Becky, Mastercard, China discussed on Squawk Pod
Squawk Pod Wall Street weathered its worst day in two years but Mohammed Al Arian urges investors to show restraint. Continue to resist as hot as that is simply because it has worked in the park shipping pains the head of the port of Los Angeles Gauges fall out as the corona virus spreads. What we're seeing right now is forty cancelled sailings and that would amount to about twenty five percent of our normal shift calls during this time post lunar and Warren Buffett one of the world's most famous investors on when you know. It's too risky to jump in your often quoted as saying that you don't know swimming naked. Goes you get the sense with a high tide right now? There's a lot of skinny dog allowing people to borrow money on much weaker terms than we were five years ago. You can hear more of Becky. Quicks thoughts only on this podcast. He's pretty biblical when it comes to how he views the world. I'm CNBC producer. Katie Kramer. It's Tuesday February. Twenty Fifth Twenty twenty. Squawk pod begins right now becky by in three two one good morning everyone welcome to squawk box on CNBC. We are live from the Nasdaq market site in Times Square. I'm becky quick. Along with joker and Andrew Ross Sorkin our guest host is Surat Sethi from Douglas. Lane and associates could see this morning. Glad to have you with US first up on today's podcast coming back from a rough trading day Wall Street woke up with a black eye. This Tuesday morning. Maybe a couple black eyes this morning. That was after Wall Street's biggest one day loss in two years. The Dow Jones Industrial Average saw its worst day since February of two thousand eighteen the S. and P. Five hundred same deal. Monday was the second worst day for that index ever the aggregate market loss on Monday totaled nine hundred twenty seven billion dollars pushing both the Dow and the into negative territory for twenty twenty about a month after the initial corona virus. Outbreak Mohamed El area and told us that he would advise resisting the temptation to buy the initial coronavirus dip. That was back on February third. The corner virus is different. It is big is going to paralyze. China is going to cascade who are the global economy and importantly it cannot be counted as I just noted by Central Bank policies. So I think we should pay more attention to this and we who try and resist inclination to buy the dip joining us down the Squawk newsline is Mohammed Al Area `alliance Chief Economic Advisor Muhammad Reflecting. Back on those comments. They were present at the time. There's still a lot. We don't know about this virus. What what would you tell people at this point in terms of the stock market? How would they continue to resist as hot as that is to simply by the dip because it has worked in the past as you say becky uncertainty three? I'm these one is the short-term uncertainties. How quickly can we contain this virus? How quickly can be verse? Economic Effects. Second longer-term uncertainty? What does it do to China to element process? What does it do to the process of globalization and finally there's a whole host of uncertainties related to initial conditions? The global economy wasn't in a great place to begin with and mock. It had been decoupled in terms of valuations Fundamental so I think a lot of uncertainties out there. I understand the clinician to buy on the dip. I understand that the cost of this resistance. What market is to bounce up? Because that's what it's been conditioned to do but I stress this is different. Everything comes down to price though. Correct mom I mean I would assume there would be some point. Would you say it's Okay. To Buy on the dip. Is that ten percent. Pullback fifteen percent pullback is there a point where you say okay there there has to be some value here now if Richard Panik levels of course I mean you know valuations matter a great deal remember? The the consensus recommendation was not only buy on the dip. But by the markets that have lack by emerging markets. So let's look what has happened since the highs We are in the US. We all five percent ten percent so yes they'll come a time not only to buy the dip but the coming time to the markets that have lacked just not at these valuations yet Muhammad. What I mean this is your such difficult things to track your an incredible economist. But we're all trying to figure out now with epidemiology as of this virus. What countries are doing behind the scenes with the political implications are? How do you try and some this upper you stay out of it and say it's too complicated right now no I? I do a lot of a lot of research. I talked to a lot of people. I'm the medical profession. Would caution you tell you. We don't quite understand this virus yet. There's lots of uncertainties I look at the economics. We having discussed skating economic. Stop US asked. Will he go on holiday to Italy again? Now he's GonNa wait so we're GONNA have a lot of risk aversion on the part of economic actors It's GonNa take time Becky. So yes. There's so many uncertainties and what you've got to do is collect data and try to put a picture together and that picture very murky right now. Who the World Health Organization is still saying right now? This is not a pandemic but when you have outbreaks that were watching in Italy Iran in South Korea and now the the threat level in Korea has been raised to read. What does that mean do? Do you think there should be a situation where we are shutting down travel between countries. And that's that's the globalization question And that question is out that we we've already issued a travel alert on career today. So you know people are thinking about about this. It is D- globalization shock and unlike an economics financial sutton stock economics sudden stops. A hot spot. I've seen it because I worked on small developing countries. Where these things happen. They don't tend to happen in the second largest economy in the world so this is consequential And it's we're GONNA LEARN A lot. I would just caution so much uncertainty right now. That if you'RE GONNA buy this dip make sure you focus on companies with very strong balance sheets a business model. That's robust enough to Global Recession and the related to move quickly. You know there are companies that are going to make sense that are gonNA get hit like others. But don't deserve to be hit but selective game is not going out and buying the indices and especially not the indices into multiple economy economies. When you look forward what are some of the things you're looking for is indications? That things are stabilizing. We're going to get better. Well what are a couple of things that we should look for that that we haven't seen yet so first understanding. What exactly is this virus? And how do you contain it We haven't gotten there yet. So Basic Medical Inflammation secondly the confidence of people to engage look at China. The government is ordering people back to work and we're getting twenty to thirty percent of the people turning up so massive risk aversion because this is unknown the behavioral scientists will tell you that when you shock us with something that takes us out of a comfort zone. It takes time to get back to normal activity so the second thing I'm GonNa look at it and then the third thing I'm GonNa go cat is how much damage have. We created two companies that were vulnerable. WanNa thank you for your time. We always appreciate talking to you and we will see you again very soon. Thank you becky. Some breaking news just in from Mastercard. The company says that Chief Product Officer. Michael me back is going to become the new. Ceo Next January first the Currency Agyei bound is going to be transitioning to the role of executive chairman at that time. Of course we should point out during. Oj's tenure that stock has increased more than fourteen fold prior to assuming the CEO role me box going to become the president of Mastercard. And that's going to be happening on March first. All of this comes of course. Just a day after mastercard warned that its revenue could take a two to three percent. Hit this quarter because of the corona virus. Some of the things that they talked about in that released last night That concerned the markets is not only a slowdown in terms of cross-border Travel that's taking place but also cross-border e-commerce people being afraid to even buy things and have it shipped here as well. You know you know the story of the stories in amazing storage. I mean his own personal stories in amazing story. But what's happened mastercard? Over these years is an amazing.