News but the point that different regions of the country have different quote unquote curves, the virus does not hit at the same time at the same rate to you hear about different states in the country and when theyre going to hit their apex, when theyre going to hit their top and when theyre going to come down, its different all across the country. Its also different across the state. Weve been talking about states like theyre uniform, homogenous entities some are more homogenous than others when i was in the federal government i worked in every state, so you have a whole different variety of states. This state, we have very different regions within new york when you say new york, people think new york city. Yeah one of the densest places on the globe. You also have upstate new york where in some counties you have more cows than people. People dont think of new york that way as you see variety across the country, we have variety across the state of new york and you have to watch each one of those individual curves and when does that region hit a high point and where is that. Because depending on that regions curve, is how you have to calculate your strategy and youre looking at those curves, how long is the ascent up the mountain and then how long are we on that plateau, and then how long is the descent from the plateau western new york, i believe were on the plateau all right. Now the question is how long are we on that plateau, is it a plateau or might it ascend down state new york it appears were on the descent in down state new york, how quickly do we descend . The worst news and the really ugliest part of my job these days is telling new yorkers this news, in erie county, we lost seven hospital deaths yesterday for a total of 125 in the state we lost 481 people. 452 in hospitals, 29 in Nursing HomesNursing Homes are a central focus and priority for all of us going through that where are we today that is new York Governor Andrew Cuomo with somewhat heartening data on hospitalizations in new york state. He does say the definition of whats good these days, though, has changed. Good, he says, is now not terrible well keep our eye on that as he makes his way down to the white house later on today good tuesday morning, everybody. Im Carl Quintanilla with Morgan Brennan and jon fortt. Welcome to squawk alley, coming to you live from separate location looking for a turnaround tuesday. So far not being able to bust into the green as of the dow session low was down 600 and change were going to begin with historic moves in oil from yesterday. Our Brian Sullivan has more on that as we sees the president tweet, stories about texas regulators, more opec source stories on reuters, good morning to you is it a good morning, carl . Throwing that out there. What a couple days oil prices are down. T you mentioned texas. With Everything Else going on, the Texas Railroad commission has their hearing right now that is basically going to vote later on today on whether or not to what they call pro rags or basically instill quotas on texas Oil Producers. That hearing was brought by Scott Sheffield of pioneer and Parsley Energy unbelievably it is number 309 on the agenda at the texas rail Commission Hearing today and last time i checked, they just got down with like number 25 im not joking so not sure when that vote will come down, but thats something to watch today look at the moves there. The may contract which got all the attention, actually, you know, were seeing a positive number there, really some screwy stuff going on with trading yesterday, very thin volumes everybody i talked to last night and today is like people jammed that contract down people are selling it at any price. We pointed out on Worldwide Exchange this morning, actually appeared to move the market a bit, guys, that theres 50 Million Barrels of oil currently on the way mostly from saudi arabia via a super tanker, most of those ships are going around the cape of africa right now and should be here in about two weeks. We got too much oil now, but the good news is, and im being sarcastic, theres 50 Million Barrels on the way this oil story is a long way from being done, guys. The opec plus cuts go into effect may 1st right now its still every man, every country, every county perhaps in the United States for itself in my social media feeds are friends talking about oil prices but they were over the past 24 hours. Lets turn back to the Broader Markets. Greg battle of bnp parabass and jim lowell of Adviser Investments join us now. Guys, good morning greg, i wonder how you see things like oil continuing to effect the markets and whether the character of volatility has changed over the past couple weeks. Well, i think we look at Something Like oil and yes, theres ed yo sin crattic issues but i view it as a red flag for the Broader Health of the economy. Whats driven oil to capitulate so badly has been the lack of demand and thats something going to affect risky assets we think equity volatility may not go back to the peaks in march, those elevated levels, but we thinks the s p could potentially make new lows. We dont think the worst is behind us. Jim, lets talk about that sort of demand issue from a different perspective. We just got ibm earnings last night and they talked about a pause in demand from certain large customers, most of ibms customers are large. You see that stock down this morning, but hey, the Broader Markets are down too relatively speaking its not down that much how much is that sort of signaling from ibm going to be taken just as an overall sign of whats happening to demand jim, do we have you we are expecting to yes. You should be able to have me. Go ahead. I would say ibms report is likely to be a map of the markets. You can overlay it across the board with a few exceptions, we did see good earnings and guidance out of j j last week. In terms of the overall market the suspension of orders coming from your customers is likely going to continue to affect businesses large, medium, small, really across the board. The question is, whether or not the turnaround comes hopefully as early as the Third Quarter or if the medical data remains uneven at best whether this pro tracts we agree we dont think the market is off to the races we saw headlines a week ago suggesting that were entering a new bull market. We think thats putting the bull before the horns so we remain defensively oriented, cautious, well diversified among not just stocks and bonds but cash reserves, not just on the defense but the medical data to have greater confidence in the economic data. We look forward to going hunting at good discounted prices. You both sound cautious right now. The fact that you dont feel the worst is behind us and we could test new lows here, what are the data points youre watching closely over the coming days and coming weeks and how are you counseling investors, your clients, to be positioned right now given that fact . Well, i think earnings season from our go ahead. Greg. We had the banks report last week and the financials really under perform the Broader Market we get a Cross Section this week and next week of different corporates reporting from different sectors. The numbers, the beats, misses, maybe you can look through that but the guidance that we get, what their intentions are in terms of cap x and means for the Broader Market, they have on their forward earnings is likely to drive analysts to cut forecasts further. We have to remain cautious weve been talking to clients about quality rather than value, not chasing the under performers but looking at stocks that have robust Balance Sheets and able to weather the storm and thinking about hedging portfolios. Jim, quick, on earnings season, weve only got 50 or so companies on the s p in, but i mean the average miss on earnings is 27 the average miss average aggregate top line miss is less than 1 . Is that a reflection of having no guidance or what kind of lessons do you think are embedded in that. We think looking at any sort of guidance or Earnings Data for that matter, economic data, at this juncture is like looking through a kaleidoscope rather than a telescope its going to be confusing and confounding. Everything rest upon the medical data to provide a clear path for us to be able to trust the economic and Earnings Data all that said and done, you know, i think we probably have a very difficult quarter ahead of us doesnt mean there arent opportunities inside of the inside of this kind of market duress there absolutely are we continue to have great trust in the active managers that we invest in alongside of our clients who are experts at selectively managing not just return opportunity but risk events yeah. Do not envy the analysts trying to develop system for the Current Quarter at all greg battle and jim lowell, thank you. Thank you just getting a check on the markets and where we stand right now in todays trade as we head to break its pretty ugly dow is moving back towards session lows down 582 points or 2. 5 s p is down 3 and the nasdaq is down 3. 7 as investors parse through more earnings and, of course, the historic moves, the historic price action weveeeinhe sn t crude oil market as well well be back in two youve served our country. If youre a vet and youre experiencing any symptoms of the coronavirus, please contact your local va hospital. Protecting your health is our greatest duty. Snhu lets you transfer up to 90 credits [announcer] if youve tried college but never finished, toward your bachelors degree. [woman] it doesnt matter how old you are, you can do it. You can finish. [announcer] finish your degree at snhu. Edu. The white house is turning to Industry Leaders to chart the path forward on covid. California real estate mogul rick caruso is part of the president s economic council, joins us this morning. Rick, thanks for coming on good to see you again. Good seeing you, carl, how are you . Not bad so we got at least seven states with plans to start reopening in the next two weeks obviously all the attention is on georgia this week ahead of friday why do you think they chose the industrys they chose to open first and whats going to determine whether its called a success or not well, i cant tell you why other states did what they did im going to be working with governor newsom. He asked me to be on his committee thats looking at this i will tell you what i feel strongly about i think that Small Businesses should really get the head start on reopening theyre the backbone of this economy. And certainly california, los angeles, but i believe around the country, we should have Small Businesses leading the way. It also gives us an opportunity because theyre typically smaller formats in restaurants and retail, we can monitor it better and test it better and see what is happening from a health standpoint. And then the larger businesses can follow on after that so they also have a lot of power of rehiring back people and getting people off the unemployment lines and putting them back to work. Theres another component i feel strongly about is, the local retailer provides a sense of connection to the community. Safely, methodically, and carefully. Right how do you do that safely and methodically without more stringent maybe nationwide testing standards, maybe you can speak to how i know testing has been a real focus for the california governor with stanford and the like, but are there guardrails in place where we will not regret this in a couple weeks well, you have to put guardrails in place. I think thats what all of these committees are working very closely on with the governors. We will be with governor newsom. You have to have strict protocols in terms of cleaning, in terms of occupancy level and you need to keep the physical distancing in places so you have to have enough guardrails that youre monitoring it well, youre testing as much as you can, youre seeing what trend lines are. If its spiking in the wrong direction or going in the wrong direction, you need to be able to pull back again, you have a lot more flexibility in my opinion starting with Small Businesses than opening up larger formats thats why i really like that idea because what we dont want to do is go back and have a double hit and then we have to go back into quarantining. I think its critical that we take this very methodically. Rick, hi, its jon fortt. I wonder hi, jon. When do you think you will have the standard set for businesses that operate in your properties for how to do those sorts of testing, have those guardrails in place and do you think businesses will have to fundamentally change how they operate and put some form of ecommerce in place as well, operating out of that physical location, perhaps for some period of months in order to survive and thrive so, what were doing right now is were drafting a whole set of protocols that are very detailed our Operations Department is doingthat. We just retained usc, the head of their Infectious Disease department to help us guide through that were also going to be hiring a full rn in Infectious Disease that will be at all of our properties as we reopen them to make sure all of the crews are following the cleaning protocols to make it as safe as possible im sure all of our employees will be in masks and well all be protected i want to make sure were creating a very safe environment. Companies around the country, im spending as lot of time talking to ceos, its amazing the amount of work thats being done on being careful on the reopening. Nobody wants to get this wrong so were sharing a lot of information, competition is gone, which is great, because everybody is in this together. In terms of how we survive, i feel like were all going to be creative ingenuity right now is really great and im seeing local restauranteurs doing really Creative Things like making not only delivery and pickup, but having the food kits so you pick it up, you come home and you cook it. It becomes an event. It becomes a family thing to be doing together and i think what youre going to see is theres going to be reemerging types of businesses and streams of revenue that restauranteurs and retailers didnt have before clearly on the large format, i think retailers need to reimagine how theyre going to be relevant after all of this is over because if its the same old same old, with these large box formats, i just dont think theyre going to survive theres clearly going to be winners who are using their ingenuity and creativity and theres clearly going to be some losers yeah. Certainly were seeing that in terms of some of the bankrupts that are continuing in retail when you have highprofile anchor tenants like neiman marcus, for example, poised to file for bankruptcy before the week is out. Key piece of the whole reopening puzzle, rick, seems to be the liability piece and i wonder how youre assessing that and what those conversations look like on a federal or in the case of california state level, because it doesnt seem clear yet at least, heaven forbid you have businesses or you have places of work that open up, consumers, employees go back, theres some is sort of flareup, people end up catching covid again and theres lawsuits, what that looks like and who ends up being responsible . Its a very complicated issue. Theres no doubt about it. I cant give you an easy answer on that. The answer may be eventually and ultimately that there has to be legislation to deal with the liability side of this because its also very difficult to trace back where somebody caught it it could turn out to be very messy. The Legislature May have to step in, state by state, and deal with the liability side. And rick, just want to talk to you about real estate as well and what youre seeing in terms of pricing, how youre working with tenants potentially in terms of deferred payments and also i guess just from an investor standpoint what that means for a company like yours in terms of the ability to maybe once the worst is over find more properties to develop . Well, fortunately we came into this crisis in good financial shape, so weve had the where with all to ride it out. Nobody knows how long this is going to go on for our plan is to ride it out small retailers the rule is simple, were working with them, we are abating and deferring rent and going to help them out and get restarted. I think the soul of retailing communities and certainly on our property are the small, local, independent retailers and restauranteurs and we want to not only have them survive, i want them to thrive. So were working with them very closely. The large retailers that are creditbased, publicly traded, national tenants, our expectation is they should pay their rent we are having conversations with everyone, but this is really a partnership to get everybody back in business and as a landlord, i have to lean in and discount rents or eliminate rents for some period of time. The larger retailers that can afford it should pay so that there is more money in the system to support the smaller ones the Government Programs are important also there will be opportunities in real estate. Theres no question. People that have a lot of debt on their properties may not be able to service them, that are looking for capital, theres going to be those problems, but thats for another day i think we get through this crisis, im not looking to take advantage of anybodys misfortune through this crisis i would rather have everybody survive, be robust and have a really competitive economy because thats where we do our best finally, rick, as were talking im looking at a jpmorgan note that cites a doc