Transcripts For CNBC Squawk On The Street 20240713

Less normally. Lets start there, jim, in terms of the market overall. I have a lot of insight this morning to share on the credit markets where i tend to be focused of late. Like to come to you. When you see a rally, the likes of which we may at the open this morning, what are you thinking what i think about when i see this, the market got oversold, people last night went home thinking theres no possibility of any sort of deal. Without a deal all you have is the fed making sure theres liquidity but nothing in the hands of the people. If you dont get money in the hands of people, people will look at the landscape and say its really just falling apart something has to get done. Now theres an expectation that something will get done. If we dont get something done today with the senate, youll give up this whole rally youre banking on the politics getting together for something, otherwise this rally will be comical and you will wish you never bought in. Well be able to offer hopefully people a good deal of insight when Speaker Pelosi joins us in about 30 minutes from now, jim. Thats the key question. You raised the key point overall, how do you get the money in the hands of people who are currently being laid off or have been laid off over the last week it remains unclear if we get the legislation how it can act quickly enough to sort of hold back the tide of personal bankruptcies, of people who frankly simply dont know where to turn. Yeah. I talked and have a team that is going to about 50 ceos in two days the landscape will change drastically youll see dramatic layoffs, not just the one weve seen today. This is in real time theres another scheme, which we know is more important in the scheme of things the health issue what are we going to do . Health versus money, health versus the Financial Health. Health comes first so what you end up doing is if you decide that listen well put money in the hands of people, but we then put people in jeopardy in terms of ages, now were hearing, listen, you cant just do post65, post70 if were going to let people get sick and come back to work, thats the big failure i think its a false dichotomy south korea, test, test, test, they got it done china, test, test, test, lockdown, they got it done slovakia got it together, test, test, test italy where some people think milans peaked because we had two days straight. Madrid not peaked. This whole knowing that we know who peaked or who has not is a false one. We know south korea did it with testing, chinese did it with lockdown theres ways to do it so its not either or. But we have not done it with testing is your point. We dont have ventilators either we have not done it with the equipment needed and with the testing. Which sets up a scenario under which were not going to be in a position to reopen effectively i had a conversation with somebody who runs a Large Law Firm based in normal city, as so many of them are the point this person made to me is if you reopen things, im not coming back. Every time somebody tests positive in my office i have to spend the next i dont know how long figuring out who they spoke to, who i need to quaerantine, who i dont. Its a logistical nightmare. Their thought was better off keeping us away until the tide has turned i dont disagree with that. I had a zoom Birthday Party last night and a drink for my buddy about 15 people attending. When you start hearing around the table what do we hear . So and sos wife has got it. Heres the thermometer somebody took a trip and stayed at the four seasons in colorado, and there was someone who was a waiter who took care of them, nine people have covid its around you now. Something happened in the last ten days where Everybody Knows somebody close in their circle you may feel like businesses should be okay but at the same time youre trying to find a thermometer and a ventilator, we have ford teaming with ge. But this is we need what happened with gm when fdr called them and said we suspended the line, everything will be made for munitions, as opposed to henry ford who balked, and then ford built a b22 this public partner partnership, if this happened 90 days, wed be like yeah instead it happened 90 minutes ago. Were like no. I think thats a fair point, jim. Here we find ourselves with the prospect certainly of getting legislation out of the congress today. That at least will be aimed at providing a huge stimulus that is needed. We had the fed yesterday with extraordinarymeasures in terms of aiding certain markets. We have the president saying i dont know when but soon we want to get things back moving again. Right the markets are taking it all at this point as a positive. I hear a very mixed message from you in terms of whether youre a believer look. I think its been a total suckers game to buy this rally. I have two of my favorite technicians, i talk about them because they tend to be in times of incredible turmoil, big money listens to the technicians they both see its oversold and there could be a rally of some size again, you get a rally of some size and it turns out at the end of the day secretary mnuchin, Mitch Mcconnell and speaker of the house nancy pelosi have not meeting of the minds, then you will give up this rally. Not only that but you could lose another 5,000 points not that much difficulty given the fact that you and i both know that employment hangs in the balance. We come in thursday and we see unemployment number thats big, then we see the real layoffs not the little layoffs we see now and suspension of buybacks and dividends, multiple layoffs from the top 100 companies, youll say thats it we had an opportunity and we failed yeah. The layoffs are happening now. Right i spoke to somebody who runs a business that is focused on hospitality, 50,000 employees laid off the numbers are starting to become staggering. We can expect they will. Weve all talked about, of course, some of the prognostications on the parts of the investment banks and analysts in terms of what theyll see. Before we get to Kevin Johnson, the ceo of starbucks who will join us, to the credit markets that also continues to be a concern. Companies, im told, when they have the opportunity are turning to their banks and saying what can you do for us . Endless requests for credit is the way one person who runs one of these divisions told me and the banks are there at this point. Its interesting its a point worth stressing, this is not your 2008. This is not a financial crisis banks remain well capitalized and in position to provide credit revolvers are being pulled down all over the place it was 75 billion in revolvers pulled down as of friday that number is already going up higher its happening the banks are fulfilling those requests without issue at this point im told but we do need to continue to keep an eye on investment grade, 35 billion in assets left. Thats about 2 of assets under management that was last week we still see companies accessing the markets. Thermofisher, general dynamics, gm said well pull down 15 billion in our revolvers but those who can access the Capital Markets are doing so as for cnbs, where carl icahn has a huge short position, thats gotten really ugly. We are hearing about bankruptcies and understanding as important as the equity market is, everything you talked about puts the banks on the red hot griddle, unless we get guarantees of the banks, which people hate because of what happened in 2008, theyre houses of cards, too. I know no one wants to hear that given the fact that the fed will backstop them. Thats too many credit lines at once i dont know. You dont think im not sure about that the 99 of the credit lines pulled down during the financial crisis, the banks made good on them im not sure the fed has been on these banks for so long. Its just a different world than it was 11 years ago. I have a little more confidence perhaps. Youre right. Im looking at the stocks. The stocks tell me when Goldman Sachs trades 80, 75, discount the tangible book. Theres two different stories. Theres the ability of the banks to actually continue to provide liquidity and be fine in terms of their Balance Sheet, and then theres the business theres not going to be any m a to speak of. No, no. Youre right im just the stocks are giving me a false signal theyre reflecting other concerns, thank you. David, we have a real business person coming in we havejoining us on the cnbc news line or whatever its the president and ceo of Starbucks International change, Kevin Johnson. Always good to hear from you jim, david, good morning. You sent out a note you basically let me not bury the lead here. This is an optimistic story. You sent a note out saying well pay you, show up or not. That was a note that went up last week. Who showed up . Well, our starbucks partners showed up, jim you know, let me share a little bit of the story you know, we have been dealing with covid19 for nine weeks in china. Throughout that entire nineweek journey we have sort of learned the playbook and weve learned the curve in terms of when you shut down what happens to consumer behavior. As you go through this, what happens when you start Opening Stores were on the uptick in china but late last week, you know, i realized that we in the United States are getting ready to go into a difficult two to threeweek period. And im a believer that Human Experience is all about overcoming adversity through resilience and so last friday we decided to communicate to all of our starbucks partners, we call everyone who works at starbucks a partner, communicate to them and the United States and canada that for the next 30 days we would pay them independent of whether their store was closed or if they were uncomfortable coming to work we would pay them. We also announced that we would shift to a drivethru delivery model where basically we would close the cafe part of our stores and just serve customers through drive through and mobile order for delivery when we announced that friday we werent sure how many of our starbucks partners would feel comfortable enough coming to work the next morning. The next morning they showed up. They showed up before dawn they opened all of our drivethrus, they recruited other partners to help where a store might have been short staffed. This is the story of starbucks partners, they are the heartbeat of our company and im so proud of them and im proud of the decisions we took to ensure that they have some economic certainty independent of whether stores are closed, open, whether or not theyre comfortable coming to work for the next 30 days they have economic certainty they will get paid by starbucks. Thats because they are the heartbeat of our company okay. Lets do it right now. How about a challenge. Make a challenge to the rest the rest of the Business Community in this country. A 30day pledge of no layoffs, 30day pledge of no layoffs. 30day pledge of paying the workers. No matter what because i think youre an inspiration. I dont think anyone stepped forward from the Business Community like you and said, you know what, this is what weve done will you start the pledge right now and we can demand it of other ceos because people are sick of ceos. They think they make too much money. They think the rank and file have gotten screwed endlessly. Start the pledge and well get others to do it. Well, heres what i believe, jim. I believe its the responsibility of every Business Leader to care for the employees during this time of uncertainty, shared sacrifice and common cause. Now certainly every business is in a unique situation. At starbucks, we have a strong Balance Sheet, we have the understanding of the model that we learned in china, so, you know, we believe weve got the ability to endure through this, and at the same time take care of our partners. Thats what weve always done. Thats what well continue to do so, you know, i step back and say, you know, not every decision is a financial one. This is a time to prioritize people over profit and, you know, ill look to we have great Business Leaders in this country. I know those that can will step up and take care of people certainly every industry, every business is in a different situation. I will applaud every business thats able to prioritize their people at this time of uncertainty and by doing that i think the country will show resilience and we will get through this thank you i think its very important that people realize that when you did pledge to give the workers, the partners, the money, the partners showed. Thats why others must take this pledge thats why ill hold everybodys feet to the fire because of what you just said. I had joe on last week you said not only is the rest of china open for business, youre opening a store in wuhan heres the reaction i got. Kevin johnson is not telling the truth. Its inconceivable thats happening in china or whats happened is they cherry picked places you could open. The idea you may not be telling the truth after ive told you for 20 years is inconceivable for me can you go over again what the story is with china so i can call out anybody who says youre a liar and take them to the cleaners nine weeks ago when covid19 really began unfolding in china, certainly a challenging period, i think it was this opportunity between government, Health Officials, and businesses that things shut down, schools shut down, people went into shelter in place so certainly, you know, early in that period we closed throughout china roughly 80 of our stores. It varied city by city, certainly the epicenter of this was wuhan and then after 45, 60 days stores began to open. Today we are at 95 of our stores open. Last week i commented that we began Opening Stores in Hubei Province and in wuhan. Were going slow to make sure this is happening, but the recovery sun folding in china. That gives us confidence that we know how to manage through this. What were seeing in the United States is government leaders and partnership with Health Officials, with government and citizens all taking action together we know that if we do that together we can get through this kevin, its david to what extent has your experience in china informed your ability to at least try to predict how things will go in the u. S. , specific to how youre running the company in terms of Capital Allocation and finances but overall obviously in terms of revenues as well in your projections. Yeah, david great question what weve done is throughout our experience in china is captured all of the store protocols that we use to provide a safe and healthy environment for partners and customers we applied that not only in the United States, but in in 81 oth markets around the world second is we tracked week by week what happens with samestore comparable, what happens with total revenue as the uptick began in china, we began Opening Stores, we built a model that basically said, okay, if this were a two a twoquarter Recovery Process to get customer traffic and get revenues back to the run rate it was pre covid, we plotted that out and we are tracking that were tracking at or slightly above that model we built. Now were mapping exactly whats happening in the u. S. Week by week its like week three in the u. S. We look back at week three in china and we sort of know what to expect. Its following a similar pattern. You know, it may be that in the United States its a little bit longer you know, a week or two longer period to see the recovery, it may be the same recovery curve, right now its tracking in a similar way to china, which is helping us plan not only our financials, but just we have a strong Balance Sheet thats not the concern the concern is not that. The concern is prioritizing the health and wellbeing our partners, customers in the stores, prioritizing with Health Officials and leaders to mitigate this virus and its showing up in our communities. Thats what our starbucks partners did over the weekend in the United States. They showed up to work in service of their communities by providing those communities a food option through our starbucks drivethrus. The economic model in china, we tracked that and mapping that to what we see in the u. S kevin, lets talk about the the first principle of your three principles. Ensuring the health and wellbeing of our partners and customers. Theres a debate going on in washington, it seems to be a debate between, lets say among secretary mnuchin, senator mcconnell and Speaker Pelosi and what seems to be hanging in the balance is as far as im concerned is that the Financial Health of the country theres also another debate about the Actual Health of the country youre someone doing something for the workers. I think that being first for the workers is probably the most important in terms of the 51 Million People in retail how are you are you confident that washington will deliver youre delivering on your end. What happens if washington fails to deliver jim, theres a lot of scenarios you can sort of game theory through at the end of the day i believe theres Good Intentions all the way around you know, the only way that we succeed is by succeeding together that means governments have to do their part. Health officials doing their part, businesses doing their part and citizens doing our part if we do that together, we can get through this its first and foremost a Health Crisis but by dealing with the Health Crisis, we figure out how we stabilize and provide economic certainty to employees, starbucks partners by doing that, then we get back on the recovery path i will summarize what i wrote over the weekend, this is a time for resilience you know, i believe that theres Good Intention all the way around government leaders have Good Intention, trying to do the right thing and i believe they will Health Officials have Good Intentions and theyre doing exactly the right thing in their communication, guidance and what theyre doing to put all the infrastructure and resources in place to do this i believe Business Leader also prioritize people over profit. Lets navigate this together as citizens, we have to play a role if that means shelter in place, that means im working from my home office here today i have all the equipment to do that and, yeah, i may go out and visit my partners in one of the starbucks drive throughs just to thank them and recognize them and ak ncknowledge them for what theyre doing. Last point, Business Leaders, people over profit, once again reiterate the challenge to america. Do you do you dare them and pledge them, okay, to not lay off people over the next 30 days because people before profit well, heres what i can pledge i can pledge at starbucks, were not laying people off. Well take care of our partners. Well get through this together. The other thing i can pledge, im here to help any Business Leader struggling with a decision and wants some guidance and wants to understand what were doing. Im here to share. I believe that our Business Leaders that run these companies are good people, they have Good Intention i believe theyll do the right thing. All right there you go i think people thats what capitalism should be about i think theres others who have lost their way and think that allied britain is the way to go. Thank you, Kevin Johnson david . Thank you for bringing kevin to us. Thanks to kevin as well. Starbucks shares do look to be higher when we open about six minutes from now as, of course, does the Broader Market with the dow, s p and nasdaq at least pointing to significant up opens something we have not seen for a bit of time. Well be right back on squawk on the street with that market open and a lot more. Which of your devices are protected by daily security updates . Daily security updates. Daily . I dont know. The only thing. Im struggling with this. Some providers you have to manually download updates to each device. Comcast business securityedge updates every 10 minutes to help keep your connected devices protected against new ransomware, malware and phishing threats. Every 10 minutes feels pretty good. Get secure, reliable internet and voice for an amazing price. Call today. Comcast business. Beyond fast. We see eat emerson,mulating when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. Welcome back to squawk on the street im david faber along with jim cramer. Well get an opening bell about four minutes from now. Before we do that, i want to get to steve liesman, he has some news regarding the g7. David, extraordinary times, extraordinary statements the g7 with a statement where members pledged to do whatever is necessary to support the economy and Financial Markets. They are all saying theyre committed to liquidity support as well as be financial or fiscal expansionary policies and theyre saying theyre willing to give or ready to give additional funds to the imf and world bank this statement came out another statement came out a couple weeks ago followed up by Central Bank Rate cuts, now this is the stage, it was the finance ministers who met. Now were at the stage where were waiting for and expecting fiscal policy responses. Thats the g7 statement. Back to you. Steve, thank you. That language, jim, reminiscent of by any means necessary. Something we talked about from draghi sometime back what do you make of it also initially from malcolm x if we want to get historical what that says is well do whats necessary on our end, but its not enough. They cant create demand they cant hire. Its great that the fed can backstop, so you get 5 500 billion in the hands of treasury secretary mnuchin. That can be levered to 4 trillion again, without if you dont get rid of the rancor, if you dont unite, what happens is i think we see our cede our roles as a great power to another nation, which is unforgivable. Its not what this president wants. I think what we get with Speaker Pelosi will be incredibly important when we speak to her in a few minutes you mentioned, its funny, the 450 billion that would be part of the stimulus bill that would be levered to the fed which could be as much as 4 4. 5 trillion thats an important component of this, isnt it snnkts t the most important component. When you look at it, if you want to get america moving again, you got to make that pledge and then they have to be able to make good and then if we get something that involves testing, testing, testing, we get a milan model where its peaked or a south korea model, a model of democracy where you have enough tests and then enough ventilators, its not a common cold, you need these ventilators, then we can put people to work you say what age i think the tradeoff here is if you want to get america moving, you have to quarantine the elderly and let the younger people go unfettered yeah. I hear the opening bell, of course, ringing for the New York Stock Exchange empty floor. Trading will be normal the nasdaq beginning its opening day as we started here its funny for obvious reasons we have not talked a great deal about individual stocks, many of which will open far higher though are still down dramatically when you look at the likes of a disney, a name you and i have not mentioned in a bit what is it at here 36 down this year market cap is below that once again of netflix actually at the open its higher does that attract you at all or does the concern about parks that are closed in various parts of the world including here in the u. S. , concern about advertising revenue, concern about espn viewership, given no spo sports going on outweigh a stock that was under 91 bucks before today started . I think disney is a particular situation and a positive one they were able to raise capital. They went to the markets for the bond yield thats an Iconic Company what i worry about is who shall live and who shall die southwest air iconic is Carnival Cruise iconic . Disney we know is. Sometimes your brand name and management is your word. I think people just said, you know what . Well take disney with a hiatus the next bit of news you might here out of disney is that shanghai reopens especially after we heard from Kevin Johnson at starbucks tl theres a lot of companies where i say theyre marginal and dont matter now, of course, to you and i they matter, theres a lot of workers there. 85 of the country is small business, but i think you picked a franchise i would have said and would tell you if i had my mad money hat on, its a stock you buy. Disney will be around. Im not a buy of Carnival Cruise, you may think we need them, but we dont need the shoeld ulder shareholders i dont want to bail out mickey or a bailout of Warren Buffett, thats what enrages democrats is the rich got richer in 2009. Speaker pelosi is saying we will not let Warren Buffett make a killing. Its interesting you mention that we have not heard from him at all. No. In times of financial dislocation, often we would turn to mr. Buffett and expect to hear from him in some way. Or via action, see him putting some of that huge cash position to work. Theres a number of his businesses as you point out are under pressure as well do you think its odd that we have not heard from mr. Buffett in some fashion . I think its illadvised that he hasnt come out the last thing he talked about was similar to his october 2008 piece, where he said, listen, im not a buyer necessarily now, but i just want to buy america then he was early he was ultimately able to claim he bought throughout. If its a great time, this is the time to step forward, whether its the incredible piece of paper he got from oxi for 8 or all the airlines criticizing an icon is not a great strategy, but i think it would be reassuring to the public which says i liked it much higher, i like it now its not his job to do that, he doesnt have to do that. I wish he would from the point of view hes the great moral authority he could strike a balance between both sides everybody would have to bend to it its a great time for him to come out im sure hes looking and theres two people i want to hear from. One we can hear from, Warren Buffett. The other is jamie dimon i pressed and pressed you beat me to it, jim. I was going to ask you about that mr. Dimon recovering from serious heart operation. Yeah. And his voice is missed i heard that from any number of people when it comes to the Financial Community and somebody we listen to, always talks straight about the challenges that are there theres no doubt, jamie dimons voice would typically be part of the dialogue and its missing. Yeah. When i pressed, i realized that i may be the most sincere man in america because im asking for hope and a lifeline. Brian moynihan is saying some things positive bank of america. When you see jamie dimon say he could come out and be like the original jpmorgan. If i press him once again, i know im part of the bad contingent, not the good contingent we talk about what needs to happen theres a theres something i think you and i both know that is worrisome how do you reopen america when its taking a long time to get test results how do you reopen america when we have 2 million test kits from thermofisher but theyre not in action how do we open it when theres not enough ventilators or icus are we courting a medical disaster what would dr. Fauci say right now if we said were open for business arent we supposed to be bending the curve, flattening the curve . Not overwhelming the Hospital System my daughter is in madrid, a sub optimal place to be right now. When you leave, theres a policeman escorting you to the Grocery Store and welcomes you back i find thats not the situation we necessarily want in our country. Lets get to the heart of the matter and get a deal done maybe we can get a deal done right here joining us now is House Speaker nancy pelosi always great to see you or hear you. Good morning, jim thank you for the opportunity to have a conversation at this serious time appreciate all the comments ive heard on your show this morning about the seriousness of it and the urgency to get something done will we, madam speaker . Can we get something done today . I know you as a person, as a practical individual i know that secretary mnuchin is a practical individual i believe senator mcconnell can help, is there any chance that by the end of the day, even though i know we have bills, can we come together under nonpartisanship because theres about 150 Million People right now watching and listening to you wanting to know if theyll have a job on friday im glad you have such a large audience i think there is opportunity real optimism that we could get something done in the next few hours. The senate bill the Senate Democrats have done a great job of taking the bill from a place that was trickle down for workers, it was about Corporate America, were about the workers. This is where the economy thrives, where people have confidence in having an income, having a paycheck, and then willing to spend in a consumer economy, we believe this is not only good for the workers, the right thing for the country, but also good for the economy. So the question is who has the leverage when they put out their bill, it was Corporate America with all due respect, Corporate America is the creator of jobs, but nonetheless, unless we were looking out for the workers that we were never going to have a solution if there was money given to large entities that they would not have buybacks, bonuses, dividends, ceo pay, that kind of thing, but putting that aside, even that the workers rights would be respected within that use of that money. Weve made big progress in that regard in terms of the oversight of the slush fund, the 5 500 billion, im happy that it appears the senate is taking the house language of oversight, which was we had the language in common that we would have an Inspector General strictly to oversight have oversight over that money, a. And b, we would have a Congressional Panel appointed by us to provide constraint but nonetheless to have oversight over that, similar to what we had done in the past that was major should we sale overarching concern. Right i have a pledge im looking at from secretary mnuchin saying that we have agreement on that, which is really important. I know that you go ahead. Thats a big change theres some other things that are of concern, but i appreciate youre saying test, test, test we produced two bills already in a very strong bipartisan way first one giving the money for research for vaccines, for therapies, this or that. And the next one, something i didnt like to do, but to give immunity for liability to the mass producers producers mas producers. Its not something i like to do, but weighing the equities it was something we needed to do. Thats in the second bill. Thats why that was important to get that out among other things. It was going to unleash the masks. Testing, testing, testing, you cant say it enough. But you have to have the right tests. In terms of some of the other things in the bill that had improved, state and local, we wanted a strong infusion of resources for state and local for state and local governments because theyre taking a big bite of this apple we have some concerns still about the president not fully embracing the defense production act, that would go so far into getting more of what we need out there. And, again, theres some issues that i dont think are deal breakers, but are of concern to my members we want osha language for better protection for our workers family medical leave is a big issue for us to be expanded. To give you some of the particular issues, but overarchingly were getting to a good place, if they stay there the problem is they move im optimistic, Chuck Schumer and the House Democrats used their leverage to a great extent to make this a much more workeroriented initiative well, Speaker Pelosi, one thing i like, you and i have known each other for a bit, we talk to each other about policy but also about business. I want to give you a George Bailey look at things, sometimes a fictional character tells more about fact than anything else. Talk about its a wonderful life. When i look in my crystal ball of what would happen without George Bailey, in this case without intervention of government, heres what the world will look like there will be a few companies, walmart, amazon, target, costco and home depot then there will be 50 Million People unemployed. If you dont get this done, thats the world there will be jpmorgan, bank of america, wells fargo and maybe citi we run a risk now thats all the companies and theyre the only ones who have the credit to do it we cant have that happen, madam speaker. T that would be the disaster for america that you and i both think is unthinkable is there any give . Do you have do you need something from mnuchin what are you willing to give in return so we get this done today and we do not have that look of what this country will be if we dont get agreement. We have to get agreement. Thats why you have to weigh the equities when youre i didnt want to do immunity from liability, but i knew i had to do that to do the masks, so we can get the masks out. Again, its legislating. You dont get everything you want thats called compromise thats important right and weighing the equity of getting those checks, as you all were talking about, getting those checks into the hands of workers and consumers as soon as possible so when we look at solutions, does this work as fast or what works the fastest and in the best way i do believe, though, that people should put this in perspective. In the past three weeks, we have put forth three bills. The first bill is 8 8. 3 billion for research, this and that, test, test, test, test the next bill, addressing many Major Concerns to the tune of billions of dollars. This bill will be a trillion dollar bill, which nobody even saw until saturday so its not while we all appreciate the urgency, its a big responsibility to do it right and for the where we can find shared values to do that you talked about that story, ill tell you what was my delivered the message to me clearly. I said on sunday when we met with the secretary mnuchin, mcconnell, Chuck Schumer and kevin mccarthy, i said let me just begin with a prayer of pope francis. He offered this prayer to the world. He said enlighten those responsibilities for the common good so they might know how to care for those entrusted to their responsibility and to that response, mnuchin said you quoted the pope, ill quote the markets. I just want to emphasize the word his holiness used is responsibility thats the word, we have to be responsible. Responsible for workers, responsible for our children who are not in school, responsible for our seniors who may be fragile. So responsible for kids with student loans. The list goes on and on. We have to be responsible. But in a way, there a bill that is very particular to the virus. Right not making general policy this is about how we attack this policy so when we had some disagreements, when they introduce things that are not were all trying to stay with that regimen are not particular to this challenge. Right im optimistic. I think Everybody Knows the overarching view is we have to get this done, a. B, i have three options. They can we can come to a conclusion that sticks, not that they change it come to an agreement where it is all compromise, a. B, that then we have unanimous consent, and this can move quickly if we dont have unanimous consent, my two options with my members is to call them back to vote to amend this bill or to pass our own bill and go to conference with that the easiest way to do it is for us to put aside some of our concerns for another day and get this done. But we cant you can you can support a bill because if it doesnt do enough that you want to do but thats what you can get. If it has poison pills in it and they know certain things are poison pills, they dont want unanimous consent. They just want an ideological statement. But, just to defend secretary mnuchin for a second i did not mean i dont think he meant to disparage the supreme pontiff by mentioning money. He, like all of us, are just worried about the worker we can say where the money comes from, it could be the corporation, but at the same time corporations do pay people. Im concerned about equity i said corporations are the source of jobs i know. I just thought it was difficult no name calling about secretary mnuchin. We know hes working pretty hard, too. I do worry about equity in the sense that its about values were saying bunnal up shga bub to find a place to meet. I think what we dont want to see that happened in 2007 to 2009 is that the very rich, whether it is Warren Buffett, the banks, ceos, they came out ahead in part because who paid the who paid for the trillions that were involved then the American Worker. How come the American Worker cant participate with the companies that are being that are going to be bailed out, maybe some equity with them because i think were all kind of tired of at the end of this, you know who got richer . The people who were already rich how do we change that dynamic with the battle for the ages coming, i think . You pose a good challenge i dont know that it can be done in this bill but i do think that there is an opportunity. I see everything as an opportunity to say how we can limit our exposure as we in the future by having more participation with all of the stakeholders it used to be more that way until it just became a bottomline economy in terms of the markets. Im a big believer in the markets. Ive been watching the markets since i was a teenager, and that was a long time ago. Youre focused on the markets. Im saying if you want the best way i think for our economy to succeed is for everybody to succeed including the consumers who are the life blood of it thats why we want money into the hands of these workers as soon as possible but we dont want to disenfranchise the stockholders. We have a lot of people who listen its 401 k money, i. R. A. Money. We dont want it to seniors have no savings i listen to people who call in our show and focus on our network, i say these people have to have a voice, too we dont want to disenfranchise the small shareholder who has tried so hard to be able to save money and might see that money go down the drain while once again the ceos get richer. Well, god bless you for that thought. Thats a macro discussion that our country has, and maybe thats the gist of the conversation in the next election but for today, trying to get this bill passed, i think its really important to note that, again, the difference we had was that they were starting with Corporate America im sure Corporate America is friendly to workers. Its not an unfriendly thing, its just saying there has to be more equity. I think the best thing that we could do so we can see a light at the end of the tunnel is find a cure that requires what we put in, billions of dollars for research i think we need a major scientific intervention right now as to what does work and doesnt work about stopping the spread of this you talked earlier about what has worked here and there in terms of keeping people and testing. I think you have to do both. Theres been a delay in the testing. No use going into what was we have to talk about as we go forward. And as we go forward, i think it has to be so to be so much more sciencebased because we can either see a light at the end of the tunnel of this because scientific basis for, you know, staying home and this or that, is working, or if we just forget that at that light of the tunnel can be the p proverbial train coming at us. That i think the country has to make that decision, and its not a question of let old sick people die so the markets can strive i hear that in some of the conversation its about how we address this in a scientific way and not notion mongering but evidencebased decisionmaking about it, but we all have the same thing none of us, nobody roots against the stock market everybody wants it to thrive now, lets talk about you are a great head counter and tactician. Can we get this bill through the fiscal hawks in the house . Can we get something today, a pledge from both sides saying american people, we are not going to let you down. Weve got a deal i know i keep, devil in the details, that say metaphor im kind of sick of, just kind of a commitment that you, secretary mnuchin, that this is going to be done by the end of the day and were just not going to let you down and weve got to work on the health care side, weve got to get the testing done. We cannot have a situation where testing is something we think is going to happen and go to the high school drivethrough and turns out we dont know whether were better for two days. Will we ever feel more confident knowing that youve got your people lined up, secretary mnuchin has his people lined up and we get a deal done and if there are other things that need to be done later, even a second bill, the bill to be able to put money in the workers pockets, 150 Million People watching us now, in one form or another, ms. Speaker, cant we get a deal that says to them, the 150 million workers, you have nothing to fear from washington. Youre going to get your money youre going to be able to keep your job for at least 30 days, while we finish this, and weve done this for you. Can we say that right now . We can say it when we have a deal that could be imminent in a number of hours. I can say were all receptive to getting something done we all know that everybody doesnt write their own bill, that its a series of compromises, and that we think the bill has moved sufficiently to the side of workers with respect we actually are talking to the employers about what they think the traffic will bear and the rest, so this isnt a conversation with workers and not with the airlines or other industries, hospitality, parking, you name it, restaurants, you go down the list, and trying to be discreetly trying to address their problem. So it is not a onesided conversation on our part however, things like a 500 billion slush fund was really insulting. Understood and i think the secretary has come to that agreement with you, and has some sort of transparency factor, Inspector General get an oversight panel. I want to leave you with this sense. One, would you put business to the test, Large Businesses to say you should join the pledge of Kevin Johnson from starbucks and keep your employees on, and then in return, can you give us a pledge that you will make some compromise, secretary mnuchin make a compromise and let the american 150 million workers know you will be protected by our government, you will be. Promote the general welfare, the general welfare will be promoted by the end of the day. Well, i think thats very possible but until they have a deal, i cant announce a deal but i can say that everyone appreciates the gravity of the situation, at least in congress, the gravity of the situation, the need, the timing is everything, but again, this is a multifaceted approach that we have to take with all of this, and addressing the needs of the workers. Its desperate i dont have to explain how desperate it is and the rest, theyre faithbased organizations, nonprofits, all kinds of Community Activists trying to meet the needs of people last night i thought we were at a good place and all of a sudden, they said were not doing any food stamps. Were not doing that right they do not do that people are hungry, dont have food now more than ever we need some of those kinds of initiatives, and as i say, a formula that is specific to the covid19 right not making policy for the general covid19. We want more money for elections, so that there can be more absentee ballots by mail and the rest of that not forever, just for this period of time so whether we get those or not, well see, but again, we have in all three, this will be the third bill, and the first two bills kick the can down the road where we couldnt come to agreement. Said well do it next, well do it next, but they dont always do it next like they didnt do medical leave, osha to protect our workers. Is that something we can absorb in order to go forward just depends on the balance. I think we are on a good track i think the Senate Democrats have moved the bill to a place that i say the leverage is more fairly distributed between employers and workers, and that my goal always has been to bring this bill to the floor under unanimous consent, where were all in agreement okay, madam speaker, i know that the 150 Million People are hoping that you guys have meetings of minds. Obviously there are some issues, i know you think theyre not tangential but 150 Million People want a deal done and i hope you folks can agree to something and we look forward to something with optimism. Thank you so much, Speaker Pelosi, for joining us i think thats wellsounded thank you, jim ghoood to talk to you, thank you. David . Back to you. Okay, jim thank you for that of course bringing on Speaker Pelosi, the market as you point out, of course, and everybody else watching very closely we do have the s p up over 6 . Unanimous consent an important component given it wouldnt require much in terms of moving things along quickly in terms of the vote exactly lets come back from break. David, the problem is no wish list i hopes she puts aside the wish list, secretary mnuchin gives in not what the slush fund is but 4 trillion save more than just big corporations, but you know, obviously they dont come together in the next 24 hours, its a different world for all of us. Yes, as you pointed out, time and again, and as everybody else knows, time is of the essence. Oh, yeah. Jim, speaking of time, well take a quick break we have the ceos of marriott, coke, and microsoft all on board the next couple of hours here on squawk on the street, and squawk alley. Were back after this. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. We sunleashing the promisegas of clean energy. At emerson, when issues become inspiration, creating a better world isnt just a result, its a responsibility. Emerson. Consider it solved. But when allergies attack,f any the excitement fades. Allegra helps you say yes with the fastest nondrowsy allergy relief and turning a half hearted yes, into an all in yes. Allegra. Live your life, not your allergies. Good Tuesday Morning im sara eisen with jim cramer and david faber as we take separations. New home data crossing Rick Santelli with the numbers rick reporter ill tell you, these are powerfully strong numbers for housing. Our february new home sales number 765,000, seasonally adjusted annualized units. Many will say you know thats down a bit from where we were thinking we were going 770s this is the best number really since july of 2007 last month its 764. This month its 765. These are truly strong numbers now, we did have numbers that were already out, march preliminary numbers 49. 2 on the pmi, on the service side it was 39. 1 these are the lowest numbers ever now, keep in mind the series started i believe in early 2017 so these are cycle low theyve never been lower and the composite number becomes 40. 5. So not very good there, but what would one expect finally, our most current read will be a march read on Richmond Fed Manufacturing index. Were expecting the number at minus 1337 we ended up with a positive number at 2. That isnt bad when you consider it diana, going to you, these numbers 765,000 last month, okay, now it makes sense i saw a revision that said down. Last month it was 764. They upped it to 800,000 so these numbers are going well back into the 2006, 2007 era why dont you comment on them, diana . Reporter yes, this is an incredibly strong beat for february new home sales and its what we were seeing in the existing home sales as well, this was set up to be an amazing spring for the Housing Market. You saw a lot of foot traffic out early. These numbers are based on signed contracts in february, not closings so as people out shopping during the month and signing those contracts, and that was when coronavirus was definitely on the radar but nothing like it is today. While these numbers are certainly not irrelevant, they are going to change quickly. I want to talk a little bit about what the builders are telling us now, after seeing this incredible february, which they did talk about. I spoke withcheryl paller, ceo of Taylor Morrison homes, she said cruise are still out building and the sales offices while locked, they are doing a lot of private showings and they are seeing Strong Demand lenar in their Conference Call for Quarterly Earnings stewart millman said even in the current environment we are still selling homes. He said we are seeing slower foot traffic but higher Conversion Rates the people who are coming out to look the at the homes, they are serious buyers and they are converting to contracts much more quickly than usual. So again, you know, its like i said with the existing home sales. It was set up to a powerful spring in the Housing Market will this demand be pushed to the fall possibly we certainly hope so, but we are seeing slower foot traffic were hearing it from the real estate agents, were hearing it from the builders so dont expect these numbers to get better over the next couple of months, theyre likely going to get worse, again, if they get pushed back to the fall, that demand, that would be great. David . Diana, thank you. Diana olick of course on the strong numbers pointing out that they are though looking backwards, as we know, and its a very different market right now. Speaking of the market the s p up almost 6 , a lot of that based on expectations that congress will move forward with a bill, stimulus bill to help support workers and companies that are suffering dramatically as a result of the cease that has taken place in Economic Activity throughout our country. In the last half hour of squawk on the street jim spoke to speaker of the house nancy pelosi heres what she said on the prospects getting that bill done in the short term. I think there is real optimism that we could get something done in the next few hours. The senate bill, the Senate Democrats have done a great job of taking the bill from a place was trickle down for workers, it was about Corporate America. Were about the workers, because this is where the economy thrives, where people have confidence in having an income, having a paycheck, and then willing to spend in a consumer economy. We believe that this is not only good for the workers, the right thing for the country, but also good for the economy jim, based on what you heard to your questions in answer, a, whether we get a bill today and b, whether it will be effective in getting the money where it needs to go rapidly . I think that b is almost a certainty, given the fact that secretary mnuchin this morning gave in, gave in to what the dems want, which is transparency and obviously oversight to not the slush fund, to demand who is going to be able to get the money to the workers, and i think that the slush fund is an unfortunate characterization and illadvised one. What it says to the republicans were right in your face, were willing to stand up and give what you want but understand what youre trying to do, it doesnt help i think that anything that advances the ball is something with neutral language, that said the speaker is a complete pro to getting things done, and knows that if the country, the country will feel very let down and obviously the markets will be crushed. If i were a betting person, and felt like it would be okay to come in when the s p is up 5. 85 , you Better Believe theres going to be a deal today, and i heard enough extraneous issues that i think do not fly with the republicans that better not be just a curious wish list. I tried to get from her what shell give up and try to get her to hell us what she needs fromsecretary mnuchin. I think she told us what she needs from mnuchin and also gave us a wish list that will not salvage the situation. Its almost as if there are two bills, david the bill that says america were not going to let you down, here is the money and its going to be administered almost like i wish it were administered via mutual panel although secretary mnuchin would do a great job and the second bill, the longterm wish list that the democrats have had, and when you get that longterm wish list, i think thats one of the wish lists the republicans will say no and well take the risk. Do you think youll get biden if its a deal breaker, and i dont think thats fair to the democrats, but i think thats going to be the characterization that they are playing politics in the republicans arm. You pointed that out earlier and its worth coming back to the legislation itself, in terms of what it empowers the fed to do, 450 billion that can be levered as much as ten times right to go to companies. It doesnt come without some strings, right a 1 commitment fee, got to pay inkind, Companies Wont be able to buy back any stock. There will be a cap on compensation of the ceo. I dont know what else is part of that that may have gotten your attention the difficult issue right it cuts to the core what i felt was the issue with president obama. Do individuals really own stocks theres a dramatic increase in people who own cash and stocks the asset is is so tarnished we want individuals to save money and if you are just sitting there, earning 0. 25 in a money fund, youre going to be destitute by the time you turn 80 so i hope that the democrats realize that dividends arent just the purview of the republicans but are far deeper in american society. So clearly, jim, the optimism that the House Speaker shared with you, a deal potentially within hours, thats helping the market is up weve got every sector higher right now, and its being led by the most beaten down sectors like energy, like materials, like industrials, staples are lagging, nearly 6 rise and more than 1,000 point gain. Lets assume that they can get together, im not sure we should just assume it right assume the optimism is wellfounded we have to have this tough conversation as a country and the president moved the ball forward last night at the News Conference about sacrificing our Economic Health for our Actual Health and maybe reopening the economy sooner than expected or sooner than many doctors would advocate, and im just wondering, bring it back to the markets, whether you can trust this kind of rally when we still dont know how much the economy is going to be locked down and whether the markets want to tee off of the virus trajectory, jim, or the economic trajectory and whether the paths will be diverging here i think some will be determined by our next interview. We have cocacola coming up, and thats a defensive stock its up. The stock that i watch more than any other stock is zoom, because we all know that zoom stands for no deal and zoom stands for no hope which we certainly dont want. We have to get past the idea its test, test, test, and then youre free. Its test, te, test, sirological test and protection and who can get the wonder drug that is really just a malaria drug that obviously has cardiac arrhythmia issues so we need to have both. Its not, you test, test, test, get the workers back to work but its the antibody protection that we need in order to make it so that we dont send people back to the wolves so i mean youre absolutely right, sara. The companies that are going up are the ones that say there is a deal and the Companies Going down are the ones that say listen, theres a deal, we dont need you anymore that trend needs to continue and you know thats a break of the trend weve had in the last five days guys, i want to shift now to the auto sector, if we can, because we have a guest i want to get to as well, of course on what actual automobile sales will be this year, and the names, tesla, gm, ford gm this morning pulling down on 16 billion in available credit, via its revolvers. Ford on the cusp potentially of being a highyield credit. Adam jonas from Morgan Stanley follows of course those companies very closely adam, good to have you this morning. Let me start with the update of the industry, you started with price targets and you as well are talking about lick wquidity balances and things of that nature why are you feeling more positive, i guess, on this industry at this point thanks, david first, i want to offer my thoughts and prayers to everybody, including the cnbc community, which i know has been empty so i want to get that out there, thanks for fighting through this so look, we stress tested our Balance Sheets auto company Balance Sheets are incredible they have doomsday Balance Sheets run by treasurers there in 08 and 09 were all theres austerity look, gm just drew fully 16 billion on its revolver and the stock is up 10 . That doesnt necessarily have to call about it but it tells you something. And then were also looking ahead to the stimulus, the unprecedented stimulus actions which were seeing on a moving daytoday, whether its to markets, stabilized credit markets and direct to the consumer, but the key here is, if you can survive the next three months, if youre an auto company, survive the next three months and we think basically they all got what it takes to do that, youre going to sell a boatload of cars later this year, and your stocks dont just recover, they multiply, so were not moving to attractive yet at the sector of this point because of the fluidity of the situation, but clearing out the sentiment where people are asking recession or depression, thats a sign of its time to do the work and pick your spots all right, so your point is basically if you can avoid Significant Shareholder or business impairment theres going to be life on the other side a lot of people think that investors certainly do as well you mentioned depression its not completely clear at all right now, adam, whether were going to be able to avoid a downturn in employment, the likes of which weve never seen, and its unclear how long that will last. Nobody knows, and this is why were kind of reminded about you know, this is a wartime a warlike environment fdr called it the arsenal of democracy. Back in world war ii, ford, the Ford Motor Company created the willow run plant to build the b24 liberator bombers chrysler built tanks and rockets and planes and General Motors put every division on this thing, right the arsenal of democracy, and in some ways, were in a similar situation. You know, you got tesla, ford and gm all making respirators with medical partners. Jim cramer you weigh in here but im not calling this, you got to ask the question investors might be asking, can you bankrupt a Company Making ventilators in an emergency crisis anythings possible but you see the level of austerity and unprecedented action thats happening, and we take all that into account, even though youre right, no one can call a bottom at this point, you just play the sensibility and the stress testing on our Balance Sheets which weve done at Morgan Stanley. Thats true, and i know theres some interesting, there was interesting discussion at the beginning when fdr asked ford to play the role and ford was too close to the access but ford came around, gm agreed that day. Lets talk about the irony of this era, adam theres one company that you have said has a Strong Enough Balance Sheet to be able to do whats necessary, it is not ford motor. It is tesla. Can you explain the irony and the fact that elon musk delivered 1,000 ventilators yesterday and that if you had to bring in someone who can create a lot of ventilators, its going to be musk well, not only does he have that kind of creativity of all of musks skills, and he has many he aint perfect but hes got a lot of skills. His ability to rouse public support and to kind of be this ambassador of Public Private partnership and work across the stack, if you will, is pretty incredible you call it irony. I think its duty. It is a duty, jim. This is, my companies are in survival mode. Yes, tesla has a Balance Sheet on paper can survive six months of a shutdown but in practice, jim, if we shut the economy down for that long, we all know the narrative is very dark at that point. So theyre doing everything they can. Theyre, what is it, everything that it takes approach, such that if there is, we hope we avoid this but if there is a moment where auto companies, including tesla, need to go to washington and say, hey, were too important to fail, they need to show that they did everything they could does that make sense right right. Yes, it does, adam finally, i do want to end on kind of what jim implied, which is the Ford Motor Company, the one company of course that did not seek government assistance, that did not go bankrupt, at least, i should say, during the financial crisis can ford survive this . Yes period yes, they can survive this they survived 0809. They can survive this. Ford has had its execution issues thats no secret your programs talked about it headed into this but between the over 30 billion in liquidity and the industrial operations, the 30odd bill on liquidity untapped at finco, treasury and Financial Team that was born in the 0809 downturn, to me the signal was when that family, when the board decided to suspend the dividend, i put my hands in the air and said, thats it. Theyre all in its all about surviving william clay, bill ford, the great grandson of henry ford does not want his name hes still a young man, in his early 60s he, ford, he will do whatever it takes for ford to survive so yeah, doesnt mean, again, ford cant go from four to two along the way this is fluid, but if they get through this, were going to sell a lot of cars and maybe another time well be talking about cash for clunkers on your program, too if we only recovered at 12 millions sar, look, you saw it happened in 09, the cash for clunkers ran out in eight weeks. You are dead right, adam, and just have such creativity in our thinking and inspiration for those of us trying to figure out whats really going on in the market youve got a great, great beat on things. Adam, we appreciate you joining us youre at 13. 5 million for 2020 in sar and a lot of companies have gotten that memo, of course, raise capital any way you possibly can adam jonas, thank you. Adam of course covering the automobile sector for Morgan Stanley. Sara, over to you. Well continue to look at the Company Impact of all of this. Joining us now is cocacola chairman and Ceo James Quincey for a cnbc exclusive coke stock by the way is up 6. 5 , though down 30 in the last month james, thank you so much for skyping in we havent gotten to talk to you as this crisis has unfolded. Just give us a sense of the impact right now on cocacola, from corporate to factories, to consumers. What are you going through well, firstly, let me express my sympathies to all those impacted by this virus, and actually thank everyone at the front edge of the Health Systems and the essential services for all theyre doing to keep us safe i would like to thank all the employees of the Cocacola Company and its bottlers for everything theyre doing to keep us up and running, as we look across whats happened in the last few months, there has been a rolling impact across the world, from asia, through europe and now starting in the u. S. , and i think its going to be were in the profound phase, to misquote wondering stn churchill, were still at the beginning of the beginning weve adapted. We started in a strong, robust position and i think you stand back and take the Historical Perspective as we enter kind of the darkest hour of fighting this virus, its worth remembering that Cocacola Company in its entire history has emerged from every Global Crisis whether military, economic or disease pandemic throughout our history, we have emerged stronger, and when its finished, weve been better, and we have grown versus the starting point were adapting we dont know all the things that need to happen from a to b and our employees have done a great job supporting the community and supporting our customers. As far as your employees are concerned, have you made any adjustments . Are you thinking of doing any layoffs . Is business hurting or is supply getting hard so that you might need to make some tweaks in terms of hiring and spending weve got a very clear approach on this the cocacola system has been through many crises and we have crisis adjustments in our dna i you like we havent launched job restructuring nor do we have any plans to do so we take a perspective in the longterm well emoernerge stro and grow by the end of this. Even if theres a hit in the short term i think q2 will see a profound economic shock around the world. We have to adjust our business and we have lots of variables and we follow our Capital Allocation model in a way, we focus on prioritizing the organic business and the dividend, and then m a and share buybacks at the bottom, so we want to keep our skilled employees because we believe there will be a rebound. Were hoping for a vshaped recovery were preparing it to be a ushaped recovery. Were focusingon keeping the resources and all our people, so that we can make that recovery happen james, jim cramer how you been hey, jim. Good to speak to you all right, now Morgan Stanley put out a piece that im sure you, lets say, gasped at, which is downgrading cocacola to equal weight and why, ill quote we see demand risk as high, visibility as low. Note a number of additional risks not widely appreciated, lower revenue profit from case, issues involving Convenience Stores and get this one, cocacolas debt leverage. How do you how that, when you got that particular missive, you can always say i ignored it probably what id do when im not jimmy chill. It basically makes cocacola sound like a second rate credit. Look, we went into the debt market a few days ago, jim, we raised 5 billion. We saw that the market was advantageous, and we were massively oversubscribed theres a huge demand out there for instruments of all sorts of durations, from a company as solid, so we started well funded and weve gone in, weve taken on longer term debt to really keep the Balance Sheet super strong as we go into this crisis weve been through crisis before anyone can draw up a list of all the things that can go wrong in a crisis and there are plenty, but also opportunities and we have an incredible workforce that can drive adaptability. Weve seen what happens when lockdowns occur. You see a big falloff in foot and demand from home channels. You see a huge rise in the demand in the at home channel. We are very diverse by business, not just in brands and categories but also channels, so there is some natural rebalancing that goes on, not to say there wont be an impact in q2 but we have the strength to see this through someone who stocked up on coke zero ahead of this, i certainly agree. Can we get a check, thermometer that at home can offset whats going on lets just say with the machines, whats going on with the restaurants, because i think a lot of people want to own your stock, james, but are worried about earnings risk. Look, theres going to be an impact, particularly i think in q2, which is going to be concentrate the largest number of countries in lockdown and there is a full hard lockdown, rather than sort of a softer lockdown, the athome is not going to compensate in the short term from the away from home, and thats the challenge on us to make sure we supply the at home while theres pressure on the away, and there will be some hit in q2 but we have a lot of levers to rebalance the business and weve used those in crises gone by whether its adjusting the way we spend, the marketing and the investments in the marketplace, the nonsalary operating expenses and the use of capital there are levers in the business that over the long run, over the future that we will emerge stronger and this will still be a great business Grocery Stores, james, have been open, even in places that have been shut down. Are you having any difficulty sourcing ingredients or supplies like cans, and getting deliveries out there to Grocery Stores that desperately need them right now yes, there are some supply chain creeping around the world. There are flash points where its getting harder to get ingredients through, whether its delays at the borders, the big changes in channel, channel mix, use different materials so the supply chain is creaking our teams are doing a great job adapting the u. S. Is in the period just as the lockdown is starting, you actually see huge volumes starting to go through the grocery trade and so what were having to do, because it helps everyone, is focus in on the most important brands and packa packages some of the smallest skus will have to be left out, as we focus our supply chain and help the customers simplify their logistics, so that we can get the maximum amount of supply into the stores to support the big shift. Theres going to be a lot more people at home yesterday half the people were eating at home half their meals and the other half of their meals somewhere else out away from the home. Tomorrow in a lockdown, theyre having all those meals at home and drinks at home theres a big shift in the channels in the very short term of these lockdowns and so we are focussed on ensuring supply to those places that are open whats the most important there, bottled water actually in the grocery channel and ecommerce channel explosive growth in just about every category, led my soft drinks weve seen it, the great thing about the coke system being a global business, weve been able to observe, implement what do we need to do in china, in south korea, in singapore, as each of these lockdowns came into place, italy and spain and france and on to the u. K. , so weve got a very clear sense of what do we need to do and how do we need to adapt by channel, by brand, and by package to ensure supply for all the consumers and how is that going to change and thats what we are really focused on, is leveraging the strengths of the global system to deliver locally. James, since youve had experience in other countries, i did want to get you to weigh in on the debate of the moment, and President Trump actually just tweeted about how our people want to return to work they will practice social distancing and all else and our seniors watched over protecti protectively and lovingly. We can do two things together. The cure cannot be worse than the problem. Trying to engage what the Business Community, ceos like you think about the tradeoff between our Economic Health and our Actual Health, and whether opening the economy sooner rather than later is more important right now than keeping us locked down to try to flatten the curve. What do you think . Look, i think every country is in a slightly different place. The disease is the same, but the strength of the national Health Systems, versus the degree of the lockdown is country fe dependent. Only the governments have all the information. We know they dont have everything we would like to understand about this disease and whats going to happen, but they have the most amount of information faced with the uncertainty to make the decision of what degree of lockdown do we need Different Countries have done Different Things chais ha china was strict in wuhan. Less strict in south korea some have gone strict, opened a little but not fully i think the governments are in place. Our job as a business is to support in a time of national time, were here to help take some of the strain and support the government in this moment of National Crisis and get it done and theyll guide us on what degree of lockdown and opening do we need and we will ensure supply in that scenario. All right, thank you very much for joining us. Zooming in, i should say, james quincey, the ceo and chairman of cocaco cocacola. Well check back with you when we can david . Sara, thank you and thank you for bringing us that as well jim, it has been one actionpacked 90 minutes weve had with you of course youre not done. No. Joining us later with mad money james said he missed the quarter, realize take the number down but you may be able to see to the other side of the rainbow and he talked about the Balance Sheet. I was encouraged by that but we have another kind of approach were doing. We have Skyworks Solutions it may be the cleanest 5g plan david, you and i both know there will be some themes that last or more important than whats going on in terms of business, obviously not in terms of human life so well have liam on, who is just fantastic i want to thank you guys for letting me be on the show. Im booking the other time i have tom demark, the great technician of our time who will make a bullish call today. David, you follow technicians more than anyone, of course im being facetious. Thank you for letting me crash the extra half hour and thank the speaker for being on and thank the people on twitter for being constructive and making jimmy feel like chill. Good to talk to you guys and thanks to you, most importantly, jim cramer. Exactly yes, well see you in a little bit by the way, well get right now on the virus sue herrera at headquarters. Good morning, sara, good morning, everybody well start as we usually do with the overall numbers on the outbreak global cases have risen above 395,000 and the death toll is above 17,200 the World Health Organization says about 85 of new infections are happening in europe and here in the United States the tokyo summer olympics being postponed by up to a year. It is the first delay in the games. Basically the japanese Prime Minister abe recommended a delay. The chief executive of the tokyo games says it is not clear who will pay the extra costs of moving the games into next year, and in addition to that, the International Olympic Committee President says the delayed games will be a celebration of humankind overcoming the unprecedented crisis of the coronavirus. More details on the timing and the scope of the postponed games expected a bit later today and the Australian Government asking the newly jobless to wait a few days before registering for unemployment benefits. Lines have formed outside offices in sydney and melbourne after a government website crashed amid a flood of thousands of online applicati applications china has announced an end date for the lockdown in the area, where the coronavirus was first detected travel restrictions in wuhan will be lifted on april 8th. They were first put into effect on january 23rd. So maybe that time line is something we should all Pay Attention to as always more coronavirus coverage is at nbc. Com david . Ill send it to you. Okay, thank you, sue. Sobering though that time line is of course absolutely. Were coming right back here on squawk on the street. Dont forget the ceos of marriott and microsoft will both be joining us on our programming yet to come. Stay with us life isnt a straight line. And sometimes, you can find yourself heading in a new direction. But when youre with fidelity, a partner who makes sure every step is clear, theres nothing to stop you from moving forward. Welcome back im sara eisen along with david faber and kelly evans joins us from cnbc world headquarters, coming to you live from separate locations as we continue to practice social distancing here at cnbc. One hour into the trading session and things have been off to a solid start the s p 500 building on earlier gains, now up almost 7 . The dow is up 1420 points, 7. 6 and the nasdaq up 6 so one of those turnaround tuesday kind of days energy is the best performing sector in the market right now, up 12 its been the hardest hit through all of this, and Consumer Staples are lagging there, up 3. 7 , which gives you the size and scale of some of the gains as hope builds that congress will pass that stimulus package with of course all eyes on washington and President Trumps strategy here about getting the economy potentially reopened sooner than expected. Kelly . We just heard from Speaker Pelosi, who said that maybe a couple of hours from now we could have some real progress. Lets talk a little bit more about what is at stake for the markets here our guests are joyce chang, and joseph amato, cio who join us now. Joyce, let me begin with you its interesting, i wonder of all this talk getting the economy back to normal more quickly takes some of the pressure off of congress to pass this bill more quickly what are your expectations i think congress is going to pass this bill relatively quickly. I dont think this goes until the end of the week and i think the steps that its not just the congress what the fed announced yesterday was extraordinary with respect to supporting Financial Markets and the economy. So the combination of social distancing, the market moves we have seen, some of the big e markets as far as the drop in liquidity, since 1929. I do think that youre going to see a stimulus bill, extraordinary actions and could you see some Short Covering from here, just given how quickly the market moved down over the last few weeks. Sure, so your expectation is that bill still moves along quickly here the markets are looking for that joe, let me ask you about again if were going to start to look towards normalization, do we start to look at what this thank means for the fed . Yesterday the whole slate of Program Announcements came out and do we start even talking about the unwind or no i think its too early to talk about the unwind. I think were still in crisis mode, both from a monetary and fiscal policy standpoint hopefully the fiscal folks in d. C. Dont waste any more time because the policy actions they are contemplating are absolutely needed to get money in peoples hands as quickly as possible and the monetary side theres still a lot of healing that needs to happen within fixed income markets which certainly responded positively to the feds actions over the course of the last several weeks but theres still more to go, lots of dysfunction going on in fixed income markets and until you see fixed income markets settle down a bit and liquidity is at much better levels than its been, its tough to see where theres a bottom in equity markets right now. Joe, its david faber always curious to hear what new bergers clients, youve got people managing all the different teams there, but what are you sort of hearing in terms of that, what are you seeing in terms of clients and their sentiment, their desire to get to cash or perhaps just stay the course so its been an interesting contrast, david. I think as you may know a bit about neuberger, we serve large institutions as well as individuals. On the Institution Side theres dialogue with where the opportunities are, given the hess were in the middle of now, im talking about markets. Obviously the Health Crisis is paramount but as it relates to markets, whether its some of the dysfunction going on in credit markets or other parts of fixed income spectrum or inequities where stocks in some cases may have gotten, may be overreactions. On the individual side, much more caution, maybe not surprisingly, i think folks are still getting their arms around something that, while weve all been, you and your folks, the Market Participants have been living with for the last number of weeks, the speed that this has occurred i think is still spinning the individual investors so i think theres still a lot of fear out there. Its march so people are getting updates from their Financial Advisers and Mutual Fund Advisers and the quarter to date and year to date numbers look pretty ugly, down 25 to 30 . What do you tell people when they ask you how much worse it can get . Well, we are in the global recession right now, and we are expecting contraction of the u. S. Economy of 14 and still in a period when you look at how long this has taken to play out in wuhan, where theyre reopening on april 8th, you still have a couple weeks to ago. Potentially the first signs of this peaking in italy. When do we see the infection rate peak in the United States so were telling people they need to be prepared for this volatility to be here for a while. That said, what the fed has announced has been extraordinary with respect to supporting Financial Markets and the economy, and we do think that the fiscal stimulus will move forward in the congress this week you could look into a month end and see some rebalancing risk here, given how sharp the market moves have been and we are looking at potential influence coming into the s p 500, but weve seen market depth and liquidity drop more than 90 in this marketplace so its hard to call the bottom here, because we cant call the peak for the infection rate and thats what markets are going to be looking for we also think youre going to see a surge in the jobless claims, 1. 5 million, so thats also going to weigh on sentiment. So a lot of the questions ahead are how quickly can we get the fiscal stimulus in to individual households, in to small and medium sized businesses, and here is where we just have to see how quickly some of these channels can work as far as getting the fiscal stimulus to the sectors where they need it the most, as we proceed with the social distancing. Back to the real person at home, and the real client for example neuberger, you mentioned fear when does that start to abate, in your opinion . Well, i think joyce makes a good point in terms of the trend on the health side and the virus side, so i think that will probably reduce the fear levels. I think markets stabilizing a bit. Our advice to clients is look, were in a deep recession. The numbers are going to be really ugly. Take the opportunity to very gradually rebalance. Dont rush to rebalance. There will be opportunities to add, we believe, at lower levels, the depth of economic decline and earnings decline are still all over the map as youve reported we have numbers that are minus 10 in the quarter, minus 20, minus 30 worse, weve seen equity eps numbers, s p 500 at 500 bucks a share, 135, 150, so its telling you people have no idea and i think when theres that void of information as we all know markets respond to that youll see the ebbs and flows and given liquidity, characteristics of equity markets, you may get squeezes on the upside as things bounce back and there is some of that rebalancing, but i still think that until you get a sense of how deep the hole is, its not a fundamental foundation to start rebuilding joseph ama tto, joyce chang, thank you for being with us this morning. Thanks. Thank you for having me with a 7 gain for the market well take a quick commercial break. Stay with us well be all over the volatile tion yes im stuck in the middle with you, no one likes to feel stuck, boxed in, or held back. Especially by Something Like your cloud. Its a problem. But the ibm cloud is different. Its the most open and secure public cloud for business. It can manage all your apps and data from anywhere. So it can help take on anything, from rebooking flights, on the fly to restocking shelves on demand. Without getting in your way. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Stocks falling to lows not seen since 2016 and one market expert says it do coget worse. Find out how low he sees the s p adgnioing on trinatn. Cnbc. Com more squawk on the street coming up. Life isnt a straight line. And sometimes, you can find yourself heading in a new direction. But when youre with fidelity, a partner who makes sure every step is clear, theres nothing to stop you from moving forward. Welcome back to squawk on the street. Phil lebeau . Ford will not be starting its north American Auto plants as originally planned remember once they shut them down late last week they said theyd start next monday march 30th the company out with a Statement Given the various orders from various governments around the u. S. And in canada, down in mexico, people to stay at home because of coronavirus, they will not be able to restart their manufacturing next monday asoriginally planned they have not given a date for when they do plan to start production again in north america, but sara, this gets right to the heart of this question that is swirling around all the way from the white house and across the country how do you restart this economy . And when do you restart this economy . Because clearly youre looking at a big manufacturer like ford saying were not going to be ready next monday, not sure when were going to be ready. This is all the same question every company is facing right now. Right, and the companies have to make the decisions and the governors have to make the decisions. Yep its not just the president phil lebeau, thank you big rally for ford today as the debate heats up surrounding bailouts, this hour in washington the former t. A. R. P. Inspector general is arguing the need for surveillance and strict government overnight neil barovsky oversaw the troubled assets relief t. A. R. P. From late 2008 to 2011 and joins us now, partner at genera and block. You oversaw the last stimulus, neil house Speaker Pelosi told cramer this morning one of the big stumbling blocks, oversight, has been agreed to she said there will be an inspectorgeneral of the 500 billion going toward corporations how important is that . It is incredibly important, sara i think this is a really, really important development, as originally was proposed. There is going to be very limited oversight that which was going to be there. It sounded like and looked like based on existing already overtaxed inspectors general, so having a dedicated resource or dedicated resources to make sure that were keeping an eye on waste, fraud and abuse and making sure these programs are implemented with maximum transparency is so important going forward. I imagine youre having a bit of deja vu as many of us are as we await to see any sort of deal and compromise give us your lessons from overseeing t. A. R. P. Last time and what you would do differently that the lawmakers need to consider as they try to hammer this out right now. You know, i think one of the most important things is on this issue of Strings Attached or conditions, which theres a lot of debate i know the bottom line is when we bail out institutions and provide government assistance, we do so for a policy reason. Theres policy goals behind this last time, the policy was to restore lending and to help homeowners but what happened last time is we didnt have the conditions, the restrictions and incentives, the carrot, sticks, however you want to call it to actually bring about those policies millions of dollars got burned out but the Treasury Department didnt want to put any of those conditions and sort of trust the institutions to carry out the governments policy goals. That didnt work. Governments policy goals and that didnt work it didnt work because of oversight and transparency and my agency was about to do an audit and show the banks were not using the money to increase lending or help homeowners and you have to have that connection if were going to moving forward, trillions of dollars of taxpayer money, to help make sure people keep their jobs, to restart the economy, you have to have conditions and then you have to have oversight to make sure those conditions are being fulfilled. Thats one of the most important things with transparency and a strong Law Enforcement presence. Do you see that happening right now or does it look like the treasury secretary and the treasury will have discretion over where the funds go and how they get distributed you know, its a very much an evolving process i think it started in place that would be a little scary. The idea of rolling out money, giving wide discretion to the treasury secretary, making it so he wouldnt have to disclose who the recipients are for a period of six months, and i say nothing against the Current Administration but thats a recipe for corruption and disaster again, im not talking about the type of corruption where bags of cash are trading hands, although without transparency thats a real possibility, im talking about the politicalization of the process of who gets the money, right we dont want to have a situation where the company that gets the loan or gets the grant or gets the guarantee is the one that has the best political connections or the fiercest lobbyists or frankly knows a member of congress in a district who can have advocate more forcefully than someone in another district all of that will happen for sure if you have enough transparency and you have oversight mechanisms that will bring those types of things to the surface, you get two things one, you get the type of strict controls that are ness voy that everyone has an even is playing on an even Playing Field here, second you have the deter rent, that treasury official or that member of congress or company if they try to game this process its going to come to the surface and be exposed on cnbc and in congressional hearings, you have a better chance of making it fair and thats going to make it more efficient and more effective that is what we have for all of the failings of the prior bailout we had transparency brought forward by oversight and we were able to beat back the efforts and minimize their impact i think youve said or written that bailouts are almost by definition a per version of capitalism, given that normal market forces, apparently they say, are not going to prevail. Were now talking about a bailout of incredible proportions for the second time in 12 years. What does that say about capitalism i think its probably a, you know, not the best to read too much into this one about capitalism this is such an extraordinary event. I mean the complete shutdown of the Global Economy because of a worldwide pandemic is, you know, if anything warrants a bailout i think it is this but the questions that we have to ask ourselves going in as we administer the bailout, do we want to reward the companies that were teetering on collapse going into this and artificially supporting them, versus, you know, choosing our limited resources to help the companies that were already in strong states this big debate about buybacks, do we want to take government taxpayer dollars and funnel it through companies to the shareholders who reap the rewards from big buybacks and dividends or do we want to make sure that the money stays within the company, at least for the dur race of the bailouts if not for some time afterwards we are tinkering with capitalism when we bailout and thats necessary, but we these to keep an eye on capitalism and not just do this in a way that supports everything in a panic we saw that in the last bailout where sort of panic overruled, moral hazard for large institutions went outs the window and money was shovelled out without paying attention to the longterm consequences and the damages to capitalism. I think thats a really important thing for us to focus on here when were talking about conditions, talking on restrictions and distributing capital, that we keep an eye so we can get back to normal capitalism, Creative Destruction which we interfere with when we bailout companies. So neal, the Inspector Generale is going to be a really Important Role you were nominated to the job by president george w. Bush, but i believe you were a lifelong democrat who should this person be and would you raise your hand to step up to the plate i think my battle scars are pretty deep and god bless the person who takes on this job i think one of the things that is contemplated in the legislation is to give my old agency that authority. Believe it or not it still exists in wind down phase, Kristi Romero the special Inspector Generale, my chief of staff and deputy and running the organization and she has the necessary experience and would be a fine choice im always happy to help out from the sidelines but i dont look forward to getting beaten about the head on cnbc any time all that soon. We appreciate you joining us with the recommendations hope theyre listening in washington neal barofsky, thank you. Thank you so much. Over to eric chemi, a sector story at headquarters. Stocks chicalawing back gain with every sector in the s p moving higher. Thats the only sector to do so. A few names related to credit card and Payment Technology are leading wait today including alliance data, visa and mastercard even after it withdrew its 2020 guidance dxc is up 20 and plans to tap 1. 5 billion from its credit line back over to you guys. All right marriotts Ceo Arne Sorenson after the back and the cbs of cbs health larry merlot on a new recession call and nike earnings after the bell. Stay with us on cnbc for breaking News Coverage of this marketal oc u6. 7 rly you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. You met on an app. Why . Delete it. Hes the one. Gesundheit. [sneezes] i see something else. A star. With three points. Youre in a. Mercedes. Yeah, we wish. Wish granted. With four models starting under 37 thousand, there could be a mercedesbenz in your very near future at the spring event. Lease the a 220 sedan for just 349 a month with credit toward your first months payment at your local mercedesbenz dealer. Good Tuesday Morning im Morgan Brennan with jon fortt and kelly evans coming to you live from separate locations as we take social distancing very seriously here at cnbc. This, of course, as a precaution just taking a look at the markets right now, weve got a rally under way with the s p up 6. 5 , the dow up more than 1300 points as well, more than making up for yesterdays losses. Strongest rally for the dow and the s p since march 13th joining us now to break down the action were seeing is mike santoli. Mike, its great to have you this morning just taking a look ats the s p, every sector in the green being led higher by energy and materials, what does that signal well, it tells you its a pretty comprehensive bounce that we were really set up for, morgan i think thats one of the things you have to keep in mind how many d