Transcripts For FBC The Claman Countdown 20240713

Correction territory, the dow has to be down at least 361 points. We are down 766. The nasdaq has to be down 145. We are already down on the nasdaq at this moment by significant 276. And the s p has to lose a minimum of 68 points. S p right now down 87. Goldman sachs now believes that American Companies will see zero Earnings Growth this year if the coronavirus becomes more widespread than it already is. Backing up goldmans call, a slew of companies revealing new warnings about how the deadly outbreak could hurt their businesses. Countdown bringing out all the big guns for this final hour of trade. The head of the Worlds Largest derivatives and futures Trading Platform is here. Cme Group Chairman and ceo terry duffy on managing risk and how he plans to keep his exchanges running if coronavirus balloons in chicago. And Guggenheim Partners cofounder and global cio scott minerd here live. The best places to hide your money if the virus gains the power to trigger an earnings or Even Economic recession. Plus, one of the stars of netflixs documentary series pandemic is here. Hes in charge of preparing all of new york citys hospitals for a possible pandemic. We will ask her how prepared this city is. Q. Forget correction. With 28 of the s p stocks in bear market territory, is bitcoin really the only safe haven in this final hour of trade . Apple ceo tim cook just spoke to fox business on the epidemics effects right now on his china operation. We are 48 58 minutes before the closing bell rings. Lets start the claman countdown. Liz let me get you more on the fda breaking News Headlines because they are rolling in fast and furiously. The fda seeing no coronavirus related shortages yet but it is continuing to closely monitor that supply chain. That includes everything from medical products, drugs, medical devices and also biologics. We are watching anything else that comes through on the fda but pfizer, lets keep with this theme, is the latest company to warn about the Coronavirus Impact to its bottom line. Moments ago, the pharma giant said a continued spread could adversely impact operations and the Financial Results of the company, including manufacturing. The stock is down just about. 33 but the supply chain and Clinical Trial operations are also at risk of being affected. Thats from its latest s. E. C. Filings. Let me get it to the broader picture. Coronavirus is driving stocks not just down, but pretty much in all directions, good, bad, ugly. Lets get to the good. Look at teledoc health. This is hitting a record high after at least 12 brokerages raised their price targets on the company. What they basically do is offer teleconference Health Services meaning everything from via mobile devices and internet where you can speak to doctors or experts. Analysts predict the company will see a boom from coronavirus cases as people stay at home but still want to dial in to consult doctors. That stock is up 17. 6 . Nice move there. Speaking of teleconferences, facebook has canceled its annual developer conference in may in california due to the coronavirus fears. It will instead swap out with video and livestreaming content of what would have been that conference. Facebook is down 2. 7 . Tesla getting slammed. This is the ugly one, for a fourth straight session after data show the virus may have impacted teslas vehicle registrations in china, which have dropped 46 in the month of january, and thats just month over month from december. The stock is down 12 right now. It stands at 684 and change. Well below a key level of 733, the exact point that would put the electric vehicle giant squarely in bear market. So its there right now. Finally, just plain painful. American airlines hitting a 52week low at this hour, down about 4 at the moment, as analysts downgrade the sector on the hit to travel demand because of the coronavirus, plus there are reports that the pilots Union Representing American Airlines may halt travel to south korea after filing suit to stop flying to china. They kind of filed suit against flying to china pretty successfully so we are watching that. At the moment, American Airlines stock at 21. 44. Again, we want to stress, theres always another side to this. You could look at that as a buying opportunity. The other day, delta was down about 6 . Its just hard to tell where the bottom is. In the meantime, companies from every sector of the market are flashing warning signs on just how much an impact the Coronavirus Crisis will have on their businesses this year. Beer giant Anheuser Busch hitting the lowest level since january of 2012. Bud down 8 , warning the impact from the outbreak continues to evolve at about 285 million in revenue has already been lost in china during the first two months of 2020. They are just not in the mood to drink beer at the moment. Footwear maker crocs seeing its worst one day percentage loss in years, down 15 at the moment after reporting the 2020 revenues will be negatively impacted by 40 million, actually could be as bad as 60 million due to disruptions to its asia businesses. Even after paypal made it very clear the deadly virus is triggering a slowdown in ecommerce activity, crossborder, then even warning the First Quarter 2020 revenue will come in lower than expected, look at the stock. It reversed earlier losses and is now about. 75 higher to 109. 98. Hard to really tell how investors are absorbing some of the news here, even bad news, but for best buy, investors in the Consumer Electronics retailer, they are not behaving the same way as they did with paypal. Best buy beat on earnings expectations but the stock is down 2. 6 right now, after the ceo said the company is monitoring the coronavirus and expects most of the impact to be in the first half of the year. But see, nobody knows whats happening in the second half of the year, so investors dont want to wait around for that. Lets get to marriott international. They predicted the coronavirus, remember i told you they were coming out with earnings after the bell yesterday . They did, and they predicted the pathogen will cause a 25 million hit to monthly fee revenues. Shares of the hotel chain, though, are up about 1. 5 . Why . Well, they did top Fourth Quarter earnings estimates. So investors decide to focus on that. But theres a much bigger name that tripped up the bulls and those would have been brave bulls at the open. Deirdre bolton, live on the floor of the New York Stock Exchange, lets talk about microsoft. Deirdre of course. This is one of the reasons why the dow is falling as much as it is. If you look right now on the screens, you will see close to 750 points, we are closer to the lows of the day which are around 900 points down, versus the highs. Microsoft weighing on the average, helping to make this one of the worst weeks for this average since 2008. Two key reasons for microsoft. It is, in fact, withdrawing from a Game Developers conference that was supposed to be held march 16 through 18 in San Francisco. The company put out a statement saying in an abundance of caution they are canceling that event. You referenced the one for facebook. A lot of these Tech Companies are doing the same. I want to mention epic games, which people know from fortnite. Fortnite battle royale, some other games. Doing the same thing, the game developing conference in San Francisco canceled as well. Microsoft also, though, i would be remiss if i didnt mention, saying it is going to miss sales targets for this Current Quarter because of this coronavirus, the effects of it and as we know, microsoft gets more than 10 of its revenue from china, it backs up what we have heard from other tech giants. Apple, for example, last week saying it would in fact miss sales targets for this Current Quarter as well. Apple as we know getting 17 of its revenue from china. But as we see in north america, all of these events being closed, we begin to feel the effects of people being afraid to mix and mingle. Back to you. Liz im betting that the traders on the floor at the New York Stock Exchange are going to listen to my next interview, because it really does impact and is about to reveal the flows of where people are moving their money right now. It is not just stocks that are reacting rather violently to the spread of the potentially deadly coronavirus. Still sending shock waves through the oil markets in this hour. Now, since oils close last friday, it is down 12 so far this week. You could qualify that as a collapse but take a look at gasoline and its year over year performance. The wholesale product that trades is right now down at 1. 51 and we can see over the year, it is definitely lower. To the man who leads the company that handles massive trading moves in oil, metals, commodities futures along with volatility, hes here in a fox business exclusive. Cme chairman and ceo terry duffy. Terry, good to see you. As the largest futures and derivatives Trading Platform in the world, the cme and its Trading Volume for our viewers really gives us a window. Where are you soggy the beeing t number of trades . Thank you for having me. You are absolutely correct. We are seeing massive flows to all the major product lines here at cme, but for starters, you are seeing the obvious ones which is in the equity markets. Its up about 127 just off of last weeks flows so we are seeing tremendous flows through our Equity Division and our fixed income is up about the same percentages. You referenced something which is oil, which i find very interesting. The flows in that is not as dramatic as the other two i just referenced but when you look at the price of oil, especially west texas intermediate which we trade here at cme, at roughly 46, 47 a barrel, down to percentages you referenced just a moment ago, then you look at some of the stocks such as chevron, exxonmobil that are part of the dow 30, thats having a big weight on these stocks. So this cheap oil, you know, one might think it would be good at the pumps but actually, it hurts your 401 k dramatically because these are all part of indexes in not only the dow but other parts of portfolios. Thats what we are seeing a lot of. Liz i do have to ask about oil because as we look at whats happening, i can only imagine there all kinds of derivative plays people are watching. What has surprised you with your decades of experience on that very floor . You began as a trader. The most that you sort of feel and maybe you have seen this before, but this feels very different, does it not . Well, it feels different because it is, liz. We are seeing the market come off of extremely high values and extremely low Interest Rates, and we have never seen anything like the coronavirus under its current form today, so corona has been around for a long time, but we have not seen this particular strain yet. So when people try to compare it to the flu, its a little troubling because yes, people die from influenza every year and its catastrophic but to say that the coronavirus, people, theres a small amount compared to the flu is acceptable is beyond me. How you call this a blip or bump in the road its also beyond me. These are human lives we are talking about. These are things i have never seen in my 39year career at cme when you have Something Like this, that is having the impact on the supply chain that you referenced in your opening. I think you answered your own question. The supply chains are being disrupted, all the companies you referenced are very much impacted which is going to have an impact on the economy and it has an impact on everything we do here at cme and the products we use for risk management. This is something new to a lot of us. Liz treasury yields. We have seen them plummeting. I think when you look at the tenyear and you start to see that between the tenyear and the threemonth, we are seeing that socalled inversion of the yield curve which gives us a sense that maybe there might be a recession. Im not going to ask you to predict whether we see a recession because weve gotten some good data. Today alone, i want to let our viewers know, durable goods came in rather decently for the Fourth Quarter and gdp was right there as they expected, 2. 1 . Tell me what you are seeing in the treasury markets and then i want to talk about fed funds futures. We are seeing a tremendous amount of activity in the treasury markets, to your point. We havent seen the tenyear yield go below 1. 32 and that is really, i think, a point where people are watching. Maybe its already penetrated that area since i have been wired up for your show here. But again, these are flows that we are seeing that you normally would never see because of the inversion of the yield curve. Again, the question is where are we going to go. Fed policy, yes, they can add to their Balance Sheet, they can do certain things. But we are basically almost at zero today. To say that the feds the bailout, im not sure is the answer either. Liz you know, im surprised to see gold, gold is behaving rather strangely. It had a very nice move to the upside. Gold at the moment is down just fractionally by about two bucks, but heres the fed funds futures on the screen. Theres a 58 chance of a rate cut in march. That number was 30 i believe for july and now its 79 for july. Now we are looking at a shorter window here. What kind of trades are you seeing over at the cme when it comes to fed funds futures . We are seeing a lot of activity. You just referenced it because of those percentages, you know, we were much lower a week or so ago. As of yesterday they were a 50 probability through the next three meetings about fed cutting. So now they are up, you are referencing 70 plus and at the next meeting, which wouldnt surprise anybody to have a cut. But again, like i said earlier, we dont have a lot of room to the downside for the fed to protect the market on rate cuts. They will either have to add to the Balance Sheet or do more stimulus into the economy. Liz i will ask you, i will ask scott minerd in a few minutes, do you predict an intrameeting cut, meaning before the next meeting, do you so the fed swooping in saying lets just cut to prop up what is, what you could call a multi thousand point slide over the past six days . I dont think that would be prudent for the fed to do that. I think the fed has a policy they are going to follow. I think we have activities of the virus which you referenced earlier which is potentially a part of the downside of this market. I referenced high valuations earlier which could be accelerating this. You could talk about passive money being managed today versus active. Theres a whole host of factors going into it. For the fed to go away from their policy to do a cut prior to the next meeting, i dont know how prudent that would be. I would be very surprised to see that. I hope they wouldnt do that. Listen, we are still at extremely high levels in the equity markets. Possibly have done ve people have done very, very well. I dont think we should get carried away and i dont think the fed should do that just off the coronavirus. We are trying to stimulate the economy, lets do it to make people healthy. Lets not stimulate them to make markets go up. Liz got you. Terry, thank you very much. Good to see you. I appreciate you talking about health and your traders. Everybody is going to stay open, you got sanitation and clorox wipes . We do. We got a lot of contingency plans put in place for the markets to continue to operate here in chicago. We are very well prepared. We wish everybody well. If you dont mind, i would like to give a shoutout to my little sister, who is in a little bit of a battle right now. I want to wish her encouragement as well. Liz we wish her the best. Whats her name . Barbara. Liz barbara, we are pulling for you here at fox business. Thanks, terry. Good to see you. Let us talk quickly about the dow. Its down 702 points. Guess what, the one green spot on the screen is mask maker, face mask maker Minnesota Mining and manufacturing, 3m taking the lead on the dow at this hour. Its the only name punching up in the green by 3. 56. Shares have been upgraded of the largest supplier of n95 respirator masks to buy as coronavirus fears to a buy, rather, as fears of the pathogen propel demand for protective gear. There is demand for more information, and that is probably why the Netflix Documentary pandemic went viral. Its stoking the demand for face masks. Watch a clip of this. The next pandemic is going to start, we just dont know where or how. But we know it will. Liz that doctor in the documentary is the senior director for the Systemwide Special Pathogens Program of new York City Health and hospitals. Hundreds of people in new york city and surrounding counties are currently under voluntary quarantine. Still nobody has tested positive in the entire state but we thought lets bring in the doctor to find out how prepared new york city is for coronavirus outbreak. To be clear, you have quite a mandate, doctor. You are in charge of making sure that the entire Hospital System here in the state is ready. Are we . So i oversee new York City Health and hospitals. Are we ready . We certainly are ready. When it comes to Health Care Systems, United States has one of the strongest Health Care Systems in the world. We are prepared for these type of situations not just now, but for years. So we are certainly confident in our ability to be able to take on these types of cases. However, as you may know, funding at the federal level has enabled these types of maintenance of preparedness or maintaining the state of preparedness through these grants being offered by the federal government, through the hospital preparedness program. That is set to cut in actually a matter of months. So it is a very daunting, you know, thinking this is going to all expire just a matter of a few months. Liz which is definitely an issue, because youve got to have some money to ramp up what is obviously a deficit, i would imagine, under the best of circumstances. But tell me, what have you done to ensure that every hospital in the Greater New York city area is ready . And that goes for albert einstein, mt. Sinai, st. Lukes roosevelt, one of my personal favorites, and needless to say, talking about cornell. Give me a sense, the bronx to brooklyn. Sure. I work for new York City Health and hospitals so these are the city hospitals, 11 city hospitals. We have a number of plans and protocols in place but we built a Great Foundation before coronavirus even kind of came on anyones radar. This all really started during, you know, the Ebola Outbreak in 2014. It was kind of a wakeup call for the United States. Folks have been putting a lot of effort into basic Infection Control. As soon as a patient walks in we want to do source control. We have a lot of processes in place to be able to identify patients right away, isolate them and identify, and notify Public Health authorities. Liz what we have been doing at the claman countdown is looking at international newspapers. We found this from a chinese newspaper. We can put it up on the screen. But people who are testing positive, then getting better, recovering, 14 of recovered covid19 patients have tested positive again. Then you have that one californian who initially wasnt tested for coindividuviindivico because the patient didnt exhibit regular signs. Is there a chance it has already mutated into Something Else . This is an rna virus. Rna viruses are notorious for mutating. I think right now, we dont have any data to support that it has mutated but certainly on the two fronts, i think we need to ramp up diagnostic capability here in the United States very rapidly. We dont know if theres more cases of Community Transmission here, you know. Theres a number of other countries besides china reporting cases. We are only screening for people coming from china. So we may already have additional cases here. We just dont know about it. This is why we need to look at surveillance. Liz we as a business network, you just heard we were talking about 3m, Minnesota Mining and manufacturing. There are some vaccine stocks we can put up which have absolutely spiked. Every time theres a news headline. But obviously, we are far away, months at least, from getting mass vaccination testing. So you have 3m, mckesson, honeywell. Did you guys immediately put in i guess increased orders for things like face masks . On a national scale, one of the things we look into when we are looking at Surge Capacity is supplies. Obviously we are looking at inventory, you know, that we have on hand. Even on a national scale, i think a bunch of Health Care Systems are looking to bulk up their supply. As we know, there are significant shortages and impact to supply chain as we speak. We are hoping we will have an organization that can help alleviate some of those concerns. Liz the dow is down 776 points. We are already looking over the sixday selloff of a loss of about 6,000 points. Theres a lot of fear here. I bloef thelieve that part of t biggest fear comes from the Health Care Workers who have contracted this. In fact, two doctors at the forefront of the initial outbreak in wuhan have died. One was the director of the hospital in wuhan and one was that doctor who first flagged in a chat group of doctors in december that he was seeing something awfully strange that was developing. Both those doctors are dead. It is a tragedy. So how are you going to make sure, i mean, these are well educated doctors, i would imagine. How are we going to ensure that doesnt happen to our doctors all across the nation . Absolutely. That shows theres a breakdown in some sort of Infection Control process they had in place. This is why its so important to go back to basics. Basic Infection Control. We need to make sure we are doing just in time training, drills for all Front Line Health Care providers so they have the training and the resources that they need to be able to respond to this growing outbreak thats happening all around the world. One of the things that we know is that china obviously has been ground zero for this. In terms of if we are going to see an outbreak similar to that extend here in new york city or in the nation, obviously only time will tell, but it will be shame on us if we have a very large outbreak, because we have been given this window of opportunity to continue to prepare for it. China didnt have this opportunity, in fairness. They obviously had the fullblown outbreak. Here in the United States, we still have obviously a handful of cases, we still have an opportunity to increase our preparedness. So if we see a very large outbreak, shame on us. Liz i have to tell you, we are thrilled youre here. When my producer saw you in the pandemic docuseries, said get her in. Thank you. I know your time is very valuable these days. Please come back when you have the moment. Dr. Madad is featured in the pandemic doc,series on netflix. For those of you opting for Online Shopping amid the outbreak, a new option could be coming your way. With about 35 minutes before the closing bell rings, the dow is still struggling as is the s p, russell is down about 28 points, dow component walmart reportedly working on walmart plus, which the retail giant could Start Testing as soon as next month. Not helping the stock at the moment which is down 1. 5 , but the price tag for walmart plus us expe is expected to be around 98 for a membership. Walmart is down, so is amazon, by about 3. 66 . Can we whip up chipotle at the moment . Lets look at cmg mexican group, right now getting burned by a very wellknown hedge fund. The stock is down 9. 5 . The mexican fast food casual hot spot is one of the biggest losers on the s p. Doesnt have anything to do with the virus, thankfully. Bill Ackmans Pershing Square fund which had been bullish on it announced we made our money, now saying he remains a longterm invest or in shares ad only trimmed his stake for quote, Portfolio Management reasons. Stock is at 767. 65. We should get you this right now. By the way, we are going commercial free for the moment because once again, we are seeing yet another significant selloff. Fox business is learning that the Hedge Fund World, the streets socalled smart money says after this wild week, tomorrow could truly be the reckoning for the market. Charlie gasparino, why . You are getting exclusive details. Charlie this is what Hedge Fund Traders are telling me, is tomorrow is a big test. Its pretty simple. If you talk to traders and you look at how they are positioning, the last thing they want to be is long going into the weekend. Particularly with the dearth of information. Barring Something Like an emergency fed rate cut which is always possible, tomorrow could be a pretty messy day. You dont want to have your positions long going into the weekend. Who knows whats going to happen over the weekend. Obviously there could be more deaths or another development that shakes the market. Its just not worth it. So what people are telling me is the algos are all set up and tomorrow might be the freight train. Now, just so you know out there, im getting this from a consensus of hedge funds. I cant tell you what the margin of error is on the number of people i called. Im relaying what my reportings saying. If it doesnt happen, dont tell me that i sold all my stocks because of you. Always be cautious on all this. But generally going into a weekend, this type of uncertainty, heres the problem. Its stuff i have been reporting on. Wall street has no idea about the size and scope of this thing. The information coming out of china is not believable, according to Major Research shops out there. Its hard to gauge just how this is spread in china. We know whats happening here. We got that. But if you look at this from a global standpoint and how it might impact gdp of one of the worlds greatest economies or i should say biggest economies, you know, its hard to figure that out. Thats what wall street does. It looks at how this might impact gdp and earnings Going Forward for u. S. Companies whose stocks trade on major exchanges. Its almost impossible to figure that out. Liz i want to show you, this may relate, because i have been watching the oil markets for the past 72 hours, watching it basically collapse, which brings me to the question, who which funds might be in real trouble here. You cant really tell because there isnt a ton of transparency for these. But we were looking at some other funds. Oepsx and ivynrg. Can we get those up . Both are down dramatically here today. Charlie lets back up a minute. The funds that are taking the biggest hits are those funds, some of these brokerage houses offer these, that go long volatility, that basically are volatility bets. If you are looking at a fund that tries to capture volatility, as volatility spikes, its very difficult. Those are the fund that are getting blown out. They are on the Merrill Lynch platform, on the ubs platforms. Theyre out there. The others are commodities are taking a hit, obviously. Commodities are taking a hit, particularly oil, on the notion this will have a decrease, a negative impact on gdp. Liz oepsx, which is rental equipment and services, down 41 year over year to date, rather. Charlie the bet is theres going to be a slowdown because of this. Again, the problem is with the dearth of information, you assume the worst. I think one thing, im getting the wrap but um goiim going to two points before i wrap. I want to make a point theres a dearth of information, you assume the worst, you sell. The second thing is this. Tomorrows a rough day, could be a rough day. Be prepared. One more i will slip in. The fed could swing into action here. Theres lots of talk about a fed emergency rate cut that comes maybe even next week, who knows. When that happens, that could quell some of this. The former fed governor, smart guy, he put out an interesting column in the journal today that said the fed should swing into action and usually those are liz terry duffy of the cme said that would not be a good move. Charlie why . Liz because theyve got to be calm about this and preserve dry powder. Charlie this is one of the times you do it, when you have irrational exuberance destroying market value, the one thing the fed needs to do is kind of kick in. It was talked about for years. Liz as we are looking, the dow is down 835 points. I want to let our viewers know charlie i dont mean to talk it down. Sorry. Liz listen, low of the session is a loss of 960 points. When we are looking at lows for the s p down 109, we are down 93, the nasdaq down 359 points, that was at the low. We are now down about 296. As the markets drop, theres one stock that has quadrupled since just the start of the week. Deirdre, what is it . Deirdre codiagnostics. The reason will not surprise anyone. It has just received the ce mark. That means that its product meets health, safety and Environmental Standards and its products a diagnostic test to detect the coronavirus. Not surprising that exactly as you said, the stock has quadrupled since the beginning of the week alone, in a week where we have seen at least the dow so far have its worst week since 2018. You highlighted this as well. As we speak, we are much closer to session lows than session highs. One other bright spot i want to point out, as we head towards the close, 3m. The company does make masks. Its obviously not the only one. But this has been the one dow component that has been steady throughout the day and by steady, i mean bright spot. Merck and pfizer at different times have been up. 3m has been up all day, limiting these otherwise dramatic losses. Liz deirdre, and Charlie Gasparino was just saying an intrameeting cut, meaning a meeting that would be held as an emergency, we are going to talk about that right this very minute. First, we got more breaking news. We are trying to get everything in for everybody. Blue apron has been halted on the New York Stock Exchange due to very high volatility. Look at this spike right now. Its up 37 . We knew blue apron had definitely been struggling. This is the meal kit preparation company. Maybe somebody sweeping in or sniffing around to im not going to guess on that one and get myself in trouble when i do. Lets mark it here, 27 minutes before the closing bell rings, we are facing yet another selloff, folks. Lets talk about junk bonds. They are getting trashed at this hour. As you look at the ibox, high yield Corporate Bond etf, it is down about 1 but if you look at it, its down but more importantly, its seeing record outflows from earlier this year amid the worsening outbreak. One of the most widely followed Fund Managers on wall street put out a note to clients last night, airing first on fox business from guggenheims scott minerd. Heres his take. To be clear, i am not saying the worst is over but rather, it is time to take a break and assess the next moves. Hes here, cofounder and Global Investment officer for guggenheim managing 265 billion, intrameeting cut, i need your prediction, will the fed pull that rip stop on the parachute and not panic but make an emergency rate cut . Its interesting, liz, if they do it, if t think its a panic. If the market is down 20 , 25 from its highs, they will view it as reasonable. I think the fed will wait as long as possible before they act to reduce rates here. Liz we are down 10 . Just a little over 10 from the recent highs, for all the major indices on the screen. Thats called a correction. Right. Liz not a bear market. We need to get you would probably guess the fed would wait until we are down more like 20 . I think weve got we understand the fed reaction function. December 2018 showed it to us. The minute the market broke below 15 down and headed for 20, the fed was on television the next day pivoting on policy. They cant stomach a bear market here. So i think but again, they dont want to be viewed as being panicking because i think they could be concerned they are sending the wrong signal to the market. Liz that is your prediction. Interesting because terry duffy at the cme just came out and specifically said he thought it would be a bad move for them but you are actually saying they would most likely wait until they see 20 drop . If they acted now, i think it would be viewed as that the fed knows more than they do and they have Major Concerns which would just set the market up for more downsti dside. Liz it is changing hour to hour. What do you make of whats going on . Do you see it as a real opportunity . In retrospect four months from now, will people be saying should have bought there . I often joke the most expensive sport in the world is bottom fishing. I think its a little premature to be stepping in now. But you know, i do think that this 3,000 area on the s p, this will be an area where we can consolidate until we get more formation. But you know, when you consider that this is close to turning no into a pandemic, the impact on the u. S. Economy if it really happens here will be much more dramatic and could affect earnings and the economy overall. Liz you are suggesting its okay to scoop up a little bit of double b credit junk bonds. Okay. So thats less than investment grade. Right. Liz which areas . Well, in particular, kraft heinz looks interesting. It just got downgraded from investment grade, its trading very wide to u. S. Treasuries. Liz whats the yield . Around 5 . If the market rallies, if we are going into a pandemic, and spreads are going to widen on high yield, you know, we are going to have the 30year bond at 1 , we will have the tenyear note at. 25 . You are going to be able, these things are still going to look attractive. Liz you worried about oil . You look at crude oil, oil is down about 12 week to date. Are you hearing any sort of greenstick fractures in the Hedge Fund World or predicting anything . Not yet. But two weeks ago i wrote a commentary on the coronavirus and i pointed out that the technicals if we broke below the lows would put us on target to go to 25. So i expect its at least going to 40 and probably lower before this is over. Liz i need to know about yield curves. We are seeing an inversion of the yield curve which for people who dont know exactly what that means, when the shorter dated treasuries are yielding more than the longer out ones, like the three month versus the ten year, for example. Thats a sign of recession coming. Do you see recession, because in your note that came out last night, you said that you havent seen anything this bad since what was expected with the spanish flu in 1918. So is that thats depression era. Do you see a recession or even a depression . Look, there was a severe downturn that followed the spanish influenza and i think if we get this into the pandemic stage, we are going to have a recession. I think at a global level we are very close to recession right now. When you take the average of all the gdp around the world, whether its growing or not, europe is probably already slipped into recession. You believe chi i believe china is clearly in recession at this point. Its just a matter of how long it takes to hit our shores. Liz ive got to ask a very pointed question here. We have seen countries go negative on their Interest Rates, whether it was germany, japan, and i think the entire bond yield curve for the german bund market went negative the other day. Do you foresee negative rates for United States . You cant rule it out. Liz wow. If we go into a recession now, and given where Interest Rates are and where global rates are, we are the high yield alternative for the world, there will be so much capital flooding into the United States that i think its very likely we would push rates into negative territory. Liz thats a bad thing, is it not . That means people would rather park their money in government treasuries and get back less. In a sense, in essence its a tax. I mean, whats happening is the government can borrow at a negative rate and you pay them to give them your money. So its a form of a tax on savings. Liz what worries you most here . Is there a trigger you are looking at where you hit a certain point . Let me rephrase that. What are you looking for that is that screaming signal that will tell you now you get it . Well, look, two things um looking for to find out how much worse this is going to get first. One is if the stock market breaks meaningfully below 3,000 on the s p, i think we will be down 15 or more. The other side of it is the pandemic data or sorry liz do you think its a pandemic . Come on. Heres the definition in my mind. If our neighbors have it, its an epidemic. If we have it in the United States, it will be a pandemic. Thats the way people will look at it. Thats the way the economy will look at it. The question is, you know, can we keep it contained. I will be honest with you, i have talked to a lot of experts. Its virtually universal in what i get back. Its virtually impossible to see how we can contain this. So its premature to hit the panic button but its certainly not time to be taking on a lot of risk assets like high yield stocks. Liz you just made quite a bit of news. You say we would have to wait probably until we are down about 20 for the fed to move but you also say that this is about the worst that you have seen and that we may very well see negative rates, you cant rule it out. Can you stay with us just for a few more minutes . We are blowing out all the commercial breaks and i just need your expertise as we move to this story. Apple, breaking news, apple ceo tim cook is in birmingham, alabama at this hour. He just stopped by the Summit Shopping Center to surprise customers and employees at a local apple store. Could you guys hear the cheers . You can take this video full. Apple did warn investors last week that it was not likely to meet revenue targets for the First Quarter and global iphone supplies could be limited. You are looking at video, birmingham, alabama, just minutes ago. This is exclusive. Our cameras were there as tim cook walked around and met all of these employees. I believe it was a surprise. The big question is, what is happening with the state of his suppliers in china. F foxcon has china operations there. They are offering bonuses of about 700 for employees to return to work. Apple down about 5. 5 , among the biggest laggards right now but susan li was right there in birmingham. You spoke to tim cook. This is exciting and breaking news. Susan it was exciting also for a lot of those here in the apple store as well, surprise visit by apple ceo tim cook. A lot of selfies, lot of smiles, lot of screams, as you can imagine. I have been trailing tim cook across birmingham, alabama as they launch this Education Initiative called the education farm here in birmingham. This is providing coding opportunities for the underrepresented across the city. This is something also thats part of the Education Initiative at apple [ inaudible ] with the white house on. Speaking with tim cook, the wideranging interview you will see more of tomorrow, but yes, we talk about the Education Initiative. Also homecoming of sorts for a hero since tim cook grew up in alabama, went to school in auburn and also about coronavirus and how its impacting the supply chain in china. Take a listen. It feels to me that china is getting the coronavirus under control. You look at the numbers, they are coming down day by day by day so im very optimistic there. On the supplier side, we have suppliers, we have key components coming from the United States, we parkey parts china, so on and so forth. When you look at the parts that are done in china, we have reopened factories, so the factories were able to work through the conditions to reopen, they are reopening. I think this is sort of the third phase of getting back to normal and we are in phase th e three. Susan i asked tim cook about whether or not they might move some of their supply chain out of china, also whether disruptions will last past the Second Quarter of this year. You have to find out tomorrow in our exclusive interview with apple ceo tim cook. For the time being, back to you. Liz susan li, kind of nice the see happy people in birmingham, alabama, because we are kind of swirling around this maelstrom with the Dow Jones Industrials down 931 points. Low of the session was 960 points to the downside. I dont know if we can bring up the volatility index but as we just talked about apple, scott minerd, what do you make of this . Its down 5. 5 right now. Volatility is more than doubled over just the past couple of days. Thats for the entire market. Annual low is 1. 69. Apple is at 267. Would you buy it here . Buying almost anything affiliated to the china situation is like catching a falling knife. Liz or falling machete. You want to lose your arm, go for it. Its obviously to me, the tim cook visit to birmingham is a p. R. Attempt to shore up confidence among the employees and to get his face out there. Because obviously, apple has got some severe issues. Theyre not going out of business. There will be a buying opportunity here at some point. But right now, i think its premature to step in. Liz i would still say okay, month to date its down about 10. 6 , quarter to date down 5 . Yeah, apple absolutely not going away. I actually applaud tim cook for getting out there and showing some leadership here. Why arent we seeing more ceos doing it . Im talking about the airlines. Look, the airlines are sort of ground zero here. Tim is a class act. I know him. You know, hes doing the right thing. We need to see more of that coming from Corporate Executives to, you know, help boost confidence. The president s speech last night was obviously an attempt to boost confidence but the minute he goes off the air, people begin to panic. So the president cant carry this load alone. We need other people to come forward and you know, look, this may be, as churchill said, i doubt this is the beginning of the end, but it is probably the end of the beginning. So you need to get out there as somebody like churchill would and say look, we are in this fight, we are going to survive, we are going to find opportunity in crisis and lets go for it. And lets be positive. Liz i like that. Meantime, lets go for our floor show part two. Guys, i want to let everybody know, we are 13 minutes before the closing bell rings, the acceleration just picked up just a bit, sarge. What do you see . Whats catching your eye right now . Theres a lot going on here. The technical impact, fundamental impact. First we have the 200 Day Moving Average for the s p 500. That was 3046. Now we are 3012. What happens is Portfolio Managers are forced to act by risk managers when key Technical Levels break. It forces an exacerbation of selling into that moment. The fundamental impact, Fund Redemptions both here and abroad. Thats why you are seeing the euro higher and the dollar lower. Some of this money is being repatriated somewhere else and has to be converted back into that currency. So its a double whammy. This will continue into tomorrow, by the way. But tomorrow, you may actually get saved by the pension Fund Rebalancing because you will see them forced to buy equities and sell bonds tomorrow. Liz yeah. You could say that. Phil, what do you think . I think liz you were waving your arms. Yeah. Theres a lot of excitement down here. Look, this day has been absolutely amazing. Its been really an education in fear trade. Early in the day, of course, you could see the market didnt have any confidence. People were panicking. They were selling first, asking questions later. They had good reason to panic. It was kind of interesting, you look at the s p this morning, we went down below the 200 Day Moving Averages and the market tried to hold. We tried to get some confidence. The buying started to come back in. It almost looked like they were going to be able to pull it out of the hole but when we are in this kind of fear trade, you are just one headline away. We had a head line came across there was concern about another virus that took that confidence away. Now we are back down testing that moving average again. From a technical viewpoint, its very critical down here at this area. Im not telling people to stand in and buy because you can see from the fear, you know, we could well go below that. But from a reality standpoint, this market has been incredible. The thing is, traders are loving this market because you are getting some big swings on short things. You can be long in the morning, short in the afternoon, back and forth with that type of volatility. Liz can i jump in . The one company that might really benefit from this type of volatility thats a sure thing would be the chicago mercantile exchange. Can we get a oneyear chart up there . Year over year, this stock is up far outpacing the s p 500, 22 there. Thats a big move considering year over year, the s p is up 11 . Cme is down about 3. 6 today, but ira, terry duffy was just on saying hes seeing massive increases in Trading Volume for both equities and fixed income, gains i believe week over week of 127 . Yeah. But remember, when is the last time we traded Something Like this . In the past, it wasnt all over in every single continent in the world so this is different. We are looking at the fear. We understand that. But at the end of the day, Good Companies will still be Good Companies. The Commodity Markets a little bit of a different world because it is short term. Youre looking at do you get anything being bought right now. Traders are scared. Who wants to go through a weekend with an open position. You cant protect yourself until sunday and by then the market can gap on you one way or the other. Trying to trade a disease, i will leave it to other people. Liz very, very tough. We just hit a session low, hold on. I know for our viewers its really important, we just want to give you the best facts and information. You can keep our traders popped up on the screen, too. Sarge, we just are now down about 1001 points for the industrials, nine minutes, call it, left in trade. Why is this happening . Is it just sell at the end of the session . No. Like ira said, there is some risk off every day. What has to happen here, this is a negative, is the majority of the s p 500 has not redone their numbers yet. They havent even taken down their old numbers. We have heard from mastercard, microsoft, apple, united airlines, but every airline needs to do that. Every cruise line needs to do that. The whole s p 500 has multinational corporations need to take down their guidance. Most of their guidance is not good. When that happens, Analyst Community will jump on and lower target prices. So there is more pain to go. For this quarter, maybe for the first half of the year. Hey, goldman sachs, there will be no earnings for the year, right, this morning . Not that they are usually right because they are not usually right, but they might be. Liz you know, people just saying forget it, im out, tomorrow we have one more day of sessions here for this week and its just gotten too touchy and worrisome . Why not buyers . Im looking at so many names, looking much, much cheaper today. I am, too. Im looking at the board here. We are seeing a lot of the sell size orders come in here into the close. This isnt good. You know, i [ inaudible ] to bottom. They really did have a good chance today. But like i say, every time you get one of these coronavirus headlines, the market loses confidence. So its very tenuous right now. But i also know this from watching this for a long time. When you get these kind of extended selloffs in a short period of time, you cant you have to be on guard for a sharp snapback. I know this is different with this virus because it continues to mutate and the story continues to go on and you dont really know where that is but you also have to be [ inaudible ] because when you go down this far so quickly, if you start to get some positive headlines, there could be a serious snap back here. People at home with their 401 k , if you are not retiring next week, if you got a few years, this is great news because you should be buying this. Liz lets see if our countdown closers are buying. We can flip the cameras at this very moment to people who got chunks of money. Chris cordero is the chief Investment Officer with about 5 billion in assets under management and we want to bring in dave mazza, head of product. We are now down 1,049 for the dow, solidly in correction im not even calling it territory. We are in correction for the dow, the s p and the nasdaq. There are traders and investors who missed the last time this happened a year ago december. They really have kicked themselves. What are you doing on a day like today . Chris . Well, on a day like today we are just sitting tight. I dont think that now is the time to start entering the market and rebalancing portfolios because there is still a lot of uncertainty out there. We dont want to jump on this right now, realizing there could be just there could be more room to roll on this thing. We are just down into correction, its not as dramatic as it could be. Liz yeah. I mean, i get it. Bit feels in the aggregate over the past six sessions that more than 6,000 points of losses are rather significant. Dave, what about you . How are you viewing this selloff . Its a good point you just raised. A significant decline over a 10 decline in this short period of time is nearly unprecedented. Last time we have seen this is 2015. But to your point, if we came into the year at multiples close to 20, now we are hitting about 17 1 2 forward pe on the s p 500, unless you believe this is truly the end of the cycle, markets begin to get much more liz liz i get it. Give me a sense what you are ready to buy when you feel the time is a little bit safer . One of the things were allocate doing, i like real estate. Later end of a market cycle real estate tends to do well when the market is in trouble. I really like reits at this point in time. Were buying vanguard etf reit. Other things i like, stay at home trade, at t is at great value. Everybody will stay at home and watch the outsider, that could really help them out. Liz im looking at at t now. It is down 3. 25 . Arguably you could say that is an opportunity. It is down 6 week to date. I like it. All the stayathome stocks. Whether netflix or telehealth companies. People will stay at home but they still need to talk to doctors. We want to interrupt for a second. We have 3 1 2 minutes before trading end for the very roughandtumble session. Dow is down 1050 points. Blue april prann resumed traded. Deirdre, it was halted. What is the news . It was halted because there is interest from a l. A. Based tech investor who reached out to blue apron according to our sources last week, wants to buy the company. In 2017 the company went public. The market cap for blue apron at that time was 2 billion t has fallen so much since then. Im looking at my notes. Currently worth 32 million. So a big fall from grace. This tech investor saying you know what . If i buy the company i will do prepared foods. Very few people who want to order and then cook at home. Well see if the purchase end up going through. That is why the stock was in fact halted. You can see it now trading higher by 19 . Quickly New York Times i want to mention, may be hit by ad revenue business. This is all related to the coronavirus. You can see the New York Times stock down only half a percent which essentially seems very modest in comparison to the rest what were seeing in the marketplace this, drop unbelievable. Looks like well close here or at the lows. Back to you. Liz dow is down011 points at this mow 1100 points. I will bring up google, dave. Google is down 5 . New york times says we may see problems with advertising that immediately makes me think, biggest name in advertising google. Google interestingly will say it will have a conference. It will not cancel it at the moment. But i find this interesting here. What will you be buying when you see an opportunity to get in . I find it a bit hard to believe nearly every company will not need to revise dine their revenue and earnings targets for the year. That being said. When we have times flight to safety. Look for companies with clean Balance Sheets, high quality of earnings and roy bust profitability that leads me to areas like 3m t has been out of favor, because of mask making and need for their products they might see a boost. Other areas like johnson johnson, pfizer. Healthy, attractive dividend yields Strong Companies that weather the storm if it is couple days or leads to weeks and months. Liz 1023 points to the downside for the dow. By the way alltime record loss for points, 1175. Folks thankfully were not there left. We have only one minute to trade. Let me talk about the nasdaq. It is the largest percentage loser on the marion indices, down 4 1 3 . I dont remember seeing a 400 point on the nasdaq a long time. Were there this minute. Nasdaq just went down 400 points. Volatility is spiking, up 35 . Crude oil dumping out again down 4 . [closing bell rings] it begs the question will we see hedge funds start to have to liquidate . If they were long certain positions that are going south . That will do it for the Dow Jones Industrials. Largest worst ever point loss in history. Connell there is the closing bell. Not a minute too soon. Official correction from the stock market, down over 12 from the recent high. The nation confirmed first coronavirus case with unknown origin. We will talk about it. There is a lot more with the market acting as it is. The dow is still settling. Down almost 4 . That is almost 1200 points. 1198. As liz said, worst ever pointwise. Third day this week weve been down 1000 or more. There you go. Imne