Transcripts For CNBC Squawk Box 20240712

Other. Yesterday, down over 200 adding that, you are down more than 1,000 points of decline in early session right now. Well see what the market does as we get close tore reopening and of course to the closing bell today s p 500 down 33 and nasdaq down 101. The central bank indicated it would keep Interest Rates near zero projected that the u. S. Economy will shrink by 6. 5 in 2020. They do see a gain they are expected by 5 in 2021 followed by 3. 5 gain in 2022 and will continue increasing Bond Holdings and Mortgage Backed securities at 40 billion a month. Take a look at the 10year note, yield now sitting at 0. 698 . Crude oil prices have also come down a little too. Wti is down about 3 this morning. Ticking at 38. 38 a lot of this is because of what the fed is you no saying you are really expecting some tough economic sledding. The news out of 12, 13 states probably not great either. I think it would be hard for me to sell right now. You wait around. We dont invest. You would have wished you had done it three days ago thats the hard thing that makes me think, i dont know you get all the way back to 3,200, which you would have killed for now we are here. It is not gone weve got people out and about whichever example of people going out you want to talk about. People talking about demonstrations and beaches and opening up for whatever reason, there is a chance for transmission now, isnt there . Is this the second wave or the first wave in arizona, they didnt go through the first wave did you hear meg terrell talking about how in places like arizona and texas, it is really hot. More than 100 degrees but people are inside where it is more transmissible because you are recirculating the air. If you are outside, that is healthier and less likely to transmit if close quarters. Not necessarily in the house but the mall or inside dining area then it is more concerning if you dont have the outside air right weve been talking about four years to zero. The fed says it. They didnt even say four years to zero. They just said for an extended period if they had said to zero, the market would have panicked too andrew, im sorry. The only thing i was going to add, we saw the starbucks numbers yesterday and what the fed had to do. I was on the phone with a number of Hedge Fund Managers there is a lot of profit making right now. It is hard to extrapolate out the bad news in the market but there is a few, by the way among a lot of professionals that some of this market was run up by retail we had that conversation yesterday and whether you think the professionals were sort of plague along and now starting to get out. I think there is something in that vein that is happening and part is trying to understand too. If you are one of these hedge funds and looking to be down 40 . You can say, forget it i can take that off the table. Your person has always been all these stats. Go back and add up the total dow point gains the week before and the week before that we were talking about that it is six days and peter is listening to the show all the time over the six days where we saw the dow just skyrocketed i was trying to figure out, 1,100 would be giving back we do talk about being up another 450, 500 just the nature of the News Business volatility is here. Remember, there used to be days where before this happened, we were up. Not talking about the s p futures but the dow. Growing up and walking to school up hill both ways you are sick of my old stories Joe Granville crashed the market it was up 27 points with the most bearish comments and the dow dropped 27 points and we didnt know that wed ever come back from that than he started dressing up in a pharoh outfit and he was the greatest ever. Looking at other areas getting hard hit a airlines with big moves there. We noticed that in the overall averages, 8 cruise stocks, which had been hard to understand the big rally there. Some of the speculations we were talking about as those came back hotel stocks does this look like fed or second wave worries. I dont know there is marriott and others those profit taking stocks went up. When bank rup stocks went from one to seven then you really start. It is probably zero. Thats the attitude of some people you tell them they are stupid but they sell out from five. They say why am i stupid take a look at some of the biggest drags on the dow boeing accounting on 80 points of the selloff boeing, which also has run up an awful lot. Up like 55 on the week. Also would be affected if we are not totally out of the woods on the virus. Andrew some corporate stories to tell but as well this one surprising the market shares of grubhub jumping after plans to merge with European Food company, just eat takeaway. They werent sure how uber would support. Their offer valued grubhub at just under 70 a share the european stock fell on that news lowering the total offer to about 65. 17 per grubhub share an interesting transaction i dont want to say it came out of nowhere there had been an expectation that uber or one of the u. S. Players would come in and do this clearly that is not happening. Interesting that antitrust was on peoples mind there was a view that maybe in the pandemic and the need for these services that maybe antitrust would look the other way in some of these types of issues unique moment in time and maybe also a sign that Elizabeth Warren and others who tried put forth a bill it didnt get approve, to effectively end or postpone all transactions during the pandemic because of antitrust issues being one element of it. Pretty interesting for those in the deal world this morning. The other thing on that, remember when we were talking about some of those issues how uber eats even with all of this, with the pandemic and people using it so much more is still not profitable you kind of look at those issues and anybody who looks at it and says, you have to have these numbers. All trying to cut into the customer until there is consolidation, a lot of people have thought it is just not going to be profitable. The question now is what happens to the doordash doordae world. The interest in grubhub, uber thinks it needs to do something. This is still a money losing enterprise part of the reason is maybe there is too much competition, which raises the competition issue. A little thing there we have a lot more coming up on squawk box ahead exclusive look at changes being made to stadiums as america looks to bring back live sports. Take a look at u. S. Equity futures right now. The dow off 500 points s p down about 50 points, nasdaq down 150 points after some sober lbeig bk tethe Federal Reserve. Wel rhtacafr is hrough 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 bbut what if you couldg do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Welcome back as sports return, stadiums will look a lot different an exclusive look at what fans can expect barely six months ago, miamis Hard Rock Stadium was rolling out the carpet for a super bowl crowd of over 65,000. Now trying to look at what stadiums will look like post covid. Already thinking of how to drop capacity to 15,000 fans. Every venue in the country is having these conversations right now. We are talking to baseball owners, football, basketball owners and their Operation Staff literally every day. Leading the Global Sports studio at architecture firm. Well see many changes. Creating virtual designs showing how seating could be modifies creating socially distance boxes resulting in only about 18 Stadium Capacity and then more socially relaxed standards as things change. We hope to have the threshold to start from and then move to different gradations also looking to expand more social viewing areas you might stand in a railing to watch the game or be in a bar environment. Fans ordering and purchasing on apps from their seats and getting an alert when ready. Ticket entry will also be contact free we put ticket scanning entry and that was a cost of about 1. 5 million costs will vary as you run the gamut of facilities from pro arenas, colleges and even high schools. There will be sizeable investments across every sports franchise and venue. Thank you for that report. As the post covid world is being reimagined, some states are seeing a spike in cases. For more on that and a bunch of other questions, dr. Scott gottlieb, former fda and serves on the board of illumina and pfizer in the past couple of days where weve seen additional spikes put it in context for us look, i think we should be concerned but when you look at arizona, texas, south carolina, North Carolina those are the big outbreaks. Florida seems to be going up it is not a second wave. They never really got rid of the first wave look at texas and arizona, they really werent that hard hit in february and march now we are seeing it start back up as they reopen. The cases are certainly concerning but they havent been able to isolate the source of infection. In some states, it is related to facility or a particular prison or nursing home. In texas and arizona, it seems to be more purr vasive they havent done the Contact Tracing to find the source they havent been able to take effective public action yet. Doctor, can you explain this, a lot of folks trying to figure it out looking at arizona that is clearly having spread but look at georgia, which was really the first to reopen not having spread and in l. A. , which was one of the first places to close down and now all of a sudden, there is more spread happening there. How do you explain those differences . Look, how do you explain the fact that new york had a horrible especialpidemic . The infection gets to certainly environments once it takes hold, it becomes hard to extinguish georgia isnt out of the woods this isnt the type of virus that could flair any time. If it gets into the right setting, it could start to propagate. You look at georgia and arizona right now. In phoenix, it is 110 degrees, houston is about 95 degrees. Whatever seasonal benefit you you are going to get, they are probably tipping over right now. Many people are in doors due to the heat that might explain the spread now in some of the hot states. I gather concern about the supply of remdesivir i wanted you to speak to that in terms of access and number of people who may need it and when we have run out of the initial supply thats been created it has been dependent on the cases we have this summer. The supply should last us through the next couple of months assuming the hospitalization rates dont go up from here it is a drug likely to be preserved for the signs and symptoms and comorbidity it will likely be given to patients that come in that present more sick. Heading into the fall, well have more supply so that if we have another epidemic on the scale of what we had during the first go around, there should be enough for the more severely hospitalized patients. It is touch and go gillate has brought out new manufacturers and been able to surpresident those the same thing goes to the they are pew tick antibodies. Those will come on to the market in the fall. Both companies will likely only supply about 100,000 doses a month for treatment. Theyll have more for prevention most will likely go for treatment. Theyll only have about 100,000 per treatment. That should be enough for severely hospitalized patients and not likely for those who present with coronavirus well bring down the death rate with a second wave weve learned how to treat more effectively. It will not affect how many people ultimately get sick and hospitalized with it doctor, i got an email last night from a ceo who asked me to ask you a question, which is they are looking at various testing different types of tests to give their employees including the abbot test and some of the pcr tests that take longer what are you recommending. If you are running a company in this case, it is a factory and warehouses, thousands of employees, how would you be going about this there is a number of apps that came on the market. I work with one called collective health. Thats just the one i know because i work with it that gives elaborate questionnaires if they fail any component or think they might have been in contact, theyll send them for testing. It is hard for a lot of businesses to bring testing on site there are businesses that will do that for you like cvs that will bring avit site and do testing on site. Being able to refer or send tests home a lot more will come on to the market where you can get a kit in the house, take a selfswab or sample and mail it in that will greatly facilitate empliors to get tests to employees if they have an outbreak in the office or fail a test you wake up, go into the app and fill it out. Answer all the questions if you fail any component of that, your reflex of testing if you dont, you dont come into work that day they screen that before they even come into the office. Isnt that going to take people out of the work force, not to say that they shouldnt but if it is all going be done by mail or fedex i would imagine that whole process could be several days or longer people have taken tests who still havent gotten results until a week later the turn around is Getting Better im talking at least 24 to 48 hours. People will be instructed to work from home youll have to see what the prevalence is. We are assuming it wont be that high going into the fall people will be asked to work from home while they are awaiting results from a test the other way is to bring it on site, collect examples and run them there a lot of businesses dont want to mess around with testing. They dont want to have Sample Collection and handle the samples. The test at home paradigm to offset the testing and not have to take it on themselves dr. Scott gottlieb, thank you. Always appreciate and look forward to seeing you again soon thanks becky. Andrew, i want to take a look at the dow over the last month. We were talking about the big moves weve seen we are taking a look at what happened it has made a massive move over the last six trading sessions where it added up so much that was a gain of 2,189 points. If you look at the last three sessions, yet down 282, the day before, down 300 this morning more than 500 that is more than 1,100 decline. Looking at the last month, all of that has added up to some still extreme gains youve been watching in this market. One day where the dow was up 1,000 points i thought wow, that was a massive move biggest move since sometime in may. With err getting used to some of these big, big swings. Down indicated down by 1,600 points amazon Second Company this week to make an announcement about facial recognition details after this as we head to the break, lets look at Retail Stocks getting hit hard in todays selloff. Squawk box will be right back. 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 music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. Welcome back amazon said it is halting Law Enforcement use of facial Recognition Software for one year said that it might give Congress Time to implement appropriate rules and it might help if requested. Researchers and activists have been sounding the alarm about racism and gender bias in the software interesting to see, you know, i wouldnt bet odds on congress coming up with legislation in the next year to deal with this. It will be interesting to see what amazon does if there is no legislation after that coming up yeah, this is i guess, as we pointed out yesterday. It is mute well all be Wearing Masks for the next 50 years anyway unless you got really detailed crows feet around your eyes. Thats all you have to work with the other thing about this, this is going to be this is an economic issue for amazon unlike ibm who this was a very small part of their business not huge for amazon but it is significant and meaningful different because amazon has taken a much more not aggressive approach but said they want to be aligned with u. S. Military and want to be aligned with the police in the United States in a way that so many other Silicon Valley companies have tried to step away intheir own way it is interesting to see them take this step its probably why they are saying theyre take a year rather than saying we are to the going to do it after that. They are letting congress see if they come up with anything that doesnt mean that this is going to stop. That just means the Chinese Companies will probably push further and further ahead. Theyve already gotten a lead. They take so many faces there. They have a massive data base to work with. The bigger data base, the smarter the ai gets with recognition because it is able to do more and more pattern recognition. More after the break on a lot. More on the pull back we are seeing in stocks talking about a potential catalyst from the fed to profit taking and many other things well find some reason to skplan it we head to break and look at yesterdays s p 500 winners and losers 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. Try natures bounty sleep3, 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. Good morning welcome back if you havent seen it already, u. S. Equity futures are under pressure at this hour. The last two sessions for the market closed down this morning, we are looking at even bigger losses dowdown by about 540 points after we heard from the Federal Reserve yesterday they are going to be keeping rates at zero for some is time to come they also gave their Economic Forecast which might have been a little worse than anticipated. Looking at 6. 5 decline in gdp in 2020 the reality of why they are keeping rates low catching up with the market and concerns about kwhaz happening with reopenings and increases in cases of coronavirus in states that have opened early target announcing 3 Dividend Increase putting the dividend at. 68 cents a share up from. 66 cents will be the companys 212th dividend it has paid 2020 is on track to be the 49th Consecutive Year in which target has increased the annual dividend we talk about tough times and companies have to get rid of it entirely not the case for target. It has been a retailer that has flourished in terms of numbers of people going there. This is the news they are giving us this morning. The fed seeing rates near zero through 2022 at that News Conference yesterday, chairman powell used phrases like, quote, considerable risk. Said, quote, we will do whatever we can for as long as it takes to support the economy the professor joins us this morning. Steve liesman with more on all of it and how to read it, steve. How to read it i think, andrew, the way to read it is the fed through a little cold water on the markets over the outlook he gave them everything they could have possibly wanted when it came outlooks for rates it was the outlook for the economy that through cold water on the market yesterday. The fed is projecting rates being low for years. All the way out through 2022 it will continue 120billion o monthly qe why . Because it is going to be a very long road back becky was talking about these numbers. Let me show you a graph with them the yellow line is the gdp outlook. It was going to be 2 , 3 , whatever now it will be down 6. 5 this year up five. Above trend the next two years d do the math on that, you dont get back to where you were until the middle of 2022 elevated throughout the threeyear phase so we dont get back to 3. 5 in any hurry it takes a while i asked powell yesterday about the good news, about the idea that job report was better than expects and asked how we would process that here is what he said we are not thinking about raising rates. We are not even thinking about thinking about raising rates what we are thinking about is providing support for this economy. We do think this will take some time the reason for that is you have to take the ice cream you are getting with the idea that, hey, there is going to be something bad down the road, which is why you are getting all that ice cream he he does not see the labor market improving that quickly. My assumption is there will be significant chunk, well into the millions i dont want to give you a number because it is a guess but well, well into the millions of people who dont get to go back to their old job and if fact, there may not be a job in that industry for them for some time. Andrew, powell has always emphasized the uncertainty of outcomes i feel like the change here among powell and maybe other members of the fed is that they are now more certain about difficult outcomes than in the past the idea that no matter what happens here, it will be a long road to recovery steve, the question id ask you is how much of a distinction do you think there is between jay powells view of the markets between the administrations view and the markets view of the markets at least until yesterday. Those are three questions mnuchin argued for stimulus suggesting it may not be such a quick rebound. Other members have been much more up beat the market it is hard to say what the market was thinking. I think the market thought it could get all of the good stuff, the low rates and the qe without any of the bad stuff and a quick recovery i think powell yesterday put those two things together. Yeah, you are going low rates but you are getting those because the economy is just not going to get back to where it was as requesticly as thought. I dont know if yesterday was the cold water that woke up the markets when it said the numbers or projections or heard what powell said. There is a reason why rates will remain low it is not all good that youll keep those rates at that level it is because it has to be challenged you are talking about the type of economy we have that justifies what hes doing as being troubling. What about just the action unprecedented in terms of just blowing out modern monetary theory embraces central bankers around the world the people who have been preaching this obviously, there has been no inflation. It hasnt come back to ruft yet. Ive seen a lot all the time on twitter and wherever else. What the heck do we do this this the dollar is already out of control and it will crash and the other stuff out there. We didnt even talk about that we talked about that yesterday. I dont know, joe if that is animating the markets. I dont either. My second question to powell if i got a second question was going to be, you couldnt get out of a 4. 5 trillion Balance Sheet, how do you expect to get out of a 10,000,000,000,001 i think its going to be a time, maybe it should be maybe it should be and maybe these guys in washington what are we going to do about how they are spending . It is necessary but, you know, rates have gone up if i could say one thing about that i think it is important, which is that most of the analyses i read says it would be a lot worse if we didnt do these things the budget deficit would be even bigger if we werent out there trying to provide stimulus and relief s if you dont do these things, you have balanced outcome. It helps to very people working to pay taxes from the money they are making. That might be better than having everyone unemployed. Thank you, steve joining us now, investment manager at voya. Paul, i want you to look at what weve been talking about in terms of the stock market and trying to wonder whether this twoday selloff, which is now three days if it ends like this. Is that the beginning of something that will take us back down around 50 of the back off or something to be in big gains. The markets are up 45 from the bottom of the s p. That is a big move perfectly natural to restrasment. 10 retracement from here would take us back to 2,900. Midmay, we would of been really happy to get here. It is perfectly normal to have a retracement like this. Policy is set for stock markets to go up no better time when the fed is telling you we are not even thinking about thinking about raising rates that is good for stocks and a blip on the road. You think the economy will be growing and we wont have to hunker down again at some point . We are beyond that there is always a chance of a really bad outcome the probability is that well have really strong growth and tapering off and still be above trend as the fed said yesterday at 5 . That is reasonable the fed put down negative 6. 5 in 2020. Following, that will fall roughly 8 or 10 for the year so well grow. From what you heard yesterday, john, is there anything that would cause you to say things were worse than you thought the day before or pretty much in line and this is a normal reaction . No. I think it was very much in line with what expectations could have been going on one of the things about this moment is that things are so uncertain. Uncertain about how the fed will act and whether there will be a second wave or another fiscal program. Uncertainties, there are things we know for sure i agree that we should expect continued support for asset and the economy becauses th thats way our system works at the end of the day, the fed committed to Something Like 1. 4 trillion qe in addition to keeping rates pushed down at zero until weve weathered the storm, whatever that precisely means is a little difficult to say. It is possible some of the market wanted them to go one step further and announce yield curve control or Something Like that really, what i see the market doing over the past 12 hours or so is just recalibrating after that new information from powell we have rates at zero. We have commitment to a qe program. We have commitment to scale that up and do more, if necessary no negative rates, john, in your view . No. It makes sense to study it we are at the moment of stress in financial and Economic System everything should be on the table, that doesnt mean you have to do everything. The fed indicated, hey, weve taken a look at negative rates every single fomc member who commented doesnt feels it good for the u. S. Right one of my pet peeves we need to have that conversation we have conversations about the most outlandish stuff. No, lets not have the conversation we are never doing it. Stop saying that what does that do. Conversation talk is cheap. Thank you. Just kidding paul, thank you. Appreciate it. Andrew coming up, when we return, dow futures down 2 this morning. Much more on todays move before the opening bell well talk about it before we return take a look at this mornings biggest decliners in the a bk j wereacinust a moment 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. Try natures bounty sleep3, 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 your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. Make ice. Making ice. But youre not mad because you have e trade which isnt complicated. Their tools make trading quicker and simpler so you can take on the markets with confidence. Dont get mad get e trade and start Trading Commission free today. Still to come, the pressure is on for ceos to make changes for racial equality. More still do come, the pressure is on for ceos and racial equality check out shares of amazon the European Union will reportedly file charges over the treatment of third party sellers. Thats according to the wall street journal well be right back. We hope you find these Digital Solutions helpful to bank from almost anywhere. Deposit a check with your phone or tablet. Check balances, pay bills, and more. Send money to people you know and trust with zelle. Explore all you can do with our Digital Tools from almost anywhere. Pnc bank. 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. Following nationwide protests, many Corporate Executives have committed to racial equality. Joanne lipman says as ceos develop action plans to end systemic racism, they can reflect on the me too movement for what effects change and what doesnt. Lets bring in Joanne Lipman shes a cnbc contributor and, joanne, i know that for several years now youve been traveling and talking to male executives, talking to them about the me too movement and what youve seen happen there shows you a lot of parallels to the corporate response were seeing now to the black lives matter movement. What are you kind of seeing there . How do you think this kind of plays out from here . Yeah, thanks, becky so there are a lot of parallels between whats going on now and the me too movement and also a lot of lessons that we need to learn because a lot of what happened were seeing the same playbook were seeing lots of corporate statements of support and maybe some donations were also seeing some ceos who are starting to lose their positions like crossfit yesterday. Im he sure were going to see more of that to come and were seeing the rise of this white allies movement i think this is really relevant because its an outgrowth of what were seeing where we have male allies. Feminism, we never thought that was our cause. Now we want to help. White allies are seeing exactly the same thing the issue is if we look at what actually happened with the me too movement and what corporate change has happened, we really have not had a lot of movement i mean, in terms of representation of women, in terms of promotions, in terms of pay. Were just not seeing the movement and so if we want to avoid those same missteps now, weve really got to put words into action and that is whats been missing from the me too movement. Something for all of us to learn. Yeah. So, i mean, theres a few steps that are there are some steps yeah. No, go ahead. Yeah. Theres steps that companies can take that have been effective and that we need to see more of. By the way, what you just mentioned with amazon, what you were talking about earlier is really relevant here, right . We have known for years that the Artificial Intelligence software, facial Recognition Software does not recognize black faces accurately its only now that amazon is doing something about it if you look at representation in terms of companies, tech firms, for example, have terrible representation of people of color. Less than 4 versus a population a black population thats like 13 . But there are things you can do. One of the first things and the easiest, you have to trust your data and look at your data and that means quantify, first of all, promotion rates look at your promotion gap companies have gotten so much better than they used to be in terms of hiring at the entry level diverse candidates, but then if you look at every level going up, it becomes less and less diverse, more white, more male if companies are really serious about this, youve got to look at where is the leakage . Its not the problem with the employees, youve got some sort of structural bias built into your organization and you can pinpoint it there. Similarly, weve seen the same thing with wage gap analyses which can be very helpful. Joanne, i saw a strain on twitter, a thread that had run through about lets say in journalism part of why you dont see more diversity in journalism is because for a very long time all of these news rooms relied on pain internships that cuts off people who have access to this that seems like a pretty significant thing that should be considered and, becky, youre right. Not only that, it actually starts before the internship it starts before college a lot of College Newspapers is considered an extracurricular activity those students are blocked out students on Financial Aid, disproportionately students on aid they cant work on papers if they dont provide a stiep pepd because they have to have a job to go with their student aid then you go into the internship phase. The internship phase if youre unpaid internships, by the way, also, you know, the fact that in journalism in particular, those entrylevel jobs are very poorly live paid. So thats another issue to deal with but theres another issue that is really important which is whos doing the interviewing whos making the decisions who are the Decision Makers about whos hiring and also whos getting promoted who is making those decisions . In football, becky, i know you know this, theres the rooney rule that if youre hiring a coach, you have got to include a diverse slate of candidates. Every company should have a rooney rule for their candidates, but they also need a similar rooney rule for their interviewers because if youve got if your interviewers, your people who make the decisions are largely white men and youve got a diverse slate of candidates, youre not goings to get the optimal result. You want to have that ability to understand to have people who are making those decisions who are have diverse points of view joanne, thank you we are out of time theres other steps that people thank you very much its great to see you, joanne. Great to see you. T avoiding me toos miss steps, goo cnbc. Com for that. Squawk box will be right back. 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. Market selloff dow futures pointing to a sharp drop at the open the feds outlook cuing the move a complete rundown of what you need to watch straight ahead. Plus, the ceo of honeywell and an update on covid hot spots. Its all straight ahead as the second hour of squawk box begins right now. I guess we can keep that promo where were all this far apart from each other. Looks weird now to me. We should i dont know. Good morning welcome back to squawk box here on cnbc those are the good old days. Im joe kernen and becky quick and Andrew Ross Sorkin talk about equity futures. The dow is indicated sharply lower at 565 points after a couple of backtoback losses and today the nasdaq is down significantly, though we should point out that the previous two sessions the nasdaq continued to outperform it was actually at levels never seen before. We should also maybe focus on the s p just as much as the dow. The s p closed up last night about 31. 90. If you take another 60 points off there, were still above 3100 a lot of people thought 3200 would be a good year end target even if everything worked out, they were very bullish were still definitely near the high end of a forecast and ranges well see whether this is the beginning of something more significant or a normal pull back bonds, which were Interest Rates were sort of going in sync with the positive movement we saw on equity markets with rates rising 1 . You can see that didnt happen oil has maintained its recent move higher. Back up almost 40 although its down a little bit today at 38 for wti. Becky . All right, joe. Thank you. Software industrial conglomerate, honeywell, one of the companies stepping up to produce ppe. Joining us to talk about a lot of Different Things is honeywell ceodarius adamchek why dont you tell us about this. Good morning, becky nice to see you again. Nice to be with you. Yeah, todays a very exciting day for us were going to be announcing a partnership with s. A. P a National Partnership with their expertise in the erp space, i. T. Space and our expert in the o. T. Space. Its a natural marriage, a natural partnership. The focus is going to be a cloudbased solution based on our forge platform and their s. A. P. Platform for our connected buildings offering this is an exciting day for building owners, building operators as were going to be bringing substantial energy savings. Were going to be bringing a better occupant experience i think whats most important, especially in these times, were going to be bringing employees back to a much safer environment. Initially when the covid crisis hit we responded very quickly and effectively to make sure that we bring the solutions that we needed, whether its n95 masks, sensors for ventilators, Hand Sanitizers where we converted two plants to make Hand Sanitizer what were focusing our energy on now is how does the world operate in a quasi state between a full medical solution and fully working from home. Part of that solution is going to be our healthier buildings offering which is going to offer improved air circulation, cleaner air through the use of uv lights. Some of our Ai Technologies are going to make sure people are social distancing. Some cameras will not only measure temperatures on people entering the building but even through the use of ai make sure that theyre actually wearing ppe in the proper way. We think this is going to be a great solution for people to transition back to the offices darius, thats huge and i think it would make people feel much more comfortable if they knew they could come into these environments, because so much of what weve heard to this point is inside air circulation could be a serious problem weve watched it in diagrams where you can see, for instance, at a restaurant, a church or something where they map out how close youre sitting and how many people on this floor of the office got it after one person came down with coronavirus what youre talking about sounds pretty intense how quickly can you roll some of these things out how quickly would you be able to scale things up . I know you have a huge presence when it comes to these nonresidential buildings. Over 25 of the world is nonresidential buildings are powered by honeywell how quickly could you roll this out . Were ready to engage customers now. The solutions are ready. We started to roll them out in some of the honeywell buildings. Were ready to go now and engage customers in some of those discussions. I would also point out that our solutions are not just limited to buildings for example, weve also created a set of solutions for the airlines im happy to have some discussions with the airline ceos earlier this week about how do we make travel safer for passengers we had some ideas, they had a number of ideas. Were all focused on the same thing which is how do we make that environment safer the same kinds of things, healthier air circulation. Making sure that the cabin is clean, that its disinfected, that passengers at the end of the day need to feel safer in their travel we have a similar set of solutions there. We have them for an industrial plant, cyber security, all of these things that are going to become so relevant now as the world gets back to work. You say you have solutions that are ready to roll out right now. A couple of questions. What does it cost . How as an employee going into a building, as an air travel joer, how would i know those things in are in there everybody is ramping up with those partnerships amc theaters is teaming up with clorox to try to make people feel better about cleaning things more thoroughly what youre talking about makes me feel more comfortable about the ultraviolet rays in the duct system and trying to make sure people are social distancing what does it cost . Whr we actually going to see, say, manhattan having all of this or any flight that i book would have all of that the costs are actually variable based on the size of the building, number of occupants, so on and so on the way youre going to know the systems are in place, for example, for our building offerings, every Office Occupant is going to have a user app where they could look up exactly whats happening on a daily basis. Theyre going to get a questionnaire in terms of who theyve been around, what theyve done were incorporating another safety feature in this they could look up at the air quality. They can look at whos been around them in case there is somebody who comes down positive testing for covid. Its a fairly sophisticated user application as well that will further enable employees to feel safer in the environment it will be very visible here which will measure temperatures, check for ppe or whatever functionality the user wants to have in that building. I would imagine they may rule some of that out immediately but maybe in the United States there are some questions about privacy. I ask that because even when we were in the heat of the virus in new york city and other places, privacy concerns are a big issue particularly talking about peoples health. There were times where youre not even told in your own workplace if someone tests positive or who that person is maybe you hear there was a positive case in the workplace and you dont hear about it because of privacy concerns. How do you deal with that . Thats a very legitimate point. Privacy issues are something we have to deal with. You know, believe actually managed the whole covid crisis very well. Very, very few outbreaks throughout our whole 110,000 employees. Weve had a couple frankly, you can still manage this without telling people exactly who has been tested positive for the virus you have to take a look at where they work without divulging whos been tested positive and so on. Thats part of the peoples privacy so instead its not evident to everybody in the office or Manufacturing Center who it is and what theyre tested for those issues are critical and important. Darius, what does the economy look like from your perspective . What do you see happening around the globe as places like china and europe start to open up and as some of the states here start to open up, too . I would say so far its very consistent with what weve expected essentially we expected and continue to see in the results a little bit of a steady progression. I would define april as our low point. May was a little bit better. We expect june to be better. Q4 to be better and 2021 to be better thats the basic financial model. Whether its our arrerospace business, whether its our performance business its starting to follow and dr. Gottleib talked about this whats going to happen were optimistic were much more ready to deal with potentially a second group. We do think progress is going to be made in terms of a medical solution even in the fall or late this year so we think that the chances of another major event when everybody gets sent back to their homes, the economys locked up, the probability of that we anticipate is going to be low. We see some level of recovery. Were not expecting a vshaped recovery, but we are expecting a gradual improvement as we move throughout the year and certainly into 2021. Dari ur s, we want to thank you for your time. Hopefully you can come back and tell us how things are progressing. We appreciate hearing the update about the new news. Thank you, becky. Great to see you. Good to see you. Andrew . Hey, thanks. Great conversation fascinating what it could mean for all of us. In the meantime, take a look at the futures. We are in the red. The dow off about 630 points this morning nasdaq down 63 points giving up a lot of the gains over the past couple of days some of those gains, as we head to a break, a look at this mornings leaders and laggards in the dow well be back to discuss whats happening in the market. When you walk into an amazon fulfillment center, its like walking into the Chocolate Factory and you won a golden ticket. All of these are face masks. This looks like a bottle of vodka. But when we first got these, we were like whoa [laughing] my threeyearold, when we get a box delivered, screams mommys work mommys work. With this pandemic, safety is even more important to make sure we go home safe every single day. 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 bbut what if you couldg do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Breaking news on regeneron hi, meg. Reporter joe, that special guest is dr. George ankopolous with news that they have begun the first trials youve laid out a pretty substantial Clinical Trial plan here with four different study arms evaluating both prevention and treatment with this drug tell us about this approach. Before we get to the trials, let me just start with the science and technology because thats where it always starts at regeneron. I do have to pause for a second here to consider whats happened here im not sure its ever happened before the very same day that we announced publication of fundamental new scientific discoveries and backtoback papers in the worlds premiere scientific journal, on that very same day we announced that we are taking advantage of these discoveries already to start and treat patients weve already treated our first patient suffering from this horrific pandemic and i think it speaks to the incredible effort and dedication by so many throughout our bioindustry, and particularly the incredible effort of our scientists and people who ever since we realized this the incredible challenge that was put to the world, they have been working 24 7 combining their incredible ingenuity and oldfashioned blood, sweat and tears to turn this into a reality to try to save mankind im very proud of the entire bioindustry and particularly our people for making the science and technological discoveries and bringing them so rapidly to this point in which, as you say, were starting to test them in trials and we have a very aggressive program. We work very closely with the fda. Very Innovative New way to combine all phases of testing, aggressive phase 1, phase 2, phase 3 adaptive design. Very rapidly we will hopefully be able to test the safety and then start understanding the efficacy for four major different settings of this virus challenge. One to treat the sickest patients those that are in the hospital, who are on ventilators or requiring oxygen support thats one class the hospitalized patients. Two is the people who are infected in early stages of disease, showing that we can stop the disease, reverse it so they dont progress and rapidly cure them and make them noninfectious third, to treat and prevent disease in the context of these very people who have recently been infected and, fourth, as a widespread prophylactic to prevent disease in people who are at high risk, for example, the heroes who are working at the front lines, the Health Care Workers and so forth to make sure that we have something to give them so that they will be able to do their job and not worry about getting infected reporter i want to ask you also about the scientific discoveries you just mentioned you have two papers accepted by the journal science well get to see them on monday. What you detailed today, a cocktail approach with antibodies can do similar things to what we saw with cocktails with antiviral drugs for hiv, which is to protect against the viruss ability for mutants to evade one single drug approach now your competitors, like eli lilly, have started human trials with one antibody. Are you concerned that that approach is going to lead to mutant versions of the virus getting around that drug first of all, i dont view any of us during this pandemic as competitors were all working doing our best together as you said, i think that the fundamental discoveries that we showed in the scientific papers is that just like with conventional oldfashioned antiviral drugs giving one can have enormous benefit initially, but it can lead to the selection and the rise of escape viral mutants which now could be very dangerous and risky, and what we showed is that in order to prevent this you have to give these antibodies in cocktails. I think that there are very serious risks to consider that we do not want to be selecting the same type of escape drug resistant mutants with single antibodies as was seen in the early days of hiv and aids i hope that everybody out there whos considering using single antibodies looks at the data, looks at the science and considers those risks. I think when we have an antibody cocktail like this available, the one that is already in Clinical Trials, i think people should think about whether they should be proceeding with single antibody trials. Reporter what do your time lines look like in terms of getting the first information back in terms of how well your drug is working . Were hoping within a week or two using this adaptive design to be showing that its safer to go into larger numbers of patients once were able to do that, this is going to be a collaboration working hand in hand, side by side with the fda, were going to larger numbers of patients. We think its possible if all goes well. This is biology and medicine and a lot of times you cant predict how things are going to go, but if things go incredibly well, within a month or two after that we could have definitive data that this antibody cocktail is really making a difference for a variety of these patients at risk i think theres a lot of reason for hope remember, we first pioneered these very same technologies creating an antibody cocktail against ebola. Remember, that in a collaboration with the world health organization, that was tested in the congo and it went head to head with old refashioned drugs like remdesivir and it had remarkably greater benefit there with ebola which is a much more lethal disease. We think theres a lot of treen have hope, but like anything in this field of science and technology, biology can always surprise us. Theres always reasons to be concerned and to be cautious so were going to be moving forward very carefully hand in hand with the fda and we hope sooner rather than later we can get answers that really make a difference. Reporter doctor, thanks for being with us. Stay tuned for the data in just a month or two hopefully becky, back over to you. Meg, thank you very much. Folks, lets take a look at the futures this morning we have seen increasing pressure on the futures in fact, the dow indicated down 56. 66. S p futures down by 66 the nasdaq indicated down by 160. Weve seen oil get weaker. Down by 4 below 38 a barrel well talk more about whats happening. Take a look at bond yields those bond yields came under pressure starting yesterday with the fed. The ten year indicated 0. 7 the market kind of moved that. It was concern about the economic outlook, seeing a decline of gdp of 6. 5 fears of a second wave growing as we head to a break, lets take a look at todays aflac trivia question. Which popular vehicle makers slogan is think osi . Utde well give you the answer when we come back ty dollars. A hundred dollars. I had good health insurance. Why isnt this covered . Well, then they started getting bigger. Eighthundred dollars. Eighteen hundred dollars. I saved for this. But not that much. Im glad i had aflac. They gave me money when i needed it most. Thats why aflac is here, to help with the Expenses Health insurance doesnt cover. I love that aflac duck. Aflac get to know us at aflac. Com try natures bounty sleep3, 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. Welcome back the answer to todays aflac trivia question, which popular vehicle makers slogan is think outside the answer, polaris. Check out the move in the stock since april. People look to get outside wow, the its almost above the left side. Year to date, stocks down about 5 andrew okay a lot more to come right here on squawk box. Fed gloom and doom and fears the second wave fueling this mornings selloff. Well speak to grants Interest Rate observer, jim grant, in just a bit about the move in the market, the fed and all of it. Shares of grubb hub saying they plan to merge just eat take away. Com eat take aways offer at 75. 15. Given the way the stock is moving, well talk about what it means. Another check on the futures we are in the red this morning well be right back right after this 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. Welcome back to squawk box this morning futures are in the red you can take a look. The dow up 645 points. The s p 500 looking to open down 65 points. Nasdaq off 150 points. We should tell you theres a new dynamic in the market. Retail investors making big bets in or near bankruptcy. Seems to be paying off at the expense of Hedge Fund Managers caught on the wrong side of this trade. Want to get over to leslie picker spending a lot of time drilling down into almost day trading bankrupt companies these days. The Retail Investors buying up shares, they needed a way to make a quick buck, as you mentioned, at the expense of sophisticated hedge funds on the other side of that trade the Hedge Fund Strategy is called capital structure arbitrage or colloquially cap structure arb. This involves shorting the equity while going long the bonds to capture mispricings up and down the capital structure the idea that they can trade differently and Algorithmic Trading can come in and capture the relative value, but when day traders bid up shares of bankrupt companies, it sent the stocks higher as hedge funds were set to cover the short positions. Guys okay. Leslie picker, thank you for that it helped explain a lot of what weve been debating of whats been going on. I think for a lot of us who watch this over the years, its been a very unique shift in whats happening in the markets. For now though on whats happening in the markets and whos getting into the markets amid all of these wild market moves, i want to bring in paul hickey want to bring in mike santoli, cnbc senior markets commentator. Let me start with you though, paul youve been looking at some really interesting numbers about what happens before and after the markets are open and youve come up with a pretty unique explanation that actually maybe we should really change the way were all trading. Well, i think the longterm performance of the market, all of the markets gains historically yeah im here can you hear me . Yes go ahead okay. So virtually all of the markets gains have come during the overnight session of trading and it makes sense when you think about it because investors are taking the overnight risk. There should be no premium to equities or no compensation, extra compensation to hold equities during the day because you can always get out of that position holding the position overnight where investors have been rewarded for taking on that risk the reason they take on that risk and are compensated for it is for reasons like we saw in february and march when good or bad news tends to happen in after hours trading and it happened in a big way in february and march conversely, the regular session what were seeing is, like we said, that performance has historically been relatively weak, but what weve seen especially since last october is regular session performance of the market doing much better if you look back to early october of last year, a big switch that changed was commissioned at schwab and other Online Brokers youve seen an increase in activity among the retail trade. You can also look at this in the breakdown of stocks based on their share price. Since october when commissions went to zero at the online brokerages, the lowest priced stocks in the russell 3,000 have been the best performing stocks versus every other share price and then if you compare that to the year before commissions went down to zero, they were among the worst performing groups of stocks so lower priced stocks tend to be weaker lower quality stocks when its a small share price and you have a limited capital, you tend to see retail money going into that area of the market and, mike, lets put this in context for the viewers because i think we should all just set up a programmatic trade here you sold at the open youd be up 650 on the s p. Yeah. If you bought at the open and you just sold at the close every single day, you would be down 3 so should we just put a programmatic trade on and go home youre going to have to make your way across a lot of interim losses you have to account for certain times. By the way, i think there actually is a Little Pocket of the investment world that does something very much like that. By the way, it makes sense not just because as paul said youre taking the overnight risk, there has to be some implicit compensation for that. More news happens outside of market hours than before the rest of the world still exists outside of u. S. Market hours. I do think youre going to have enough switchbacks and bumps and thats one of the trading strategies where because of the enormous sample size of all of the days youre calculating seems like a slam dunk there will be stretches where youre not going to feel that its all that smart. It makes some sense on some level. What is interesting to me though is if this is a change in a rhythm or the last several months, you have seen a little bit more of a belltobell type of push for people to buy stocks retailers mostly on the buy side, mostly pushing certain segments of the market the issue is Small Traders trading itself is a zero sum game during the day. That isnt necessarily an ongoing source of new money into the market its a little more just kind of a little bit of a side show, a little bit of a speculative area of the market that gets moving when bull markets have been around or when you have massive volatility as we have in the last few months. Hey, paul, just speak to where we are now go ahead i wanted to get your ideas on where we are in the markets right now given that we seem to be pulling back. Yeah. I mean, i think today is the markets a little bit concerned about the upticks in case counts in certain states, but i think the market maybe got a little bit ahead of itself pricing in a very smooth recovery Going Forward from the summer into the fall theres going to be bumps in the road i think when you look at an issue like today, its investors taking a look at concerns. When we look at the market were continuing to see positive signs. I mention this pretty much every time im on. The relative strength of the semis hit another high yesterday. Theyre one of the best leading indicators of the Broader Market as long as that holds up, were more comfortable than income tabl with equities. In terms of professional investor versus Retail Investor, how do you see this playing out . Theres a view, we were talking about the bankrupt companies, that the Retail Investor is moving a lot of this is that whats happening in the market or no nkts ye yeah, so i thinktheres som retail money coming in its always referred to as the dumb money if you look at Hedge Fund Returns historically, equity hedge funds are flat over the last 15 years so im not necessarily sure that the hedge fund money is smart money or that the retail money is the dumb money i think when you look at the overall trends of accumulation whether it be retail money or institutional money, thats what drives stock Prices Higher as you see that money coming in, which were seeing as mike was saying earlier, it tends to be a zero sum game, just day trading. Thats money consistently coming in and thats driving the market higher right hey, mike, we have to run. Give me a 30second assessment of the market this morning given where futures are, what you think is happening is this taking profits or is there something larger happening . Reporter ive been talking for a couple of weeks, speculation in the Options Market the overheating of the indexes you mhad a lot of stocks going. It does make sense the beginning of a routine pull back looks the same as a more significant one. Right now its routine well see how it goes. Okay. Paul, mike, thank you guys both. Appreciate it. Joe, over to you. Coming up, a look at rising coronavirus hot spots. Theyre whats driving the spike in cases as we head to break, heres a look at the s p winners and losers this morning. Regeneron up almost 3 , 16 points on what we were just talking about. The chief scientific office. 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. 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. Welcome back, everybody. Take a look at the futures this morning. If youre just logging in, youll see the dow is down by 650 points this morning. S p down by 63 the nasdaq off by 146. It comes after big runoffs in the past few weeks. As states are up the new cases or hospitalizations from covid are accelerating once again. Meg tirrell joins us and whats driving the spike in those areas. Meg, this is a concerning story. Reporter it is, becky. I mean, if you look at the country right now, it really is in two different situations. States like us in the northeast are in recovery, whereas, states in the south and parts of the west are really starting to see an increase after having reopened a few weeks ago specifically epidemiologists are pointing out texas, florida, and arizona. We really want to hone in on arizona. If you take a look at the graph of their cases, you can see the reopening was in the early to middle of may. That blue line is the daily confirmed cases. You are seeing a spike there now there is some question of is this just due to increased testing. The red line is the test positive rate. In arizona thats approaching 13 and its increasing. I talked with experts there including dr. Michael bank who said this is not just increased testing. We are actually seeing more infection here when you look at the specific areas of the states, specifically phoenix is an area that saw the fastest growth in the entire country of cases in the past week, you can see here for arizona this is apples mobility data. People are starting to move around again this is driving data showing its reached baseline levels and even a little bit higher than baseline levels after dropping down when everything closed down they do say this is probably associated with reopening and one factor, guys, weve been talking about this morning is in many of these very hot states were actually in indoor season. People are back inside and that could be contributing to spread. If you want to drill down to the county level at potential hot spots, this is a combination of potential indicators from carnegie mellon. The darker areas are where people are doing telemedicine on covid. They have symptoms or somebody they know has symptoms you can see a lot of places, california, arizona, southern part of florida you are seeing that a lot more. We could see potential up ticks there, guys. Back to you. Meg, the question is because these are the states that are opened and opened up, would we see similar trends here and places in the northeast where they were hot spots originally things have died down a bit. If we start to open up like we are gradually starting to do right now, will those similar trends pick up here . Reporter ive asked epidemiologists that question because im wondering the same thing. Are we a few weeks away and the answer is, they dont know we dont know what the trends are going to look like the one thing they will note about arizona is they didnt see the spike already that weve seen they were saying they were kind of expecting this surge to potentially come in june because they hadnt seen it before so different curves but were going to have to see how it looks as we reopen what steps we take to try to be careful. Meg, thank you very much. Great to see you again when we come back, jim grant talks Interest Rates the feds outlook for the economy and much more. Before we head to a break, take a look at Airline Stocks theyre lower this morning a few news items yesterday united said passengers have to do a health Self Assessment demand is returning slowly but flight volume remains pretty uncertain. Delta said its issuing new debt to raise an additional 1. 5 billion. All of these stocks have run up significantly over the last week this morning american is down by 10 , united off by 13. Delta 12 , southwest by 10 and jetblue down by almost 12 well be right back. When the world gets complicated, a lot goes through your mind. With fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. Thats the clarity you get with fidelity wealth management. And tailored recommendations. Bbut what if you couldg do better than that . Like adapt. Discover. Deliver, in new ways, to new customers. What if you could come back stronger . Faster. Better. At comcast business, we want to help you not just bounce back, but bounce forward. And now, with one of our best offers ever, were committed to helping you do just that. Get a powerful and reliable internet and voice solution for only 29. 95 a month for three months. Call or go online today. Futures are the worst weve seen in the premarket. Down 680 staup indicated down 66. Its pretty much across the board. Look at three representative issues in the dow. Boeing is the biggest news this morning. Its down 9 18 which adds a lot to what youre seeing on the dow selloff. Exxon mobil, the oil is down its down 5 more than 5 5. 5 and financial j. P. Morgan chase is down about 4 in the premarket benchmark Interest Rates are near zero. The fed made quite a bit of comments yesterday and some people indicating that those comments are unhelpful in terms of whats happening in the stock market today lets get to jim grant quickly here to discuss what this could mean jim grant, founder and editor of grants Interest Rate observer what i was talking to Steve Liesman about earlier, many are saying the feds appraisal of the economy put a damper on sentiment today for the stock market i just ask the question about whether the feds overall action and the action of central bankers around the world, is there anyone worried about a day of reckoning for that at some point . And i think maybe you would be a person that thinks maybe this will be difficult to unwind at some point in the future yes, it will be difficult to unwind because its been wipeding for years and years with every bit of difficulty, the Central Banks weigh in the rates, bigger Balance Sheets and more intervention of all kind. So what we see now is certainly unique but it is it is unprecedented. There are precedents going back 25 years, arguably much longer the chairman talks about the smooth functioning of markets, but markets are not meant necessarily to be smooth they are meant to discount future cash flows and to express the best guess of the collective group of investors as to the risk of default and impairment of credit. And what the Central Banks have done is to deaden those sensors. Junk bond spreads are back to slightly before yesterday, slightly below average for the past 10 or 20 years, which is astonishing given the state of things in the real world so i would say Central Banks have been instrumental in making markets less perceptive and to making them tell us less in the moment about how things really are. I guess, jim, in a real simple way to ask it is when do you think either the stock market or the bond market will start to view the fed and central bankers around the world as not part of the solution to all of our problems but maybe adding to the problem and being part of the problem instead of the solution were not there yet, do you think . Were really hearing accoladines and praise do you think there comes a time where we can look back you can even throw fiscal moves in on this, too as the debt soars, the National Debt does there come a time because we havent seen a weak dollar or a lot of inflation or any of the things that hawks worry about we havent seen. Is that time coming . I think it is coming. You know, the muscled memory in the market is one of fed dominance and helpfulness and competence Interest Rates have been falling i guess theyre falling, it will be 39 years the fed did not see the last crisis coming but emerged from that with greater powers and greater prestige no, this market has not chosen yet to discount the feds ability or judgment or capacities i think the moment of truth well see it in a number of possible ways. One is if there is an unscripted rise in Price Inflation, most everyone doubts that possible. Certainly the existence of more than 10 trillion worldwide, less than nothing, thats testament to a general conviction that Price Inflation is dead and decomposing but, you know, if you look at the rate of growth in various aggregates of money supply over the past year, youre looking at 15 to 20 year over year and higher never higher rates of broad money growth in peace time than at the present moment. The feds Balance Sheet has shown, what,80 or so year ove year analyze it, its now 700 . The atlanta one of the Federal Reserve banks, cleveland came out and said that come the next trial by fire we might be looking at idealized negative federal funds rate of 7. 4 thats the conjecture on what the appropriate federal funds rate the Federal Reserve has taken it upon themselves to intervene in a way that is just to me astounding and what is equally marked as how well this has gone over with the fed and wall street people wait and i wait to hear someone saying this is just the road to financial surfdom. Its the handsiest federal Regulatory Agency i can think of we all collectively on wall street say, thats the fed doing what it can do, what it must do and such a humane organization, it wants to do well. But these interventions, these policies are radical policy with more radical policy which begets more leverage and frailty and right back in the soup so whatever question you asked five minutes ago, joe, thats the answer to it. So if i were to be really on guard, if i was a sentry, what would be the canary in the coal mine if we were to start to see this unraveling in some way from fed missteps two things, gold and silver gold and silver 17 i mean, gold has finally challenged its old highs but it was supposed to break through 2,000 an ounce ten years ago never happened well, wait. Okay. All right. Gold and silver. You gave me those two. You know, i see it i see gold and silver advertised a lot on channels and silvers been trending higher. Yeah, really its been trending higher for like you know those commercials. Its the same commercial from three years ago. Is it still trending higher . Why hasnt it gone any higher . It has jim, thank you we appreciate it. Youre welcome, joe. I love silver i love gold. Jim graham, thank you. Andrew okay. A lot more on squawk box ahead. Senator ron johnson on the reopening of the u. S. Economy. The fear of the second wave and getting more money to Small Businesses in the meantime, here are the futures at this hour we are in the red. The dow looking like it would open off by 722 points right about now. Well talk about it on the back def is a big hour ahead provided for my fa mily and ive been running cranes for this will make 34 years. Im ready to retire. Its been since 2011 that ive really started getting into precious metals, moving money out of the stock market trying to protect some of it. Makes more sense to me than a piece of paper and its an awesome feeling to hold that in your hand. I mean, its been in monetary value for thousands of years and itll be here for a 1,000 more. Theres always a risk. I mean, you take a risk put your money in the bank, you take a risk putting in the stock and bonds. I know i worked hard for it and i know itll be there tomorrow and the next day. Precious metals has given me the security in my life knowing that my familys taken care of knowing that my future is taken care of. What theyve done for me in my portfolio is i cant, i couldnt ask for anything better, i really couldnt. Im well ahead and im very happy. laughs my name is dan and ive been a customer with u. S. Money reserve for about six and a half, almost seven years. You know there may never have been a better time to start diversifying your assets with physical gold and silver and right now its easy to get started. Just pick up the phone and call u. S. Money reserve. [narrator] if youve bought gold in the past or would like to learn more about why physical gold should be an important part of your portfolio pick up the phone and call to receive the complete guide to buying gold which will provide you important neverseenbefore facts and information you should know about making gold, silver and platinum purchases. With nearly two decades in business, over a billion dollars in transactions and more than a half a million clients worldwide, u. S. Money reserve is one of the most dependable gold distributors in america. Good morning a big stock selloff underway in the premarket investors used to some big gains. Now showing their nerves after the fed predicts a big Economic Contraction and covid cases rise in some states breaking information on unemployment plans exclusive numbers from yelp on which business is closed and whos reopening. Plus, were going to talk about the big run up in tech stocks and what comes next for the sector dan niles joins us straight ahead. The final hour of squawk box begins right now. Move apart move apart good morning welcome to squawk box here on cnbc this we can do this we can do im joe kernen along with becky oh, wow okay im going to blush becky quick and Andrew Ross Sorkin u. S. Equity futures indicated down more than 700 points now. 720 points big losses in boeing and exxon mobil as we look at financials jpmorgan, those losses in percentage terms dow futures have trended down for much of the morning. There you can see were down 2 in the s p the dow jones down 2. 7 and the nasdaq finally joining in on some of the pull back, which we did not see yesterday or the day before for the dow fell. Treasury yields have backed up backed down. Oil prices are also reflecting some of this down almost 5 , down 1. 94. Andrew okay. Thanks meantime, we have news breaking on moderna. Meg tirrell has some of the latest details reporter hi. The news coming fast and furious. Vaccines and drugs for Covid Moderna says they plan to start the trial in july in the United States randomized with half on placebo, half receiving 100 micrograms. Thats towards the higher end of the doses. Thats not the absolute higher end in the trial the primary goal is prevention of symptomatic covid19 disease. Theyll be evaluating whether the vaccine can prevent hospitalization and prevent infection by the virus completely they are on track to deliver 500 million doses per year, possibly up to 1 billion doses starting with 2021 with lanza they updated on the enrollment in the phase two study which just began a couple of weeks ago. They plan to enroll 600 people in the first two weeks of that trial they enrolled half the study already. Those patients will be getting two doses of the vaccine 28 days apart, guys. This moving along quite at a record pace here with this first phase 3 large scale efficacy trial plan to start in july. Guys thats great news meg, thank you very much we need to come to you about every 20 minutes just to keep up with whats happening on covid these days thank you. We will see you again very soon, im sure. In the meantime, lets get back to the arkets this mornings implied losses coming after the gloomy outlook from the Federal Reserve fed officials see the economy contracting by 6. 5 this year though they think it will grow by 5 this year and 3. 5 the year after that the central bank will keep Interest Rates near zero for some time. Fed chair Jerome Powell says hes not even thinking about raising rates but powell also used last months surprise jobs gain to point out no one knows whats coming for the economy. If you look at the may employment report its a pretty good probably the biggest data surprise that anybody can rememb remember its a pretty good illustration of how uncertain these times are. The fed will increase the Bond Holdings targeting 80 billion a month and mortgagebacked securities purchases at 40 billion a month. Joe . Thanks, beck. On the congressional side, with lawmakers debating more stimulus money, ron johnson says any additional funding should only be given to those that can demonstrate a need businesses can disclose what percentage of revenue theyve lost due to the pandemic senator johnson joins us do we still need to fine tune the stimulus we already have or do we need more . Good morning. Its hard to say how much is spent of the 2. 9 trillion of Financial Relief its around half, maybe less than half. We probably have 1. 4, 1. 5 trillion that has not been spent or obligated before we talk about authorizing more spending, we ought to take a look at what worked, what didnt work. Lets face it, we had to do something massive. We had to do something fast. In hindsight it by and large worked we had to provide liquidity. We had to provide that type of certainty. You can take a look at what has not been spent, what has not been obligated lets try and reflect future Financial Aid and particularly those businesses that are viable, can reopen, might need more capital we need to be smarter about how we approach it in the future. Dealing with covid in terms of shutdowns and reopenings, its not even statewide, its almost countywide specific to whats happening could you just comment overall on what were seeing some of the troubling signs that we may be seeing in states that were not originally hot spots but now seem to be moving into that arena, like arizona or texas is it troublesome . Does it mean that, you know, maybe the economy wont open as quickly as we had hoped . Well, i was a pretty early advocate of trying to keep as much of our economy open as possible recognizing so much of the economy is integrated. If we want to keep hospitals and Grocery Stores open, we need to keep Distribution Centers open everything is essential to somebody im not being critical policy makers from the president on down had to deal with some very imperfect information at the time now weve learned. From my standpoint what we should have been focusing on are the nonessential businesses. Remember, the goal here was to flatten the curve so we wouldnt overwhelm our Health Care Systems and by and large that hasnt happened. Whats happened is weve under whemd our Health Care Systems. Whats important is an elective procedure for one person may be somebodys life saving or diagnostic treatment from my standpoint we should try to keep as much of the economy open as possible as safely as we can recognizing the human toll of this economic devastation that were undergoing right now would you vote no against more stimulus . At this point, absolutely nothing that would make sense for you, something thats really in need if it could be proven that thats something thats needed too late i would absolutely vote to redire redirect, repurpose, remedy part of the 2. 9 trillion right now we do not need to authorize more spending. Thats the last thing we need to do we need to take a look at what needs to be done i think by and large that worked now we need to focus and really direct what were going to do in the future based on what were dealing with right now one of the biggest problems with the relief packages we passed, we wanted to help workers. No doubt about it, everyone wanted to do that. The 600 flat payment plus state unemployment, wall street journal ran an article 68 of people are making more on unemployment than they made in their job. That is a huge disincentive to return to the work force i hear from employers they cant hire people. They cant bring them back we have high levels of unemployment there are still jobs open going unfilled anything we do we need to provide incentives for people to come back into the work force and the capital for businesses. Switching gears entirely. Do you foresee a federal answer or solution to what weve been witnessing in terms of, you know, Police Reform or some way of just trying to make some progress on these infratractabl issues within the republican conference theyre taking a look at what the federal government can do policing is by and large a state and local issue and i think you need to be a little careful in terms of the federal government imposing its wishes on state and local governments. I dont know that anybody that didnt take a look at what happened to george floyd and not just recoil at the horror of that just take a look at other instances, things that possibly can be done in terms of training, data gathering to provide better information take a look at Police Unions in terms of some of the protections they offer to bad cops i really do believe the vast majority of Police Officers are good people. Theyre doing a very difficult job. Theyre putting their lives on the line a lot of them lose their lives so i completely respect the position theyre in and i do believe the thing that good cops hate most are bad cops we need to have a system to be able to weed those folks out, that very small percentage that should be weeded out of the profession. Thank you, senator for all of the different topics we went over appreciate it. Senator ron johnson. Thanks a lot more on squawk box ahead. Futures pointing to a pull back this morning we are in the red. Were going to get a progress check on reopening the economy looking at the dow off close to 750 points right now meantime, the ceo of arkansas based Southern Bancorp were going to take to Darrin Williams after the break as we head to the break, take a look at the biggest premarket aycliners in the dow st tuned, youre watching squawk box on cnbc why bother mastering something . Because when you want to create an entirely new feeling, the difference between excellence and mastery is all the difference in the world. The lexus es. A product of mastery. Experience amazing at your lexus dealer. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Welcome back to squawk box. The futures are in the red s p 500 looking to open down 73 points the nasdaq looking to sell off 154 points some of this may be just taking profits. Much of this may also be what the fed said yesterday about their expectations for the economy. Meanti meantime, want to check out shares of some of the biggest u. S. Banks in the premarket as well show you where they stand. Looking at a screen of red across the board wells fargo down the most down 7, almost 8 youre looking at citi, bank of america all taking hits as well. Want to get a broader look at the Banking Sector progress on reopening the economy. Joining us is Darrin Williams. Hes the ceo of Southern Bancorp which is providing 1200 protections for low and middle income communities darrin, i want to thank you for joining us straight to the news this morning given the selloffs in the market and the expectations for the fed for the next 12 months if not longer, what are you seeing as the ceo of one of the largest banks in your region well, we see a community a Business Community thats really still a little concerned you know, if we can open reopen the economy given the pandemic, the consumers have confidence, then our customers will be fine were optimistic but if we can regain Consumer Confidence, the communities and the markets will open back up safely then i think well be in good shape you heard what jay powell had to say yesterday in terms of their expectations for what unemployment looks like in this country over the next 12 months. Whats your expectation for employment in your region . Understand we certainly look at a delta weve always had unemployment. Were concerned about that thats an issue for us were going to continue to monitor that and watch that. We wanted to support the Small Businesses that provide the jobs for the people we serve. We just had ron johnson on the last segment and joe asked him about whether we needed more stimulus money, whether we need to get more money to Small Businesses whats your view on that stepping stone. The Paycheck Protection Program which was a big help for the markets we started 250 paycheck protection loans for 1150 most of that had to be spent on payroll but other things that businesses need to support themselves to allow them to survive this pandemic. So there may be a need for Additional Support of Small Businesses that are really the backbone of the economy. Until the Consumer Confidence comes back, until we feel safe about going back into the market, going back into restaurants, going back into stores, these businesses will need Additional Support. Theres some economists that are worried about what happens to employment come the end of this month given that some of these loans and the provisions around employment. You were just discussing how you think these loans are being used do you think there are people being kept on the payroll that may not be on the payroll come july its quite possible Consumer Confidence comes back and people return to the stores to buy and purchase, many of the businesses may not need as many people so, sure, were concerned about that the Paycheck Protection Program required 75 , now its produced 60 of those dollars had to be spent in keeping people on the payroll. That was a primary driver for that money there are people who may be on the payroll where businesses may not need them right now. That is a concern. Whats loan rope look like . Its not nearly as high as we would have expected but prior to the pandemic. We are seeing loan rope a pretty good portfolio we operate in rural markets. Our farmers are still planting so we have some loan growth but the vast majority is the Paycheck Protection Program. Loan growth while its slow, its not completely diminished we would love to see it increase even more. And what are you seeing in terms of delinquencies you know, again, we provided as much relief as we could both to our consumer and to our business borrowers so we provided a 90day payment holiday for any consumer and on a casebycase basis we work with our business borrowers providing them relief. Were not seeing any because weve given them 90 day payment reli relief our assets remain strong well see that in the first, Second Quarter of next year. Were monitoring that. So far so good were cautiously optimistic. As youre speaking were looking at the market premarket as i mentioned, its off now over 800 points. Do you see a disconnect between the market right now and the economy as youre seeing it as a ceo . Tlst does it make sense to you think of the markets we serve. We serve some of those poor communities all over the United States in the arkansas mississippi delta. Very low income markets. So there appears to be some disconnect but, again, our markets, our communities are resilient. We believe we can bounce back. Were going to do all we can to support our borrowers and customers through this crisis. Darrin, let me ask you this the country as you know so very well is reeling. It took place now two weeks ago. And weve been having some really i hope important and powerful conversations on this network and elsewhere about what needs to happen in this country to change the dynamic to really end the systemic racism and you guys are doing a lot where you are to try to get money into peoples hands and trying to figure out what the private sector can do. What do you think can be done immediately . Well, immediately we have to continue to have these conversations. I am pleased to see that so many people are speaking out, speaking against the type of injustice that weve seen that people of color have known for some time now. Im glad people are becoming woke, they understand whats happening. Theyre speaking out thats not enough. We must act. Every industry must look at itself whats been their role in the systematic and Structural Racism thats caused the problem were seeing throughout the lives of people of color, not just in the criminal justice system, not just in Police Brutality but in almost every facet in health care, education. Everyones got to look at their own company, their own industry. In the banking industry, red lining was outlawed in 1968 but even today people of color have a much harder time accessing Mortgage Loans people of color, Business Owners are denied Business Loans at three times the rate of whites our businesses, our banks, weve got to look at what are the structural reasons for this. Weve got to be very intentional about this we have to intentionally create programs and products that have served this community, build these communities and help solve this wealth gap that we see. That will go a long way in tearing down the structures and systems that have allowed for the basic racism that we see today. Darrin, i want to thank you for joining us i hope youll come on back its a longer conversation and we appreciate you being with us this morning and offering your perspective on all of it thank you so much. Thank you very, very much bet joe . Thanks, andrew. Coming up, breaking data on unemployment claims. Its thursday. Estimates still calling for a number well above 1 million for the last week. Almost 2 1. 6 million. Special look at some on the ground local business data from yelp helping us with the question who closed and whos reopening. The futures right now are at the worst levels that weve seen almost 900 now ay ted youre watching squawk box on cnbc 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 this morning take a look at futures as the morning has progressed weve seen more red. The dow looks like it will open down 850 points. Nasdaq up 176 points s p 500 up 81 points it appears in large part based on some of the comments that have come out of the fed and jay powell, expectations about where the economy may or may not be and unemployment throughout the rest of this year, it may also be investors taking profits. Big questions though about where things are headed. Becky . Andrew, in the meantime, lets take a look at shares of grubhub. The company has agreed to be acquired by just eat takeaway. Com in a 7. 3 billion all stock deal that transaction would create the Worlds Largest food Delivery System outside of china. The agreement comes after acquisition talks between grubhub and uber fell apart. It raises questions about what uber does next when we looked at that stock, it was down grubhub shares are up by over 7 just eat takeaway. Com shares are flat. We have the latest initial jobless claims that are expected to top 1 million again as the virus keeps battering american businesses those numbers are next dow futures down by almost 840 points things are heating up here been down all morning long these are the weakest numbers weve seen s p futures down by 8. You are watching squawk box on cnbc well be right back. Ever since weve gone mobile on the now platform, somethings gotten into the office. 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 on cnbc. Were just seconds away from the latest initial jobless claims numbers and Consumer Price data. Could affect what were seeing in the markets down 800 plus points on the dow. Rick santelli has those numbers at the cme rick reporter well, would we be looking for a tenth week in a row of claims being lower . It hasnt hit the wires yet. Indeed, its a definite yes on that last month of course or last week was 1. 877 million so it was suddenly not revised. Thats exactly the way it stood. This week 1. 542 million on this week on initial claims and on continuing claims, 20. 929 million. 20. 929 million and if we look at that particular number, that follows an unrevised also, 21. 487 million so definitely it is a bit lower. And if we continue to look at the drops in these numbers, maybe well actually get some positive comments from our fed chairman at the next meeting we look at ppi up. 4 up. 4. That is definitely a bit of a surprise on core energy, its up. You only have to go back to 2009, joe, on ppi. In the last crisis they modified it a bit they wanted to have inflation be more, i guess, moldable in a way that they can control it that number is the worst its ever been since 2009 or minus 110. There are revisions coming out to continuing claims, by the way. It now stands on initial at 1. 897. There was a bit of a delay it moved a bit higher. On continuing claims it also is revised to 21. 268 million so thats a bit of a drop considering the last numbers of course in weeks numbers are lower. Lets go to year over year on ppi. Minus. 8 year over year core up. 3. This data is pretty much a surprise on the up side for ppi on headline. Tenth week lower should give the market some reprieve, of course. Definitely we did i think suffer at the expense of you could call it maybe more realistic. So many experts would say more sensible view by jay powell on the economy. I would say, you know, if the economys a restaurant, he saved it only to disthe food after he was done becky, back to you hey, rick, let me just clarify something. Ppi up 0. 4 when you strip out food and energy its down 0. 1 . Yes. Energy prices werent higher but food prices skyrocketed. Is that telling us this is food prices and thats been the big issue . Well, i dont have the intricate aspects of this number so im not going to make a guess, but what i can tell you is is that all these numbers, of course, have different adjustments that are associated with them and my guess is part of that may be whats going afoul here but, indeed, we do see a divergence in many prices with regards to energy and food and some of the things we buy on a continual basis. I am sure that as we reopen parts of the country we will see more anomalies on pricing. Okay. Rick, stay around. Were going to talk a lot more on the market. Steve liesman joins us too we want to get his reaction to these numbers weve seen steve, go ahead with your reaction yeah. There was a big jump in food prices i saw 6 jump, becky im still, im sorry, trying to learn to read these tables in real time. We used to get them from the wires but theres no more lockup out there so were dealing with it in real time. Im looking at the energy numbers. I thought i saw an Energy Increase which i cant quite square up 4. 5 Energy Prices in the ppi. I dont know where thats coming from there was a turn around, as you know, in gasoline and oil prices and it must be picking up that even though while theyre low, theyre very high. Back to claims its a its a debate i think within the market between the change, which rick emphasized, and the level. Yes, it is down for ten weeks, but its still 1. 5 million its still an enormous number of people are losing their jobs and filing for jobless claims. The continuing claims number, its down a little bit but its still north of 20 million. So you still have awful lot of pain gathering its not like its all in the Rearview Mirror so, look, we have to square up the idea that everybody thought the jobless claims number was a good way to forecast what was going to happen in the payroll number thats no longer thought to be true we have to think about what the right way to think about it is, but what we know for sure is that theres still a lot of people filing for jobless claims it could be that its catch up, it could be mandates that people refile every two weeks, but bottom line is, theres still a lot of pain in the job market. While the numbers are going down, i think 600,000 was the most you ever saw in a single week in the great financial crisis youre still at multiples of that you can focus on the change, maybe that makes you upbeat. You can focus on the level and you still see an awful lot of work ahead and still deterioration in the jobs market. We have been watching the futures all morning long and things have definitely taken a turn for the worse when we started this morning at 6 a. M. We were looking at futures. The dow down 460 points. Now youre talking about the dow down by more than 900 points s p 500 off by 86. Nasdaq down by 185 again, this is a progression at this point the dow futures indicated down by 3. 4 . Thats the type of move that starts to catch your attention lets talk more about this mornings selloff. A couple of other guests joining us now mike santoli and jim muriel. Mike, lets talk about what youve seen this morning whats happening reporter first of all, becky, the setup was a little bit stretched. Even opening at these levels, youre going back to the beginning of last week that last little push higher this is in hindsight we were talking about how the market was over heated and stretched and some of the sentiment and tactical indicators were extreme. Were seeing a little bit of a roll back of that. I do think often on the day after the fed meeting, mentioned this, a bit of a rethink the bond market is clearly rallying, yields getting compressed a reminder that were in perhaps for a long slog here its a little bit of a gut check on the idea that we had this runway towards momentum of a reopening. It was just going to be relatively smooth and strong i think were just having a little bit of a check on that he enthusiasm at the moment not necessarily anything that has at this point certainly gotten beyond the level of a routine pull back. This has been a pretty fastmoving market so you have to stay on top of it. Jim, lets talk a little bit about wti, too we were watching this morning. Wti was down by 7 energy has been incredibly volatile which one is leading which is all of it being led by the feds comments i think all of it is being led by the feds comments. First to answer about the markets, on march 21st that was the day the fed said unlimited qe regardless of what camp youre in, whether its forward looking or fed liquidity, you cant deny that at least part of it is fed liquidi liquidity. All of 24 is building up to yesterday where we want to hear from the fed and we want to hear that theyre supporting the market and thats what the rally was up in. Buy the rumor, sell the fact kind of thing, too secondly i think that news coming out of texas, arizona, florida, people havent dug into this news yet but i think people are now a little bit worried that a second wave is upon us. That is more of an excuse to sell it than any real hard data. As far as the oil thing goes, you know, just the negative 40 print up to the positive 40 print in futures contracts over a month just shows how wildly volatile that it is. This is frank discovery. 40 seemed too high i think theres still a global, you know, recession depression going on and even 1 at 96 is not going to help that yet. Santoli, i know what powell said yesterday and all of that, but i immediately thought it had to do with worries about some of these states spiking reporter yes. Then i looked at the airline stock, boeing the biggest loss leader in the dow. It seems related to all of the covid cases, but then i realized thats also where the biggest gains have been. Thats right. The most out sized gains. I dont know whether those got extended or its concerns that were not out of the woods reporter i think its all of the above. I think the fact that people felt as if the market was benefitting from the fact that if you were worried about complications to the reopening or switchbacks in some of these policies that were not going to be as good for the economy, you had weeks and weeks before that was ever going to come into play i think the data on texas and arizona, its been bubbling in this direction for days and the market was ready to look at it at this point on the day, hey, by the way, the nasdaq closed at 10,000 tesla closes at 1,000 for the first time people were feeling pretty good. Maybe a little bit too good. I think its normal oscillations in the market. The normal kind of mood swings that animate stock prices. Absolutely its to say a legitimate excuse, as jim says, to have a little bit of a rethink but not necessarily a lasting change in trend. Well see depending, right theres a lot of people out and about and weve said that. People shoulder to shoulder all over the place i mean, that might not weve heard this is the first wave in arizona and texas. Its not a second wave right. If we do get some kind of second wave on the east coast, then all bets are off, i would say, wouldnt you . Well, it also speaks to this other big question thats been hovering over the market, weve seen big comb backs in air travel and mobility. What equilibrium does it find . Where are we working towards this improvement the fears about possible rises in infection is something thats going to make that a little bit lower. Theres still major states like illinois that are still in some form of lockdown. If these things if these news stories start to affect the Decision Makers, whether its really happening or its not really happening, those lockdowns stay longer and very, very clear economic effect were living that in illinois. The people, like you see the restaurants open outside, people are absolutely flocking out. It seems like theyre not ready to go on any sort of extended sort of lockdown i think the worry is, like these guys like j. D. Pritzker gets spooked and holds the lockdown further. Or they dont hold it down and the cases go up. Either side of that. Did Rick Santelli stick around, too . Is rick still there . Reporter yes, im here go on. Well, i just wanted to ask you about the yields that were watching, too. Those had gotten to the point where the ten year was above 0. 9 earlier this week now youre back below 0. 7 the swings in equity prices playing out in bond prices and yields, too. What does that mean to you reporter well, it means to me that the market has got this cycle going, going into employment reports which most likely will continue to improve on the jobs front just due to the math and rate of change. As we led into that, on wednesday before the jobs number we topped 70 in a 10 year. On thursday we topped 75 basis points on jobs friday we had an interday high of 95. We settled a whisker below 90 and we havent seen that since the fed meeting is coming up leading into the jobs report every first friday of the month, youll see Equities Firm and rates going up going into the feds meeting, youll see the opposite. This is going to be around for a while. There is a tug of war in the market based on information that everybody is just guessing about but the one thing were not guessing about is the t in trillions that jay powell and the treasury have jointly agreed to throw into the economy. I dont know how we can forget that and scratch our heads and wonder how all of this has occurred because that is a the the epicenter. Jay powell in many ways bought and paid for the rally okay. Thats a fair point. Its a fair point. Its been a huge criticism thats been around for quite a while. Jim . Theres no question about that, too. Another thing as well is that us being disappointed about jay powell yesterday because we wanted to hear something about curve control. We wanted to hear him say that he was going to compress the long end, he gave us curve control. He said he doesnt think were going to raise rates until, you know, 2022, which by the way i think jay powell makes a decision, puts that out there based on what he thinks the market and the economic condition need now i dont think him saying that means hes really believing that the point is, that is curve control. If hes going to control the next year and a half of the yield curve, yes, the implication is there that hes perfectly willing to start extending that further of course this part of the rally has been a jay powell fueled rally. Were talking about alltime highs here to go through alltime highs i dont think its unusual to request genuine needy Economic Data thats probably still months away this seems like a fairly normal breakdown in the stock market how long it goes i personally think just a couple more percent from here mike, how much of this is potentially professionals taking advantage of Retail Investors stepping back in we were talking yesterday with one of our guests about how he thought there was something massive amount of money on the sidelines from Retail Investors who had now felt like they missed out on this run back up andrew said he had talked to some Hedge Fund Managers saying they were able to make good and get out to recoup losses. I certainly do think, becky, in a lot of the real speculative names, the story stocks, lottery tickets that people were paying more than face value for like the bankruptcy names, that, you know, is pretty easy to take the other side of that i dont think overall in the market, i mean, apple made a new high yesterday i dont necessarily think that was because Small Traders buying fractional shares of apple were taking it higher thats what the market does when its feeling more defensive. I dont know that it was really a factor in the overall indexes stretching to that high and then professional selling the peak, but the retail getting is what we saw in pockets is emblematic of how people started to feel more belief in the rally and felt like it was upand away. You know, i dont know that theres a way to isolate exactly what the players were and the interaction between professional money and retail money, but to me its, again, pretty normal rhythms of an exuberant rebound rally and now a little bit of a gut check. So the world is spinning out of control and theres a lot of so worried about so many Different Things im not making light of any of it, but if youve worn that ugly jacket today with the bicolor lapels it would be better. Why not why not . Its in my closet i can go get it. Its not at the exchange. Youve got it at home, right i do have it at home, yes i dont know why you wouldnt throw that ugly looking thing on to do it will you do it next time next time i will. Make things more calm and seem more normal. I will do that. I dont want to make light of anything down 900 points. All thats happening in the world. 2020, right . Santoli, if youre in there with doc and Michael Jay Fox and youre in the car and it goes in the 2020, change as quickly as you can. That is not the year right. That is not the year to go. They never got that far, i dont think. They didnt go forward yeah, they didnt go forward they were flying around so elon musk has to get on the stick because were not obviously doing that yet anyway, i digress. Becky. Want to thank everybody joe, i never thought of that what if you went back to 1919 and brought the spanish flu forward. You cant do time travel because you dont know what youre going to do . You dont want to do anything in the past. If a butterflys wings do something, everything we wouldnt even be born probably or something i dont know its very scary to mess with the past supposedly there are alternate universes going the other way. Never mind well talk about that in this universe the dow is down by 889 points we will continue to watch this story closely. Coming up, more on the markets as we make our way to the opening bell futures, 888, 890. The s p down 85. Nasdaq taking it on the chin down 185 the biggest premarket decliners in the s p 500 you can cierre lines, all Energy Related issues and a cruise ship take a look at some of the top stocks taking a hit again. Stay tuned, youre watching squawk box on cnbc we hope you find these Digital Solutions helpful to bank from almost anywhere. Deposit a check with your phone or tablet. Check balances, pay bills, and more. Send money to people you know and trust with zelle. Explore all you can do with our Digital Tools from almost anywhere. Pnc bank. From almost anywhere. Hey lily from at t here. Im back and while most stores are open, im working from home and here to help. Heres a tip get halfoff the amazing iphone 11 on at t, americas Fastest Network for iphones. Second tip you can put googly eyes on your stuff to keep yourself company. Uh for example, thats heraldo. Hes my best friend. Oh, sorry nancy, i forgot you were there. Get the amazing iphone 11 for halfoff on at t, americas Fastest Network for iphones. Welcome back to squawk box. Watching futures this morning. They have continued to see quite a bit of pressure. Dow futures down by more than 900 points started a the 6 00 a. M. On the east coast down 480. Those losses have almost doubled. S p futures down by 88 nasdaq off by 190, and this all comes as weve been getting additional news. Saw the jobless claims, initial jobless claims posted 1. 542 million down from last week at 1. 897 million. Continuing claims of 20. 9 to 1 million. Number were watching closely. Ppi up more than expected up 0. 4 a lot of that came from food prices, which i believe were up about 6 and that is a significant issue weve been tracking the dollar index yesterday hit its lowest level since early march. Today looking at dollar index up slightly 96. 33. Joe . Get to cnbc headquarters jim cramer joins us now. Have you gotten to see any of our discussions this morning the fed, you know, kind of a glum forecast. Also spikes. Right. And some renewed concerns about covid and a lot of people have been out, jim what do you think is accounting for this, and is it okay all in the course of doing business to get back gains of the last week . Fine to give back some of the gains. You saw the spike yesterday, video e spike, good companies, but shares, got ahead of themselves a little. Yesterday the most important guru in the market, which im not exaggerating, david portnoy, my friend from barstool. Look, printing money why take profits when every airline goes up 20 every day. Losers take profits. Winners push chips to the middle i should be up 1 billion. And paid a lot of money and criticized by warren buffette. Becky, youre probably interested, unloaded Airline Stocks at the wrong time there was strength in the Airline Stocks small Retail Stocks, oil stocks lets just say all the travel leisure, the cruise stocks they were all kind of emanating from people who had similar ethos to date. And i think what happens is, those get overheated you see them going down around 5 00 a. M actually reversed after the article market watch there was money congregating and in a couple of stocks, and those stocks got too high. You can see them on the board. Nasdaq 100 juggernaut. Everything got a little too hot. We have to come down a little. See what happens. I mean, look at tesla i read it went over went through 1,000, like, hot butter through a knife. Yeah. Ron barron, he was right in 100. Price targets that may not happen instantly but could happen it makes people excited. People are very excited about this market the last couple of weeks. Hit by the reopening people say forget the reopening. Can you look at that in our sick i know people who got sick and who died, its cavalier to say the hot spots mean nothing. Right weve been through a lot i worry now about getting complacent get it now in new york, thats just bad luck, i guess. At least they know how to treat it better. We do we do. But, you know anyway. Scary. Were all dealing with that anxiety on top of Everything Else thanks, jim. Well see you in a couple minutes. Andy great thank you. Meantime, talk more about the markets and talk a little how tech could fare in this selloff this morning the Founding Partner of of a fa one capital joining us this morning. Dan, you look at whats happened over the past couple of days does it make sense to you . Yeah. Absolutely makes sense i mean step back from all of this sort of think, does it make sense to you that the s p was up year to date with 13 unemployment that doesnt make sense. So you know, to have some of these stocks give back, definitely thats what should be happening, because the valuations right now are at record levels, and so that just gives you a sense of where risk is and you know, jim cramer just said a few moments ago i mean, a lot of these stocks have gone up too much, too fast. Now you head into earnings season, and thats when, you know, the rubber meets the road and youre going to find out our expectations are still too high. Yesterday you saw well, let me ask you about that, though i think theres a a view among some investors youre supposed to write off whatever earnings we get. Discount completely and forget about it, because you just decide this quarter and then maybe the next quarter are, you know, a anomalies. Idiosyncratic. You dont think thats how the markets going to react . Dont view it that way. Definite permanent changes have happened to the economy because of whats just occurred. Were not all going to be crammed together in a Movie Theater or in everybodys not goi going to be a lot of people are staying hol ining home the recovery was one of the weakest ever i think the weakest ever coming out of recession. Look at this one to acoukussume things go back t normal is pretty cavalier and valuations of the big disconnect for me march of 09 market trading at 0. 6 times market cap to gdp. Today the markets trading 1. Time times. Today the risk is greater than at the depth of the financial crisis thats the big difference and a way to look at rick in terms of valuations. Okay. Lets talk about, from a valuation perspective you think makes sense, doesnt make sense and what youre doing about it sure. I think, really, tech being the leader of the market that makes complete sense. For a lot of those names, think about amazon to some degrees the poster child ecommerce, a trend happening before the virus or, amazon was actually up, if i remember correctly, first quarter, with the s p down 20 if you look at some of the Gaming Companies i think actvation, another name up in q1 people spending more time online playing video games is a trend that trend got accelerated by the virus. So, you know, people connecting over social media. Facebooks another one i think theyre doing incredible and that accelerated the virus to a degree sped up trends that would have taken a couple of years, and they pulled for that couple of years, into a couple of months those stocks will continue to be strong thats where im really staying focused. We had owned an airline. We got rid of that had owned, you know, lithium near the bottom, got rid of that a lot of the names we bought for a bounce, we jettisoned and winners, reluctantly got rid of, like disney. Numbers still have to go lower a lot of the big fang stocks, just sold one. Thats facebook. At one point owned five out of the six but thats the question dan, if you have cash on the sidelines right now, would you be putting it into tech . Try and go back into a disney . More value in some of these other companies that are outside of whats gone on the same way no. I mean, were actually short disney now using that to hedge a viacom position we still like i think what you do, if you have money on the sidelines, you wait valuation has gone up too fast, too quickly. A lot of estimates have to go down saw wells fargo go down. Starbuck, yeah, things reopened but their estimates are too high that stock went down yesterday as they updated guidance youll see more going through earnings, definitely get back into names like amazon, or nvidia, or things like that. Bigger names, google, et cetera, once the markets had a little, worked off some of the froth weve seen thats the way i think about it. Yeah back to the winners of q1, those names will continue to win if the market goes down Going Forward. Okay. Dan, its always a pleasure to spend time with you, get your insights appreciate you joining us. As everybodys watching this morning dow off over 900 points now. Well see where things open. Becky and joe, that was a fun show well do it again tomorrow make sure you join us tomorrow. Its friday. Squawk on the street begins right now. Good thursday morning. Welcome to squawk on the street. Jim cramer is with me coming to you from separate locations. Rick off today as futures suggest well unwind historic rallies of the past weeks. That reality check from the fed. Nine states with strong increases in covid 1. 5 million jobless claims this morning. Oil below 37 and the vix above 31 take you back t