Bullishness as manifested by a huge part of the market, i call it the 11 11. 5 trillion portiono the market, which is related to the cramer covid index you cant get enough of these stocks these are the companies that do best when you stay at home whether it with General Mills, a surprise preannouncement that was extraordinary yesterday or a lot of the apple number bumps today. Even just out of the woodwork abbvie put on the recommended list why . Now you can stay at home and go get your botox there is just absolutely a level of bullishness about this stay at home, work at home market then theres the rest of the market, which is just awful. And astonishing. Well get to calhouns comments on the today show in a moment i know you have logitech on tonight. Sales up 13. Theres a lot of web cams, mice, and keyboards that are being bought right now if you want logitech. Its so interesting because soi. They have a particular mouse that is almost as good as a wired mouse. People want that because they dont want latency if you want a home office and want quality stuff off of amazon, you can quickly set one up yourself and zoom we look at these guests, and anyone who is a phoner, they should go to estee lauder or something or go to a dermatologist. Theres no reason not to do a zoom logitech interview. It will cost you about 180 bucks. This is happening so fast that i think its just incredible i had an outfit called upwork yesterday. They find people who would be working at home and they would be the right person for you. I see tremendous tall Office Buildings with nobody in it. David, youre seeing with these Real Estate Investment trusts, with the exception of Simon Property, distressed like you wouldnt believe its yet to hit the banks. Yeah. You know, the future of work is something well be talking about. Its funny, in talking to people on wall street, the plan to get back to work, for example, it goes to your point its not just retail and simon which well get to reporting numbers, and well get to that in a bit but its also all the Office Buildings. How many people are really going to be going back and talking to people about their plan for return in the Financial Services industry traders, for example, probably would be the first to be brought back but theyre going to bring back only a slice and theyre trying to figure things out about how many people can be in an elevator. Theyll be monitoring every move made by the people who do go back theres going to be a cohort of employees who just work from home continually and, jim, that makes you wonder. Yes, theres going to be more social distancing. Yes, you may need more space. But theres going to be, i dont know what the number is, 20 , 30 of the Employee Work force that doesnt come back it may not be the same people, theyre going to be working from home thats kind of what i continue to hear. I dont know if its what you do as well. American electric power was on last night. They saw a dramatic decline in industrial use a lot of that is skyscrapers Office Buildings, a huge increase in residential. A lot of that is the office at home this is the largest Transmission Company in the country its happening so fast, its even impacting electricity carl, i have to tell you if the choice between going and getting yourself some covid by going to it the office and pressing the wrong button with too many people in the elevator, side to side, shouldertoshoulder with traders or sitting at home, having a nice breakfast, going to work, if you can silence the dog, no crying babies, youre in busines business yeah. Some of the scenarios being laid out, especially in the uk. Theres a story in reuters about london scenarios about bankers and traders not going back to work for at least a year. Then theres corporate travel. David calhoun of boeing on the today show this morning talking about something that the sell side has been laying out there for a month, whether or not demand comes back in 3 to 5 years, and whether a Major Carrier ends up going out of business take a listen. Do you think there might be a major u. S. Carrier that just has to go out of business . Yes, most likely. Something will happen when september comes around traffic levels wont be back to 100 , they wont be back to 25 . Maybe by the end of the year we approach 50 theres definitely adjustments that have to be made wow on squawk box this morning, they said a 50 number by the end of the year is optimistic. Hes a bit of an iconoclast, so to speak. I think secretary mnuchin doesnt want that. I think the Airline Business is an important business for our country. When i looked at a united air flight yesterday, its packed, i question how poorly these do heres mr. Calhoun, he gave a critical New York Times interview of his company one of the things ive learned in life having been a salesperson and taught sales, you just dont tell the clients that they dont have enough money to do business with you. So im putting that one in the illadvised category just because hes a ceo of a major company, you cant say he was illadvised. Stunning david, stunning . Maybe maybe one of the three of you guys will be out of business by yearend i dont know which one no, come on these are customers, buying billions of dollars of equipment the one thing you dont dois say im going under. Thats just not what you do in america. I suppose calhoun is a straight shooter a weve learned. He seems to speak his mind, perhaps to your point. Thats great. Even when he shouldnt. All ceos are sales people yes yes, they should be. Many of them are many of them are very good at that thats why they got to the jobs they have. Because theyre good at selling, jim. Youre right yeah. You know, guys, when i think of boeing, i still come back to the 25 billion that the company was able to raise in the Corporate Bond market. And that leads me to Something Else that is going on every day, which is the level of Capital Markets activity is just off the charts yes its not just debt. Its equity as well. Raising another 11 billion through sales of from five years up to 40, 3. 8 notes, they raised 11 billion in total those were priced at a discount. Youre talking about what could be 2 trillion in Investment Grade debt raised this year by the time the year ends its just extraordinary. Companies willing to come back again when they already hit the market once. And then, jim, weve also got equity we talked a lot about it, but for companies that have had to issue equity, but then you have this huge secondary from pnc, for blackrock. Those numbers are or nor mousens every revolver has been turned everyone took the revol revolvers. Also, federal reality, a Good Shopping center company, they tapped the bond market, people are willing to buy a lot of stuff. Make th maybe that has to do with the fed buying bonds of high quality. I cant believe when will we see the banks on the hook for real bad debt . Well talk about Simon Properties david simon is amazing he made this stunning thing in his Conference Call. He said ill pay my dividend in cash one after another. Analysts congratulating him that hes paying it in cash so many reits stopped paying or cut their dividend in half we dont see the reserves yet. But the reserves better be up. Boy the bank stocks are bad. The bank stocks yesterday were bad they had a bad day yesterday, too. Simon will open half of its properties in the next week. I know theres more activity, david, regarding zillow group today and lyft on some converts. I read this morning weve already priced mosh th ed more so far than we did all of may last year. Unbelievable right its not just straight equity. Its not just debt the way disney is doing. We saw yesterday the deal with coty, kky stepping up for a billion dollars in a convertible preferred. Its extraordinary and again, if you are a company, you probably want to get out ahead of the issuance thats still to come and the idea that there will be a repricing of some kind that will make your cost of capital more expensive thats what disney seemed to be thinking by their decision to hit the market some prices that are buy s p global. By Doug Pedersons company its a windfall. Buy it here. Spgi well take a break. Theres so much to get to today. Theres other news regarding disney bullard is on the tape talking about fed programs, fauci at the top of the hour. A lot more squawk on the street. Dont go anywhere. When the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. Im really proud of our people and what we accomplished since the acquisition. The performance of the business has continued to be strong across the board on all value drivers for the acquisition where we are executing well. The pipeline is progressing. The approvals of new medicines in the First Quarter really is a demonstration of the strong focus we have on the pipeline. Thats jim last night on mad money. Theres moderna and labcorp also moderna loves press releases. Theyre fabulous at that when you fast track something from the fda, all it means is the illness is bad its not like, hey, they just got some approval to do something fast bristolmyers, dr. Caforio is a levelheaded guy he talked about alliances among Drug Companies to get a vaccine. This celgene deal is unrecognized this stock sells at ten times earnings it had 8 growth thats the kind of thing people say, geez, the market is overvalued bristolmyers this company is unbelievably cheap. I know its chic to come on and say the whole thing is a big house of cards. How do they explain the fact that theres a 3 yield with a decent Balance Sheet that sells at 10 times earnings with 8 growth and it will get faster . I find the ignorance of people who want to slam this, they should look at individual stocks there are stocks overvalued. Bristol is not one of them no, but in some ways as the market noted granted, in your opinion, its cheap, but its up 33 over the last year, jim. I guess it has not been getting respect for a long time. Thats it thats what i said to dr. Caforio. In the 40 level, it was just me. I know that people said, oh, he likes to say bristolmyers 42, come on he was using a gigantic number the synergies are better this is the stock i implore people to put in their portfolio. I find theres many, many people who are so quick to say theres nothing to buy, but they dont want to look at individual stocks they made up their mind about the s p and theres probably twothirds of the s p thats wrong. That doesnt work. I have 11 11. 5 trillion worth o cramer covid index that does work and it makes sense here. Yeah. If you bought the s p index, you are not unhappy in the sense of youre down 9 for the year and you benefited from those Mega Cap Companies that we talk about all the time for obvious reason apple, alphabet, amazon, microsoft, that have allowed that index to be where it is, despite the performance of so many other stocks that are far less you are a Glass Half Full guy. But youre you dont understand its a glass full not unhappy, Glass Half Full no, you should be its its happy look at the trillion dollar index that ive got. David, its okay i mean, i know its difficult to accept because of how horrible the situation is companies have pivoted dramatically Services Services david, just be less glum youre at home it looks fabulous. You have a fabulous life you probably even have the dog there. Hows the dog . He gets put away over in that side youre like a call center over there youre a call center yeah. Ye yes. Quiet dogs, david, for the win for sure well take a break here. A lot more to get to on this tuesday morning. Stay with us whatd we decide on the flyers again . Uh, fifteen minutes could save you 15 or more on car insurance. I think were gonna swap over to over seventyfive years of savings and service. What, were just gonna swap over . Yep. Pump the breaks on this, swap it over to that. Pump the breaks, and, uh, swap over . Thats right. Instead of all this that ive already . Yeah. What are we gonna do with these . Keep it at your desk, and save it for next time. Geico. Over 75 years of savings and service. Thats why working together ist more important than ever. At t is committed to keeping you connected. So you can keep your patients cared for. Your customers served. Your students inspired. And your employees closer than ever. Our network is resilient. Our people are strong. Our job is to keep your business connected. Its what weve always done. Its what well always do. Welcome back to squawk on the street. Time for a mad dash from this very happy household to your miserable one, jim ill do anything to improve your mood ill do anything but open a factory in alameda that im not supposed to. This is what im talking about alphabet this morning, citi bumps its price target and takes it from 1400 to 1600. Why did they do it i dont know they cut Revenue Growth. They talk about revenue deceleration theyre talking about youtube Revenue Growth they bump the price target this is what youre talking about. The this is called it doesnt say it it doesnt say factious at the top. You dont cut your Revenue Growth and then raise the price target but, david, its alphabet. Its like china town right yeah its china town. Yep. Yep. That said, there are some there are some investors, jim, who are seizing on the efficiencies that alphabet has been finally willing to seize as they cut costs as a real positive revenues maybe wont go up margins will yeah. The drunken sailor thing kind of got a little bit weary hi, david. Thats you, david. You can go okay david, go out for that one. I think were taking a break now, jim ill do that well be back. We have an opening bell. Nine minutes away. A lot more for you on squawk on the street. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Confident financial plans, calming financial plans, complete financial plans. Theyre all possible with a cfp® professional. Find yours at letsmakeaplan. Org. Tesla is up 2 premarket as elon musk tweeted yesterday. Tesla is restarting production today against Alameda County rules. Ill be online with everyone else if anyone gets arrested, i ask it only be me. The plant was shut down for five months it sounds like maybe you think he doesnt have legal standing but moral standing to do what hes doing here. I think hes a zealot i think hes correct in thinking the whole thrust of this country is to put people to work why do we presume that he cant do it in a fashion that is safe . I do not know. I mean, i want this is not tyson, okay . This is not smithfield why do we think this man is going to put people at risk . When i look at my twitter column, theres two kinds of people people quho thiwho think hes te greatest and people who think hes willing to sacrifice people he may not be as concerned about covid as every person in the cold, but theres no indication that hes willing to sacrifice peoples lives. Why cant they make a deal i dont understand this. Its time to open up that factory. I think hes dead right. I dont want to violate the law, but come on. Do we not want this factory open secretary mnuchin wants it open. Heres what he told us yesterday. I agree with elon musk. Hes one of the biggest employers and manufacturers in California California should prioritize doing whatever they need to do to solve those Health Issues so that he can open quickly and safely or theyre going to find hes moving his production to a different state. He does have the argument that theyre essentially the only oem not allowed to open on a week when the other big three are going to open. We got rid of osha oh, osha still exists. Im sorry. They would be valuable here. We dont have standards. Theres a county elected official shutting down maybe one of the most Important Companies in america if the president would step in, that would be very valuable. This is on the firing line of whats wrong with america. This incredible even a county commissioner can shut down a great company. How is this possible how is it possible we have unfettered confederacy of anything i use the word confederacy not disparaging in terms of the things they did wrong, but the idea that everybody seems to be equal when it comes to being able to tell someone not to do something. Youre supposed to be trying to open up america, not close america. I dont get it at all. Who is this guy to stand up in front of a real company . Jim, all that being said, theres no unified approach here we know that its each state making their own decisions. Down to the local level. Based on all of the different factors there. You have been the first person to speak out about protecting Peoples Health every single day and how concerned you are about it trust and verify. Do you know what the specific conditions are i dont know certainly i can understand why you would want to open the factory. Im surprised to hear you say that its not the soviet union in 1935 were not putting coal into an engine i think you can sit down with this man and work it out thats all im saying. I think the disease is horrible. Far worse than most people but i do believe there are ways if we let tyson open plants, okay tyson. We should let this plant open. Tyson was there are ways to do it listen, i come back again to carrier and david gitland on friday talking about their lines of production, spacing people out,using potentially robots i between. We know theres a great deal of robotics in any tesla factory. Probably more than theres people we dont know the spacing requirements we dont know these things i guess well find out there should be a way to get everybody open and we have very little distance between us other than washington and connecticut and right here all right opening bell here. In terms of markets, a lot has been talked about in terms of this rally being led not by valuations but by flows. I wonder, you know, the historical setup when the nasdaq is up six days in a row, 50 basis points a day is not great. No. No would i like it to cool off . Absolutely i think that there is look, they forced a lot of money into the market if we do get negative rates, thats also good for stocks. We have a lot of stocks look, that target boost of alphabet takes the cake were cutting our Revenue Growth but raising our price target thats about being a part of the flow people dont want to be left behind there are companies doing well data dog was data, i know, were starting to its not davids dogs name i do like it data dog was one of other than service now, data dog was one of two companies that actually put dramatic increase in forecasts most Companies Just suspended forecasts, theyre into the saying anything good i have two that would deserve to be up if we were playing by the old rules. Data dog and service now that is a little thats just wrong. We did go down a lot apple is doing better. I think microsoft is doing better a lot of companies doing better. Facebook turned out to be better advertising did not collapse among those. Then we have these other companies. Marriott, there was a cut there that was significant anything travel and leisure is not working. So, i dont know we just have two markets one market is horrendous the other market is getting the money from the bad market. Its happening its happening now its a little unnerving to see the board up again and oil is up the retailers, really . Wait until we see the monthly numbers, theyll be terrible the leaderboard is Simon Property at the top, nordstrom, l brands, gap, carmax. Were clearly playing a retail reopening dynamic. At least carmax they had some good things that upgrade was very interesting it talked about how people will be afraid to take public transportation, so theyll buy a used car that was good. Nordstrom is just a belief theyre not going to go under. Thats not really a good reason to buy a stock gap is similar wow, i have to buy that stock because it may not go under. Theres a lot of companies that i just think are are momentum we have cisco reporting tomorrow thats been momentum from 38 to 43 maybe they got that division that competes directly with with zoom. Its doing well. You know, webex we had this company that a lot of people like, a company that does fiberoptics that people dont focus on, iivi, they had a blowout quarter. People are buying fiberoptic companies companies. A lot of companies are doing well the General Mills quarter the General Mills ceo was on he cannot contain himself. People are baking, cooking, feeding the dog multiple times baking more. Theyre eating cereal. Theyre doing things they used to be going to work, miserable. Now theyre at home, cooking i think stay at home has some real advantages and you can see the skylines wild animals i saw a fox. Yeah. Did it have a lot of fur on it i notice the foxes have a lot of fur do they always have a lot of fur i dont know do they shed im not familiar with their m. O. Any coyotes up there, david . Yeah, there are there are. Yeah . Thats why my dog, named scoop what to be careful at night. Do you have a gun i do not. No do you have you ever hunted . No no. Yes, actually, once. Hunted some pheasant just up there now you have wildlife everywhere bald eagles. Everything is coming back. Its amazing that wildlife is its like real its Like National geographic incredible nature finds a way. Air pollution, you name it, jim. By the way, speaking of air pollution and carbon, the president tweets just now, crude Oil Prices Going up as saudi arabia cuts production levels. Our great Energy Companies with millions of jobs are starting to look very good again at the same time gas prices at record lows. The best of all worlds transition to greatness. The there is some discussion that even if you dont believe the squeeze in equities, oil is telling you that there is a rebound in global activity happening. Yeah, minus 37 was a scary day. The way that happened, it happened so quickly most of the actual Big Oil Companies are not nimble enough they couldnt be down there chevron would have loved to have been down there. It happened too quickly. There is some demand theres some airline demand. Theres i would point out that theres that most Oil Companies cannot break even at these prices its great not to lose those jobs, but were at nowhere near the break even level we have to go up another 5 before we can before more than Six Companies can make money. Imagine that if youre at 70, you lose money here yes, its great now that they can get some revolvers, do okay. But this cant last. It has to go to 32 thats where you start getting breakevens. 32 aways from here yeah. You mentioned Simon Property being a leader in terms of performance this morning the stock up 6 . We mentioned it a couple times at the top its worth quickly going over it they talk about the fact they have reopened 77 of their u. S. Retail properties in reporting numbers. David simon, the companys chairman and ceo as well talking about the unprecedented challenges theyre facing right now. The disruption to the business, of course. How quickly they had to pivot to address the spread of the virus. What he didnt discuss is the taubman deal thats why shares of taubman are down this morning, because once again, he did not hand hold in any way, shape or form did mr. Simon. Its a deal they entered into the early part of february if they only waited a couple more weeks, it might have been a different tale there are those looking at the 10q and you might not make much of this if you were just passing through the 10q, but the fact that within the 10q, they talk about it in a different way. They say that its contractual under the terms of the merger agreement. The contractual Purchase Price for taubmans common stock is 52. 50 per share in cash, or 3. 6 billion. The use of that word contractual seems to be freaking people out. They seem to be saying this is the contractual price. He doesnt want to talk about this thing i love the guy hes one of the neatest persons ever hes tough. Hes tough. He looked at me and said you, 33 billion. I said, what you, 33 billion i paid 33 billion in dividends i said thats fabulous im jim cramer 33 billion hes a tough guy hes a tough man do you think this is a guy no matter what hes got to do will figure out a way to try to get out of this deal or delay it as much as he can and get a price cut . I dont know. Hes also an incredibly honest and good businessman that would not be in his nature. No one thought hes anything other than the most honest forthcoming i dont know how to get out of this, david. I know. Man, the timing was just about as bad as it could possibly be we bought a house march 22nd. So i dont know. You want bad timing . I dont know no kidding. Another house . Yeah. Wow maybe we should go to rick. All right we can do that. Maybe we can cover that another time lets get to Rick Santelli on what is a busy morning for him good morning, rick i was enjoying this i didnt really buy anything big in march but i want to hear more if we look at cpi, the headline number goes back to 1947 but core, the concept of core came ten years later, 1957 down 0. 4 today on core think about it, x food and energy you would think energy is it x food and energy down 0. 4 we never had a core number that small since 1957 it is enlightening treasuries didnt pay a lot of attention. Maybe because the treasury keeps buying so many, though theyre buying less and less as you look at chart for two weeks, theres an upward trajectory to tenyear note yields as we go from the 50s 60s to the 60s and 70s its tame. Curve is around 50, 51 basis points tens to twos. If we look at a one month of tens, we have closed onemonth highs yesterday, 71 basis points, you can see its rising. What we really want to see at some point is a test of 1 , 1. 25 , somewhere in that area, where it started to get messy when rates started to come down. Now, we all know the Federal Reserve has made a play to come in and buy high yield etfs is it a good idea . Many dont think so. Theyre doing it nonetheless if you look at a chart going back to the beginning, the hyg, it started in april of 2002007 you can see the whole run there, in 2009, that was the big break where it was at its worst level, outside of march where its coming back and its idling, waiting for the fed. Its come well off its lows because it knows that the fed is coming with some dollars to purchase that etf and its going to be interesting. They have not purchased anything as of this point in time finally the dollar index this chart goes back to midmarch. Whats interesting, this is the ninth week in a row where we had one session close at 100 or higher they already had it earlier in the week it slipped a bit that underscores how strong the dollar index is and ultimately it explains one reason why our Inflation Numbers are where theyre at as things come in, that strong dollar actually buys us lots of things compared to other countries. Carl, jim, david, back to you. Thank you for that. Well talk to you in a little while. We were talking tesla, jim, the president now tweets california should let tesla and elon musk open the plant now it can be cdone fast and safely yeah. The key thing is people against musk presume that he runs some sort of sweatshop. They presume he runs some sort of tyson plant, the old tyson, before tyson got religion. I think, look, trust and verify. Open it, make sure its run safely, lets put these people to work. I dont know where it came about that once the plant starts youre not allowed to look into it the president oh. The president is right there. Well see maybe fauci will be asked about this in a few minutes. Fauci will talk to Senate Health committee this morning at 10 00 a. M. As well as the heads of the cdc, hhs and the fda he will do it remotely, jim, as they do a bit of semiquarantining because of the exposure in the white house the last week or two im glad he was doing that. It was unnerving to see the west wing have people who were infected look, we all know that its very interesting. T they opened shanghai disney. What do they do . They have a meter social distancing, but everybody has too wear masks were into the sixfeet social distancing, but the masks are optional the optional thing is starting to lose a lot of, i think, gravitas i think when you go to costco and you have to wear the mask, every store i went to in long island this weekend you had to wear a mask. Look, we know theyre not perfect. By the way, marc benioff has a great tweet talking about how theyre this good, then they cut them down this good. Its still better than nothing i think the chinese understand that i think its interesting that the social distancing is not nearly as significant to them as it is in this country. Why is that . Because we dont know anything not we them or us i think theres a belief that somehow the Novel Coronavirus has been figured out by our scientists, thats just simply untru untrue jim, there is a lot to back that up, it would seem, given every day we learn something new and the medical professionals on the front line are trying to respond as quickly as they can to all the different inputs theyre getting. Guys, i want to mix it up here and bring on a guest that, jim, youve had on many times as well a company you follow closely, International Flavors and fragrances, the company having reported numbers it will begin its Conference Call soon as well but weve got the companys chairman and ceo first on cnbc seasons in with us this morning. Andreas, its nice to have you with us. I want to get to the quarter and what you saw you saw positives as a result of significant demand for ingredients and solutions in certain consumer products, packaged food and the like you also saw fragrances and cosmetics, i would assume, sales of which decline given that nobody could go into a department store, for example. What are you doing at iff to adjust to this new reality first of all, thank you good morning thank you for having me here we had a good quarter. That was driven by certain categories and certainly by the ability of iff to basically work with the supply chain. All of our 110 manufacturing facilities are open. That was a bit of a challenge, ill come to that later. On the flavors side, the ingredient side, the center of the aisle in the supermarkets, packaged foods which goes in there. We have seen it on hand sanitizers, detergents which are doing extremely well thats driven by the demand. We see that in the marketplace, but also by some of the big wins we had the end of last year. As you were saying, fragrances is not going well or cosmetics or some of the Food Service Products as well, but in general i would say Strong Quarter and a good start into the year yeah. Given that, andreas, why not share 2020 fullyear guidance . Look, we believe that or we see that the market is super volatile at the market now we see spikes in some categories that goes up 200 , 300 , and others are going down. We said its just too volatile right now. We dont know how the recovery will happen when all the Different Companies are opening up again to keep the guidance. But we will give over the Second Quarter more guidance on the Second Quarter when we can do so and i think its the right thing to do for that situation the good thing is its a Global Business we are selling our products in more than 200 different markets. The whole covid19 crisis started in china, so we took a lot of learnings from our chinese operations and we went to europe, then finally to the u. S. And latin america that helped us to adjust what is the big question for us now and our consumer studies, what will be sustainable of these trends so will it be the health, the vitamins in food be a sustainable trend . Are we seeing people using more hand sanitizers Going Forward and washing as much as they do now . Thats under way we do that every year with 5,000 consumer interviews. We want to find out whats important for our customers to be successful in the future. Yeah. We talk a great deal about what the new normal is going to look like, andreas. What about your own workers . I know most of them are reporting to your facilities and have been throughout this. What changes have you made what changes do you anticipate making as well in terms of how the work is getting done yeah. First of all, im extremely proud that all of our essential workers are showing up every single day in our factories and working. We have done a lot to help them to stay safe we have split the shifts the shifts dont see each other. We have the face masks in there. We know before they leave their homes they do their own temperatures those are s. O. P. S theyre following. Thats a reason all of our 110 factories are open and working even most of our labs are working with different shifts as well the only thing are the office workers, which in many countries are still home and now regularly we are restarting the office as well but as we find being out on zoom here, it works very fine with people working from home as well what we have done also is help the Front Line Health Care workers, police departments, with some hand sanitizers. We have up to now produced more than 17 metric tons of hand sanitizers, and have developed a special scent called oak 2020 which we are delivering right now. Andreas, its jim great to see you, congratulations on an amazing quarter. Thank you, jim. I dont know if people understand how much of your business is the business that is sidelined. We dont care how we smell on zoom you pivoted. I always felt that was so great about your model, right . You could pivot. We have to figure this out. Certainly the merger of the business is on track as well we announced that last december. We are very proud that we have announced yesterday that the top leadership team, the purpose and vision of the new company, and even despite the covid19 situation, we are not missing a beat in combining these two companies together yeah. I love the nutrition part. I love the way you broke things down its a great down again its a great mosaic, its a couple billiondollar product lines that are all growth mode something you taught me early on was that we like the taste of the first thing we tasted when we were born we are in a very insecure time and people are at home we want to be comfortable in any way we can are you seeing a resurgence of the basic tastes that we got when we were born . Yes depending on when you were born, what you experience, macaroni and cheese, in this country, for example. In other tastes all over the place. I think thats a reason why people are now going back to some of the big brands they know for years and for decades. Incredible. Andreas, finally you mentioned the dupont deal, of course on track to close in the early part of 2021 your stock got whacked after you announced that deal. It has come back since, in part on the strength of the results themselves, but what did the market not appreciate, understand, or not like about that deal that it seems to have come around to appreciating now . I think a couple of things. First, we had to understand what is the Strategic Logic behind the deal secondly, we had to discuss the financing, how we really want to make it happen, and we acquired two years ago another Company Called futarome and well finish that integration until the third and Fourth Quarter of this year and basically go First Quarter next year in the next big integration exercise, and i have to say, looking at the First Quarter of both companies, whether it is dupont or ours, it shows they are two essential businesses which will be combined here and were prudent to grow Going Forward even in that environment on top of it, we are now in the position to really do integrated solutions, where we can bring a lot of these ingredients together let me give you an example we see right now a lot of plantbased burgers and meat now as a company, we are not just flavoring that, we can do the plantbased protein, which we get we can bring the texturizers into it. We basically can do almost the whole product here for our customers, and i think this is a very strategic advantage we are having against all of our competitors. Well, andreas, we always appreciate your updating us on those various efforts. Thank you for joining us this morning. Thank you take care. Stay healthy you, too. All right, guys, dow did get a pop at the open, up 160, but now settling back to the flat line a long with the s p as dr. Fauci is getting ready to testify in front of the senate, in just a few moments. Dont go away. Watch the markets here keeping some powder dry as we await dr. Faucis testimony in front of the senate in a few moments. In the meantime the president tweeting on everything from oil to tesla to negative rates were back in a minute across america, Business Owners are figuring things out. Finding new ways to serve customers. Connect employees. And work with partners. Comcast business is right there with you. With a network that helps give you speed, reliability and security. And enough bandwidth to handle all your connected devices. Voice Solutions Like remote Call Forwarding and readable voicemail. And safe, convenient installation. When every connection counts, you can count on us. Get the connectivity your business needs. Call today. Comcast business. Lets get to jim and stop trading. Carl, you want to know how bad the bank stocks are . Pnc financial is selling that incredible, incredible blackrock steak so good. The analysts are positive stephens saying you should buy it, upgrading to overweight. Everything that banks do perceived as being desperate and this one in particular and bank stocks are poison here, poison pnc in the bottom ten of s pers in a moment incredible. Two things we didnt get to you with this morning, peloton hitting a million subs and disney launching hamilton to disney plus about a year and a half early in july i think disney is doing a lot. People wrote this thing off when it reported. I like everything theyre doing. Theyre really look, theyre going to open everything, but most importantly, it looks like were going to be sports maybe no fans but do we care even more of a reason to stay i want anything. Ill watch any sport i mean honestly. Ill watch curling i never really understood it but ill watch it. It blacked me out, though. That was not so good jim, how about tonight . Okay, weve got one of, what, we got the hottest stock there is, novavax. People love vaccine stocks we have bracken darrell, logitech the way you build an office as good looking as yours and davids, because they make all the things that come with office at home, the most incredible story ever told how is the dog, david . Jim, well see you at 6 00. So many stories to get to. Thank you thank you. Jim cramer, mad money 6 00 p. M. Eastern time of course tonight on cnbc. In the meantime, everybody happy tuesday. Welcome back to squawk on the street. Im Carl Quintanilla with david faber, sara eisen, live from various locations. A bit of a tight range dow did pop at the open up 160 but settled back as we await dr. Fauci testifying in front of the senate this morning in just a few moments, along with the heads of the fda and the cdc, all remotely, even the senate chair of the committee will be remote as well sara, interesting cpi number of course the month on month drop, the worst ever, but mens suits down 11, and then you got eggs up double digits. Some fascinating price action within the cpi this morning. Yes, the only places where prices are rising are at the grocery store, thats obviously painful for the consumer, but the picture that was told by the inflation data is that deflation, at least right now, is the risk, falling prices, which corresponds to an economy thats in recession. The high job losses and the collapse of wages, and that really is something that the Federal Reserve and other policymakers are trying to get in front of by lowering Interest Rates and trying to stimulate demand once it comes back. The Economic Data is not really being traded or reacted to in the markets because its considered so steal. Its the High Frequency indicators like little more sub way usage in the new york area or little more gasoline demand as states start to reopen. Thats whats providing some of the optimism here, and its those realtime indicators, because we have states opening week by week, carl, which is really creating more of the trading environment. I would also point to the collapse of mfib Small Business optimism also, the other data point people are watching today that shows the pain. Yes, absolutely on all of this, the Market Action and more. Lets get to david costin, Goldman Sachs chief equity strategist who inz jo us thjoin morning. Good to talk to you. Nice to see you id love to get an update on your world view right now, because you did moderate sort of your extreme downside target when it came to the s p, but it does feel like your notes are chock full of warnings about concentration in a few names, obviously declines in buyback activity, and dividend activity, as companies preserve cash how are you feeling . So carl, here is how i think about it basically all of the good and optimistic outlook is basically priced into the market today so where the market is trading now, i would say that a sem tree of upside, perhaps 2 . The downside maybe 15 and the thought process behind that is what is the market pricing, and the market at this juncture is trading at around 17 times multiple on our optimistic 2021 earnings estimate for next year of about 170 so to put that in some perspective, last year, 2019, the market earned 165 my forecast for next year, in 2021, looking through the trough this year, next year will be about 170, so thats actually a slightly higher level than we had before looking back in 2019. So in that context, the market is trading on a twoyear forward basis on a very high multiple, not the most extraordinary multiple but a pretty high multiple, and the risk of activities and developments looking forward as i think about it is probably more skewed to the downside near term than the upside theres modest upside. I think the end of the year, the market will be a little bit higher than we are today but not a whole lot higher and the market is pricing in as i said a very optimistic i think likely scenario, but its certainly not giving a lot of cushion for Portfolio Managers yes what youre describing, david, though is what the bulls always say and that is the markets looking through this incredibly volatile period were in whats wrong with that so yes. Absolutely, makt is a discourke discounting mechanism looks forward and Market Information is coming in every day here are some of the things maybe arent being embraced by some of the Fund Managers with whom i speak so first of all, if you think about the amount of bank loan loss provisions, theyre likely to take place over the next 12 months, so my good colleague richard ramson, the bank analyst and Goldman Sachs they calculate around 115 billion of provisions are likely to be made in the next four quarters against whats likely to be about 103 billion of losses, of loan loss recognition, and so thats a question, what does that suggest about bankruptcies, about defaults, about loan quality in terms of the growth of business . Thats one example weve got buybacks. The number one source of demand for shares in the last ten years, something we have talked about for a long time with you, and the viewers. Thats not likely to be a big support level for the market theyre going to be down around 50 in the next 12 months. We expect a big pulling away in terms of the money flow demand dividends, we have 40 Companies Already have cut, eliminated or suspended their dividends, thats likely to increase, if you will, as we go through the year of fewer Companies Looking to make those payouts. Capital spending also falling, about 25 , in the next year. So those are some of the issues. You got the risk of the election coming up, were about six months away, were less than that the prospect potentially of a higher Corporate Tax rate, you know, i come back to the valuation of the market. The markets trading now on our optimistic numbers around 17 times forward earnings, but if i went to you and said well, gee, under a different tax scenario you could have maybe 20 a share of earnings could have to lower your earnings estimates. Suddenly the market multiple is closer to 20 times earnings and thats the concern i would have. So again, the economic scenario is getting better, the hopefulness is that the second half of the year will see steady restart of the economy in different states its all priced in everything seems fully valued in the market today, and these levels are less, less enthusiastic about where we are. David sara . David, the biggest argument against what youre saying is against the fully valued, against the fact that there are meanty of risks coming up. Is that the Federal Reserve is in, in such a big way. Just today the Federal Reserve is going to start buying Corporate Bonds, and Corporate Bonds etf s frkfs, clearing ther the most risky Indebted Companies like high yield, which benefited tremendously already from this. Are you saying to fight the fed here because the wave of stimulus appears to just be washing over all the bad news absolutely, the most Important Development that has taken place in the last two months, no question about it, has been the various actions of the fed. March 17th they came in helping to back stop the commercial paper market, an important lubricant of the business Financing Activities and the 23rd of march came in an enormous way backstopping the Investment Grade market and even some of the fallen angels previously Investment Grade had been downgraded so the actions of the fed have been extraordinarily important and really is a primary catalyst for why the market has moved so far so quickly, and of course, congress coming in with its actions on the fiscal side so clearly those are Important Developments, and the question is on the rate of change, so as each successive action has somewhat less effect on the general trajectory of the market, the market moved back 30 , basing 30 up from the lows, basically from the same level we were trading the u. S. Equity market was trading in november, and so obviously things are a lot different in temples terms of the outlook not suggesting to fight the fed, im just saying that from this level, Going Forward, we are pretty fully valued on the way i would think about the earnings prospects for the market now, when i talk with clients, all over the world, the discussion point is they are already pushing back enough saying our earnings estimates are too high, that they use themselves a lower level of profits for 2021, so already were getting pushback, that were too optimistic on the profit recovery for corporations, and again, thats i would say is our baseline, its optimistic but its about a 170 earnings level for next year, and so if you want to think about the distribution of risks, what the Federal Reserve did and congress is cut off the proverbial left tail, the downside abyss that was a potential risk thats been eliminated and the question is, whats the right tail what is the upside what is the opportunity set on the other side well, the market is highly concentrated in a few stocks, 20 of the market is five Big Technology companies those companies are expected to have Revenue Growth and Earnings Growth over the next two years of around 14 , and they trade clen collectively around 28 times earnings so its a petogrowth multiple around two times. 14 growth, 28 times p the other 495 stocks in the market have expected Earnings Growth of around 4 per year over the next two years and trade at 16 times earnings, so you get a very narrow concentration of the market, where theres some growth, and the concern would be on my part was where is the vowulnerability and i think the big source of vulnerability is on the Small Businesses, and you just mentioned, sara, a minute ago that nfib metric came out this morning, on the Small Business optimism, it fell, came at 6 00 a. M. This morning, it fell slightly its not merely the level that it was at the lows in 2009, so it certainly based on history would suggest it could fall further and u. S. Companies whose customers are Small Businesses, they are at risk, in terms of those stocks tend to do poorly as this sensitivity, the High Sensitivity to the downward slope in the nfib service. Thats an area of vulnerability and an area of focus, no surprise, is basically the technology area, primarily because they have among the best Balance Sheets so the biggest long short gap in the market without question since the start of the year, companies with the strongest Balance Sheets are up yeartodate, and companies with the weakest Balance Sheets are down 25 yeartodate, and so that is an indication of what Portfolio Managers are paying for is the security, the solvency, the Balance Sheet strength, thats what theyre focused on in this market and i think thats appropriate its the biggest risk for so Many Companies the technology, stronger Balance Sheets and thats kind of where we are at this juncture. So are you talking about just the major names that have already rallied so much, amazon, facebook, google, microsoft, the ones that showed us theyre relatively immune to some of these headwinds, based on what we got out of earnings or are you expanding the coverage and looking more at Software Companies with better Balance Sheets as well you could look certainly, if you want to think weve got 90 of the way through earnings season were pretty much done for those that are working off of a calendar earnings reporting season so you go through the transcripts, and you look and reflect on what managements are saying about their business, and on their outlook, one of the key issues is the digitization, the automation, but businesses and the companies in those areas have generally been relatively immune, there is a pun intended there, relatively less negatively affected as compared with a lot of industries, where theyre obviously if everyone is at home, theyre not, you know, basically patronizing their businesses, whether its a retail organization, for example. Its more challenging. So yes, the Balance Sheet is a key variable, and also the revenue side, where are there more stability on the revenue front are things to be looking for. Yes, the big debate with so many Fund Managers is what is the trajectory of the restart of the u. S. Economy how smooth will it go . Clearly there will be some setbacks, not clearly but we expect at some point to be various outbreaks, et cetera im not the epidemiologist but that would be evidence of whats been happening in singapore, korea or some other place in europe sure. Which suggests that is a recur sore of what could take place here that would suggest that Balance Sheet strength, ability to withstand any uncertainties is a real key, and so yes, theres a lot of other companies in most of the Technology Space but i would focus really its a Balance Sheet story first, and then worry about some growth afterwards right, right. David, thats really great explanation of where we are, especially with fauci on deck in a few moments. Well keep this a little bit brief, but we thank you. Well talk to you soon david kostin of Goldman Sachs. Sara at let ache particlemaker under armour reported wider than expected loss in its quarter with results on sales dropping 23 as covid19 is hampering the companys turnaround plans. Joining us now the ceo of under armour patrick frisk thank you for taking the time. Great to see you again. So you painted kind of a rough picture of whats going on for you and across retailers just talk about what youre expecting at this point for the second half of the year. Well, i think what youre going to see now, if china is any indication is a slow gradual opening again of stores. Well start opening some stores this week, and then were going to continue to open stores here in front of memorial day and continue into june thats also whats happening with most of our customers right now. So were going to see a gradual opening, and i think theres going to be a few ups and downs in terms of potentially shutting down stores, reopening stores, but it will be gradual, we believe, and if china is any indication, and weve had a gradual comeback in china, feel good about that, and i think youre going to see a similar picture in the u. S what are you seeing in china, in terms of the consumer response to shopping and how they are coming back to your brand, specifically . Well, its interesting. I think it was gradual i think now were almost back to the levels we were before covid19 hit, so in other words, the consumer has come back in brick and mortar consumer has also come back online of course, we were always online we havent lost a lot of traction online since the stores opened, which is really interesting for us to see, but the consumer is back the consumer is shopping a little bit more accidentally in terms of how theyre moving around, moving about but definitely shopping. If thats any indication, it will be gradual here in the u. S. As well, but they will come back you know, one of the problems with under armour specificcally that is that it was having trouble before this crisis with the brand, with getting traffic, with really getting traction in a way some of your bigger competitors like nike and adidas were what do you tell people wondering what is it going to look like when under armour reopens. Are consumers coming back to the brand where its not like they were drawn in to begin with prepan demme ing, one of the reasons you were taking over as ceo earlier this year. I think one of the great things that weve seen during this pandemic, you know, its interesting in the Digital World it is the great equalizer to some extent. As our team saw this happening, we rejigged ourselves and really went all digital and what was great about that was all of our influencers, all of our athletes also stepped up in a major way, and as we went online completely, we were also helped by our connected fitness platform platforms, especially the map my run app. Enormous engagement, up over 275 this time and our connected footwear, over 200 increases in connected footwear sales and down thats been an incredible boost for us, and thats also translated to online sales weve seen also traction in terms of our womens business, and you know, its interesting, what happens when youre actually able to compete on more equal terms, so we feel that when we have the right components of product and marketing, and are able to show up in the right way, the consumer is still there for us, and you know, our mission to make you better is probably going to be even more important as we turn the corner and people want to get out and about again. Fitness and staying healthy is going to be top of mind of a lot of people, and the number will be there for them. What does that mean youve gone all in online and how much of a needle mover is for you at this point in other words, can you actually make up a decent portion or any of the lost sales from the stores being closed online everything is relative. The online sales is still a small component of overall sales, low double digit in terms of revenue however it is important in terms of engagement. For us whats interesting to see is the level of engagement and weve seen also needle movers in areas that weve been working on to really get some traction on for some time, like womens, which is very encouraging to us. So our run in womens categories are really whats trending really well for us during this time but ultimately for us, its also about new consumers. One of the things weve seen onsign a lot of new consumers for under armour, very encouraging for us as we turn the corner what are prices going to look like pro motimotions, discounts Outlet Stores as we try to manage inventory and get people back into stores i think that was one of the good new stories i this i in terms of how we think about things we came in to the Second Quarter with a little bit of elevated inventories, but ultimately lower than most of our competition, about 7 . Everybodys going to have inventories building in q2, but because we stood up demand planning in terms of a great investment over the last 18 months or so, we were able to react very quickly when we saw what happened in china to really readjust and rebalance our demand planning for the back half of the year so as we think about the rest of this year, its really going to be a question of rebalancing inventories, and we feel that were in a good position to do that your strategy has been to bet on performance, and athletic apparel. Where weve seen a little bit more of a slant from nike and adidas to embrace more of the fashion crowd and the fashion influencers, do you wish you hadnt done that at a time where theres no sports right now . Well, i think whats interesting is how weve been able to continue to make People Better during this pandemic in terms of helping people workout at home. Like i said before, i think this pandemic has shown people the importance of staying healthy, staying fit, and i think under armour is truly one of the brands that can help people do that and i think our aim to really get back to the roots of the brand, and competing in athletic performance is our path forward, and were going to do that in a really good way and do it through sports, whether its team sports or individual sports, and we believe that the way to win for us is truly staying focused Going Forward. But what does it mean for your signature athletes, a steph curry for instance, line do the sales get challenged by the fact the nba season is not happening . Well, i think all of our athletes, steph included, has been fantastic and phenomenal during this period in terms of what theyve done for their communities and helped under armour over 60 of our roster of athletes have helped us, you know, get people active by creating these workout at home programs through digital apps and ecommerce platform and we feel that in terms of how to think about sports Going Forward, sport is going atoalways be there and come back the timing of it is uncertain right now but were getting ready for it and you can see the start of some of the things happening right now, like ufc last weekend, the premier league talking about starting up in europe again, the bundesliga in germany, the nfl conversations we will see sport return how its going to be manifesting itself i think will be gradual in a similar way that we see the landscape restart again in retail as well how do you think about what sales look like in a world where even if sports does restart, you cant have packed arenas or necessarily audiences, where the sports are only played on tv, what does that do to the business yes, i think from a participation perspective, people are going to want to do sports so one of the things that were doinged ining as under ars helping to reinvent that part of it one of the things weve been doing, for example think how a mass something worn. You might have a situation where a lot of sports will have to wear masks or a lot of athletes will have to wear masks when competing so were looking to reinvent that space as well as we think there are new opportunities for product, as you operate in this new era. I think in terms of people going to watch sports and how thats going to happen, its going to be different it depends on the sport. It depends on the location it depends on the development of this virus i think theres a lot of uncertainty right now, but i think the demand is there. People want to watch sport and our job as under armour ultimately is to make you better and were working hard to make sure were going to be able to do that in terms of engagement, whenever and however the market opens back up. And finally, patrik, want to highlight the initiative to get under armour into high Gear Manufacturing masks and other ppe. How big of a switch and how big of a lift was this, and just how much have you been age ble to create for our Health Care System its unbelievable the work, and im so proud of our teams at under armour and within a week after the pandemic hit here in the u. S. , basically turning our entire Innovation Lab in baltimore into manufacturing facility, and right now were working with some really big players like johns hopkins, our local partner of course in baltimore, university of maryland medical system, over 40 hospitals and senior care facilities around that area, to really deliver on what we can do, which is we will have produced about 5 Million Masks by the middle of june and about 250,000 gallons, and we can of course if we decide to continue to do that, so stepping up in that way, and also trying to help out in other ways, making o ourselves available for maryland to get food and medical supplies to any area that needs it at this point in time so i feel that under armour has truly lived up to its values during this time and im very, very proud of our teammates stepping up and pitching in to try to do whatever we could to help out. It is a cool story. Patrik frisk, thank you for joining us. Thank you very much, sara we appreciate the time, ceo of under armour. Lets hit our etf spotlight for the day, fdn, first trust pulling back after six Straight Days of gains today. As for the three holdings there, paypal double digit game amazon and facebook also in the green. Taking just a step back today the overall market down just a fraction, pretty much flat we are still waiting testimony from dr. Anthony fauci of the nih. Well take his q a for you on the other side of the break. It is a remarkable morning of live news dr. Fauci is about to testify in front of the senate. Of course along with heads of the fda and the cdc, at the same time, david, scotus hearing some arguments about congressional oversight of the executive branch we have bull lard, kashkari, harker all opining on the pandemic and its effect on the economy and of course the president s tweets on negative rates, oil, teslas reopening in Alameda County and a lot more. Yes, it will be interesting to listen to dr. Fauci, of course you know, one of the key questions remains testing, carl. Are we doing enough . The president of course has said that were doing record amounts, but there are many who say the states need to be doing a lot more testing until we can fully and safely reopen. One would expect that would certainly be one focus of the questioning. Lets actually go to it right now and listen in. Is fourfold, one to improve our fundamental knowledge of the virus and the disease it causes, next, to develop new point of care diagnostics, next to characterize and test therapeutics and finally, develop safe and effective vaccines first, with regard to diagnostics, as you probably heard from dr. Francis collins last thursday, the nih has developed a rapid acceleration of Diagnostics Program called radx, with an award to that specific program up to a half a billion dollars to support the development of covid19 diagnostics. It is a National Call for Innovative Technologies that will be evaluated in a shark tank like Selection Process to get to either success or failure rapidly. Moving on to therapeutics, ill talk a bit about the remdesivir success antiviral in a moment but let me emphasize that there are a number of Broad Spectrum antivirals that are in various stages of testing. In addition, we will be looking at convalescent plasma, plasma from individuals who have recovered from covid19 to be used in passive transfer in prevention or treatment. In addition, hydroimmune globulin could be used as a shot well be looking at repurposed drugs and immunebased therapies and host modifiers and finally monoclonal antibodantibodies let me take a moment to describe the remdesivir placebo controlled randomized control Done International with more than 1,000 individuals in sites throughout the world it was in hospitalized patients with lung disease. The end point was primarily timed recovery the result was statistically significant but modest and we must remember it was a modest result showing the drug made a 31 faster time for recovery we hope to build on this modest success with combinations of drugs and better drugs moving on to vaccines, there are at least eight candidate covid19 vaccines in clinical development. The nih has been collaborating with a number of pharmaceutical companies at various stages of development. I will describe one very briefly, which is not the only one but one that we have been involved in heavily developing with messenger rna platform from moderna. You may recall in january of this year i said it would take one year to 18 months if we were successful in developing a vaccine. The nih trial moved very quickly. On january 10th, the sequence was known. On januarythe 11th, the vaccin Research Center met to develop a plan on the 14th of january, we officially started the ravaccin development. 62 days later, we are now in phase one Clinical Trial with the two doses already fully enrolled there will be animal safety. The phase one will directly go into phase two, three in late spring and early summer and if we are successful we hope to know that in the late fall and early winter there are important issues however in covid19 vaccine development. We have many candidates and hope to have multiple winners in other words, its multiple shots on goal. This will be important, because this will be good for global availability if we have more than one successful candidate. We also as the chairman mentioned will be producing vaccine at risk, which means well be investigating considerable resources in developing doses, even before we know any given candidate or candidates work. I must warn that theres also the possibility of negative consequences, where certain vaccines can actually enhance the negative effect of the infection. The big unknown is efficacy. Will it be present or absence and how durable will it be and finally, i want to mention the nih has launched a Public Private partnership called accelerating covid19 therapeutic interventions and vaccines the purpose of that is to prioritize and accelerate clinical evaluation of therapeutic candidates with nearterm potential. Hopefully our Research Efforts together with the other Public Health efforts will get us quickly to an end to this terrible ordeal that we are all going through. Thank you very much. Happy to answer questions later. Thank you, dr. Fauci. Dr. Redfield good morning. That is dr. Fauci of nih testifying in front of Senate Health remotely because of some selfquarantining issues, but riding a tough balance, sara, talking about the risks of opening the economy too soon, which we expected him to talk more about in his q a and also some of the net positive developments on remdesivir, vaccine trials on a day moderna fast tracked to phase two and three saying we hope to know more in late fall and early winter and this idea of multiple candidates that could potentially be successful, which if supplies are constrained, would go a long way to getting people inoculated quickly. This is why wall street pays attention to dr. Fauci, just this little taste. He is independent, not at all political, just total straight shooter and doesnt sugar coat anything when it comes to the facts and lays it all out there. When it comes to remdesivir, he said it was significantly statistically significant study in terms of the results they saw and the benefits at the nih. 30 faster him thtime to recoved only modest. I think it was important he highlighted some of the other treatments going through Clinical Trials that there is hope for, convalescent plasma, inm immunoglobin and potential updates there and as far as the vaccine, he said he was optimistic the time frame was moving carefully and faster but david, also warned that there could be risks as well and efficacy is still the big question mark on that. As far as what traders are looking for today, the question of the second wave, which we know dr. Fauci has been warning of and whether that would require more shutdowns and what sort of size of a wave theyre looking at and just any new data that he is getting at the federal level on states that are reopening and what those cases there are looking like yes, sara, i think there is a hope of course that there will not be a need for another shutdown, because that would see, is seen as quite debilitating if in fact that were to occur. And to your point, while a vaccine may be still some time away, although the time line certainly has been coming in, it is the hope for i think a regimen of antivirals that could combat the disease early on, and be taken orally, that is certainly perhaps a more reasonable hope and lets call it the near term, although were not still talking weeks, were talking many months potentially. But would be seen as a real positive, if in fact we do get that second wave and i think thats something the markets been teeing off of as well. Every day theres a new company, small or large, with some announcement that they are testing or working on or using some repurposed drug for some condition, asthma, you name it, cancer, any kind of inflammatory diseases that theyre looking at obviously theres no concrete results but theres hope that so much of the worlds pharmaceutical industry right now is focused on this problem, and putting all their resources there, whether its a vaccine or a treatment, carl, or testing, something the president yesterday touted from the white house. He said that theyre expecting to do 10 million tests per week, something he calls a huge faept that feat beating the world so many experts say we need more in the United States relative to our population yes, and then of course these headlines out of wuhan that theyre going to test all 11 Million People in the city because of the very first new cases since their lockdown ended, if you believe some of the numbers we get out of china, but i think to hear fauci talk about at least eight vaccines in various stages of development, thats noteworthy and to your point, david, on testing, that was the whole discussion with Lamar Alexander prior to fauci taking the mic, this bipartisan agreement that testing is the name of the game, until any of these other developments can bear fruit yes, states reporting right now were doing about 300,000 tests a day, i believe, carl, and there is a belief amongst many experts i think dr. Fauci included that we would need to increase that some tenfold to really feel confident. Thats an enormous amount of testing, of course, when youre talking about 3 million or so tests a day, but that is the kind of thing that many experts, and youve heard them on our air as well, talk about as being sufficient to make sure that we are in a position to know exactly where the virus is, if in fact there should be further outbreaks down the road. Yes, take a name like labcorps today, has that home test called the pixel, which originally was being limited to First Responders but today they did announce theyre going to start releasing that test to direct consumers at large. Sara yes, lets go to our meg terrell, also following the testimony of dr. Fauci on the hill or actually quarantined from looks like his house where he has a lot of books that he needs to organize, but probably doesnt have a lot of time to do it these days, meg what stood out to you . You know, talking about the really quick time lines theyre working an highlighting moderna in particular and the 62 days that have passed since they envisioned this project together, but dr. Fauci also brought up some of the concerns that could happen here, including with the safety around these things he brought up something called antibody dependent enhancement, or essentially what weve seen with a few vaccines in the past where the vaccines can actually make the infection worse when people encounter it, so the need to really be sure about the safety, even as theyre moving at these incredibly fast time lines and then of course the need also to be able to prove efficacy, and it will be very interesting to watch how Different Companies and Research Groups approach that as the outbreak sort of changes in terms of prevalence around the country, because one of the challenges with developing vaccines and outbreak scenarios is outbreaks often die out before you can actually test a vaccine, before you can have the vaccine ready to be tested so those are all going to be really interesting challenges, and unfortunately, it doesnt look like this outbreak will die out before we have the chance to test it, but those are all really important considerations that dr. Fauci brought up and things that were going to be asking these ceos about this afternoon in our healthy returns conference, we have the ceo stefan bonsell talking to us this afternoon so well talk more about that. Its great and we look forward to that, meg on the monoclonal antibodies, quickly, weve heard a lot about talk it. Fred hassan is hopeful about that we saw some success with ebola regeneron is working on it when do we expect to see more results and what does that with targeting an antiviral like remdesiv remdesivir there are multiple Companies Working on the antibody approaches reyen ron at the forefront, doing it for ebola successfully and faster time line here for covid19 they plan to start their human Clinical Trials next month, and then we should see data within a month or two after that. Eli lilly, am gen agen are in tc as well. They create or isolate antibodies people who recovered from covid19 or in some cases original sars and antibodies are part of our immune response to neutralize the virus remdesivir is an antiviral that interferes with the virus ability to replicate multiple different approaches going after the virus and ones if successful could be combined to have an even better therapeutic effect fauci suggested that. Meg, thank you very much and we look forward to some of your interviews from our healthy returns conference how states are faring when they lift coronavirus restrictions with government officials struggling to find that balance between human safety and economic revival. An example since iowa began loosening restrictions may 1st its seen a 73 increase in cases an average of 475 cases per day, but testing has increased in that state by 82 , big part of the story there. Of all of those tested in iowa, 16 have tested positive iowa was one of the few states never to issue stayathome orders but as of may 1st, restaurants, fitness centers, malls and retailers could reopen in a limited fashion restrictions on religious gatherings also were listed. Since texas began reopening, that same day, its seen a 41 increase in cases, an average of 1,013 cases per day as testing increased there as well by 59 of all of those tested in texas, 8 have been positive. At this time, restaurants, retailers, movie theaters allowed to open at 25 capacity in texas, while barber shops, hair salons and nail salons can reopen as long as they abide by Health Protocols david . Yes, and sara, speaking of texas, the state also preparing to reopen gyms and nonessential manufacturers, Office Buildings as well next week. The city of austin, however, saying it is extending stayathome orders for another three weeks, that would be until the end of may we are joined now by that citys mayor, steve adler mayor adler, thank you for joining us your state is opening up, but your city is not yet why not . Well, were opening up to the extent that the governor has put it in his order. So were compliant with the state. But the messaging that were trying to send to our community is to take this cautiously, and slowly, because no one knows what the impact of this is going to be, and its going to take us three weeks, maybe four weeks to get the data on hospitalizations that we need to see, to see whether or not our toe dip here is putting us on a path to another surge. So its more of a messaging element than anything else we have a lot of Community Members that know that while these things are opening, it doesnt mean we have to go and it doesnt mean that we have to open the governor has allowed those things to happen, but we are urging our community to take this cautiously, and slowly, so that we can measure the impact before we end up with another surge. Well, what are you seeing on the ground that gives you cause for concern, if you have cause for concern . I do have cause for concern, because i think whats resulting is kind of a mixed message we have part of the community that thinks this is over, as we begin to open things back up, that somehow or another, we have beaten the virus, and we have not. So were trying really hard to were seeing more people this past weekend that just started going to some of the retail establishments, going and sitting down in restaurants to that 25 occupancy that the governor has ordered i see people closer together, so im concerned, but as i look out and go through the community, most people in the community are not doing that most people in the community are still maintaining the social distancing, still avoiding the groups, but an example would be our governor has indicated that people should continue to wear Face Coverings when theyre in public Lieutenant Governor said that that shouldhappen, but they took away the right of cities to be able to make it mandatory actually they took away the right for us to be able to have a criminal or civil penalty, so in my order, im keeping it mandatory, but the penalty is just that more people are going to get sick and some of them will die, and ihope that that penalty is enough to have most everybody in our community continuing to wear Face Coverings, but its hard, because theyre getting mixed messages mr. Mayor, i think about austin a lot got a lot of friends there my dad went to u. T you were on such an economic tear prior to all of this, attracting tons of new business. Big tech was moving in, home prices were on the move. I wonder, how much of that is going to be able to cushion whats happening now, and what is the effect of the trouble that Higher Education is surely going to have . I dont think anybody knows the answer to that we dont know how soon were going to be able to really be able to reopen the economy we dont know to what extent, so there are a lot of open questions but i do think that austin is positioned well relatively speaking. A large part of our community is able to work from home were seeing that real estate transactions are not suffering as much as is happening in other places we have a very resilient and creative and entrepreneurial and innovative people that live in this community, but its hurting. I mean, we have a lot of people that are filing now for unemployment insurance, so i dont want to minimize at all the horrible disruption thats happening, but we have already started taking a look at what we need to do to come back and to be resilient on the back side of this, whenever the back side of this happens were trying to position ourselves now. So many of our surveys, mr. Mayor, have shown a partisan divide when it comes to how people view safety measures, like wearing a mask or going to hair salons or restaurants youre a democratic mayor. Youve got a republican governor do you see this as a big factor in terms of the decisionmaking in people in texas, and is that making your job harder you know, you cant avoid noticing the partisan divide thats happening, certainly on the National Level and as you look from state to state i wish my governor was not moving forward as quickly as he is i wish there was more opportunity in our city to put in place testing and Contact Tracing to the level that we want, but he is under the same pressure i think that republican governors are under around the country, frankly, governors in democratic states, too, just reacting a little bit differently. I think we see the greatest partisan split on issues like Face Coverings the governor is very strongly encouraging everybody to do that, as is the Lieutenant Governor, but yet they wont let cities make it mandatory, and im envious of the communities around the country where they were able to impose that kind of sense of urgency for their community, not that we would be arresting or fining people, because quite frankly, there arent enough Police Officers or Sheriff Deputies to actually do that, but the message is important, and the fact that i get asked all the time now, you know, so are we not supposed to wear Face Coverings anymore, and people shouldnt be asking that question they should be just wearing the Face Covering as well as maintaining that sixfoot difference i think that the messaging is getting confused around th confused around the country as to where we are and whats important. Would you rather that there was a nationwide sort of similar message from the federal government on down, or are you happier having the ability to dictate terms on the ground in your city, similarly to the way that elon musk is upset in california with the local officials trying to prevent him from opening his factory i think the physicians and scientists indicate to me that having certain standards and certain communities make sense because communities are different, but at the same time we are all traveling around the country. I wish there were minimum standards that were set around the country mr. Mayor yes. I apologize for having to interrupt you. We do want to go to the live question and answers that is currently underway with dr. Fauci. Im going to thank you for your time this morning and look forward to seeing you again soon. Thanks for the opportunity. Senator alexander questioning dr. Fauci. Persuade parents and students to return to school in august . Start with treatment and vaccines first and if you can save about half of my minutes for testing i would appreciate it. Thank you very much, mr. Chairman i would be very realistic with the chancellor and tell him when were thinking in terms its a her in this case. I would tell her, im sorry, sir. In this case, that the idea of having treatments available or a vaccine to facility the reentry of students into the fall term would be something that would be a bit of a bridge too far. As i mentioned, the drug that has shown some degree of ef iffy kasy was modest and it was in hospitalized patients. Not yet or ever maybe to be used either yet as prophylaxis or treatment. If the issue is that the young individuals who will be going back to school would like to have some comfort in that theres a treatment, the thing that would be closest to utilization then would likely be passive transfer of conva lessent seral. But were not talking about necessarily treating a student who gets ill, but how the student will feel safe in going back to school if this were a situation where we had a vaccine that would really be the end of that issue in a positive way. As i mentioned in my opening remarks, even at the top speed were going, we dont see a vaccine playing in the ability of individuals to get back to school this term what they really want is to know if they are safe and thats the question that will have to do with what we discussed earlier about testing. Im about halfway through the remarks and would likes to pass the baton to admiral girard who would answer the question of availability of testing and what role that might play in school. Thank you you said while were doing 10 million tests this month we might be as high as 40 or 50 million by september in a month, which is a significant increase. If im chancellor of the university of tennessee could i develop a strategy where i would say to all of my students we have an antigen test, which is quick and easy, and want everybody on campus to take it once before you begin school, at least let everybody know on ta day weve isolated anybody thats positive and then we can continue to monitor . Is that strategy possible in august and september so thank you, mr. Chairman. I may reserve 20 seconds for dr. Redfield as well the strategy that is going to be employed depends on whats the Community Spread at that time. If theres almost no Community Spread your strategy will be different. If theres high Community Spread it will be different yes, technically we will have the ability and your chancellor will have the ability, we expect there to be 25 to 30 million point of care tests per month available. Its possible to test all of the students or it is much more likely that there would be a surveillance strategy done where you may test some of the students at different times to give an assurance theres no circulation. That would be done in conjunction with the cdc and local Health Department and also strategies still needing to be validated but a pool sample. In some experimental labs as many as 10 or 20 samples can be pooled and one test could test 20 students. There are experimental approaches that look interesting, if not promising, that, for example, waste water from a dorm or segment of a campus could be tested to determine whether theres coronavirus in that sewage, the waste water. There are other strategies being developed and i would like to give 20 seconds to dr. Redfield who will be working on the strategy of how to employ the tests of different Community Spread. Just quick comments its important to evaluate critically the role of changes in social distancing on College Campuses and schools and the situation, not to forget the importance of what weve learned. Clearly also developing Aggressive Program for wellness education, making sure people understand when theyre symptomatic they need to seek evaluation i think you are going to have to look at the role of testing. I think there is going to be an Important Role of testing in this circumstance and i think it will be individualized based on where these different schools are, where and how much infection is in that region. Im going to wrap it up there so i can set a good example for the other senators with their five minutes senator murray thank you very much, mr. Chairman thank you to all of our witnesses. Dr. Fauci, you have warned of needless suffering and death if we upush to reopen soon but the president has been sending the opposite message what is the most Important Message you have for communities and states that are reopening, even if our Public Health experts make it clear its too soon tell us what the consequences are. Thank you very much for that question, senator murray as ive said many times publicly what we have worked out is a guideline framework of how to safely open america again and there are several checkpoints in that with a gateway first of showing, depending on the dynamics of an outbreak in a particular region, state, city or area, that would really determine the speed and pace with which one does reenter or reopen my word has been and ive been very consistent in this, that i get concerned if you have a situation with the dynamics of an outbreak in an area are such that you are not seeing that gradual over 14day decrease that would allow you to go to phase one and if you pass the checkpoints of phase one, go to phase two and phase three. But ive expressed then and again is my concern that if some areas, city, states or what have you, jump over those various checkpoints and prematurely open up without having the capability of being able to respond effectively and efficiently my concern is we will start to see little spikes that might turn into outbreaks therefore i have been very clear in my message to try to the best extent possible to go by the guidelines which have been very well thought out and very well delineated. If a community or a state or a region doesnt go by those guidelines and reopens, the consequences could be pretty dire, correct . The consequences could be really serious, particularly, and this is something that i think we also should Pay Attention to, that states even if theyre doing it at an appropriate pace, which many of them are and will, namely a pace commensurate with the dynamics of the outbreak, they have in place already the capability that when there will bes cases, there is no doubt, even under the best of circumstances, when you pull back on mitigation, you will see some the cases appear its the ability and capability of responding to those cases with good identification, isolation and Contact Tracing, will determine whether you can continue to go forward as you try to reopen america. Its not only doing it at the appropriate time, but the appropriate constraints, but having in place the capability of responding when the inevitable return of infections occur. Well, thank you for that. Its very clear in order to do that, we need knowledge, which is about testing and for months this administrations approach to testing has really been plagued by unrealized goals and disregard for systemic problems within that supply chain and last week an average of 250,000 tests per day were performed in the United States. That is a small fraction of what we need. Yesterday President Trump had the gull to declare the u. S. Has prevailed on testing in a press conference filled with misinformation and distortion. Dr. Giroir, Public Health experts do not think the u. S. Has prevailed. Im glad youve finally committed states for may and june but this administration has had a record of giving us broken promises more testing is coming and they dont we know testing will need to persist long past june i wanted to ask you today passed and signed into law will that strategic pla
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