning on guidance and supply chain issues due to the coronavirus. L josh has more on the story for us microsoft surprising investors with that warning saying it wont meet quarterly guidance for the segment that includes windows due to the coronavirus, sh the more personal computing segment, windows and surface, accounting for 36 of total revenue in fiscal q2. Microsoft saying the problem is not demand but the supply chain, returning to normal operations at slower pace than anticipated. The rest of the business appears to remain on track for now, so they have xe v questions this morning. They wonder whether deals slated to close in q3 could slip due to travel restrictions. It may not come as a complete shock to the market from apple and what hp said this week, saying the outbreak would impact results in it fiscal q2. The companys cfo said he thought the impact would be temporary. Which companies could worn next . Rich steves says other companies include intel, amd, and western digital, gefen v given their exposure to the p e market and qualcomm with its exposure to that industry. Bob peck joins us this morning, chairman of internet Global Banking and barclays at post 9 different chair again, today thanks for having me. I have to ask what you make of the i dont know going list of companies, not warning but saying we dont know enough to warn at the moment i think thats number one the numberone takeaway were getting from the board level, the c suite is just be prepared, be ready, whether thats for what could happen because of corona, whether its pushing for an ipo, whether its an m a deal the best you can do is just be ready for your current plans its interesting, when you take a look back and say how did we get where we are today and where are we truly, in 2019, the markets were up pretty strong, s p up about 29, nasdaq about 35 . As i pointed out before, you had that anomalous Fourth Quarter in 18 that took you down 20 , so you look across that, you had the s p up about 15 , nasdaq up about 20 . Strong, healthy, but not ebullient, sort of reasonable. Now you bring that forward to today and what do you have given whats happened in the first half of the First Quarter of 2020 youve got the s p up about midsingle digits, nasdaq up around double digits or so, and that goes from october 1st to basically today. You havent had this really overinvesting run in the markets right now. You dont think there was a chase on high growth in the nasdaq, in tesla, virgin, in the First Quarter . There absolutely was. Right before the drop, the alltime highs saw that spike my comments are where we are today versus the beginning of the year you had a spike in between and its come back down. Went wh when you pull that lens back, lets look over those 15 months, and where are we, i think what youre seeing is it hasnt been ebullient, its been sort of prudent by the markets, honestly youre arguing where we are now, and we hope on the ground as far as peoples health, that that condition continues to improve, but marketwise and tech stockwise, where we are is reasonable yeah. When you peel it apart, so the tech market, where are we there, last year everything was up. Strong across the board. When you peel the onion back and do that same analysis from october to now, you see only two that are up, semis, which is very strong, software, which has been strong as well. Year to date today, 2020, the only tech market thats actually up is software, which is flat. Everything else is somewhat down what were hearing out of the likes of microsoft, hp, perhaps dell later today, about having to push out guidance and say we dont know exactly whats going to happen, thats happening as were seeing plateauing numbers as far as new infections over there. Thats good news in a way. But were just starting to see the impact on companies and uncertainty flowing there. What does that mean . Does that mean that were going to see these same concerns from companies plateauing a couple weeks out in a lag does it mean well start hearing about demand disruptions out of europe because we see whats happening in europe and south korea . Absolutely. None of us know for sure right now, but the one that was interesting was last night when priceline, booking. Com reported. They had to take guidance down, as we know, but what was indicative of the story was while the guidance came down, the stock is actually trading up today. Part of the question has to be whats baked in so far, particularly for the subvert cals, that, you know, we would all think would be most impacted, travel, tourism, those types of things. And how do you think about the subve subverticals that will benefit peloton, not going to the gym. Delivery, depending on whats going on there theres a bunch of different areas that can play well depending how this virus goes. Its a good point expedia down a percent marriott is up they were one of the it was their turn in the machine last night. Yeah. The other thing to look at as we think about ipos going forward, how they fared during this market if you bought all the tech ipos in 2019 and held them to today, youd be up about 25 . Not bad, right however, if you look at maybe only from the first day pop to today, how would you be about the full positions on the pricing . Youll be down about 8 or so. It hasnt been that great. Whats more interesting is that any Portfolio Manager needs to build a position over time if you look at day 30 to today, how has that been . Down slightly. The ipo markets, the point im making, havent been as ebullient as well. You see investor discernment on the ipos, everything leading up to pulling its ipo i think that shows a level of healthiness in the market. Whats happening to the ipo window now yeah, its great. We saw doordash confidentially filing an s1 they could b sit on that far long time. Stloi absolutely. None of us know whats about to happen with the coronavirus, so therefore lets continue along as planned and well adjust along the way. Going for an poif poipo, keep p forward. You saw that with doordash if its m a, continue to push with that. You saw Morgan Stanley and etrade, intuit and credit karma. Lets keep pushing along youre coming off anime maye market that was the fourth best of all time. M a market that was the fourth best of all time the companies have a lot of cash on the balance sheets. The poipo will continue on but adjust the last point on that is the election we should be wary of the election a lot of companies plans are lets get our ipo done before july or august and do you get a push out of that because of corona and if so, does that go after the election or slip into 2021 youll see those plans adjust. That was goldmans point a couple days ago. They thought near term drop could continue, but that would migrate more to election risk in the coming weeks. Absolutely. We have a month left in the quarter. We know theres going to be more guidance down. Yep you wait until you hear them or try to buy in front of them or sell in front of them you want to position those subverticals that should benefit from the news coming out the pelotons, teledoc, et cetera. Theyll be less inpacted by that i saw jim cramer this morning talk about dividendpaying stocks and stocks that are more stable and secure that could help with your portfolio thats the bay v wway to think i because none of us know what well hear in the next hour or the next week. What about stocks with heady valuations based on dreams of the future thinking tesla thinking about, you know, virgin galactic, things like that those are the most at risk. Virgin is down 40 from the highs. Youve seen that correction. One thing weve learned is that the ipo class of 2019, maybe in ride sharing specifically, was youre seeing investors focus on Unit Economics and past the profitability. Forgiving on profitability, as long as the core business makes a profit for ones with those bigger questions around that or that path to that, i think those are more at risk good to have you. Thank you were grateful. Appreciate it bob peck. As we mentioned, starbucks is announcing its reopening hundreds of stores in china. Kate rogers has more on that starbucks announcing just now with a letter to its partners posted on it website is now has 85 of its stores in china currently operating. The stock is well off the lows of the day its still lower, just under about 2 remember, china is a very important market to starbucks. The company says its its second home market. Well read you the letter from Kevin Johnson saying with the number of cases slowing, we are seeing early signs of recover in the region the situation is improving throughout major parts of china. We have 85 of stores open across China Shanghai grocery has reopened, one of its largest stores there. During its last report, the company said things were going so well, they had considered potentially raising guidance for the Year Coronavirus will have a big impact on their earnings next quarter. They didnt wind up lowering guidance, maintained it, but theyre keeping their eye on it. 85 of starbucks china locations back up and running. Back to you. Kate, thank you meanwhile, a check on the major averages dow, s p, nasdaq, all fighting back from the lows they were all down about twice as much as they are now. Dow is down about 4 5. S p down 1. 7 . Nasdaq, the worst of all, down about 1. 9 but they were down at one point nearly 4 . The president holding a News Conference on the coronavirus last night, naming Vice President mike pence to lead the response to the outbreak eamon javers has more on what we heard last night eamon . Thats right. As we watch this market try to rally back in real time here, last night the president was talking a little bit about the stock market selloff that we saw happen before that press conference the president very careful here to present, you know, an image of optimism to suggest that the United States government has got this and is prepared for anything that might come i had the opportunity to ask him about that stock selloff. Heres that exchange to be clear, the dow jones drop mrd than 2,000 points this week are you suggesting it was overblown . Are Financial Markets overreacting here . I think the Financial Markets are very upset when they look at the democrat candidate standing on that stage making fools out of themselves and they say if we have a president like this, and theres always a possibility, it ice an election v is an election, who knows what happens. I pressed him on none of this is to do with the coronavirus . He said no, it is. But clearly reaching for other explanations for selloffs weve seen this week and attribute v uting it to the Democratic Candidates debate on National Television the president here acknowledging that the virus is playing a role but suggesting theres other factors involved in the selloff weve been seeing throughout the week eamon javers, thank you you bet Carly Fiorina joins us now worth noting she led hp through the sars outbreak back in 2003 good morning good morning. When you see what has happened with hps warnings on coronavirus with its call, microsoft last night similarly warning on the outlook were expecting to hear from dell in a few hours. What do you think . Well, i think its prudent and i think its predictable, honestly these are all companies with hugely concentrated supply chains in asia in general and china in particular. So i dont find it surprising. And i think we dont know what we dont know, obviously but i think theyre being prudent and i dont think we should be surprised. What is the information, the data, when youre in the ceo seat right now, trying to give investors as much good information as you can, of course trying to keep your people safe at the same time and deliver products of high quality . Whats the data that youre looking for out of the base of your supply chain at a time like this well, let me say first in terms of keeping employees safe, now would be a time for all companies, no matter what their size, to review their Emergency Preparedness plans i know that sounds so basic, but actually, when i arrived at hp, we didnt have them. An Emergency Preparedness or Emergency Response plan includes things, for example, like do you actually know where all i dont have v your employees are working at any given time and can you contact them quickly when you need to do you have evacuation plans in place for every single location . Do you have Emergency Response teams in place and do employees know who they are . Can you communicate broadly with your employees and i do think its important to recognize that employees are going to look to their own companies for much of the information about what is really going on in some cases, the information out of governments may be suspect, and so companies have to take it on themselves to inform of their employees and make sure that they have the plans in place to keep their employees out of harms way. Were reminded of this as well last night with this t