Points right now down more than 900 following yesterdays huge lerelief rally and that fear bleegd into the bond market. The ten year yield hitting a fresh record low breaking below 0. 9 . Thats a staggering move right now, at 0. 928, but it was lower than that earlier, we now have about 177 cases of coronavirus in the United States as the cdc begins to roll out more testing across the country. Washington state dealing with the largest outbreak so far. Cases doubling in new york well tell you how bad things could get as power lunch begins right now thanks, ty and im kelly evans. Were all over this virus volatility today our Team Coverage of this market sell off rolls on as coronavirus grip wall street once again. Bob pisani is track iing the action at the nyse for us. Rick santelli watching these amazing moves in the bond market meg with the latest on the outbreak and Steve Liesman digging into a potential credit crunch coming for corporate america. Bob, we start with you the debate has been is this a shortterm phenomenon for american businesses or longer term were going to be dealing with for several quarters today, the concerns about lopger term are prevailing. Heres the three sectors that would be most affected energy and industrials, all down here banks are weak on top of that. You see gold rallying here multiyear highs for gold notice china, this is a broad china market is up theres been hopes, been look bing at maps indicating pollution levels are back up in china. Maybe a hopeful sign here but not if you look at the whole demand side. Folks, look whats happening these are new multiyear lows in these sectors. Royal caribbean, marriott, delta, live nation concerns about less participation entertainment. Madison square garden down as well take a look at some of the banks. These are new 52week lows here in all the big banks these are big superregional banks including wells fargo. All new lows so why the chaos and whats going on were debating whether or not theres a recovery and whats it going to look like nobody can answer this question. We dont have enough data. Independeications in china are hopeful. Europe is chaotic. As for the supply versus demand, forget about it. Its a supply problem and a demand problem just ask those people that are in the e or supply. They dont care. Guys, back to you. Thank you very much to the bond market now where yields are just collapsing as the tenyear hits an all time low. Rick santelli live at the cme with more. Hi, rick hi, tyler just look at the yield curve today and net change gives a lot of information twos are doup 11 fives are down 11. Were down 14 and tens 13 in 30 so the curve has a bit of o flat ping because the drops are bigger in the long maturities. This has been the odty mostly steepening with short rates outpacing the drop of longer rates two year note yields at worst at 55 basis points. You see on that chart would have been the worst close since july of 2016. Theyre up a little. Really isnt going to change the comp intraday of tens as alluded to by tyler. 89, there it is on the right side of the chart. Thats the low at least for today and how do you make a bounce to 1 look good start at. 89 one year boons, they sell at minus 68 minus 71 august, late august of last year was their all time low close were within striking distance finally. The dollar index intraday. See where its trading no right now, it is under a half a cent from unchanged on the year which was 86. 39 and it would be the first time in to 2020 we challenged that level. Tyler, back to you thank you very much the major averages seeing their second steep drop in three days after yesterdays big rally. The second biggest point gain for the dow ever after mondays. The dow now down more than 10 from recent highs, so are we heading back to fridays lows . Thats the question for jason, chief Investment Officer for private wealth for glennmeade and tim will join us for the hour welcome to both. Jason, what do you think the head wind is here for global gdp and potentially corporate earnings sure, tyler so we have to recognize first and foremost that you could basically drif a truck between the upside and doup side cases here because nobody has a good beat on how long this is going to last for a region and how governments, corporations or individuals are going to react now having said that, if fair heads prevail through this p pattern and we try to minimize damage while also trying to deal with the disease in ways that weve dealt with other outbreaks in the past, we should experience somewhere around a half a percent to 1 head wind to global gdp growth thats based on assuming that china took its hit and that is what it is and has to pass it to the system and efb else thats affected takes a smaller, but still notable hit along the way in trying to rectify the situation and slow the spread of the disease. That is part of what markets are are reflecting i would argue that markets may be overreflecting a bigger chance of bigger downside at this point in time but you know time will tell on that as we process tim, do those numbers sound in the ballpark to you a little too modest too grave . What do you think . I think for First Quarter gdp, if you look to the main economists on the street, ubs is down. 06 weve seen people cut to the bump bruce at jpmorgan is right down the middle at 1. 2. The bottom line here is we had risk to Global Growth before the coronavirus. So if you think about europes economy. Think about the biggest economy in europe, gdp and the export route into china what was happening with the trade war. Pmis around the world throughout the fall were essentially caving then we were wondering where we were starting to see a bottom. We were. The dynamic here isnt great i think thats eck quities shoud be grappling with because if you think about where we were on those lows of october 3rd before the markets then went up 19 , a lot of that was fed liquidity and i think markets would have been grappling with the same things now with the coronavirus. And jason, in terms of liquidity, let me just go back to the question about whether providing more liquidity, acting as the lender of last resort, are all these things going to help the u. S. Economy or do they risk doing more harm than good so, number one is id say theres two problems to fix. One which the fed and liquidity has no solution to whatsoever. The actual outbreak of the disease and ramifications that come from that and any shutdowns governments have to do regi regionally and otherwise the Economic Impact of that is going to be what it is number one but number two, what theyre trying to avoid the a seizure of Financial Markets and credit markets that could be a second order impact here. With the Central Banks stepping in, they try to avoid that situation and try to keep this from spiralling to the downside out of control and having come second order knock on effects that take this down further. Longterm impact, hoolook, low rates, ongoing fiscal and monetary stimulus. Eventually, we have to get out of that trap and some point in time we need it right now what they need to do is once things get back online, they have to take that away at a reasonably fair pace in order to get us back to normal operation. Were not near that right now. To you see signs of financial panic, the kind of crunch situation hes describing. We see empty store shelves do you see a financial mashlgt analogy there . So the panic around getting supplies is largely things weve seen this is an extreme version of that around macro weather and certain events i think the Financial Markets are you can make an argument that the bond market is panicking. Forcing the fed here and i would argue actually that rates this low is detrimental to the economy and this creates tighter financial conditions, not looser why because ultimately, first of all, banks start to reel in credit and at these rates, they arent moving lower because of people are buying debt out of confidence in the growth story theyre going lower as a safe haven. So the create dynamic. If it was nine months ago, we were talking about this tehran ch tehran ch of triple b plus, concern of going to junk the big part of the Credit Community and weve seen credit spreads be reasonably well behaved, buted to see Companies Give you their guidance. The sectors we may talk about later, theyre a lot closer to credit stress than i think people know. Energy being one of them. So jason, here we are, the first week in march. In the first week in april a month from now, corporations are are going to start reporting their earnings would you expect that would be a time where we might take another leg down as both the actual reports and forecasts get revised . So i think i have to go back to my earlier state stalt is that the range of expectations is really, really wide on this i would argue that you know, we started the year at 9. 4 growth for the s p expectations for 2020 were knocked wak to about 7 Percentage Companies theyve started to guide lower or have started ratcheting down numbers. I would expect wed see around zero to 5 growth for 2020 as being ultimate results so but inlg i think market rs already kind of baking that in the question that creates the further leg down is if the downside case gets realized at this point in time meaning prolonged virus contagion and outbreak and or second order impacts on the market those are not our base cases, but they are in the real m of possibility and we need to be aware of them as investors what is the risk, tim, jason sort of alluded to it, that the Financial System could seize up. This is not a financial crisis right now, that i can tell like 2008 was. But are there risks. Not even close. Especially in terms the sovereign Balance Sheets in a very different place corporate Balance Sheets in a quite good place its been buybacks and the ability to raise debt at low rates and do other things with it if you look at the Balance Sheet of the banks, the Money Center Banks have never had better ambulance sheeBalance Sheets i think a lot of this is market positioning. Came into this with 400 billion of Balance Sheet thrown at the market you have an expectation and bob pisani at the start of the segment talked about are we v, u, l shaped recovery i think he was talking economic. I think people think thats the market i think people think the market after december 2018 a lot of people were burned sitting on the sidelines and it was a v shaped recovery and it was a place where you should have been buying with both hands im not saying people should be running for the hills. You can argue were in the same environment and even though there are Great Companies right now that i think are worth owning im sure were talk about them zpl you want to mention a couple disney is a company to me that was rerating on the back of essential ly their disney plus service. Has a studio business thats been cranking for a a couple of years now. And yeah, i understand that their theme park and Consumer Experiences business is 38 of their revenue line, but in the short to medium term, thats a head wind for a company that we were repate rating and using a hybrid model theyre trading inside of where we went before it rerated. And tim is sticking around for the hour jason, thanks so much for joining us appreciate thanks. Our next guest says there are three scenarios for what happens next as the number of coronavirus cases climbs in the u. S. And around the world. Here to break down what the Global Economic fallout could look like is robert kohn great to see you you have the benign serious and severe and which are we now . We dont know were still hopeful that a benign scenario could play out but i think were increasingly worried about the more severe snacenarios and thats why we st out to lay out these scenarios and talk about the Critical Role of policy, as well as the virus itself we started with the science by the way in doing these scenarios. It really does depend on when the pique in cases occurs. In the benign sscenario, if sout korea, japan, italy, make Good Progress in coming weeks in containing the virus andthe u. S. And others are more aggressively going after it, we are still hopeful, still possible we could end up with a pique in the growth in cases in the next six weeks or so and certainly, we believe that in that scenario, you get the v shaped recovery, a pretty rapid bounceback in growth you get some recovery spending as people go back to work and to the theatres but as i say, were less and n less optimistic that that is going to be what happens and more concerned about what we call a serious scenario. And the serious scenario, we dont see a pique in the new cases. And the spread of this disease until the middle of the year perhaps july and that leads to profoundly different outcomes for the Global Economy because with a virus and a pandemic that is of that length and duration, the damage to supply chains and to the Balance Sheets and households is more severe and in that case, were far less comfortable with a quick bounceback in that scenario, we see zero Global Growth theut middle of the year and a gradual recovery in the second half and that would leave as i say, lasting damage that really will put the pressure not just on the central banknow, but on the fiscal authorities, to come in, provide not just credit facilities, but to make fundamental decisions about how whoa to fail and who to bail how you provide support for the industries that are being badly damageded or simply were overextended and got into trouble given the shock. So, robert, do you take any comfort from the reports that the disease or new cases of the disease in china seem to have moderated very dra mmatically in the past week or o so. In other words, they are having sort of lower lows most days in the discovery of new cases is that enkournging to you and if so, how much . Its certainly encourage iin, but i have pretty fat tails in distribution im not a scientist. Not a medical professional, i dont even play one on tv, but we listen to them carefully and the news out of china has been good i would emphasize and its a theme that comes thu all our scenarios, particularly the more serious ones the serious and severe scenario, that policymakers face this tlad off between a very hard containment strategy and one that perhaps is more focused on identification tracing and testing. Gives a higher priority to reanimating the economy. Containment has advocates, but comes at a High Economic cost and we see the chinese strugging to get people back to work where theyve decided to do so so i think our basic view of Eurasian Group is to be cautious about making firm medical judgments about this virus u at this stage lets talk about Central Bank Policy because people are immediately looking to that, people are immediately looking to that for a bailout. Sfwl Central Banks are going to be the front line, but i had no problem with the fed cutting interestrates 50 points to bolster demand yes, it doesnt really address the supply shock element of this, but it does add Additional Support to demand and the combination of supply and demand is unavoidable here. Wish it had been better coordinated, but were living in a world where i think Central Banks and finance ministries are going to alwayg to be in the sense likely to be acting in a seemingly independent or less coordinated fashion. I think though pretty soon were going to really be turning the focus away from spres rate cuts and more to the credit issues. Perhaps as early as next week when we get in england, we get a new budget and we probably may get some action from the bank of england. I think weve also gotten messages out of south korea and japan that credit may be really the next frontier for policy action and ecb really cant do much on Interest Rates some sort of term facility extension is probably where we go so i think once again, the shift will come to providing liquidity from Central Banks now, just one caution on that. When Central Banks do it, they do it based on the idea these are solvent enter theties they are lending to on good collateral thats a great plan as long as youre comfortable so returning to our scenarios. If you really believe the virus will pique in the next six weeks or so and youre in that benign scenario, your liquidity approach works pretty well, but if were talking about a pique that comes in july or later, then the solvency questions are going to be front and center ultimately then, were going to have to pivot governments and Fiscal Authority thanks for your time today. Some dimpt possibilities for the outlook from here. Coronavirus, of course the trigger for virtually all of the recent market mayhem global cases exceeding 95,000. Deaths reaching more than 3,200 and there are 11 deaths and 177 confirmed cases here in the United States. Meg has more on the latest outbreak the numbers here are continuing to climb and with expanding testing capacity, experts expect them to continue to do so today, a doubling of cases in new york to 22 eight tied to the westchester case identified earlier this week new cases being reported in new jersey and tennessee in europe, more than 4,000 cases with italy the largest numbers in germany, france and spain climbing as el italy has ordese more than 290 Million Students are out of school due tong it unparalleled in seattle in king county, washington with at least 31 cases, recommendations for those at risk to consider staying home and away from large groups of people as much b possible. Those of higher risk, age 60 and older, those are