Market meltdown. Hang on, everyone, this is the final hour of trade. Good afternoon. Lets have a look at whats driving the action the lack of a Production Cut deal from opec coupled with a saudi price cut sending prices tumbling down 17 on the day alone. Coronavirus fears remain front and center as global cases top 111,000 and italy locks down a quarter of its population. And the bull market chaos rages on as yields on the tenyear at a low of 0. 31 and remain at the moment below 0. 5 . Joining us for the full first hour of the show, lindsey bell from ally invest they have 7. 85 billion in total customer assets. Shes here along with our team of reporters to break down this massive market sell off. Bob pisani is on the floor of the change Brian Sullivan covering the Oil Price Collapse mike is here to look in the the market mike holland ond transports. Well get to all our reporters the dow is down 7. 25 . B bob. Important thing is the Circuit Breakers hit this morning. Down 7 . Halted for 15 minutes. Want to remind everybody that halt remains at 7 down. Now we have to drop 13 for it to drop again before 325 after that, it would not halt unless it dropped 20 then the market would halt for the day. A couple of major movers Jpmorgan Chase was down 13 . Worst decline since 2009 bank of america down b aboabout. Certain sectors rallied then drooped. Industrials. Cat pill lehr rallied after the market reopened before 10 00 a. M. Sitting off the lows of the day. Same with yuntd technology theres only one dow stock in the green today. At least most the day, walmart still remaining in the Grocery Stores in general, consumer names have faired much better. Oil market collapsing as tensions between saudi arabia and russia boil over leading to massive declines for crude prices and Energy StocksBrian Sullivan swroining us here with more. Brutal day across the board the price of oil down 10 bucks, about 23 . If you go back in time to reverse inflation to 1991, oil is now trade iing about 17 a barrel in 1991. Thats how far that we have fallen that move by the way slamming an already slammed oil complex. You have names like apache and others down 40 and 50 today it is hitting all kinds of portfolios pretty much selling across the r board and natural gas up a little bit. Im thinking the reason that is is because the Justice Department is that if we start to slow production either or beganically, companies decide theyre not going to produce more oil or they simply run out of money and go out of business, that we will also produce then less gas because remember natural gas is a natural by puckett of drilling for oil. You had Diamond Back Energy say it is slowing down crew completions. Slow down welcome pleegseverybo expects lot more of that type of stuff. Oil not really an oil story. A jobs story and its a debt story and well have more on story at 5 00 on fast money. Sxwl thank you so much for that. Bank stocks also getting absolutely slammed today the strong correlation when panic is in the air with what yields are doing very much at play why, of course banks make a lot of money based on whether yield curve. Here is exposure for the banks to Net Interest Income citi the highest bank of america often seen as the most Interest Rate sensitive because of its High Consumer exposure and bank of america was down 37 from its intrata february pique to its intraday trough today add to that the fears of exposure to the Energy Market b and and you have a perfect storm today for the banks but here is loan exposure u to energy for the big banks. Fairly low though small regionals will need to watch out for. Cadence, bank seven. Some of the names with the highest exposure to energy and those stocks down sharply today. Unlike Energy Companies, bank stocks are still above their 2016 lows, which was the last time markets feared a sort of rates are never going to rise again or oil prices are tanking type of environment and that might suggest more downside. On the flip side, theyre a lot cheaper today on relative terms. Whether thats pes or dividend yields last year, autonomous estimated bank stocks were pricing in a 50 chance of a recession. That number today higher still here are the dividend yields much higher than in 201 at the lows when the dividend yield was about 2. 5 one other comparison thats being made is versus 2008, two big differences. Capital, liquidity, so much stronger and higher today and the epicenter of this crisis is not financial and therefore clearly a big difference none is less, can expect more downside if yields or Oil Prices Keep sliding can you touch either of those groups, energy or banks . I think youve got to stay away now youve got to let the dust settle here and theres so much uncertainty related to where yields are going the market is pricing in a 75 basis point cut. Its a miss war and we dont know where its going to stop. We know the 26 low on w the ti in 2016. Will we go below that is the question over to mike for a look at Market Trends in the s p what are you watching . Yeah, lets try to frame this when you go down if price, you dpo back this time so look at threeyear chart of the s p 500. We were talk iing last week abo the chance it had to retest the intraday lows. We sliced right through because of the oil price trap door so here we are. What i find sbresing, 27. 40 was the level we go back to. It was a springtime level. Also a technical retracement amount of the whole rally from 2018 but this brings us back to early 2019 these are levels we first hit in january of 2018. So were going back 26 months before you know, when we first got to these levels. So clearly, a lot of stretching to the downside. Weve got washout conditions aacross the market we were oversold getting to the extreme. I want to get a longer term look today, we handicapped it last week the 11th anniversary of the bear market, march 9th of 2009. So this shows you the entire length of it what i find interesting by way if we get to about 27. 08, its a 20 drop we close that. We can finally say at least on a tech statistical basis, its over so i told you we went back to 2018 look at the previous times weve done Something Like that when youve kind of gone back about a year and a half or so. So its not this unusual what is is how fast we surged above it then gave it all up so clearly, its still a treacherous situation. Just looking at a lot of the intermarket stuff. The volatility indexes and credit markets mike, it seemed earlier in the session like the Circuit Breaker helped because after we reopened, we were more like 4 or 5 down on the day now testing a 7 level what do you make of whether they helped or hindered its interest the Index Futures premarket theyre limited to a 5 loss etfs were indicate iing a 6 or percent loss if youre down six and a quarter, youre testing that Circuit Breaker. Once we did, we had a lot of purging of stocks on the open. A monday open k you have a lot of mondays where you have down day, its the most frequent day to have a big loss and to me, youve got a lot of it out of the way. I think the fact we are down 12 coming into today is is part of that reason. Also, yields did actually bottom overnight. So that helped what is it b about mondays . You have all weekend to think about it i think so lindsey, what stands out is the speed at which we have erased just what, almost two years of a rally what does that tell you how fast its happened . The speed is definitely breathtaking for sure, but it means we can bounce back much quicker, too what we have seen is it takes normally a about five months to get to correction territory then you get five months later, youre back to where you were. So two weeks i think we can potentially see it happen quicker, but theres no guaranteed. Transports plunging frank . Dow transports on pace to close at their lowest level since december of 2008 rail stocks plunging and overall imports from china which would hurt rail volumes. J. B. Hunt, those shares down around 8 . It gets more than half of its revenue from hauling containers. Airline stocks, they continue to be under pressure from reduced business and lee sure travel and the major shippers getting hit today with the Broader Market ups gets about 4 of revenue in china. Gave lower q1 guidance fedex gets more than 4 of revenue in china and according to Deutsche Bank estimates it reports earnings next week that will be a window into the health of the u. S. And Global Economy. Back to you. Thanks so much for that now u oil prices seeing their biggest oneday decline since the start of the golf war on january 17th, 1991 oil lost 33 how far will Oil Prices Drop from where they are . Ill start with you. Extraordinary moves in the oil market were down 25 on wti. How much of a sort of perfect storm or can it still get worse. What makes it a perfect storm is that this is a first real crisis in which weve had on the one hand and supply oversupply injected in the market for political reasons. Yes, theres much more Downside Risk at the moment how, why . You look at where demand is going and then you compare it to where the supply is coming from and you look at the indicators of where inventory is going to grow we think now that negative growth territory is where we are for the World Economy as a whole and were going to see negative oil demand growth. That number is an open ended number were pretty sure its going to be negative year on year, but we dont know how far negative. Lets assume we have something in the u. S. And europe thats similar to what we have in korea, italy and china hit a big hit in february of chinese fuel demand was lost if we put this same number in the economies, that could be a 12 million barrel a day loss for as much a month. We dont have that balance if the market sees that the saudis and russians are continuing to produce a lot more then theres another demand shock on top of the current one. Thats another big step lower in terms of prices. So paul, i mean it is brutal out there. If youre an energy company. Marathon oil right now, down 47 . Apache, down 46. Whats going to happen its a question of how good their credit coming into this and how much access to capital they have and the second thing which weve been pushing for for two years now u is they have to cut cap ex so what were looking for is the fastest to cut and who cuts the most weve had examples from diamond back, the fastest movers are say ing chesapeake and amongst the Investment Grade oxy both really the bellwethers were look at credit for active managers are just on the sidelines and were just letting the machines do their thing which is why you get these extreme moves. Theres no guys stand iing ther with a piece of paper and pen to control the market its quite hard to price a binary outcome risk like a Company Going bust what percentage chance, lets pick the two you said. Chesapeake and oxy what percentage chance they go under . A 1 or 20 . I think in the case of chesapeake, its an extreme danger frankly more than 50 ive got to be careful what i say because i dont cover the stock and i dont want to get ahead of myself, but its pricing extreme risk just to speak in terms offi inmt cap, still over a billion. Bp was down 20 today is there any chance that Company Goes Bust . I dont think so. I think the very biggest here, these global supermajors that have been around for 100 years are going to come through this i dont think theres any question about that. But they are in a competition with the saudi Balance Sheet and the russian Balance Sheet. Thats really where youre at. So where we think the market balances given what eds saying about demand is usemp and Balance Sheets thats going to be the deciding factor and were going to have to cut u. S. Production by as much the market needs to balance which is going to be a lower and lower price and worse and worse Balance Sheet. Some of the chatter is putin wants to put the u. S. Fracking business under water is that really whats beginning on here . Talk about the political dynamic between saudi arabia and russia and how u. S. Oil industry gets dragged in so theres no question but the Russian Companies would like to put the u. S. Shale industry under. So we have to separate out i dont know what mr. Putin is thinking, but weve had the ceo make a series of comments from the middle of last summer to today saying we dont have to worry about saudi arabia losing margaret shar market share the real elephant in the room is the u. S. And theres nobody at the b table in the u. S. And u. S. Cant have a political leader at the table because of the nature of the u. S it has to be driven down by price. Now others tried this before the saudis tried it in 2016 and 2016, as early as then how will they maintain this price cut . Theyre both sitting on war chests the saudi one is about 500 billion in cash available. Now maybe a little bigger in 2016 when they and the russians got together they are less vulnerable one is the world is cutting off from the rest of the World Economy so their liabilities are lower than saudi liabilities and hard currency, but the real significant difference, the saudi currency is pegged to the u. S. Dolladollar the ruble floats and appreciates with oil prices. It depreciates with oil prices that correlation gives it a kind of a boost when the ruble is low and the cost of production is lower and the chances of a company in ruble demom nated cross environment expanding in that environment is much greater. So id say theyre both going to struggle at 30 or lower for a long period of time, but in the shortterm, the russians are sitting more comfortable would you by any of your companies now, paul . I think we like the best in eog or particularly eog, some of the best stuff is very attractive here. One thing ill add to what ed is saying, we havent heard the last from the president here we could put in an import tariff they could stop release iing sp and stop building spr. Theres a number of things we might see. Thank you good to see you both cme Group Chairman and ceo joins us now in a first on cnbc interview. Terry, good to have you. Especially on a day like today welcome. Appreciate it tell us what youre seeing in terms of how the market is functioning after these giant moves across assets. Well, i think theres a whole lot to talk about. I mean youve had a lot of guests on today with a lot of opinions, but the markets for the most part are functioning quite well even though theyre going and the volatility is quite high i think one of the real issues that youre seeing here is this reminds me a lot after the 08 crisis when we were going to get into regulation except nobody knew what it was going to be what were seeing the complete unclarity as it relates to the marketplace. No one knows exactly whats going on as it relates to the rye ru virus. So if you want to give stabilization to the marketplace, we need to get the test kits out into the hands of the public weve got 75,000 test kits today. And for the most advanced country in the world, were not doing that so you cant have 500 cases reported here in the United States and 16 million quarantined in italy and saying theyre both correct somethings wrong here and the markets, they know that. And the markets are trying to figure out some clarity. So whatever it is, i would be hopeful that our government instead of trying to slash the rates to zero, would get these test kits out into the Public Domain so we can figure out what it is and that will help the overall market in general, knowing exactly what it is and terry, how are markets functioning . I mean not just the last couple of weeks, but particularly the last 24 hours. Clearly, extraordinary news know over the weekend when theres not much liquidity in various different futures markets. How have thinged functioned in the last day or so just fine and theres liquidity. I heard some of your guests saying theres not enough liquidity in the marketplace the bid offer is going to get higher i dont care what youre trading. It doesnt matter anything were still trading just under a trillion dollars s ps every day so theres plenty of liquidity its swrus at different price levels than it is when you dont have volatilvolatility the markets are functioning properly the Circuit Breakers kickeded in oils been a big story the input cost was between 40 and 50 a barrel the perm yan is the cheapest at 40 youre earlier guest was talking about this when you look at oil in saudi arabia, input costs are between 20 and maybe as low as 12 so it doesnt mean its going there, but their threshold for pain is a lot greater than ours and thats why its important for people to use markets like ours in order to defer some of the risks. Wanted to tuck b about the impact of trading halts. You guys halted futures last night when we see the 5 decline. What is the impact of that how does ha help or hurt the process . Especially when you have the rise of al r gor ittic trading everybody wants speed for everything they do in life, but not for markets. We want to make sure markets go nice and slow for us as we want our computers to be able to search anything in a nan o second not the world we live in so the trading is not the issue. The markets move quicker like Everything Else in life. Theyre efficient. We were down 7 this morning on the halt thats really where we halted was this morning and just in coordination with the other marketplaces, so again, i think theyre a good thing it gives people an opportunity to resasz whats going on. You saw them kick in this morning and had an upthe tick. Markets hate u