Dow Plunges For Second Day
QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. We're going to hear from the chief executive of the world's largest company, the Aramco. Saudi Aramco CEO tells us how the virus is hurting the oil industry and therefore, his business. And the Democrats closing ranks take on Bernie Sanders at a pivotal South Carolina debate, that's tonight. Before any of that, this is CNN and on this network, the facts always come first. The coronavirus has claimed another four lives in Northern Italy. It brings the death toll there to 11. Italy is now dealing with more than 300 cases of infection. The most confirmed cases outside of Asia. Iran's Deputy Health Minister has now tested positive for coronavirus one day after appearing on television to warn Iranians about the outbreak. He appeared ill wiping his brow several times. He was standing next to a government spokesman. Iran is facing the largest coronavirus outbreak in the Middle East. President Trump is heading home after wrapping up a two-day visit to India. There was a State Banquet at the end. He says his trip was a tremendous learning experience. The President and the Indian Prime Minister announced agreements on defense and security, but not on the contentious issue of trade. The former Egyptian President Hosni Mubarak has died at the age of 91. He'd been in a Cairo hospital since having surgery last month. Mubarak's 30-year of rule ended during the 2011 Arab Spring protests. He was convicted and later acquitted of conspiring to kill protesters. As from now and Democrats who hoped to be the ones to take on President Trump in November, will again be on the debate stage, this time in South Carolina on Saturday. This the presidential primary in the state. Seven candidates have qualified for the face-off, the frontrunner Bernie Sanders is likely to face attacks from his rivals. The standing on Wall Street has accelerated with 30 minutes left in the trading day. We are off the lows of the day, but you can see the Dow is of 807 odd points. The NASDAQ is down. They're all off roughly two to three percent, three percent for the Dow. Paul is with me. And Paul, on top of yesterday's 1,000-point or four, 3-1/2 percent, I mean, I can see it's obviously serious. And but what is the market afraid of?</s>PAUL R. LA MONICA, CNN BUSINESS REPORTER: I think the market is afraid of the unknown, which is how much worse the coronavirus outbreak will get. And I think everyone was spooked by the news over the weekend, about the cases in Italy and South Korea and Iran. I think there had been this sense that it was mainly a China story and that things were improving there. Now, that doesn't seem to be the case anymore. And, you know, I spoke with one fund manager earlier today and he said the big problem right now is that everyone wants for the Fed to come in and save the day or other central bankers.</s>QUEST: And do what?</s>LA MONICA: That's his point. He says, when you have financial crises, the Fed can do things to inject liquidity in the market. The Fed can't solve a health crisis with lower interest rates. So, that's the big problem right now.</s>QUEST: The Fear & Greed Index, the CNN Fear & Greed Index is virtually verging on extreme fear. How's that -- how's that measured?</s>LA MONICA: Yes, extreme fear is where this index is. Now, this index looks at seven components of market sentiment. The VIX is one, it looks at demand for stocks versus bonds and looks at junk bonds, looks at a lot of variety, variety of factors to get the true market sentiment. And right now, obviously, it has plummeted because there are just so many worries about what the economic -- not to mention the human toll -- impact will be as a result of the coronavirus.</s>QUEST: Bonds obviously a gain. We've seen a rise in the price of bonds and the corresponding fall in the yield to almost record levels.</s>LA MONICA: Yes, record lows now on the 30-year and the 10-year so I mean to --</s>QUEST: So, even though --</s>LA MONICA: I believe this is a great time to refinance, if you haven't done so already. But obviously, you know --</s>QUEST: But even though -- even though than we saw --</s>LA MONICA: Lower than we saw in 2008, and lower than we saw in 2016, which is the last time that the 10-year was at this level.</s>QUEST: It was a couple years ago -- last year, we also saw the bond during the '17, '18, when we saw the markets -- the equity markets tumble. And so, what do you do in this scenario? Because if you're holding bonds, you want to keep holding them. And is this a moment to look at whether to go into equities in the fullness of time?</s>LA MONICA: Yes, I think that investors who don't already have significant exposure to stocks probably could bargain hunt right now and try and find some values because it is the proverbial case of the baby being thrown out with the bathwater. Everything is getting hit. There are very few exceptions. You know, Clorox is a stock that is held up well as everyone expects her, you know, run on their wipes. But I think that right now, just about every stock, if you liked it a week and a half ago with the market at record highs, you shouldn't fear it like it even more now that there's 10, 15 percent discounts on them.</s>QUEST: Provided you've got the stomach to see this out.</s>LA MONICA: Of course.</s>QUEST: Good to see you, sir. Thank you.</s>LA MONICA: Thank you.</s>QUEST: As the virus spreads, it threatens to dump an economic activity. And if economic activity slows, there'll be less demand for oil. That's the nuts and bolts if you like. The mechanical way in which the coronavirus is affecting the price of oil. Crude sound for a second straight day. Futures are below $50.00 a barrel. OPEC is going to meet to form a consensus plan if they can. The CEO of Aramco has been speaking to John Defterios in Riyadh.</s>JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Richard, a terminal 48 hours in the financial markets, especially for oil with concerns about the coronavirus hitting demand, especially in Asia. Saudi Arabia's Minister of Energy told me this is no time to be complacent, and they have an emergency meeting scheduled next week in Vienna. But what does it mean for the major Middle East oil exporters right now? I spoke to the largest, Saudi Aramco. The CEO Amin Nasser was on a panel I chaired here in Riyadh, and he said that the first half of the year is basically a wash out because of the challenge of the coronavirus.</s>AMIN NASSER, CEO, ARAMCO: Let me say that I think it's a short term, first of all, issue that will be hopefully -- the second half it will be</s>DEFTERIOS: So, you see it as first-half challenge that can be cleared up in the second half of this year?</s>NASSER: That is our view.</s>DEFTERIOS: So, some fresh guidance from the CEO of Aramco, now a publicly- traded company. And for a context, we have to remember, China is the number one importer of crude, so a slowdown there will, of course, have wider implications. And other top customers for the Middle East exporters', South Korea and Japan, call it the "Asia ripple effect", all linking back to the coronavirus. Richard, back to you.</s>QUEST: John Defterios in Riyadh. Disneyland Shanghai isn't looking like itself as usual as the coronavirus disrupts the park's operations, in just a moment.