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tv   The Exchange  CNBC  April 1, 2020 1:00pm-2:01pm EDT

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backlog is huge. >> your third what >> what? >> peloton. >> peloton. >> peloton >> you're breaking up a little bit. wow. three of them. >> my wife would have three -- >> nice to be you. >> thank you, everybody. we'll talk to you soon jim, thank you kelly picks it up now. ♪ scott, thanks. hi, everybody. new month, new quarter and same markets today. check on all three major averages which are down for the third day in four now and pretty much near session lows here. the president saying the u.s. should prepare for a quote very, very two weeks from the coronavirus. italy's death count improved today but officials are saying that the u.s. should prepare for 100,000 to 240,000 deaths and continuing to weigh on sentiment here another decline in oil weighing on the markets with crude off the worst quarter ever and now the bankruptcies
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are starting check on the action today. crude down another 1%, just over $20. just in the past hour, new york governor andrew cuomo as you just heard said 20% of those on a ventilator live to come off it listen. >> what we're looking at now is the apex, top of the curve, roughly at the end of april. which means another month of this >> sure enough stocks took a move lower on the comments let's get more from bob pisani with a look at the different factors here as we kick off the new quarter. >> yeah. and very sober assessment from governor cuomo and he did impact the market let's show you the s&p 500, kelly. governor cuomo came on about 12:15 eastern time 2490 on the s&p and drifted lower there. maybe 20, 25 points on the s&p
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drifting to the downside and there you see a dra day chart of that as a result the market resumed what i call the defensive crouch it does when the news is bad walmart, kroger, chlorox, campbell's soup among the few groups on the upside today reits and banks hit hard fifth third down 7%, 8%, 9%. energy weak. we had a bankruptcy filing from whiting. retailers note bring to the downside if you take a look. macy's thrown out of the s&p 500 into the small cap, not the mid cap and names in that very small cap group of kohl's, all around $2 billion in market capitalization more on that in the next hour. back to you. >> big declines. thank you. meantime, the 10-year yield dropping back. maybe that's why we're seeing such poor action across the financials let's get to rick santelli with more on that
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rick >> yes, kelly. actually we are moving a little bit above 60 basically at 7-year lows on their closing yields but as you move down the curve, history, look at a 2-day of 3-year notes, the fact it's down is historic. if you look at a week to date of 5-year notes you can see same scenario here we hover at all-time yields as long as we continue to be down on the session and we are remember, 32 was the low today that's the all-time intraday low and moved above that by 3 or 4 basis points as you see. seven years, same scenario 7-year all-time closing yields because it is down on the day and yesterday it was all-time low. as we move towards the 10s you can see week to date chart come up with a bit from that under 60 basis points that kelly referred
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to down to 57 54 is all-time low yield close finally let's look at the dollar index charts quickly two-book of the dollar index shows us that even though we have come down hovering above 100 is not necessarily low by history standards. open it up and you can see what i'm talking about. back do you. >> rick, thank you very much it's a new month and new quarter but this is another selloff for the dow. joining me with more is barry james and robert waldner great to have you both here. barry, i mean, if you have a long enough time horizon you can kind of wait anything out but how would you tactically position portfolios for what could be an extended period of weakness >> yeah. that's a great question, kelly we are in a shock and awe. we had the shock if i can stay
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with the wartime an armando galarraga -- an armando galarraga -- and the three things like i was used to be a fighter pilot and if you get in an emergency, number one thing is keep flying the plane you need to fly the plane of your portfolio make sure your allocation is right and weldy verse if ied and managing the portfolio and the names that you would have in the portfolio. i would take two steps first step is things that are going to hold up reasonably well within the current environment and that's, you know, things like health care, some technology, some utilities and those sorts and then things that will also work on the other side of it so that you can stay invested throughout this period of time. there's great opportunities when the markets are down like this to do some buying and way up to do some selling but stay with the plane. keep flying it >> from anyone else it would be
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a trite analogy but as a fighter pilot you use the terms, barry robert, let me ask similarly, i mean, it's no more safe in fixed income right now because you have extremely high valuations or a higher default risk than normal so what is your advice? >> thank you the way we look at this is the fundamental problem here is that economic problem which is the virus and the sudden stop in the u.s. economy and unprecedented but on top of that we need to be careful about the financial system and the financial credit facilitation across the economy because if we don't want a financial crisis on top of the economic crisis we need to make sure that the policymakers putting the credit through the system i'm sure most viewers are aware of the issuance in the credit markets. march $259 billion of investment grade issuance and outflows of
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fixed income in march. all that, those are -- all that is offset against, you know, the fact that the fed is doing qe and what we need to do, what policymakers need to do is facilitate the credit in the economy to make sure that we can go through the bottoming process. >> explain, robert, more about that you mean by that. using conventional tools or the new toolbox? >> well, we're looking forward to the investment grade purchasing program really getting going and we think they need to look in two different areas. one they have very highly constrained the financial system and the banking system has a large amount of regulatory structure around it and keeps the banking system from flexing its balance sheet in response to credit demands like we are getting now and one approach would be to ease up on the regulatory burdens so the banks move to provide some credit to
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the system another approach would be for the fed or the treasury to be much more aggressive in buying other assets which could also be done you've seen or we have seen that they said they'll buy investment grade bonds. that's a start and as a result the market seen more support and areas of the mortgage market and the structure market that's important to the economy where we haven't gotten support from the fed so far. >> you are saying they need to either ease up regulations so the banks do more lending or have the fed come in with that credit support barry, if you could just reflect far second there are so many similarities unfortunately between now and what happened in '08, '09 but that time it felt like imbalances in the economy that needed to be addressed and this time around i'm not so sure. does it matter i guess is what i'm saying in terms of what brought us here and in how -- as it relates to how we get out of
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this or how we should be investing? >> it is i think quite a bit different than '08 which was a financial crisis that just kind of consumed itself in the end. the federal reserve has learned from that. they have almost unlimited qe out there and they're supporting the credit markets an the like so i think, you know, we are not going to have that problem and the banks are not going to face the fact that they don't have any reserves so that's a different piece than what we have this is a real recession that could be incredibly deep it might not be long but incredibly deep and the one truth i have always found is things go further than you think they should and that will happen both to the economy, to the stock market, to the bond market and, of course, to, you know, the entire united states so some similarities we have gotten a lot of the risk out of the market that you would normally see what we would have this whole outside factor that
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is totally different than what we saw in '08. >> do both of you think we need although we have seen programs to equal 40% of gdp do we need to see more and do we worry about the sort of side effects of that on the debt and deficit or not barry, quick answer. >> well, i think -- we are talking about extending credit rather than outright fiscal payments we have had the fiscal package it's pretty substantial and need to see how that washes through the economy and were very concerned to make sure that the credit channel stay open and facilitate it to finance the sudden stop in the economy >> all right barry? >> i think we are starting to see it spread out. local church just got $200,000 on the small business side so there is money actually going out and hopefully will be a support for right now and see how it works first. >> fair enough
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thank you both today really appreciate it barry james, robert waldner. well, the pain of the oil price collapse is felt by a bunch of companies two formerly big players in the market are now filing for bankruptcy let's bring in brian sullivan on the phone for more on the significance of these moves today. >> yeah. kelly, i mean, listen. i wish we could say it was unexpected it is not. this is whiting and hornbeck not major players but not small either market caps are obviously minuscule but they used to not be one is an onshore company dealing in north dakota and two bankruptcies, hornbeck said it is going to file for bankruptcy. whiting did. they have filed. hornbeck will. these are two of the first and there are likely many more to come and spending the day talking to bankers and lawyers and people in the oil and gas markets and the first of many unfortunately. >> we are showing the five-year chart of whiting trading at $150
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a share, brian you could go back to trading at almost $400 a share. there we go. back in 2014 this is a shocking, shocking decline. might not shock us today but looking at what's taken place over five years it's almost unfathomable. >> breaks my heart, too. i was up to willis, north dakota, many times i remember the first time up there $499 for a hampton inn at night because so many people going there, people were buying a drink for $25. dropping 100 saying keep the change things are very different now, tough. there's good families that are deeply impacted by this. i want to be clear whiting will continue to operate and continue to pump not going away but the reality is pay is coming down. you have seen okccidental cuttin pay. >> they'll keep pumping, is that the worst thing? is there something to say for
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getting together or decide how they can maybe constrain their supply >> well, they're trying. we can't have an opec. right? that's illegal in the united states but be clear. pioneer and partial energy,the have petitioned texas to basically import quotas. tell producers what they're able to produce will the state do that i don't know but they're asking for it which is interesting. >> here's another question, brian. i don't want to be too melo dramatic about the swings because this industry experienced this time and again and almost inherit in this business is there something i guess about this time that's better because of the recent experience we have been through with the dramatic swings in crude? quicker process? something that's constructive or just going to be another very difficult stretch for a while? >> i don't know. i mean, you know, i talked to a guy a couple months ago saying
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i've been through eight busts and i only know there will be a ninth. when prices rise, people take out loans and pump fuel again and oil. the industry in the united states is likely going to have to get smaller not once, two, or maybe have to get smaller to stabilize prices as we have said. it is not inconceivable the price of oil into the high single digits. coming up i'll do in a few minutes there's a report and some of the stuff and the headlines are pretty damning for the industry to be honest, kelly. >> meantime let's quickly mention what's going on beyond the borders because april 1 is when saudi i believe was -- they were going to start ramping up production is that still the case and looking at iran and what's happening there? >> this is really interesting. so yeah. today is actually the day, the price war is starting today.
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april 1st when the saudis said they'll ramp up. everybody's focused on the saudis and the russians in the united states. that's interesting data of tanker truckers tracking the movement of ships around the world, professional service, do a great job. showing huge amounts of iranian exports to syria syria imports 70 to 100 million barrels a day. not much we have a picture of the ships a couple of weeks ago with satellite data and what they do is follow the ships around the world. the ships have their trance responders turned off but they have to have them on when they go through the suez canal. starts to pink satellites again and then goes dark again and tanker tracker showing syria is buying all this iranian oil. kelly, low prices will bring in buyers until the storage is full. >> yeah. we are quickly getting to that
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point but not there just yet. >> for another day. >> for another hour and we'll see you in a bit with more appreciate it. >> thank you. let's turn to casino stocks down again today and are down more than 40% so far this year as the coronavirus joutd breoutk continues to take a toll on this industry contessa brewer has more with a special guest. >> hi there, kelly macau revenues down over 80% but an improvement over february when the government ordered casinos to shut down the gaming operations for 15 days so casino companies with properties there, las vegas sands, wynn resorts, mgm resorts seen the operation shutdown in las vegas and nationally along with all the other casinos pretty much every casino in the nation shut down at this point. the job cuts are steep the loss of revenue is devastating. and now, of course, president
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trump has issued a guideline for social distancing that lasts until the end of april that may keep casinos closed amid all of this coronavirus crisis, there's been a changing of the guard at mgm resorts. bill hornbuckle who was the coo has taken the reins as acting ceo and joins me for an exclusive first interview. bill, thank you so much for making time for us today. >> good morning, contessa. thank you. >> tell me why you're taking over now when there is so much crisis swirling around you. >> well, look. jim had announced he was retiring and going to move on to doing something different. when this began to really hit and became a real challenge, not only for us in macau and here in nevada and the other jurisdictions we are in, i had been leading the charge if you will as the former coo of the
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company in pushing forward how we would get our head around to be a safe environment that customers and employees want to work at and ultimately push this through what became now a closure of all of our facilities with the exception of macau. challenging times but i was in the midst of it to begin with and thought it was an appropriate moment to take it over. >> can you talk to me a little bit about the furloughs, the layoffs? how many people have you had to lay off? and what do your day-to-day expenses look like even though revenues have plummeted? >> sure. we have 82,000 employees worldwide. as you know, macau is back open again. we have 12,000 or 13,000 between the 2 properties there but of the 69,000 remaining we have furloughed about 60,000 employees. when we came to the decision and it was a quick decision led by the board to ultimately close on the 16th, we quickly closed our
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casinos the following monday evening, closed the properties within 48 hours. and by the following friday and i am proud of the way the troops handled this, it speaks to the 2020 programming, we had laid off and furloughed over 60,000 employees. concern for them, very we hopefully set up programs and benefits to protect them into the immediate future and i think the long-term view, we have taken a long-term view on all of this is good for the company we had the good fortune at the -- if you call it fortune at this point but at the end of the year we sold off $8 billion worth of our assets. we retired about $4 billion in debt and have about 4 billion right now of liquidity to push us through this and think long term. >> and you will still have represent payments are you still feeling good about this, what they say is an
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operating company and releasing the property you used to own and adding to the balance sneet. >> absolutely. we are protected well into next year in macau and here nevada and other jurisdictions we are in as good of a shape as we can be and better than six months ago had this happened to us and so we feel secure in knowing that we have the opportunity to play safe, the long game and ultimately protect all of these jobs not only here but throughout the other states. >> what are you learning from reopening in macau about what the ramp might look like and for business to resume >> it is a little different there. it is an island. what we learned about clouds your here is that they were decisive, quick. we closed the properties literally within 48 hours, as well and it went a long time to protect the safety of that environment, the citizens and the employees there.
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same thing in reverse. we were able to ramp up. property has good days and leaking cash ultimately. yesterday by way of example we made an operating profit and one of a company over last several weeks and until the ibs system, the visa system opens up the borders that market will suffer but we do believe through this summer we'll see it regroup, regain some steam and ultimately return to where we were a year ago when this all -- six months ago when it all first started. >> and how will you know it's time to reopen in the united states >> when it's safe. the governor here is just about to announce april 30th will be pushout and not going to open here anywhere between now and then really, though, when it's safe we were quick to do this in terms of shutdown. and we will take the same lens if you will as we look at opening. we want to make sure for our employees first and foremost and
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ultimately for the customers it is a place people come to and enjoy and relax. corporate america checked out for a good while the good piece of business in southern nevada is corporate and group business that's pushed itself into the third and most notably the fourth quarter and the major events we host but, you know, we'll take it one week and one month at a time we won't want to be the first to open we'll open intel jeligently and hopefully with forethought. >> bill, this is an amazing time to take over the reins of a company like mgm and it really is an opportunity for you to show leadership. we wish you the best of luck going forward and appreciate you've given us the first interview. >> i appreciate it, contessa thank you. >> our thanks to you, contessa. coming up, the u.s. now has more than a million tests for coronavirus. but hospitals and states say it's not nearly enough we're going to look at where
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testing stands and one bio tech investor's bold idea to fix this problem. millions of small businesses expected to tap the coronavirus rescue loan program when it launches on friday everything you need to know about that is straight ahead. a reminder to watch our listen to us live on the go on the cnbc app we're back in two. doing everything possible to keep you connected. through the resilience of our network and people... we can keep learning, keep sharing, keep watching, and most of all, keep together. it's the job we've always done... it is the job we will always do. you may be learning about, medicare and supplemental insurance. medicare is great, but it doesn't cover everything ...only about 80% of your part b medicare costs. a medicare supplement insurance plan may help cover some of the rest.
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welcome back stocks about 100 points off the lows but a grim day across the board with the dow down 800. nearly 4% for all the major averages today russell 2000 small caps looking worse than that, too the president warning of a very, very painful two weeks ahead as coronavirus cases and death numbers continue to climb. let's get out to rahel solomon with the latest for us >> let's start with new york the governor saying that the state will now see the worst of the pandemic not until the end
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of april cuomo closing new york city playgrounds to try to improve social distancing and new yorkers to follow the restrictions so that the worst-case scenarios don't come to pass. >> our course for planning purposes is a moderate model because in truth the higher models we don't even have a chance at meeting that capacity anyway you say over 110,000 beds. there is no possible way we could get there. >> maryland is expanding the coronavirus testing with three drive-through sites at motor vehicle registration centers for people who have approval by the doctors and symptomic. florida's governor issuing a stay at home order for floridians of course, as always, for more
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coverage head to the website kelly, that florida news pretty big because the state getting quite a bit of heat not issuing that order sooner. >> thank you very much we watched the markets dow down 840 points. can't hurt at this point better late than never questions about the voracity, the race to improve testing, meg tirrell is here with a guest. >> kelly, more than a million americans have now been tested for the coronavirus. we hit that milestone this week. and it's a majority done by commercial labs, more than 800,000 tests performed by companies of qwest and lab corp. and see when testing just started to ramp up timely surpassing that million test mark but there are still bottlenecks and not everybody that wants a test can get one and the cdc is guiding to prioritizing to people in the
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hospital and health care workers and first responders with symptoms there's shortages of supplies and protective equipment to protect the people taking the samples. a backlog from the beginning of this that the labs just couldn't keep up with the demand. a logistics slowdown with fewer flights carrying the samples to the labs to be processed and debbie birx saying people are sticking with the tests they started with and causing backlogs, too. you are seeing a variability of testing across the country this great chart made by our nick wells shows new york, washington, louisiana testing the most on a per capita basis but states like texas, south carolina and california way behind and in fact california has a major bottleneck reporting 57,000 pending tests so to join us to discuss all of these issues and how they could potentially be improved is dr.
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mike paleni with section 32 of venture capital firm, a doctor thank you for being here what explains the problems with our testing capacity you have been on this for weeks trying to figure this out. what have you learned? >> i want to thank you for inviting me on to speak. i wish it was better circumstances but i can't imagine a more important topic to discuss right now i think one of the fundamental changes to face as a nation is that we have absolutely undervalued diagnostics. not just in the past three months but certainly over the course of the past couple of years so diagnostic testing is the foundation of everything if we are going to move forward so in terms of saving the health care system, in terms of economic recovery, in terms of our emotional recovery, and it's just an area we haven't placed much value on. i have seen some positive signs. right? we see the labs, the national
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labs are starting to scale up. the manufacturers both large and small are pushing forward but we have to continue to press hard we need a comprehensive national strategy here both for covid but also for diagnostic testing itself. >> now you have an idea, proposal, for how to be better using the data from the tests on a national level tell us about that plan and why we won't have an ability to use this data already to guide our response. >> yeah. there's statute that makes it difficult but a thing that this administration has done an outstanding job of is rewriting our rule book so take advantage of it. let's assume that the rules to this point in time don't matter anymore. let's start from scratch we can do that we can do that to fix diagnostic testing for the immediate term with getting the tests, making the tests available, for the midterm which is where we need
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surveillance testing by the fall and then for the long term which is an overhaul of the diagnostic system to make sure it never happens again. but what takes a comprehensive strategy and as part of that strategy every single test that is run needs to be uploaded into a national database and so then you say how does one do that we know we can build a national database and how do we incentivize provider who is as running the tests to do so this is straightforward. let's pull the government payers and the private payers together. let's agree to payment for these tests, whether they're performed in the home or the national labs or somewhere in between. but before payment is made, let's make sure that each test result is uploaded to a national database because that national database and if -- that national database, if made available to
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academic government and industry researchers can have dramatic affects. it is going to help us refine and improve the testing going forward. help with national surveillance which is going to be critical to help us get out of the economic downturn and also with -- potentially with the recurrence of covid in the fall an make informed decisions based on data, not -- we have to stop guessing. >> that said, doctor, it is kelly here in the studio how many tests roughly speaking do you think this country needs to conduct to get our arms around coronavirus so ballpark how many tests how many times do you think people might have to take this test including to figure out if they do have it and once they're clear of it? >> it is a great question so i think we have seen numbers over the course of the past couple of days where we might need a million tests per week i woulden courage everyone to
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think about it differently what we need is an ability to test up to 330 million americans. let's do the math. let's do the math very quickly even if each test cost $100, we have just $2 trillion on a package to help the economy. i think we can all agree we are going to be doing that multiple times over in the coming months and quarters if every single individual in this country had access to one, two or three tests that's $100 billion that we might spend over the course of this year to right the ship and that ship is the united states. >> absolutely. >> we need tests and there are certainly strong economic incentives for us to get this right. >> you are right we could have the money for it can we get the tests how bad is the bottleneck? studies suggest the tests are themselves coming from china can we ramp up testing here in this country quickly or are we going to continue to have a constraint >> well, i'm not convinced that the constraint is in the tests
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themselves most convinced that the constraint is in the system, the logistics around the system. but let's be very clear. it is going to take continued pressing from the diagnostic manufacturers including abbott and including thermofischer. we have to figure out how to get the national labs to scale up the offerings so we no longer have bottlenecks and qwest and lab corp. pushing and takes local hospitals. i'm told there's over 80 hospitals, perhaps i would guess higher than that, offering testing at the local level and going to take home tests simple tests that can be run in the home when we put all four of these things together we can certainly have the capacity to run the appropriate number of test in the near future but it takes a concerted effort. >> fascinating. >> doctor, thank you so much for being with us. i agree, kelly
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it is fascinating. >> thank you. >> meg, terrific stuff your reporting, the guests and everything on the story, we greatly appreciate it. it's a new quarter, a new month and time to pay the rent for millions of americans but for many of them they're not going to have the cash this time how are the landlords handling the reality? robert frank will have the details. the servicing companies are flooded with help me out calls how's that industry going to deal with the deluge our special breaking news coverage will be right back. life isn't a straight line. and sometimes, you can find yourself heading in a new direction. but when you're with fidelity, a partner who makes sure every step is clear, there's nothing to stop you from moving forward. a partner who makes sure every step is clear, ever something's gone mogotten into the office.m,
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i hear you. feels like there's no barriers between departments now. do you think everyone appreciates it? i do. huh... forgot my glasses. serivcenow. the smarter way to workflow. and sometimes, you can find yourself heading in a new direction. but when you're with fidelity, a partner who makes sure every step is clear, there's nothing to stop you from moving forward.
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welcome back we are just slightly off the lows of the session. the dow down 4%. the s&p 4.2% nasdaq less than that and earlier i mentioned the russell 2000 down 6.7% or so all 11 sectors in the s&p lower. real estate, utilities and financials the worst performers. there is as i said the real estate sector down 8% and the country trying to deal with the crisis and wreaking havoc on the market diana olick is looking at the situation. robert frank with an angle die yeah no, the kind of volume we are seeing for the requests. >> reporter: kelly, the calls are pouring in ceo of caliber home loans to service three quarters of a
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million government-backed loans with 8,000 calls on sunday alone. the government program allows borrowers to miss up to a year worth of mortgage payments and tacked on to the end of the loan i spoke with a regulator and he had a stunning prediction of the number of borrowers who could need help. >> april looks like it will be approximately 300,000 loans for fannie and freddie and trance lite in late into 7,000 loans and we think it will be closer to a million and probably by may a little more than 2 million. >> reporter: that's just two months, though the numbers likely much higher the longer it takes for the economy to reopen and people to get the jobs back. there's criticism of the program because it doesn't require borrowers to prove hardship. he admitted they're working on the honor system kelly, back the you. >> i just appreciate you
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standing in front of that tree that is a beauty is that a cherry tree? >> reporter: cherry blossom? weeping cherry blossom for those of you who wonder. >> we needed that break from the grim news this hour. diana, thank you very much let's turn to robert frank where, robert, we are facing a pressing situation in new york where according to reports 40% of people might not be able to make their rent. >> reporter: that's right, kelly. two thirds of new yorkers are renters, over 5 million new yorkers and if you extrapolate the math, that's $20 billion in rental payments due today. many of those up to perhaps 40% will not be paid as diana mentioned, homeowners and landlords received some forebearance and representers are legally required to pay the rent in the streets protesters in new york and california calling for a rent strike. there's a protest, digital prozest starting 2:00 today.
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and many are hoping for this bill making the way through albany to allow new york to cancel the rent for three months now, the bill would also provide some relief for landlords through mortgage freezes and the domino effects are huge. not just for the banks and the mortgage holders but also the city of new york which gets a third of the revenue of property taxes, funded in large part by the rents and the building, staff, vendors, the vast economy built around new york real estate that relies on the $20 billion a month in rent. governor cuomo has answered this by calling for a moratorium on evictions but many housing advocates and lawmakers say that's just going to lead to a wave of evictions in july when this is all over so therefore, you have to have some kind of legal protection for people not to pay their rent at least for three months. kelly? >> it is going to be a mess. like you said, hopefully help on the way and a digital protest is another sign of the time robert, thank you so much.
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up next, bullish calls on the phone, the bank and the coronavirus comfort food, pizza. well'll tell you about those. now that congress passed the relief act, it is time for small businesses to figure out how it works. after the break, kate rogers will walk us through the process. we'll be right back.
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welcome back let's get to some of the big calls of the day goldman sachs added verizon to the conviction buy list, one barry james liked at the top of the hour verizon's around 53 today. goldman sachs saying they think the stock is the most attractive combination of total return in risk and three reasons why
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well covered and a strong balance sheet. verizon down just about 1% today. meanwhile kbw upgrading jpmorgan to outperform while lowering the price target saying jpmorgan well positioned to withstand the recession and come out better because of the balance sheet and say investors because it's a high quality franchise. down 6% today in a tough session for financials. finally, mkm upgrading papa john's to a buy with a $64 price target saying that segment is better positioned than other restaurants with digital and the delivery infrastructure. there are reasons for the upgrade is clear evidence of same store sales momentum. and management that can further support the franchisees and pulled guidance yesterday. still up nearly 5% today on the back of that bullish call. residents of pennsylvania have now been placed under a
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statewide stay at home order this right after florida issued theirs finally and this just before the new $350 billion small biz coronavirus loan program launches the launch is tomorrow and millions are expected to apply treasury secretary nmnuchin was on cnbc earlier today with this message to small businesses. >> i very much want people to sign up for this it's a great way to hire people back or make sure you get paid if you have people at work and this will cover about 50% of the payroll of the private enterprises. >> all right so how does the program work let's bring in kate rogers kate >> hey, kelly. while those loans available beginning friday and senior administration officials say that the capital may be available to small businesses as early as same day so here's how it will work the small business administration's currently working on a portal to find lendors in the area entering the zip code that's if they don't have a banking relationship in
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existence and then apply online through that bank. right now some 1,800 lenders part of the program and any fdic insured institution is eligible. loans with a 0.5% interest rate, payments deferred up to six months and loan forgiveness is available if they're retaining or rehiring employees and used for payroll and rent or utilities. the loans are 100% backed by the sba and will be administered by the banks and available on a first come first served basis which is really important. demand also is going to be really high and a lot of questions do remain about how this demand is met another important point, one that treasury secretary mnuchin made again today on our air, if it's used he plans to head back to congress to ask for more funding from main street not sure how much to ask for but sure it will go quickly and certainly monitoring it in
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realtime on friday, kelly. >> a lot of questions about how well they can get this, you know, web side and the digital infrastructure all up aen running and in terms of the people who can apply, kate, what are the cutoffs? i think you mentioned this before that it does apply to independent contractors. how big a business can you be until they say, hey, sorry, these aren't for you >> so the loans that will be available beginning friday are for small businesses with 500 employees or fewer independent contractors and sole proprietors apply on april 10th and we have heard some concern from some of the small business advocacy groups on how much capital is left once they apply. how big of a run to the banks will we see on friday? as we heard from senior officials yesterday they really do expect volume to be very high a lot of businesses are hurting and surely applying for the loans. what will be left? all remains to be seen one other major point here, the consumer banker's association
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says typically a $20 billion annual program they're looking to ramp it up to nearly $350 billion. in just a few weeks, kelly this is a massive undertaking in many, many ways. >> great point about whether there's enough even next week. interesting. and then have to maybe go back to congress for that all right. sort of narratives to watch. last thing, will they tell us when the money -- will we get a daily or weekly update in terms of how much is dispersed >> i hope so we are in frequent contact with the sba and assuming they want to let people know how quickly this cash is getting into the hands of small businesses but the banks are going to have the delegated authority to actually make the loans the sba makes sure that the business hasn't already applied with the tax i.d. number but in the hands of the banks to get it to you as quickly as possible. >> i hope they get the data to us thanks so much. coming up, a new month, a new quarter but still the same volatile markets looking at dividend darlings for
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income as it continues here's a look at the names outperforming today. dollar general, too. we'll be right back. ♪ ♪ ♪
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welcome back major pressure on the cruise lines. carnival is down 18% and it also increased the size of its bond offering with a 13% coupon to get those investors. seema mody has more for us seema? >> kelly, that's right both credit rating agencies moody's and s&p downgrading carnival's credit rating today to one notch above junk level status this as the largest cruise line
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operator, carnival is going to the bond market with this $3 to $4 billion bond market offering. a coupon that i'm being told is 12 to 13%, which trades right in line with some of the other high-yield junk credit that is currently on the market. it comes as the cruise industry has suspended sailings until mid-may, in some cases, until the end of the year, depending on what line at the same time, we're watching these two holland american cruise ships, kelly, headed towards florida, unclear whether they'll get entry or access to the ports in florida yesterday, president trump referencing those two ships, that he will be having a conversation with the governor of florida to get those ships access to those ports, so those passengers can disembark certainly a lot of pressure when you look at shares of carnival, now down as much as 18%, trading at the lows of the day, and a year-to-date chart will show you it's down 80%. >> yep, under $11 a share. seema, thank you seema mody with the latest as the hunt for yield continues, you can get 13% from carnival,
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investors are looking at where they can get the best and safest returns on their money here with some ideas on that is dan jenter i imagine you're not participating in the carnival bond offering. >> we're not participating in the carnival bond offering one of the things that's going to happen with carnival is since it's not a u.s. entity, with the new package and the care package, primary companies that are domiciled out here all of our ships are offshore, they're really not going to get any help, we're going to weather this on their own. ones that are going to survive on their own, frankly. >> what are some examples of those. >> i think you have to go to some three areas that are really going to lead us out of this it's going to be tech, it's going to be health care, and financials we've all seen that we've underinvested in infrastructure. we're not just prepared as we try to go through this new abnormal, if you will, if you have 100% of our workforce working from home. we're going to have to expand,
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companies like broadcom will certainly be a major part of that 2.3% in dividends while you wait those dividends are only taxed at 20% cisco is going to be the major king of networking and we're getting 3.5% while we wait on cisco. corning will be providing more fiber optics and more infrastructure the same as you go on the health care side. the health care, which has been our redheaded stepchild for many, many years, still may have red hair, but it's going to come through this with a white hat on and companies ligilead are going to lead the way, amgen, abbvie has a 6.1% dividend. these are going to be, certainly, we've reinvigorated that industry and seen the benefit that they have to mankind. >> you've mentioned tech and health care, which don't take too much persuading, but what about the banks especially today when the financials are trading so poorly again? >> i think the financials clearly are really getting hit one of the things that happened overnight is you're seeing a lot of news that's coming out about the european banks that are cutting their dividend
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and we're worried if that con teenagen goes into our own banks. but we're dealing with a totally different situation. we have a $2 trillion bailout that can be rapidly expanded our banks are getting a lot of help the fed has just totally opened the spigot to do whatever it needs to do, even more than we saw in 2008. and i think one of the things that frankly was missing about the banks, you're not only getting these extraordinarily high yields, you know, like you're seeing with jpmorgan, with citi, 4.5%, even a super regional like truist, but you're -- they're going to actually be very active during this time period they're going to provide the financing and as your prior segment just said, they're going to administer these sba loans. there are going to be millions of applications and the only way to do it is through a local network of banks that already have relationships they're going to make money here >> they want to be part of the solution, not part of the problem. you think that wells fargo 7.5% dividend is safe, real quickly, dan? >> i do. i think they'll backstop it. i think there are a lot of
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places they can go what we have to realize is the bank industry has been stress tested and overstress tested and they're on solid ground. >> dan jenter, great idea, sir thank you so much. we appreciate it when our breaking news coverage returns, airline stocks getting hit hard today as the new numbers show the skies are virtually emptied. plus, checking the market. with over two hours left in the first trading day of the second quarter, about a hundred off the lows stil t rse 2l,heusll000 is down 6%, having a tough day we'll be right back. now, doing everything possible to keep you connected. through the resilience of our network and people... we can keep learning, keep sharing, keep watching, and most of all, keep together. it's the job we've always done... it is the job we will always do.
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good afternoon, everyone welcome back to our breaking
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news coverage of the coronavirus pandemic and the big market sell-off that we are experiencing at this hour. welcome, everyone, again, i'm tyler mathisen the dow near the lows of the day, down about 800 points right now, to kick off this second quarter. this, of course, after the dow and the s&p 500 both had their worst first quarter ever the worst first ever, as fears about the impact of the virus spread gloom and doom about the market and the economy we begin with breaking news. the boston fed president, eric rosengren speaking right now, and steve liesman has those details. hi, steve. >> good afternoon, tyler eric rosengren, the boss and fed president speaking in boston over some form of teleconference says he expects the rate of unemployment to rise dramatically he also says that central banks can and most do a lot in crisis. for the record, rosengren was very early in saying the federal reserve may have to go out and do things that it neve


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