Transcripts For CNBC Squawk Box 20240712

With the dow gaining 6. 8 there has been some controversy about that too explain whats going on behind the numbers. In terms of how many jobs have been lost during the pandemic. Its fifth positive session. Its been up five sessions in a row. Its indicated higher and the 6th day of the week. That was up by 6. 8 . S p was up by 82 points. And then the nasdaq was up by 2 almost 200 points. The s p indicated up by 6. 5. And treasury yields and did see quite a bit of activity there too. The ten year yield picking up substantially last week and this morning its back at 0. 91 i cant remember the last time we had a ten year above 0. 8 let alone 0. 9. It could be a round number some day not that far 1 maybe cross your fingers. Oil too is almost 40. Oil looks like a bad break looks like it went down and it is such a quick one right back up and almost to the levels where it was almost prior to this the journal has the piece when the spiggots are opening here today. We have a huge show again today. Big lineup of guests to talk about the market and recovery and how the Business World is trying to find some solutions. Among the highlights you dont want to miss the legendary investor and the incoming ceo of and cfo of zoom and the ceo of intel. All on the same people and all of that on deck this morning back to oil prices that are on the rise surprise nearly everyone with the fast and drama free virtual meeting. The group which was lead by Saudis Energy minister quickly agree to continue its Current Record supply cuts of 9. 7 Million Barrels per day and iraq and nigeria agree to enforce their quo toes both countries have been seen as cheating to raise output its likely to raise output. 2 Million Barrels a day. We told you about fridays jobs report. You probably heard this by now but it was stunning for many reasons including forecasts of so many economists were just so wrong. Joining us right now to walk through the data is heather. She is the economic correspondent at the Washington Post and there was all of this controversy around the mistakes and many miscalculations that the Labor Department said look theres a problem in how this was compiled and a lot of people seeing conspiracy theories and made me understand it in terms of something not all that unusual. These are career professionals theyre doing their best these are very unusual circumstances. What happened. I dont think i have ever seen so much interest in the footnotes of a jobs report before on the misclassification era went viral over the weekend and generates a lot of buzz on twitter. What is this misclassification era. 4. 7 Million People were classified as employed but absent from work but because they were technically employed and they werent factored into the Unemployment Rate and they put that note at the bottom of the may report that says look the Unemployment Rate probably should have been more like 16. 3 instead of 13. 3 the Unemployment Rate would have been even higher in marchand april as well. Should have been like 19. 7 and may still was a decline in that and obviously a lot of people are saying 4. 7 million is a lot. We have seen this type before during hurricanes but never in the millions. What does it do to the, so they were looking for a loss of 8. 5 million jobs or whatever does it change those numbers because that was really i dont know if anyone had an absolute number of unemployment that they were basic the viewpoint of how the labor market was at this point it matters 13 was better than 16 but wasnt it the surprise in the number of jobs or is that also 4. 7 million. Is it screwed that way i dont think it is. Ive never seen so many people really happy that there was a mistake because things are hopefully a lot worse than were indicated. I dont understand the thinking but a lot of people are like, its wrong, thank god its much worse than we thought. Its very strange but does it change the actual number of jobs. I think a lot of people forget that the unemployment, the jobs survey is coming from two different surveys. So this impacts the Household Survey where people from the Census Bureau knock on peoples door and ask them are you employed, are you not employed, are you getting paid right now or are you not getting paid right now . Thats where this misclassification era occurred the other thing that they do is they look at payroll data from over 120,000 companies and Government Industries and similar to what adp does that we were talking about last week as well so in the payroll number is the one that feeds into the headline 2. 5 million job gain that was positive and that was not coming from people that were claiming they were employed. That was literally coming from the data that businesses have on their payrolls this idea of the conspiracy and i get back to this idea of a conspiracy all the people that thought the Obama Administration was messing with the numbers now are convinced the numbers were right. All of the people that thought the Obama Administration never messed with the numbers now think the Trump Administration is doing it. Can you walk through why these numbers are the best that these career professionals can come up with just how many households are measured with this what the questions are and why they dont actually mess with the numbers. They want to make sure that theyre hands off so theyre not seen as being somebody thats actually contaminating the evidence walk us through that yeah. The reason why the vast majority of people that actually spend their days looking and digging into this Labor Department data do not see any signs of rigging or let alone any sort of political tampering is because the bls is being incredibly transparent about what happened here these numbers as somebody said to me, its a well oiled machine. Its a highly automated process and theyre using the same methodology that they use every single month and the way this data is calculated is very standard they go out and talk to 16,000 households for the Household Survey that feeds into the Unemployment Rate and then they go out and look at over 120,000 Business Payrolls and government payrolls that number feeds into that headline 2. 5 million job gain figure and its also important to keep in mind that this is an agency the bureau of labor statistics with over 2,000 career employees, many of whom are statiticians and economists, the best of the nerds if you will and again those people, their whole careers are staked on this many of them work there for decades. And former commissioners assured me that the numbers, they dont even see them until thursday when the report is finalized so shortly before theyre sent to the president there is no time to tamper with them they do not have access to the underlying data. As a matter of fact most people do not have access to all the underlying data. They would only have access to parts of it. Joe. No, no, im good. Makes sense. I mean, i dont think im fine with the bls. I just think that were back to the people that do this for a living and how you can miss by 11 million thats 11 million jobs error isnt it 8. 5 plus 2. 5 minus thats a big miss in terms of not being able to tell how many jobs were but then again its a net number so you have to subtract out how many were lost from how many were gained and then when its 200,000 i think the error in is that like 300,000 most months. Theres such a big margin of error anyway i guess the last thing that i would say after talking with many staffers and more people after the article came out who work at the bls and work with the bls and work on their Data Review Committee and they were very transparent about it all three months. Its understandable. Were in the middle of the pandemic how many times we use unprecedented situation obviously. This is a little bit hard to do your normal process and procedures on as you try to knock on peoples doors and talk to them. So their surprise was the bls was very up front about this in marchand april and they were also trying to correct it and trying to add additional questions to their survey to figure out why so many people were being marked as employed but absent from other regions. Its one of 11 categories in that question. Why couldnt they ask enough follow up questions in may to really figure out how much of this was pandemic related. So the error rate went down a little bit in may but it was still very high. The term misclassification error was used for the first time in may. It actually did not appear if you go into your computer and search find, they digit use the term misclassification error in april and only in may and the question is why havent they fixed it yet and we should hopefully see it fixed by june and if not thats going to seem a little off to me thank you it was a great article and incredibly explanatory we appreciate you coming on today. Thanks for your interest. Folks also a programming note for you, in our interview at 8 00 a. M. This morning he is of course Senior Adviser to the president. And what we really think is happening in the economy now up next were going to talk about the phase one reopening for new york city that begins today. He will join us next as we head to a break, take a look at the shares of boeing its one of the biggest drivers of last weeks rally up more than 40 for the week. Well be right back. Stock slices. For as little as 5, now anyone can own companies in the s p 500, even if their shares cost more. 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Cases hit 1. 9 million with 110,000 deaths new York Governor Andrew Cuomo announced new testing measures and it includes opening 15 testing locations dedicated to those protesting and the governor still warns there will be a lag in the data and protestors should behave as though they already have the virus. Becky. An update right now on reopening america. New york city begins phase one of reopening today after more than two months in lock down construction and agricultural. Manufacturing and wholesale trade can resume operations today. Curb side and instore pick up. Its estimated that as many as 400,000 people could return to work today for the First Time Since march. If all goes well in two weeks the city can move to phase two which allows Outdoor Dining at rest ants and hair aslsalons alw to open at 50 capacity. States are now reopening or reporting a rise in cases as they lift restrictions california, utah, and arkansas and texas are among the states that have seen a rise in the five day moving average. Theres a few charts that can help visualize the pace of reopening. Restaurant bookings high there Online Reservation Service the company says that bookings are at 80 below levels from last year. Its better than the month of april. Bookings are down 100 Hotel Occupancy rates are approaching 40 . The firm saying among the top travel destinations in new york city, higher occupancy rates in Orlando Florida and why has lower occupancy rates air travel is still struggling. Past numbers are down more than 80 from last year but increased slightly since april ahead of the busy Summer Travel season. Joe. We showed you vegas baby. I was just thinking about i read about things that have changed and i dont think we were ever big buffet people were we guys . Unless it was right on top of the whole. Thats not come back thats lagging a little. I worked at the Golden Corral as a teenager i dont know. I mean, it used to be a little bit disconcerting because you would see people [ sneezing ] right in the lettuce but now you can die. What does the Golden Corral, lets not pick on them but what happens with those all you can eat is not my friend either. Its going to have to be redesigned where the food is brought out to you every Single Person that walks in go up and touch a spoon and stick your hands where ever you want theyll hand it over to you. Probably more like a subway where you tell them what you want on your sandwich, right yeah. That doesnt mean its fine though and it goes right under their face you just never know. I guess. You could say the same thing about anybody needing my food or preparing any food for you. We all are going to be like this for quite awhile. Sei cesars its a big statue and were going to walk quite a bit about that were going to show you some images late last week and the first four weekend is in the book and even though face shields and you can still smoke. And temperature checks are now standard and if you have a feature you can give them time to cool down and then you can be tested again. Those that still have a fever have to be evaluated by a medical professional and could be denied industry i dont know what that means if youre from out of up to and if you just came in on a plane and go ahead, what do you think. These images are the samest images that were showing. I dont know if you have been on twitter. No but im saying on friday night if you saw the images that were coming out of vegas, no masks, no nothing, thousands of people all young though, so maybe that bodes well but you saw people going oh my god why have you been clamped down for three months if this is what were doing. We have to get different shots. So that was unbelievable that doesnt even look like vegas. So the middle seat at the black jack table, that is not really the Biggest Issue i guess. Big crowds. I read people people huge crowds they were all playing, you know, yes. It was unbelievable. Well get some different shots maybe. You know that the odds were against you in general it may come back tohaunt us. Were going to talk to doctor about it with new Testing Technology available employers should test employees at the work site where they face the greatest risk. Hes with us this morning. Hes also a cnbc contributor utah, arizona, florida, arkansas and texas rises in confirmed cases. You see the data as much as anyone has it risen to the level of where youre going wow this is a problem or is it about where we spoke in terms of a red flag well, theres persistent spread we have about 20,000 cases a day and its not going down. Its about 20,000 cases a day. And which states are expanding their epidemic theres about 15 states where the epidemic is expanding. Arizona seems to have a large epidemic underway. Tennessee, idaho, kentucky, georgia, florida seems to be expanding as well. And the number of states changes. And the point is that we still have an epidemic very slowly expanding in this country and 20,000 cases a day and that would be the challenge heading into the fall. I dont think that was going to have an out of control epidemic and the only region in the country i thought has gotten every production rate down low its new york, new jersey and connecticut. Fewer hospitalizations and the entire city of new york is less than Texas Medical Center so this region is doing better we paid a heavy price for it thank you its the Largest Health care system in arizona and said their icu beds were reaching 100 capacity thats to get concerning, right. If the idea that it overwhelms the hospital system. How concerned should we be about that story in particular you see capacity rising. Its also rising in parts of texas as well. And that state is probably one of the states in terms of the outbreak right now and other states look pretty high wisconsin is on the list and minnesota has been building and this doesnt mean that were going to have another epidemic the states are going to shift around over the course of the system which states are hospital and which states are cooling down and my concern is that we dont get below a rather high level of infection across the country. All right, doctor, latest on articles on china. They have five of the leading vaccine candidates right now we all want vaccine. And a more profit venture who is going to win its going to be like a flu vaccine and a seasonal vaccine and its not going to be the vaccines that we ultimately settle into. Were trying to get something to the market quickly here. The u. S. Should win. Were far ahead with technologically advanced vaccines but the chinese are working on vaccines. And its very Old Technology and they might get a partially protected vaccine to the market and perhaps more quickly than us and their vaccines are unlikely to be like ours and i think that their gamble is that they want to get shots in arms as quickly as possible and probably feel a partially protected vaccine in time for the fall to prevent the economic damage in the first go around and still able to get our vaccines on the market in probably early 2021 in the u. S sometimes you have pick ups so you have to account for that so you like that technology its never we dont have anything like that thats been on the market to do it you think the technology, the proof of that concept is there you think thats going to be something that could work. It will be better than i always wonder about getting a virus. A whole virus or something you take their word for it that theres no contamination, right . Well, and pfizer has one of these vaccines too you think thats going to work early data thats been made public shows that people are generating an immune reaction. The data showed that the vaccines look efficacious as well the problem at least theoretically is you cant redose them. Youll develop antibodies and you cant redose the vaccines. They might generate cell immunity but theyre not the vaccines that youll be able to give every season. So it might be one and done where as the others you can probably redose ever season. It could be a more seasonal vaccine. Once again thank you. All the intricacies of this. We appreciate it thanks thanks a lot. Meantime, a lot more coming up this morning, elon musk pushing his spacex employees to focus on the next big project. We have the details and well bring it to you next as we head to break, take a look at the biggest pmaetrerk gainers in the s p 500 well be right back after this why bother mastering something . 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With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Welcome back to squawk box this morning elon musk taking a break at spacex after the first launch of u. S. Astronauts. Telling his employees to accelerate progress on the next generation star ship rocket dramatically and immediately thats according to a company wide email that we are seeing this weekend by cnbc and please consider the priority, anything to starship. Company starship rocket aims to be fully reusable and launch as many as 100 people at a time on missions to the moon and yes guys, mars so wait for that and im not betting against it and maybe were not all going to mars after all. Just remember that, huh. Youre okay with that ill stay here. Huh. That was matt damon in case youre wondering so i dont know, mars seems i like it here i think i dont know youd be like after anything that youre going to do up there, you better be happy with absolutely a lot of space. Thats about it. Anyway, this is years in advance isnt it like 100 years or five years i think he thinks hes going to do it. And we bet against him so far. We never thought this would happen. Do you know what youre going to need . Youre going to need a foot l k locker you need to bring a lot of stuff i think. You cant go out and get something if you forget it were going to talk about the markets big run and the dow and the s p now less than 10 away from recent highs and the nasdaq trading at an all time high. Head to break. Take a look at shares of amazon. Rbc capital markets. 3,300 up from 2,700 thats a new wall street high. Well be right back. As business moves forward, were all changing the way things get done. Like how we redefine collaboration. How we come up with new ways to serve our customers. And deliver our products. But no matter how things change, one thing never will you can rely on the people and the network of at t. To help keep your business connected. Welcome back to squawk box this morning the markets coming off a very strong week extending the rally. The dow down 5 . The s p close to break even and the nasdaq is up 9 according to our next guest the shortest recession in terms of duration on record. The timing on march 23rd was about right for a recession thats likely to end in june 100 days roughly so the whole thing played out pretty much as youd expect. The managing director is thus far called the market side of this relatively right. So now the big question of course is how much room is there still to run or is there this is the tricky part and i talked to a lot of investors about it and when youre early in the Business Cycle and you have it flowing through the labor market trying to pick a level inner thes of valuation and say well its gone too far because now and its really complicated. And early in the cycle and thats when you get your best returns and i recall falling into this jujt era a little bit. Too far too fast and maybe well stall out. I think instead of focussing on that, i would focus on whats the next big trend wheres the room for significant upside and its with respect to global trade and manufacturing if we had Global Production in trade and in a recession last year its largely attributable to the trade war. Its one of the unique periods where its slower than world gdp. At the end of the year we were just starting to see it pick up in the trade activity. And we get a bit of a mini expert boom going. Its amid deglobalization and we should have had a boom this year obviously covid crisis knocked that for a loop and that will start to pick up even the chinese export data wasnt as bad as it had been as we get into the second half of the play, youll see a real sharp acceleration there furthermore its really contingent in some ways for places like mexico, brazil that is dollar weakened and what happened during the financial crisis as you know is the dollar has become the primary source of safe haiven assets largely now is dollar denominated as well. So that tightening of trade credit in a crisis makes it impossible for a place like mexico to take advantage of the drop in their currency and competitiveness that should have been associated with that. So i think that youll have just a general softening or flattening out of the dollar that will let trade credit flow to places like mexico and youll see a big pick up in mexico. That to me is probably the next big trend higher to be sure software and health care from a structure perspective and that to me is the next big trade would anything that feels really cyclical or industrial right now. And at a conference two weeks right now talking about how the change in accounting standards caused banks to be very aggressive with their provisioning and with the economy coming back faster than most expected they probably overprovision and in which case by the end of the year theyll be releasing the reserves and those banks have extended a tremendous amount of credit. We have two trillion of Bank Asset Growth this year this is the opposite of what happened last Business Cycle if they didnt make loans theyre going to wind up with very strong Earnings Growth on a forward basis so i think there very attractive here its the one sector that even all of these investors that looked at the market and said its too expensive you could look at banks and say theyre really not expensive that is worth wihile im sure. We could have you debate all morning about the jobs numbers you saw the debate that took place over the weekend around the numbers what is your take away from those numbers. To feel good about where we are. I lof this labor market stuff. Theres some great work that came out all the way back in 2014 and we get very worked up about net change in payrolls off 150 million worker base. Statistically insignificant number this is precrisis. Six Million People get a new job. Six Million People leave their job. It turns over every quarter and the labor flows in the last month and were just fantastic. 13 Million People went from not looking for a job to finding a job in the month of may. You could see this building in the differential between the increase in initial jobless claims and continuing claims number adjusted for their baseline back in february. That spread was 17 Million People now you could argue that some people filed claims twice in the state systems didnt work properly not 17 million clearly a lot of people went back to work so there is a lot of digoing on there. The other point is theres a very similar survey to the Household Survey that youre discussing with the Washington Post reporter earlier. You ask if jobs are pentful or hard to get. Thats been a really closely correlated survey to the Household Survey it lines up at a 6 Unemployment Rate 6 of the people think they dont have a job when the shutdowns end. Thats a heck of a long way from, you know, either 13 or 17 . So right now the work force still is pretty confident and i think that were going to have to have a strong number in june. And see where the shutdowns ended and continue claims versus initial claims and theyre strong always good to see you. Enjoy your perspective and insight. We look forward to seeing you again soon becky. Thank you. When we come back las vegas is back in business well get a check on the Gaming Sector as casinos look to recover from the virus thats straight ahead. A reminder, you can watch or listen to us live. As we head to a break lets take a look at the scenes from the r sisscrs era. As States Reopen fobune aosamic after my dvt blood clot. I wondered. Could another come around the corner . Or could it play out differently . I wanted to help protect myself. My doctor recommended eliquis. Eliquis is proven to treat and help prevent another dvt or pe blood clot. Almost 98 percent of patients on eliquis didnt experience another. And eliquis has significantly less major bleeding than the standard treatment. Eliquis is fdaapproved and has both. Dont stop eliquis unless your doctor tells you to. Eliquis can cause serious and in rare cases fatal bleeding. Dont take eliquis if you have an artificial heart valve or abnormal bleeding. If you had a spinal injection while on eliquis call your doctor right away if you have tingling, numbness, or muscle weakness. While taking eliquis, you may bruise more easily and it may take longer than usual for bleeding to stop. Seek immediate medical care for sudden signs of bleeding, like unusual bruising. Eliquis may increase your bleeding risk if you take certain medicines. Tell your doctor about all planned medical or dental procedures. Whats around the corner could be your moment. Ask your doctor about eliquis. Welcome back everybody it is monday morning and we are watching the us. Equity futures in the green again dow futures indicated up by 170 points this comes after a gain of 829 points on friday a gain of 6. 8 for the dow and its back at the almost 7 we gained just over the last week s p up by 11 points right now. The nasdaq is indicated up by 1. 9. He has a sign of dreams to come. Lets take a look at the scene on saturday. Customers wore masks or face shields provided at the door and many night clubs have turned into day clubs the club now opens at 6 00 p. M. At half capacity social distancing was not enforced by the dance floor however. Oh, boy, im glad that i have a family there was a time no, there was a time when i used to have to go out there and pose and never work youre so good at it thats true too. Coming up, Viva Las Vegas sin City Reopening its stores late last week and were going to talk about the recovery for gaming stocks with Kevin Macarthy i know what youre saying. Get back to work in washington who cares what you think about ffenon stocks but its a thats coming up next. What do i need from a partner right now . An insightful outlook that comes from experience navigating multiple bear markets. Can i find a partner to help guide me through this uncertainty . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Talk to your financial professional or consultant its only human to find inspiration in nature. And also find answers. Our search to transform. Farm waste into renewable natural gas led chevron to partner with california bioenergy. Working to provide an alternative source of power. For a cleaner way forward. Big story were covering las vegas is opened. Mgm resorts was up 30 initial take aways from sin city Kevin Mccarthy senior vice president. Do you have a middle name . Kevin andrew. Ka mccarthy Kevin Mccarthy doesnt tell us a lot. You couldnt be the actor, as you know, hes gone, 2010. Oh. You remember him, right i like both body snatchers. Kevin sunderland is 84 you point out that there are some positive trends people are flush in terms of you mentioned consumer wallets are primed to return to gaming is it going to be a bad ending with so many people so close to one another without masks, kevin . Thanks, joe you know, we hope not certainly. What were seeing from Consumer Spending is wallets are primed for a variety of reasons to spend. If you look at the experiential channels, there are very few outlets. Gaming whether its las vegas or regional gaming is the only game in town so there are crowds gravitating towards these venues and near term, you know, were seeing that. The evidence of that in the spend per visit. Those numbers are up significantly. Volumes are down with regulations on occupancy levels and there is a lot of plexiglass theyre seen as being a current beneficiary. I think beyond sorry ill let you finish that thought, but theres a lot of people its going to be crowded but there are things that dont get you back to 100 , right . With the seats missing at black jack and with some of the other things that are not going to be like before, how far down of revenue . Can it get back to where it was or you need to build in 10 to 20 less okay. So you need to keep in mind las vegas, there are two different venues here. Were talking about regional gaming which is a lot more dependent on gaming itself and las vegas is much more diversified. You have convention business, food and beverage and lots of other businesses there las vegas tends to be more of a destination Business Center that is going to lag naturally with the Business Cycle to the extent that Business Convention is in long booking cycle, youre going to see a lag. We expect that to be a several year lag we were looking at gaming, the lens kind of as were looking at the consumer right now, we look at it as being the present environment for spending the wallets are primed for spending as we looked into the next call it several months, then you start to see other competition coming online from other experiential based venues which will compete away the dollar then structurally even beyond 2020 i think we do have some questions that you have to consider about the extent to which covid centric consumer platforms may have accelerated the adoption for mediums such as home fitness, Media Consumption and these sorts of things that for people that would otherwise have been sitting in a casino that day, this might be a new source for taking wallet share anybody whos got an Online Presence in draft kings, i mean, you look at or the other online, thats going to for the stocks themselves, if youre involved, that could help offset some of the other stuff structural problems that you just mentioned. Without a doubt i mean, the Sports Betting angle is a shot in the arm for all of the operators that have, quote, skins in thegame right now weve been constru constructive on the Sports Betting industry, been involved for the last year or so. There are a few different avenues of getting involved in those stocks you have draft kings, you have pen through bar stool and then you have the caesars and el dorado with william hill so there are differing channels through which you can participate. I would say the environment is ripe for, you know, state deficits leaning on legalization across the board, but this process always takes slower than youd like and even though, you know, where we are right now is probably factoring in something already approaching an 18 billion market for that. Kevin andrew, thank you appreciate k. A. , appreciate your time today. Well see you again. Thanks. See ya later. Thanks andrew good middle name. Big lineup for the next two hours. Among the highlights you dont want to miss is Stanley Drukenmiller joining us. The cfo of zoom, the ceo of harlem zone and intel all here on squawk box. N. Verizon knows your customers need to reach you seamlessly. Your team needs to work from different places across many devices. Plus, you want the security trusted by some of the Largest Companies in the world. And thats why you trust us. The most Reliable Network in america. You know, the chef here trained in france. Mmm, it shows so good. Oh hey, did you say you needed help with investing . Because i know someone whos really great. And you trust him . Totally. Yeah. We went to school together. Ill check him out on investor. Gov. So, whatll it be . Ill just have the burger. Before you invest, get the full report. Check out an investment professionals background for free on investor. Gov. Before you invest, investor. Gov. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Markets building on last weeks big rally what you need to watch and the opening bell is straight ahead. Plus, famed investor Stan Druckenmiller talking about the reopening of america and his work with the harlem childrens zone. The epicenter for coronavirus in america as america starts to reopen new york city kicks off its phase one plan this morning. What has changed in the big a apple . Well get a live report as the second hour of squawk box begins right now. Good morning, everybody. Welcome back to squawk box right here on cnbc im Andrew Ross Sorkin along with becky quick and joe kernen. Equities in the green and dow opening up 142 points higher s p 500 looking to open 7 points higher nasdaq looks like it would open off just a slight bit there off about 8 well, move it up to 9, almost 10 points right now. Joe . Thanks, andrew. The surprise monthly jobs gain has some economists rethinking their outlook for growth in the second half. The potential for faster rebound. Steve liesman. Steve liesman and the lease m liesm liesmaniacs. Tell us about that number. That surprise number echoing through the weekend through today. The futures in a positive mood this morning what its done is its caused economists to think, you know what, maybe theres some up side to the disaster that had been forecast theyre still forecasting very negative numbers now theyre starting to think about up side risk to their forecasting. A note over the weekend, quote, we expect growth data in the u. S. And europe to turn more clearly positive in the coming weeks. One of the things that they did is they lowered their outlook for unemployment for the year end to 10 so still a terrible number but a better number than they had in the forecast jpmorgan writing the latest employment numbers reinforce the sense of up side risk to the Second Quarter i want to show you a little curtain razor on the fed survey well have for you tomorrow. Here are the gdp numbers what you dont see is you dont see an improvement from the april forecast thats because a lot has gone down from april when we last did these numbers. Take a look at the third quarter. Ill show you the Second Quarter. Had been a 24 average decline now at 29 thats worse you can see them dialing in a better rebound a 12 rebound quarter to quarter. 7 quarter to quarter. On the jobs numbers, a lot of talk about where the miss came from, how it happened, and a lot of talk about the bls statement that workers continue to be misallocating, the unemployment number is higher that has nothing to do with what the market is so excited about which is 2. 5 million jobs gained in the payroll the separate payroll survey. A lot of guys going back and looking at their forecast. Saying, what did we get wrong . I thought the best quote came from, as often it does from ian shepard son from pantheon, the single most surprising u. S. E economic report ever published is explained we know a great deal about the numbers of people losing jobs but not much about people finding jobs. I think thats a pretty good way to think about it. We have to think, you know what, maybe those claims numbers are not playing the way it is happening in the jobs market we need to look at how people are being hired. One of the things ive figured out, becky when something goes from negative 50 to negative 30, for example, the spend dagg at that, some of the High Frequency data that weve been looking at, it means that people had to have been brought back. If youre doing even less negative, it means that theres still some positives going on in the economy. In this time of really extreme movements that weve never seen before, you know, forecasting is reflecting the uncertainty and the opaqueness of whats happening in the economy steve, we had a conversation at the top of the 6 a. M. With the Washington Post reporter who had run through a lot of the numbers, explained why this happened with the bls, the way they go about collecting their data the biggest thing we were trying to do was dispel the notion that the numbers were tampered with with the Trump Administration or previously with the Obama Administration this is the way these things get reported its the way they do it. They dont change the questions that they ask because they dont want to look like they are tampering with things along the way. I think its important to restate that because i think i heard more about that complaint than just about anything else over the weekend oh, it was all fake numbers. Thats not the case. There was not a conspiracy here during the Obama Administration either no, the people who blamed the Obama Administration were dead wrong about that the people who are doing it now are dead wrong about it. I actually went back, becky. When there was a Government Shutdown in 2013 there were workers who were misclassified as absent from work, employed but absent and they should have been classified as temporary they should have been part of the Unemployment Rate. What happened in 2013, the Obama Administration, its not the administration, its the bls, separate run by career economists, they used the same language the bls used seven years later to say, you know what, these people were misclassified, we do not want to go back in and change their answer because we want to preserve the integrity of the data you can go back to a 2007 report from Erica Groshen its an attempt to be totally transparent about how many workers are affected by this and what the Unemployment Rate will be its not a conspiracy. Steve, thank you. Joining us for more on the jobs report and whether we are in for a faster recovery is alley ans chief Economic Advisor Mohamed El Erian one of the things steve mentioned in his report was this commentary, this quote that came from jpmorgan where they said there is up side risk to the Second Quarter, which is strange phrasing you would think up side potential, down side risk. There are a lot of different economists and people who are market watchers saying, hey, mace we misunderestimated to use another phrase on this how quickly things could reopen. What do you think based on what we saw on fridays report. I think you have to ask yourself that question, becky, and thank you for having me this morning. It was a very surprising report. As steve said, it was perhaps the most shocking positive surprise formarkets and the biggest miss to economists so you have got to look into that the complication is you have not two but three factors. Weve been talking about two one is is it reflecting the economy picking up quickly two is is there something about the data theres a third one, the impact of government policy so both policy makers and economists are continuing to scratch their head and theyre going to have to err on one side or the other an uncertain balance. Markets are completely different. It confirms the winwin. And this winwin hypothesis. I win if its a recovery i still win if its not because policy makers will do more has powered this market in a really impressive way and will continue to do so thats an interesting point, mohamed. Just based on the idea so many people are saying, well, wait, maybe things arent so bad as we thought. Will that in itself prevent policy makers from taking additional steps there have been all sorts of questions asked about whether unemployment wages would be extended past july 31st . Does this make it less likely that the policy makers will go ahead before they wait and see what the fallout might actually be think of fiscal monitoring. On thefiscal side that questio is really live i think republicans are pushing back, lets wait and see weve already borrowed 15 of gdp more than we had anticipated. On the monetary side, if they maintain their insurance mindset, it will not be derailed in any way from what it was thinking we have to see a distinction between monetary which serves the markets and fiscal which serves the real economy mainly what would you advise people at this point . If the fiscal is at this point kind of thinking, okay, we may not see additional fiscal stimulus, at least not until there is more fallout proven to really be hitting the economy hard, what would that make you do in terms of looking at the market right now do you think the market is getting it right or is there room for a pull back if it looks like there is a lot more damage and policy makers did not step in lets start with policy makers, first. I think it will be a mistake to say everything is fine i think what you need is to evolve your approach one, its focused much more, the relief measures, including in a pro growth manner. So enough of the universal support. Lets focus on the most vulnerable segment and do it in a pro growth manner. Lets make sure we can live with covid because this is the phase were in better and lets prepare better for the covid economy so we dont get hit by lowerproductivity in the economy. Markets matter a great deal. The narrative has been winwin you win if you look through new data that narrative is so deeply embedded now that it takes a major shock to change it thats why you see these markets continuing to go higher after last weeks really impressive gain that came on top of a few weeks of really aggressive gains. Yeah, weve been watching some of the big gainers over the last week and that includes of course boeing which i think is up 40 over the last week. The Major Airlines all came roaring back you have emp companies, the Energy Companies that were all up incredibly sharply. Even the cruise lines have skyrocketed. That rotation taking money out of those areas doing well back into the areas that have been hit so hard, does that strike you as wise . It strikes me as understandable the socalled defensive stocks, the ones that i like did well but got to valuation levels that were very high so people naturally look at the laggards if you believe that we will continue to reopen in an accelerated fashion and a healthy start. I understand where thats coming from its a natural extension of the risk taking in the market place. For me personally ive got to stress this is a very personal choice it depends how else are you exposed . Are you structurally exposed to the markets . Are you tactically exposed for me its an uncomfortable bet to continue to bet on a huge recovery or to bet on moral hazard i dont like doing this but i respect and admire those who can. Mohamed, its great to see you. We will talk to you again very soon thank you, becky. Thank you andrew okay thanks, becky. Thanks, mohamed. Coming up, a lot more on squawk this morning. Stocks to watch. Then well talk theme parts starting to reopen but with social distancing and capacity, well talk about demand and what to expect in the sector. Famed investor Stanley Druckenmiller. Squawk returns with all of it. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Couple of stocks to watch this morning amazon was upgraded at a price target raised to 3300. Analyst mark maheney said the company is likely the best global play because of the covid19 crisis. Apple up nearly 3 friday to end at 331 1 2 this morning the stock is giving back very little 50 cents Dunkin Brands upgraded from overweight to sector weight at Key Bank Capital markets good execution by the restaurant chains during the pandemic as we head to break this morning, take a look at this mornings winners and losers in the s p 500. Couple of winners. First two are oil related. Check out the piece in the journal. Get you back in business on the yound side, dish, regeneron. S p 500. Well be right back. This is decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology for smarter trading decisions. Fidelity. Ever somethings gone mogotten into the office. M, i hear you. Feels like theres no barriers between departments now. Do you think everyone appreciates it . I do. Huh. Forgot my glasses. Serivcenow. The smarter way to workflow. Welcome back to squawk box. Americans are venturing back and guests are going back to theme parks. For a closer look at the reopening i want to welcome jessica erlich good morning. I want to talk about what these openings look like youve been now to one of these theme parks. Tell us about the experience i havent been to the theme park since covid19 so i can only imagine. I apologize i thought you had gone what is your sense in terms of i think this is the big question, which is just how fast this ramps up, meaning how fast do you think that were going to get back to a sense of normal . Our view is that its a question of when not if demand is high. Demand was extremely high when covid19 hit in the middle of march. You can see from social media theres huge demand. Demand will be there we dont think prices need to be cut but as demand has to be controlled you can see what happened in shanghai with disney capacitys 80,000 a week and i think they started initially with 5,000 theyre up to 10,000 no, sorry, theyre up to 20,000 now and its been open for several weeks. So it will be a slow it will take months to get back to normal, a couple of quarters a couple of kwaurlt terquarts you think by the end of the year well be back at 100 capacity our view is 2020, what a year this is. So 2020 is sort of a lost year 21 is a recovery year and by 2022 we think that things will be normalized. And we would just point out that the biggest swing factor in earnings for both disney and for comcast at the nbc u division will be from theme parks for sure this was the biggest decline this will be the biggest swing up and in terms of looking at universal theme parks versus disney theme parks in terms of the ability to get customers back and get them back more quickly, do you have a view one way or the other i mean, universal opened first. Theyve already said that their maximum loss will be 500 million for the quarter. Everyone has to in both parks need to bring employees back, train them in new protocols, procedures, get custodial staff up and running the parks need to be not that they werent clean before, super clean. Make sure people wear masks. Different process. Food will be handled differently. Hotels will be handled differently. Theres a training period. There are a lot of variable expenses this is just an education process and they think that you have for both companies, i think the good news is that theres a huge pool of visitors, local visitors who dont have to fly in florida the same thing, these annual pass walkers, same is true in california when that opens up later in the summer. Another point for both of the companies is once the parks are open, universal now, disney in a few weeks, they can start to recognize revenue again from the annual pass holders as well. Which stock do you want to own at this price . In the media world, comcast and disney are really the two key stocks to own. Theyre very different they have very different drivers. Disney of course had a bulls eye on its back with covid19. Most ever their businesses are live with the exception of direct to consumer so we have a look at recovery in front of us. Comcast never got hit hard because of high speed and theme parks, advertising, anything live as well, tv production, film production, et cetera so as our world recovers, these are two stocks that investors should want to own if you could only own one we have buys on both. Okay. Well leave it there thank you so much for joining us this morning thank you you bet becky, over to you andrew, thanks still to come on squawk box this morning, back in business new york city, the american epicenter of the coronavirus lifting its twomonth old lockdown orders today as it kicks off phase one of its reopening plan we have the details right after this break. Then investor and philanthropist stand druk druckenmiller. Squawk box will be right back. Welcome back to squawk box. Multiple states have allowed indoor dining. They have referred to booking sites. Restaurant bookings ticking up below from last year according to open table. In the month of april bookings were down 100 compared to last year most restaurants in the u. S. Were obviously restricted to takeout, Curbside Pickup or delivery orders. Andrew thanks, joe. Meantime, new york city wanoncee epicenter of the coronavirus is taking the first steps of reopening. Contessa brewer joins us with more contessa reporter hi, andrew. New york city, epicenter of the nations coronavirus hits a milestone today. As many as 400,000 people expected to return to work for phase one, but just because these stores can reopen doesnt mean they will here in the seaport Howard Hughes tells us none of these retail tenants are opening up today. Some of the most iconic stores like macys in Harold Square says it will remain closed retail is only open for in store pickup or curbside delivery. That rules out any kind of in store browsing thats a big draw for a lot of shoppers coming to new york. Nonessential Construction Projects can resume. New yorks mayor says there are 33,000 throughout the city almost half a Million People work in manufacturing in new york city, and starting today those employers can start welcoming people back. Look, almost 1 Million People have lost their jobs since february tourism, a Major Economic engine feeds the economy to the tune of 70 billion a year, its crashed. New york city is facing a 9 billion gap in tax revenues, a billion in sales tax revenue alone. This phase one a step in the right direction. I should mention that new york city has not met all of its metrics. It still is closed but doesnt quite have the number of contact tracers that the state has laid out. Governor cuomo says hes going to watch that. If cases or deaths spike, hell reverse course on the economic openings. Contessa, did he describe what a spike will be we have seen spikes in other states they closed for a short amount of time and were the first ones to reopen. Reporter hes not being specific about what it would take to reverse course i have to say the mayor of new york city also says hes watching this closely. Well have to wait and see what happens in a week or two from now following all of the protests that weve seen unfold in new york city because that may influence what we see in terms of cases, too. Contessa, thank you contessa brewer. When we come back, famed investor Stan Druckenmiller is working with the harlem childrens zone to close the racial divide through education. Well get his outlook on the markets. Squawk box will be right back. A guy who just got into college. Thats why behind these masks, Johnson Johnson scientists are working to accelerate development of a covid19 vaccine, drawing on decades of experience responding to Public Health emergencies like ebola and hiv. For the life behind every mask, the clock never stops and neither do we. What do i need from a partner right now . An insightful outlook that comes from experience navigating multiple bear markets. Can i find a partner to help guide me through this uncertainty . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Stocks coming off a sharp rally. Futures are adding to that up a couple hundred points on the dow. The nasdaq is a little bit lower. Thats been outperforming the other average is actually up for the year and doing very well records, perhaps some parts of it the s p is up 14 well talk more about the markets eventually with famed investor Stanley Druckenmiller that he was bullish. Well discuss his work with the harlem childrens zone to help close the racial economic divide we had jeff cannon olan st week. Well talk a lot about that when we return. Communities showing support in their own way. Our way is massmutual healthbridge, a free Life Insurance program just for healthcare workers fighting covid19. So to all the healthcare workers on the front lines, thank you. You say that customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. The harlem childrens zone has been investing in education and support for children in new york city for many, many years stand druckenmiller has been investing since almost the beginning. Now the initiative is hoping to expand what its learned in new york across the country. Joining us is Stan Druckenmiller. Chairman of harlems children zone and kwame i think in july, if you have doubts, youre getting close its going to be great stan, youre chairman of the board. I think weve got a pretty good idea not everyone does. Of exactly what happens there. Can you summarize for maybe people that didnt see that interview . Its not just schools, its almost a cradle to the job all encompassing program its fixing everything its who he lis particulaholistc can you go into that. Go ahead, kwame. The mission of the harlems children zone is breaking the intergenerational cycle of poverty where we are building up opportunities for children, for families and for the community so that they can thrive in school, in life and at home. So one of the common misperceptions about what we do at the harlem childrens zone is were a Charter School while we have two Excellent Schools k12, theres a whole wrap around that we provide from birth through college. It is a comprehensive set of circumstances where we are building up pathways and opportunities for folks for mobility and prosperity. Stan, you were one of the early investors and you have pointed out when you invested you took big positions with a lot of impact in those positions. It used to be philanthropy was like the arts or hospitals, but now you were early, but you think the time is right for this type of philanthropy its expensive, its detail oriented but you can see results. Theres no magic bullet for a lot of these intractable problems. Exactly joe, this started way back in the early 90s when i met jeff canada and i worked with him on the board of readland center for children and families. Spending four or five years with him up there in harlem i could see that the American Dream that i was living just was not possible for hundreds of thousands of kids, and specifically tens of thousands in Central Harlem. Across the nation i was learning what these kind of situations were i grew up in this country loving this country believing the story if you pull up your boot straps, anybody can succeed, and i had the background where that was enabled and i was able to succeed, but looking at Central Harlem 25 years ago, it was such a toxic environment that had been marred by disinvestment, education, health, infrastructure everywhere you walk through dilapidated buildings. It didnt look safe for the kids when jeff came to me and proposed and i had already known him for four years, the harlem childrens zone, to try and level the Playing Field and make that neighborhood similar to the middle class neighborhoods across the country where children would have the opportunity to succeed not a guarantee for success but just a shot, a shot at the American Dream, i was all in i was all in, a, because we had jeff cannon on last week ive known him for four years. I believed at the time he was the most extraordinary leader i had ever met and i still believe that i like making big bets and particularly on great management this was a massive, massive investment that i knew there was a lot of risk to it, but if jeff canada told me to jump off the Brooklyn Bridge with him, i probably would have done it. When he proposed this idea, where i was already sort of sickened by what i saw that this never would by the way, was almost all black and brown children, just wasnt giving kids the opportunity to succeed that i had had, so we made the bet together and jeff delivered over and over again. Harlem Childrens Fund is a huge success. One of the things theyve done thats most interesting to me is jeff was succeeded with another leader, william dyson. The transition was as smooth as i had ever seen. Theyve done a phenomenal job. Kwame is set to take over july 1st. We will have had three generations of africanamerican leading the harlem childrens zone which if you look at them, its probably the most successful intervention in the space in the country. We want it to be scaleable. Thats the question here kwame, the National Collective consciousness is primed to act right now. Its time to act this is when, you know, consciousness has been raised to the point where its not going to be lets go back to normal. Is that going to be part of your mission . It has moved to more than just harlem, this whole concept, but it would be a huge undertaking to do it in every neighborhood that needs it. Very expensive so is that youre a young guy. You had some time on wall street, then got an mba from harvard. Youre probably the guy to do it is it going to be focused where you are or scaleable the harlem childrens zone is absolutely scaleable it has always been part of our mission to be an example and holding the standard of excellence of what it takes to do on the ground and be able to share them with or for communities across the nation. As you mentioned, the time to act is now we exist as an entity for what were seeing thats playing out daily in the news. The daily reminders of the systemic inequality, the injustices thats causing a lot of mixed emotions on the ground with the folks that we serve, right there is anger and this is all on the backdrop of a pandemic. On top of just the fear of death, there is economic insecurity, food insecurity, housing insecurity all on the back drop of Impending Health Crisis that is going to continue to cause devastation within the communities. Yet despite all of that, theres still a great sense of hope, a great sense of a fighting spirit amongst our community. That is the reason why ive dedicated my life to this work, that is the reason why the harlem childrens zone exists and we believe as we continue to codify our best practices, we have a decade of evidence. When we think about the 2004yearo200tw 2000 fouryearolds that have graduated, the 950 students that we have in college in addition to all of the Wraparound Services we have a healthy Harlem Initiative where were dedicated to eradicating childhood obesity. Were seeing the rates diminish. The Evidence Base that we have that we know works, we are continuing to share that with practitioners all across the field. Pea have people visiting us from 70 plus different countries. Everybody understands its going to take comprehensive set of services at the neighborhood level where we hold each other accountable for real outcomes and i absolutely believe our model here is scaleable. Joe stan, both of you gentlemen emphasize the private sector in doing that, publicprivate sector thats what i want you to explain to me, stan. It almost sounds like you want Government Funds but private sector oversight to make sure its done properly or something. Can you explain what youre talking about there. Yeah. Id also say, joe, im incredibly optimistic this model is scaleable im about as helpful as ive ever been. 20 of philanthropy goes into the social sector. That was almost zero 20 to 30 years ago. It needs to go forth only 4 of leaders in fi philanthropy are black and latino ive been around the country and ive met several and i think theyre there with this model. With regards to this sector, this is a 20 year trial and error experiment what we did was we just kept trying things basically for 20 years. Jeff was a data geek and data hound and we have data to see what did and didnt work 20 years later we know what works and we also know whatnot to do and we want to share that with the country that 20 years involved tremendous innovation and a lot of projects that now we want to share with others. I dont think public the government could have done this the way we did we held our leaders to make them accountable. They delivered and now we have this model but with regard to your question, i think the end game is you get places like the ha harlem childrens zone, show that kids in Central Harlem can succeed, show that you can eliminate the opportunity gap, the achievement gap and then once they have proven success, government comes in and helps fund these organizations over the long term and, again, im incredibly optimistic. We did it in the toughest neighborhood in the country. There are leaders all around this country i met one great one in sondred samuels in minneapolis there are many others around the country. Im extremely optimistic that this will be changed and whats a stain on our nation. Stan and kwame, i applaud you both just to follow up on joes question to some degree in terms of the scaleability of it all, i pray that we can get it to be scaleable. Clearly the results speak for themselves the question that i would ask is how you think you persuade frankly all of the teachers unions around the country that this is the right answer this may very well be the right answer for kids. Do you ultimately need to perd ner with the teachers . Im being pog particular about it, at least the way they approached it in terms of their view of Charter Schools. Kwame, maybe you can answer that one let me just say even though we run two very successful Charter Schools, we are involved with interventions helping out the Public Schools in harlem i think kwame deals with the teachers unions on a daytoday basis is better able to answer that. Sure. As stan articulated, less than 20 of the students we serve at the harlem childrens zone attend our Charter School. The 40 attend traditional schools. Its about quality education we believe that we in many ways serve as r d for the field we have great set of educators who have dedicated their lives to this work we have the ability as stan articulated to be innovative in our practices. We have an opportunity to shorr that between our family and i know that feeling. Our commitment is widespread across the nation. Stan, i want to get a quick market comment for you on what weve seen you had your speech at the Economics Club at that point you looked around the world and stocks moved quite a bit then it may have looked rich. Its moved quite a bit since then are you more concerned now in the last three weeks what have you witnessed would you say . Well, ive been humbled many times in my career and im sure ill be humbled many times in the future in the last three weeks it certainly fits that category i had long term concerns that because of easy money too much was being built up in the corporate sector whencovid hit, i was pretty much of the view that there was a good chance that the bubble had finally the credit bubble had finally burst and the underlining of that leverage would take years im still of that view next week i turn 67. If i have a view five years out, thats all fine and dandy. Im not sure ill be alive lets talk about the intermediate term. I did give a talk to the club and i talked about how horrible the risk. Referee reward was i underestimated how many red lines and how far the fed would go the great marty zweig had this thing called a breadth thrust. Earlier last week the advance decline on the New York Stock Exchange was over two to one for a tenday period that is an undefeated record on an intermediate basis. What is clearly happening is the excitement of preopening is allowing a lot of these companies that have been casualties of covid to come back and come back in force with a combination of the hope of the vaccine since the Economics Club i think more important than the market here is that breadth expansion and the fact that the rotation out of the covid winners into the covid leaders gives you a big, big breadth expansion because frankly there are a very limited number of large cap but very Large Cap Companies that benefit from covid. There are hundreds of companies that get hurt by covid thats why, say, the first 35 of the rally was led by the Growth Stocks and now its being led by obviously the last few weeks the value stocks let me just say youve got to have an open mind. The Health Situation is ever evolving i dont think anyone, particularly me, knows how its going to end up. Personally i have still Something Like amazon and microsoft are my largest holdings, but i have the least growth rating in my portfolio ive had for maybe six or seven years. I dont want your viewers to get too excited about that i could change my mind in a week or two this is very binary how this comes out on the health front. I think its a fascinating time where if you get an outcome if you get a vaccine, then you get another outcome if you dont then you have the stimulus plans in july. You get one outcome if they dont liquidity falls off the cliff and you have another outcome. So as always, im staying flexible but ive been far too cautious i was up 2 the day of the bottom and ive made all of 3 in a 40 rally and i missed a great opportunity here wont be the last time but those are my current thoughts, joe. Kwame, you were at morgan stanley. Youre not on camera youre kind of smiling youve got your own opinions about what happens but stans the best ever probably i think we want him to do well just for chc as well, right . Absolutely. And its interesting because as ive been following the economy, even with the recent release of the Unemployment Rates and surprisingly going down for most of america, what challenges me in the work that we do is it didnt go down for black americans. It was slightly up at 16. 8 . The Economic Impact covid is having is taking a devastating toll with corporations and those that are being able to benefit from the uptick that is happening in the markets, the question becomes how are we reinvesting those profits back into the communities, on the Community Level to ensure that we are unlocking the Great Potential that exists in communities of color all across the nation. Joe, can i just say one thing . Of course ive done a lot of investing in my life ive had some misses as i just pointed out and ive had some huge wins. The best investment ive ever made in my life was the harlem childrens zone. Its been a huge success ive gotten great satisfaction in it and i encourage others to invest in the harlem childrens zone and other communities where economic mobility needs to move. I know when you say you go big we dont need to talk about numbers, but you went big, big, big in this investment. It paid off. Kwame, we were talking before the show on twitter. I said id get you some more followers so kwameok. Youre the perfect guy for this, stan superstar. And i just hope we can do it everywhere reparations bob johnson was looking for 14 trillion. You probably wouldnt need quite that much to make a huge difference i think across the country because im not sure, bob, its going to work out that way. Would 14 trillion do it, stan . Kwames my third superstar in a row and i cannot wait to see his action keep us updated, kwame, will you . Im going to be following you. Absolutely. Thank you, gentlemen. Thank you, joe good to see you. Thanks, stan. Andrew . Hey, thank you guys. What a great conversation and what a Great Organization that weve just been talking about. Meantime, a lot more coming up on squawk box. Another big hour ahead Senior Advisor to the president , Kevin Hassett is going to join us then well talk to zooms ceo and then at 8 30 we have the ceo of intel on deck as well take a look at the futures ahead of the big conversations right now we are in the green. rba iju aomt. Wee ckn st men a trio of big interviews for you this morning on the national economy. The work from home economy and making all of it more equitable for every American Well be joined by Kevin Hassett. Zooms cfo Kelly Steckelberg and intels ceo bob swan a big hour of squawk box begins right now. Good morning and welcome back to squawk box here on cnbc im joe kernen along with becky quick and Andrew Ross Sorkin u. S. Equity futures are adding to the really outsized gains in the dow last week. Almost 7 in one week. Up another 200 this morning. Well see whether that holds up seeing treasuries kind of reflect a little bit better outlook for the globe maybe. Were closing in on the possibility of getting back to 1 also Energy Prices getting up to almost where they were prior to everything hit the fan as you can see, almost 40 now on wti crude after opec, russia, other allies extended Oil Production cuts for another month beyond their original deal becky . Joe, thank you. Economists and investors still digesting fridays shocker of a jobs report which showed a gain of 2. 5 million in may instead of the expected loss of 8 million. The overall Unemployment Rate could be a full 3 Percentage Points higher than the 13 that was reported joining us to talk about this as well as the reopening of the economy is Kevin Hassett he is Senior Advisor to the president. This number caught just about everybody off guard. Steve liesman when he saw the numbers coming out took a double take there has been a lot made at the misclassification error. Having had the weekend to dig through everything and taking a look at all of it, whats your take away . It happened to us all twice when the adp number came out, i was on a different network, sorry about that when the number came out, i said, geez, that doesnt make any sense. I have to get my pencil out whats going on. Were looking at about a 20 signal shock to the economy. There are going to be massive fluctuations in things my guess though is that the thing the headline for me is that there are about, say, 18 Million People in april that said they expect to be rehired in the next six months mtd 15 million in may people are getting back to work. If you look at the home base data, 73 of businesses are now open we went way, way down and now were crawling back. I think well continue to crawl back and maybe even accelerate back for the summer. I think the headline is we stopped. Everything went way, way down. Now its coming back whether its coming back this fast, this fast is something that will probably vary from month to month it was a great jobs report, it really was. Thats what so many people have been looking at this saying, okay, we know that people are starting to come back the question is how quickly, which industries and where will there not be so much we will all be caught by surprise from time to time because its just so hard to guess on things of this scale. What would your anticipation be . Because before the fridays jobs report there had been a lot of economists that would anticipate come november there is still an 8 to 9 Unemployment Rate. Do you think thats the case obviously were in unchartered territory. The one thing we did do with three phases of stimulus is we built a bridge to the reopening of economy by the ppp loans to get back to work right away. I think now the question is do we stay on the other side in the sense that the disease continues to trend down and even though were opening up, we dont get another outbreak i think if that happens, then all of these positive numbers will accelerate. We bought time and another reason for confidence for which i invested dr. Birx and fauci did a great job of giving governors guidance for how to work safely and were all wearing masks. People are going back to work which is why its happening faster than we expect. Kevin, thats all great news. Again, the market has cheered this the entire way. If you look at some of the states that did open for business early, you are starting to see an yup particular in cases again. Places like texas, places like california and arizona in arizona there was a story about how the largest Hospital Center there was talking about how its nearly 100 capacity in its icu. That is the type of thing that would kind of watch and wonder i know you are not a doctor, neither am i, but were all watching those numbers to try to figure out what comes next whats your thought from that . Thats right. Well, the thing is that one of the things weve noticed in terms of the variation in the data is that the places that have been closed have had sort of surprisingly high numbers of covid cases. The places that were open actually had kind of lower than a lot of epidemiological model cases. There could be a little bit of a wiggle it looks like what is mostly going on is all across the country things are starting to open up and while there are definitely hot spots where we can send people in, much better testing, much better treatments. Generally speaking theres not been an inversion in the National Curve the other thing i could say is theres an enormous amount of geographic variation in opening up and the economic context of it so as an example, here in washington, d. C. , still about the case that 50 of businesses are closed and then there are other parts of the country, montana is the place thats the most open right now. You can think about geographically why that would be almost 100 of businesses in montana, its a little bit less than that. Its not necessarily related to the path of the disease. I think its related more to the, say, preferences of the governors and mayors in those places that geographic variation, it could be a limiter on how quickly the economy could get back the places that open safely could get back because of the three phases of the deal the places that are still shut might see bankruptcies and even what happened without sales. We had a conversation earlier with Mohamed El Erian who was pointing out one of the reasons you might have seen the outperformance is because of the strong Government Programs that were put forth including ppp when you start to think about, okay, maybe the numbers arent as bad, maybe things are looking a little bit better, he pointed out that that could take away some of the push behind having a second stimulus package coming through congress and then signed by the government. What are your thoughts is there any reason to put additional fiscal spending out there . Right i think the position of the president and the white house, there has to be a phase four deal whats in that one of the things were saying is that we watch the economy recov recover, we see if it surprises us on the up side. If the programs out there work or need to be fixed, youll notice the ppp got fixed a little bit last week because they extended the duration of it were watching the data and making a plan for up side scenario, down side scenario we had a good month of jobs numbers. We get another month like that in june, then i think it would absolutely affect the things we pursue in july in the phase 4 deal there are a lot of things that will definitely need to happen i think the odds of that happening are close to 100 . What kind of conversations are you having with some of the fiscal conservatives we have senator rick scott and ted cruiz and given concerns about the deficit and how much weve spent, what conversations have you had with those individual leaders i wont talk about private conversations, but ill just get a couple of sort of headlines from things i can say. The first is were talking to lots of different people in both parties and its something that i think is underreported and under covered. Senator mcconnell put out an estimate that the phase 4 deal should be a trillion dollars i presume senator mcconnell is talking to his colleagues. We are thinking of up and down side and we want to wait and see the data. Youre right the bipartisan has been underreported where do the two sides agree what do they think should be spent on i think, again, look being at t the ppp revisions and the phase 3 deal that went through so quickly, in a week or two it shows that when were focused on things, then we can get things done in a bipartisan manner even though it feels like partisanship is as bad as ive ever seen it in my life. Because of the national emergency, its been heartening to see patriotic people have worked together to do this massive, massive Economic Policy i think weve had the biggest negative shock and the biggest and baddest response as we go forward, that will continue it will be obvious to everybody in july what needs to be done. Just as we did over the past three phases would you request get that done and done quickly. You made the point, trying to stay on it with such a huge issue. This is a good one given whats happening . Yeah, there are a lot of real time things that we never had before even when i was back a couple of years ago when i was on your show every week, becky that im using now that i wasnt using then open table tells you if people are getting back to restaurants. Home base tells you whether businesses are open. Apple tells us whether people are moving around and so on and so on and so on. There are all of thus indicators and as we look at the nuances and the footnotes of the jobs report, the fact is everything is saying the economy is opening up way faster than we expected i think the reason its doing that is theres very, very strong policy response right at the moment when we had the biggest negative shock to the economy in u. S. History. That has to be working otherwise we wouldnt be turning on as fast as we are. Kevin, we did see great numbers in almost every quarter. We were speaking with the incoming ceo of harlem childrens zone who pointed out that for africanamericans for the month of may, they did see a slight uptick in black americans unemployment numbers. Its up 0. 1 from the month before that may be because some of the industries were hit so hard like retail and travel and leisure my ha have what are your thoughts its been a great opportunity. Finding distressed communities and supplying aid there. There is a history, a very, very sad history. When there are economic downturns minorities tend to be disproportionately harmed. The may job numbers are not the good signal. You need to get Steve Liesman on to talk about it africanamerican employment went up quite a bit but so did labor force numbers. The Unemployment Rate ticked up because even more came back into the labor force. When i dug into the numbers and thought about is there a pattern here that my first hypothesis was that it could be because there are different places that are more closed than others that that could explain it turns out theres a huge increase in labor force that affected the Unemployment Rate but not the job creation numbers. Kevin, thank you for your time thanks, becky great to see you coming up, much more on the current jobs picture in america with the chief Financial Officer of zoom. The apps been basically a must download in the last few months. As the market surged on friday, shares fell. Does a broader economic recovery mean for tougher times ahead check out the shares of amazon rbc capital upping the price target to a wall street high of 3300. Druckenmiller said microsoft is its biggest position, too. Online retailers are a structural winner resulting from the covid19 pandemic. Stay tuned bcn re watching squawk box o cn can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Talk to your financial professional or consultant you say that customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. The dow is up and adding the big gains and the s p is indicated up 11. 5 or so. Oil back to 40. Im not. Does that make any sense . Now to zoom. Video conferencing easily topping analyst expectations this quarter on tuesday dare i say people said spectacular then on friday shares of zoom fe fell the dilemma is the staying power of giants. Zooms cfo Kelly Steckelberg good morning, kelly. Thanks for joining us. You saw the way the stock performed last week. You had an amazing quarter and now people are saying, well, if everybody goes back to the office, if the world reopens, what happens to zoom and to other companies that have benefitted during this period . Lets talk about this issue of sustainability i dont mean climate or anything else, i mean the sustainability of a business in a post pandemic world hoping we can get to that place. Good morning. Thanks for having me we, as you said, had a strong growth in q1 we added over 265,000 new customers. Thats over 350 growth. What were doing is really setting a strong base for future growth of the company. As we saw growth across all segments all the way from individuals up to enterprises where with customers rated at 100,000,000 of ar, we added 500 customers in that segment in q1. As we look forward now to the rest of the year, we have the opportunity not only to continue to support them in their zoom meetings use but also selling additional products, like zoom phone which is the cloud pbx and as people think about returning to the workplace, we also have zoom room, which is our Conference Room solution that will allow them to connect employees that might still be working from home as well as employees who return to the workplace as we think theres going to be a hybrid model as Video Communications has been integrated into everything that we do every day. Speak to this issue of taking free consumers, freebies, folks using the service for free and migrating them how much is a strategy or not . So we love our free users first of all, we have given zoom for free to over 100,000 k12 schools around the globe as well as we see many interesting use cases of individuals and families keeping connected during this time and we are absolutely happy for them to keep using the product for free as every time a free host has a meeting, they have the opportunity to expose many more people around the world to the power of zoom. That is what started this company was a highly viral component to our go to Market Strategy and were happy to have them using it that way. Product question for you. You have a lot of competition now. Google is out pushing it meetings product, microsoft is out pushing the teams product. Facebook is out pushing rooms product. There are going to be others when you think about what differentiates your product from the products i just talked about, what do you think is the biggest differentiator i think the biggest differentiator for zoom is our ease of use and reliability. As you have seen during this period of time where we grew from 10 million daily participants in december all the way up to 300 million daily participants in april is the security and the reliability of our platform as those users continue to increase, we were able to support that i think thats really key. People want to know that when they come to their platform, its going to be there for them. So simple for them to use. I heard stories of 6yearolds here all the way from 80yearolds to keep connecting with families. Kelly, you know, we use it internally at squawk we use it to kind of have a chat on friday nights oftentimes just for everybody to have a cocktail, kickback, see what happened through the course of the week we used it for family birthday parties to celebrate because we cant be in the same places. Ive used it for work events too. In terms of as we reopen, how much do you think how many of those events will still be happening on zoom . How many of the people who are using it were dancing around the same thing, but you guys have been a life line during this time i will probably use it from time to time but i cant imagine i will be using you as frequently as the past three months. What weve seen during this time was an accelerate for Video Communications weve integrated into aspects of your life and thats perfect what that does is allows you to keep connected when you cant be with someone in person and yet when you can, its great we did a Birthday Party for my niece as well via zoom some were together, some were remote weve also seen, you know, a transition for enterprises as well where theyve taken things like their users conferences last week i did several investors conferences that used to be in person and now theyve moved them on to our webinars product. I think its going to be some time before we go back to a place where everyone is meeting back the way they used to forever. Maybe its never going to be the same maybe not everybody wants to get on a plane and fly together at a globe to come together for a conference weve heard from some of our customers that these Virtual Events are more efficient and effective than they were in person one of our customers told us they got twice as many leads as they did last year i think were going to move to a new world where we have a combined approach and people have just seen how effective Video Communications can be as part of the Communications Strategies going forwards. Kelly, i want to talk more about the product for a second look at it in the future, a year from now, a month from now how much is the product going to change how much do you need fixing or to be made better now that were all experiencing it. I know people talk about the latency issue which you can talk about people have good wifi and others dont image quality. How do you get people to go off in little sectors together there are so many things you can imagine in the future. Im curious for you if there were two or three things top of your list that youd like to see come out of zoom or frankly your competitors. Well, we always are looking for ways to make a product look better approximately 20 is devoted to feedback from our customers. We heard a lot during these virtual times. The thing that i would love the most and hopefully it some day is coming is the ability to, for example, reach out and virtually shake your hand and say hello to you. Or as youre mentioning on friday night, having a virtual drink with some friends. Those are the kinds of experiences that were looking forward to at some point in the future okay. Kelly, great to see you. We appreciate you coming to us on zoom and as you know, as becky said, were all zoom users so looking forward to seeing you again very, very soon on zoom but maybe one day in person. In the meantime, im going to send it over to becky. Andrew, thank you when we come back, were going to continue our series of interviews with americas biggest Corporate Leaders on race opportunity and inequality in the Business World joined exclusively by bob swan heres another early stock mover for you. Boeing check this out shares of boeing are up 9 in the premarket. They make up the bulk of the gains weve seen in the dow. The dow is up by 250 points. Boeing makes up more than 125 points of that watching whats been happening for boeing shares theyve rebounded pretty sharply, by more than 20 just last week this is all hopping. We will continue to keep an eye on this. Ay tuned you are watching squawk box right here on cnbc yes. The first word to any adventure. But when allergies and congestion strike, take allegrad. A nondrowsy antihistamine plus a powerful decongestant. So you can always say yes to putting your true colors on display. Say yes to allegrad. Domestic airfare picking up. Another real time indicator on the rebound on airlines. Soared more than 80 united more than 50 phil lebeau joins us. Reporter we just got the numbers from the tsa in terms of number of passengers who were screened from checkpoints. Both friday and sunday for the First Time Since late march the number of people scanned or screened at those checkpoints topped 400,000 it hit 441,000 yesterday now keep in mind thats still down 83. 5 compared to the same day a year ago, but you get the point here were seeing an improvement. You can see that when you look at the passenger levels in terms of people screened each week by the tsa, it has gradually climbed higher that mark there, on may 17th of 212,000, that was down about 89, 90 . It is improving. As you take a look at the airline stocks, looking at the big four, the big question is have they gone too far too fast. As you look at where theyre headed today, theyre going to be even higher bank of america upgrading jetblue to a neutral rating. Were seeing more of this and upgrading to a neutral, in some cases to a buy not often. Dont forget, this afternoon were going to have an interesting guest. You want to hear from robin hayes. Ceo of jetblue joining us on the closing be bell. Well see the strength of the number of more people getting out and getting on planes. Okay. Phil, thank you for that its fascinating want to talk to you a lot more about it well look forward to that interview a little bit later today. When we come back on the other side of the break, a special conversation with intel ceo bob swan on the Biggest Issues in business, with rising tensions with china and the role of Corporate Leaders and calling out injustice in america listen to us live on the cnbc app. Youre watching squawk box on cn bc usaa was made for right now. And right now, is a time for action. So, for a second time were giving members a credit on their auto insurance. Because its the right thing to do. Were also giving Payment Relief options to eligible members so they can take care of things like groceries before they worry about their insurance or credit card bills. Right now is the time to take care of what matters most. Like weve done together, so many times before. Discover all the ways were helping members at usaa. Com coronavirus discover all the ways were helping members our Retirement Plan with voya gives us confidence. Yeah, they help us with achievable steps along the way. So we can spend a bit now, knowing were prepared for the future. Surprise we renovated the guest room, so you can live with us. Oooh, well. Im good at my condo. Oh. I love her condo. Nana throws the best parties. Well planned, well invested, well protected. Voya. Be confident to and through retirement. Welcome back to squawk box here on cnbc it is a big day for new york city the big apple set to begin reopening. Three months after the coronavirus hit and forced much of the population inside construction operations can return with some restrictions. Retailers that were deemed nonessential that have been closed for months can now offer deliveries, in store and curbside subways will be returning to the normal schedules with the continued overnight shutdown for train cleaning new york was undoubtedly the epicenter of the virus for weeks as many as 500 people dying. 21,000 new yorkers died of confirmed or probable covid19. Meantime, we are going to kick off the final half hour of the show this morning with a leader in the corporate world in our continuing conversation about their roles as america grapples publicly and painfully with its legacy of racism. Joining us is intel ceo bob swan theyre hosting a quarterly adjusted financial call including how intel treats the employees in the environment they have ranked fourth on just capitals list for all of the work he and his company has done for employees. Want to talk to bob about that thank you for joining us i want to get to all of that in just a moment. I want to start with this because i think its something our audience has been trying to grapple with in addition to some of these larger issues, but trying to understand from an Economic Perspective the way intel is working in a post pandemic world and where we stand and more importantly, the relationship with china and the announcement by the Trump Administration a couple of weeks ago that would prevent huawei from buying supplies from u. S. Technology companies what that means for intel and so many others. Good morning, andrew. Thanks for having me i think first id just say in terms of economic the economy, first half of the year for us has been very strong. As you know, we power almost 95 of the worlds Digital Infrastructure at a time where more people are working from home, studying from home, need to be connected all the time, the First Quarter was the best First Quarter in our 51year history. Were expecting a very strong Second Quarter as well that being said, as we go into the second half of the year, things are just a bit more cloudy what the implications will be, a declining gdp on the demand for our products we took our full year guidance about. We talked to our investors back in april real Strong Demand now little cloudy horizon. Well go into it eyes wide open in terms of how we manage the business end both protect the safety of our employees while also delivering on our customers china as you know is a huge market for us. And our position has always been global trade is good for the Semiconductor Industry and definitely for intel were a large u. S. R d for Manufacturing Products but we sell to the globe and chinas a big market we deliver for customers there we make a lot of money there and we bring that money back here in the u. S. And expand our manufacturing footprint and increase our r d to stay ahead of the game. Its an important market at the same time as the rules of the road change, we have to adjust and adapt and deal with the practical realities, including the most recent changes about the implications on export control. So were all in favor of global trade at the same time or Global Citizen that has to meet the rules and regulations in which we operate let me just follow up on that for one second, which is what is your position on the way the u. S. Government should deal with huawei and think about huawei . Its a topic we talk about virtually every week on this show well, again, my answer is not dramatically different as the ceo of intel, were trying to continue to deliver for our customers around the world so we have the capacity to reinvest and at the same time to the extent that the u. S. Government knows things that we dont necessarily know and puts in regulations as a result, well just adjust and deal with the practical realities. But do you as a u. S. Citizen and also as a ceo look at that company and think of it as an arm of the Chinese Government . Do you think of it as a Security Risk do you think its not those things whats your take. Well, look, andrew, others have better information than we have and they set the rules of the road in terms of how to engage we dont have perfect information so we simply adjust and adapt as the rules of the road change as a Global Citizen, as a u. S. Based company. We have to meet rules as theyre established in the markets in which we operate okay. Fair enough. Lets pivot the conversation and talk a little bit about what he was been happening over the past several weeks. Specifically the way intel has been thinking about it you pledged a Million Dollars to support efforts for social injustices and how are you planning on deploying the capital specifically well, its awork in process we not only said that we would invest a Million Dollars we also match our employee matching for the areas that our employees choose so in events like this, we strongly believe black lives matter and for a Large Tech Company like ours, we try to play an active role in things that make sense and give our employees voice, not just put the companys money behind, you know, helping out inequities but also giving our employees the opportunity to invest in those social causes that they believe will have an impact. Youve set a goal to double the number of women and under represented minorities in Senior Leadership you say you want to do that by 2030 what are you doing and how is that working on a very practical level inside the company yeah, you know, this year the ending of a decade and the start of a new decade our Corporate Responsibility report that we issued a few weeks back, you lay out our goals for the next decade i would say as it relates to diversity and inclusion, weve made really Good Progress since we stepped out in a fairly significant way back in 2015 we met full representation in our u. S. Work force two years earlier than the goals that we set. We have global pay equity for all roles and responsibilities around the globe we spent 1 billion with minority owned businesses so it gives us a chance not only to reflect on our accomplishments but also to reset some new goals that will that are important to us. I mean, our purpose as a company is to create world changing technologies that enrich the lives of every person on earth what that means is we need to have a work force that represents every person on earth. So its very important to not just the purpose of our business but how we execute and deliver for our customers. So we set up very ambitious goals. Were proud of what we accomplished in the last decade, but were not satisfied. So the idea of doubling the number of women in leadership positions, doubling the number of under represented minorities is very important not just because its good for the business but its also the right thing to do. So the cascading of these goals set is pretty broad and deep into the organization. As it relates to increasing representation in leadership position, we build a pipeline. That pipeline does not start when people arrive at intel but its a pipeline that starts when we engage with universities, and with schools and deploy and engage deeply. Deploy ai related training in the role weve developed that were getting in thousands of schools to gauge under represented minorities and women early on in their schooling so the idea of embracing Technology Becomes increasingly important for them which in turn builds the pipeline for us to meet these goals that we sell the out in ten years in addition to that, in these goals and objectives, we want to embrace other players in the industry as well to set similar kind of goals because in doing that and getting more mass support around these initiatives, we think together we can make a much bigger impact as an industry than we can simply do on our own bob, so much of this is being done voluntarily by different business whose want to make change and want to improve things there is increasing chatter about whether some of these types of steps should be regulated. Youre seeing states that have done this state of california on the basis of gender when it comes to boards. What do you think about the possibility that regulators and politicians may get involved in this in a much deeper way. Would you advocate for that or not . I think when i talk to my peers on the role that particularly Tech Companies play in social causes, it is a top of mind issue and i think were all trying to move the ball forward, if you will, on key issues that matter for society and that matter for our business. So the ideas around engaging on common initiatives that can have a broader based impact, these are top of mind dialogues that ceos are having. To a certain extent if regulation can help accelerate, nor will we at intel, my peers will not use it as an excuse not to continue to try to improve. Bob, we appreciate you coming on the program this morning. Want to let all of the viewers know that you can listen to and you can participate in a Conference Call thats taking place. The quarterly just capital Conference Call at 4 30 p. M. Go to justcapital. Com to be a part of it thanks so much for joining us. Joe . Andrew, coming up, what to watch in todays trade making our way towards the opening bell futures about where they were. Up a couple hundred points on the dow. The s p 500 is just about 5 off the alltime high. If you believe it, on friday the nasdaq completed its rally all the way back from the coronavirus. Least hitting a new inrdteay high stay tuned, youre watching squawk box on cnbc vo at audi, we design cars that exhilarate with versatility, whether on the track, or the everyday drive. Today, that philosophy extends to how we connect with you. We call it, audi at your door. Whether a remote test drive, shopping, tradein, or even service pickup, audi at your door can do this and more at participating dealers. The premium audi dealership experience, on your terms. Audi at your door. And their financial wellbeing. Since our beginning, our business has been people. Its evident in good times, with decisions focused on the longterm. And crucial when circumstances become difficult. That continued emphasis on people our advisors, associates, clients and communities gives us purpose, strength and a way forward. Today. And always. Coming up when we return, jim cramers first take on the markets this monday morning. Were going to talk much more about whats powering stocks the s p 500 is up 40 since the lows in late march as we head to break, a programming note you dont want to miss this special interview with ron baron. Well talk tesla and so many others right here on uasqwk box. Stay tuned jim cramer on the other side of this break a unique trilayer supplement that calms you, helps you fall asleep faster and stay asleep longer great sleep comes naturally with sleep3. Only from natures bounty. 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. All right. Lets get over to cnbc headquarters jim cramer is standing by waiting for the top of the hour. Before we get there, we get the chance to talk to him about his first preview of his thoughts this morning watching what the market is doing and boeing driving things higher after all the gains they experienced last week. Up 40 last week and looked like it was about 8 to 9 this morning once again seeing moves of 20 to 25 in some of the energy names out there just wonder, would you tell people to go with the flow at this point or does the momentum worry you how fast and far some of the gains have come i was listening and i think there is something going on that is hard to reconcile these are morning moves. People placing bets, basically, in the morning and then, there you go the stock runs and sellers dont come out i think that is what is confusing people like norwegian cruise lines and something i speak about but the stock is just on a tear but its on a tear between 5 00 and 8 00 its almost as if people are saying, okay, listen, this is the one were going to take up today. Thats a medium size boeing is hard to manipulate up, but it does seem, why get the jump on the boeing why go in like that . Maybe because the numbers that phil talked about or something going on are people just gunning stocks and then not finding any resistance as if the sellers have decided to take a holiday and, becky, the airlines have all since the price that Warren Buffett sold them. Now, of course, theyve gotten some money from the government but this is very unnatural buying and i work very hard to figure out the unnatural buying but its in cruise ships and oils and its in airlines. And cruise ships and airlines seem almost manipulated up before the market opens. Very strange never seen it. Jim, just in terms of what youre saying, if you wanted to sell this stock, you probably sold it long ago you mentioned theres no sellers stepping in to say, okay, well give it back to you at this point. They took a lot of debt and the government took a lot of stock. I mean, the government should be blowing out all its stock. I calculated how much the government made and it seemed fanciful when they made the investments but ill try to get a hold of secretary and say to secretary mnuchin, its time if theres any downturn, any covid, covid hasnt gone away but these stock trade like it has. American was very bullish about the fact that they might do 55 of last year does that American American should go back to where it was before the pandemic . So, im watching these stocks and saying, where are the sellers . Amiricore had a price tag of 1 and the other stocks are hertz and i dont know what theyre worth and neither does anyone else but i tell you what theyre not worth, what theyre being gunned for. Now, this is a process that ive seen maybe in the 80s that you could gun stocks coming through but its happening and i do wish some sellers would take advantage of it because these prices for hertz and lucen may not last well be watching to get more on this take fascinating stuff. Thank you. Joining ahead of the opening bell, i missed the opening anyway, jim paulson chief investment strategist. You have a family, jim wife and kids and stuff . Sure do grandkids, too, joe. How do you find, you find the most arcane stuff that makes me think you have nothing going on on the weekend anyway, you point out and thank you for doing that, sacrificing. You point out that when yields go up, you went back and looked at when tenyear bond yields have been increasing then you looked at gdp growth at the same time and chose the lowest, the weakest growth as bond yields are rising and you find out that the average annualized pace for all those months was 23 up. And we went and you point out were at 0. 9 and thats higher than weve seen. So, you think people would say, wow, that might choke off a rally. In fact, you found that the opposite was true. Yeah, joe im putting that note out later today. But it turns out is it okay i mentioned that oh, yeah, its okay it turns out that when you look back historically since 1950 since the postwar period. The bond yield movement have on the stock market depends on how speedy the growth rate in the economy is weve, as everyone knows, has been growing at very sluggish rates now throughout the last decade since 2008 crisis what you find is when youre growing very slowly in the economy, higher yields actually are good for the stock market, in a big way, as you say when yields go up from the lowest Economic Growth rates, stocks appreciated the annualize pace of 23 versus only 2. 5 when yields go down. Its very different if youre a speedy economy, rates are more detrimental. But i think it has to do with the fact that higher bond yields can note confidence in the future of the economy. It actually would improve private sector player confidence you think about it if bond yields went to zero right now. Tenyear yield fell to zero, that is very bad for the stock market, i think. Yields climbing back above 1 will help boost confidence among investors that this will turn out okay so, i think yields are heading up as the economy restarts and i think thats going to help private sector confidence. And rather than the fed coming in right now and trying to keep them down, i think they should stand down and let yields climb because i think it will help boost confidence economy wide. And, so, rather than fear those bond yields rising, stock investors should embrace them. We called you a little more what a concept why dont you call some of the people who have been right and have them on more than having the people that were dead wrong on constantly. And they said, thats an idea. Youve been on the one thing because you have been right about this. And it was not easy. Because things are scary well, i got a mixed history, too, joe like everyone else in this business heres the thing, though. You say now the one negative, the bad news is that the sentiment is becoming bullish. Right you see that. I do. I do i mean, i think, i think that the markets going to continue to climb irregularly and a new recovery and new bull and we have a higher risk bull market and mainly because more people are feeling comfortable about the future and when, to me, one of the things that kept me bullish earlier was just the massive amount of fear that existed everywhere and panic and that is not there any more i wouldnt say theres abject bullishness, but certainly a calmer feel right now and thats a risk you got call waiting if we call, answer were going to have you on again, soon, jim we have to go. We have ten seconds. Well take a quick look at where we are more gains today after a big gain last week make sure you join us tomorrow squawk on the street coming up right now. Good monday morning. Welcome to squawk on the street. Live from separate locations futures are green as the cyclical growth trade gets another leg this morning new york city begins its reopening today. 100 days after its very first confirmed case well get a fed meeting this week opec extends cuts through july and the tenyear 90 basis point, jim. As they were just saying on squawk about